Donald Trump's Very Yuge Tax Problem

[dismal]

If you declare a $900m loss, you WILL be audited and will have to defend it.

Yes, indeed, but at question is whether you did or did not have a $900 million tax loss, not whether it ought to be deducted.

Since Trump seems not to have been prosecuted over this tax return I guess the auditors found he did indeed have a legitimate tax loss to report.

 

[Alcoholic Actuary]

I'm positive those individuals defending Trump's tax gaming as some sort of act of genius are the very same people applauding those who game the welfare system and have extra kids that they can't pay for.

Because, you know...consistency.


aa

"Reporting a loss" not equal "tax gaming". You try to claim you are a knowledgeable financial professional but then you say things that make you look like a shameless partisan hack.

Oh, hi dismal. I didn't see you there. But you might take time to consider that not everything I post is in direct response or even in half-hazard consideration of you or your position. Sorry if that kills some internal relationship that you perceived that we had. I honestly didn't posit you as someone "defending Trump" as a tax genius. (Unlike articles linking Rudy Giuliani to the same).

But, if you throw a stone into a pack of dogs, the one that barks is the one that got hit. Right?

Sorry, but we're raising a child for up to 18 years on the State's dime. Whether we do that for a real human being or we're calling the child a "Casino" that was horribly mismanaged is no distinction for the taxpayer - Other than the magnitude of the amount. I have some experience in raising real people up to college age, and I can tell you that I can do it well below $1billion.

And, no that doesn't necessarily qualify me as a 'knowledgeable financial professional'. But I am a Fellow in the Casualty Actuarial Society and a Memeber of the American Academy of Actuaries, and my opinion on risk pricing and financial acumen of Insurance Companies is well sought after. Turns out I don't really need to appease everyone on the internet for validation.

aa

 

[Jimmy Higgins]

The problem isn't that Trump didn't pay taxes, the problem is that this illustrates that Trump is the beneficiary of the very system that his followers believe is unfair. Now they will be told that since Trump knows how to game the system better than anyone he will be the one who can fix it. Their little heads will bobble and they will all cheer.

He said exactly as such at the RNC. He was dangerously crossing into the category of satire in his speech with that.

'I know how to fix the loopholes, because I took advantage of them all.'

 

[dismal]

The problem isn't that Trump didn't pay taxes, the problem is that this illustrates that Trump is the beneficiary of the very system that his followers believe is unfair. Now they will be told that since Trump knows how to game the system better than anyone he will be the one who can fix it. Their little heads will bobble and they will all cheer.

He said exactly as such at the RNC. He was dangerously crossing into the category of satire in his speech with that.

'I know how to fix the loopholes, because I took advantage of them all.'

Can you let me know what these loopholes are that allow you to declare losses without, you know, actually losing the money?

Because in my experience actually losing $1 to save $0.35 in taxes is not that great a loophole.

 

[jonatha]

If you really believe he lost that money I have a nice bridge for sale in Brooklyn.

Ah, we've left the realm of reality I see.

Maybe there's a way to get back: why don't you claim a $900 million loss on your next tax return and report back on what happens.

One facet of the tax code that I have not yet seen mentioned is that in a partnership, gains and losses do not have to be allocated strictly pro rata according to the partners' individual capital investments. It is thus possible to have larger losses than the amount one has invested in the partnership.

Such arrangements must have a defensible economic rationale (the IRS can challenge them).

 

[Loren Pechtel]

I read a post by an accountant who said he'd guess Trump "parked" his debt. Meaning he sold it to an entity controlled by family or friend who would make no attempt to collect it. Technically, forgiven debt is income.

Isn't this the debt he sold to Trump Hotels as part of selling the bleeding hotels?

 

[Loren Pechtel]

The typical person would be ruined if the market crashed on them. They wouldn't be able to make up from the hurt by pushing the losses against their taxable income for the next decade.

From my experience the average person can only deduct $2000 per year in capital losses from investments. But real estate or a business might be different.

ETA: What I meant was you can only carry over $2000 per year to subsequent years. Still, it doesn't seem fair.

ETA: Oops. That should be $3000 per year.

Because of the passive loss rules. The $3k limit does not apply when you're active in the business.

 

[Horatio Parker]

I read a post by an accountant who said he'd guess Trump "parked" his debt. Meaning he sold it to an entity controlled by family or friend who would make no attempt to collect it. Technically, forgiven debt is income.

Isn't this the debt he sold to Trump Hotels as part of selling the bleeding hotels?

Sounds like it, but more like he had Trump Hotels sell it to someone who will not forgive it or attempt to collect it.

 

[Elixir]

If you declare a $900m loss, you WILL be audited and will have to defend it.

Yes, indeed, but at question is whether you did or did not have a $900 million tax loss, not whether it ought to be deducted.

Since Trump seems not to have been prosecuted over this tax return I guess the auditors found he did indeed have a legitimate tax loss to report.

We don't know that $900m was allowed. It could have been adjusted (up or down), and that would not have been evident in the docs that were made public.
I really think the Donald is stupid to not release his tax returns - none of his acolytes are going to turn on him no matter what shows up in them. He could just keep lying, saying he paid all kinds of taxes and made bazillions of charitable contributions, and they'd believe him over any silly piece of paper.

UNLESS... there's something in there more damning than shooting someone on 5th avenue, but that would be hard to imagine.

 

[ZiprHead]

If you declare a $900m loss, you WILL be audited and will have to defend it.

Yes, indeed, but at question is whether you did or did not have a $900 million tax loss, not whether it ought to be deducted.

Since Trump seems not to have been prosecuted over this tax return I guess the auditors found he did indeed have a legitimate tax loss to report.

Just because he wasn't prosecuted doesn't mean the IRS was all hunky-dory with his tax return.

 

[Axulus]

Ah, we've left the realm of reality I see.

Maybe there's a way to get back: why don't you claim a $900 million loss on your next tax return and report back on what happens.

One facet of the tax code that I have not yet seen mentioned is that in a partnership, gains and losses do not have to be allocated strictly pro rata according to the partners' individual capital investments. It is thus possible to have larger losses than the amount one has invested in the partnership.

Such arrangements must have a defensible economic rationale (the IRS can challenge them).

In that case, you will have insufficient basis to deduct the loss. Pretty much all the games people played with losses pre-1986 code reform were removed in 1986.

Which tax game is Trump alleged to have done here? What are the specifics of the strategy? Are people saying he is such a business genius that it is impossible he could have lost that kind of money in 1995? If not, people accusing him of gaming the system without the specific details of the strategy used are talking out of their ass.

 

[ZiprHead]

Trump henchmen Chris Christie and Rudy Giuliani write off the tax scandal with 14 soulless arguments

http://www.slate.com/articles/news_and_politics/politics/2016/10/trump_s_no_taxation_representation.html

 

[ZiprHead]

"The $916 million loss that Donald Trump reported on his 1995 income taxes was extraordinary. As Alan Cole from the conservative Tax Foundation notes, total net operating losses claimed on all individual income tax returns in 1995 amounted to $49.3 billion."

http://www.businessinsider.com/trump-tax-returns-estate-taxes-hillary-clinton-2016-10

Donald's losses in 1995 were 2% of the individual losses for the entire country.

 

[dismal]

I read a post by an accountant who said he'd guess Trump "parked" his debt. Meaning he sold it to an entity controlled by family or friend who would make no attempt to collect it. Technically, forgiven debt is income.

Isn't this the debt he sold to Trump Hotels as part of selling the bleeding hotels?

How does one generate a tax loss by selling debt?

Generally to generate a $900 million loss one must a) invest $900 million in something; b) sell it for $900 million less than you paid for it.

 

[dismal]

"The $916 million loss that Donald Trump reported on his 1995 income taxes was extraordinary. As Alan Cole from the conservative Tax Foundation notes, total net operating losses claimed on all individual income tax returns in 1995 amounted to $49.3 billion."

http://www.businessinsider.com/trump-tax-returns-estate-taxes-hillary-clinton-2016-10

Donald's losses in 1995 were 2% of the individual losses for the entire country.

so now you are comfortable that the IRS accepted the loss?

 

[ZiprHead]

"The $916 million loss that Donald Trump reported on his 1995 income taxes was extraordinary. As Alan Cole from the conservative Tax Foundation notes, total net operating losses claimed on all individual income tax returns in 1995 amounted to $49.3 billion."

http://www.businessinsider.com/trump-tax-returns-estate-taxes-hillary-clinton-2016-10

Donald's losses in 1995 were 2% of the individual losses for the entire country.

so now you are comfortable that the IRS accepted the loss?

We don't know that the IRS accepted the loss.

 

[Harry Bosch]

"The $916 million loss that Donald Trump reported on his 1995 income taxes was extraordinary. As Alan Cole from the conservative Tax Foundation notes, total net operating losses claimed on all individual income tax returns in 1995 amounted to $49.3 billion."

http://www.businessinsider.com/trump-tax-returns-estate-taxes-hillary-clinton-2016-10

Donald's losses in 1995 were 2% of the individual losses for the entire country.

That's amazing. Thanks for finding that.

 

[Cheerful Charlie]

Ya, sort of like those individuals who are against murderers are also equally incensed by people who only come to a rolling stop at stop signs because both are examples of breaking the law and are therefore equivalent. Anyone who disagrees is nothing more than a partisan hack who can't see past their ideological blinders.

Reporting a tax loss when you have had a tax loss is not the sort of thing that requires a defense.

It's like asking someone to defend using their left turn signal before making a left turn.

On the other hand, Trumpo has been touting his wealth and business acumen, and it turns out he lost almost a billion dollars and has been furiously gaming all systems he can game, including stiffing people he owes money to. He is as slippery as an eel in a bucket of snot.

 

[Harry Bosch]

Reporting a tax loss when you have had a tax loss is not the sort of thing that requires a defense.

It's like asking someone to defend using their left turn signal before making a left turn.

On the other hand, Trumpo has been touting his wealth and business acumen, and it turns out he lost almost a billion dollars and has been furiously gaming all systems he can game, including stiffing people he owes money to. He is as slippery as an eel in a bucket of snot.

He's a conman. A bigoted snake oil salesman. Have you heard the story of how he conned the guy who won the $1,000,000 hole in one competition at one his golf courses? You have to google it, it's just classic Trump!

 

[bleubird]

http://www.cnn.com/2016/10/03/politics/trump-foundation-cease-and-desist/
Deflect this Trumpsuckers.