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Donald Trump's Very Yuge Tax Problem

Harry_Bosch said:
Cheerful Charlie said:
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.
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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!
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If he can con the IRS into thinking he has a $900 million loss when he didn't maybe he is a genius.
 
He likely really lost that money:

After borrowing more than $3 billion to build his business empire during the 1980s, much of it personally guaranteed, Mr. Trump faced a severe financial crunch starting in 1990. That was because casinos and an airline he owned at the time didn’t meet operating projections just as some of his debt was coming due. Meanwhile, a downturn in the New York City real-estate market and other factors made it hard for him to sell some assets, according to reports by New Jersey casino regulators at the time.During this period, he worked out several restructurings with creditors that bought him time, putting him on a monthly allowance for a period. He leaned on his Atlantic City casinos in New Jersey, dragging them through bankruptcy court and then borrowing against them to pay off loans elsewhere. He took out around $160 million from the casinos during this time to pay down other debt, a Wall Street Journal analysis showed.

He finalized a deal with creditors in 1995 to wipe out the last of his personal debt.
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http://www.wsj.com/articles/donald-...ghten-focus-on-treatment-of-losses-1475415294

In other words, his debt gamble backfired on him big time, leaving him personally on the hook for almost a billion.

Is it really surprising that someone who has gone through six bankruptcies (or business bankruptcies that he owned a substantial stake in) would lose a lot of money in certain years?

What it seems like is he made a fortune in the late 70's and early 80's, would've paid a ton of tax in the 70's and 80's, then lost a bunch of money in the 90's, and hasn't accomplished much, financially, since then.
 
The fucking point is trump is an asshole con man who could not even run a water store in the desert!
 
Axulus said:
What it seems like is he made a fortune in the late 70's and early 80's, would've paid a ton of tax in the 70's and 80's, then lost a bunch of money in the 90's, and hasn't accomplished much, financially, since then.
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My impression as well. I think Trump really lives from his retarded TV shows and scams. And bunch of money he made in the 70s and 80s was due to corruption and crookery. The guy is an imbecile without any conscious whatsoever and he has a chance of becoming a president, this is insane.

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bleubird said:
The fucking point is trump is an asshole con man who could not even run a water store in the desert!
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Yes.
 
Axulus said:
He likely really lost that money:
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I don't doubt that he did.


Is it really surprising that someone who has gone through six bankruptcies (or business bankruptcies that he owned a substantial stake in) would lose a lot of money in certain years?
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Not really. Of course it does sort of go against the narrative that he's the smartest businessman ever. There are corporations out there that could absorb a billion-dollar loss in one year. The CEO would likely be shown the door, but companies have survived worse. An individual businessman losing a billion dollars in a year? I'd call that a spectacular failure.
 
barbos said:
My impression as well. I think Trump really lives from his retarded TV shows and scams. And bunch of money he made in the 70s and 80s was due to corruption and crookery. The guy is an imbecile without any conscious whatsoever and he has a chance of becoming a president, this is insane.

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bleubird said:
The fucking point is trump is an asshole con man who could not even run a water store in the desert!
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Yes.
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You are welcome.
 
Axulus said:
jonatha said:
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).
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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.
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The bolded statement is true, but a partner's basis is increased by the partner's share of the partnership's liabilities. And the losses are not lost, they are suspended until you have gains from the activity, or until you dispose of your interest in the activity.

The scenario in which Trump's losses were due to partnerships in which he was allocated losses in excess of his investment (but not in excess of his investment plus the partnership's debt) - essentially, losing OPM - thus seems entirely plausible.
 
Harry_Bosch said:
Cheerful Charlie said:
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.
Click to expand...

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!
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Wait a sec, I just read that story and apparently he paid the guy about 1/6 of the award money... but to cherry top it... Trump paid it out of the Trump Foundation.

Interesting that they created a prize that couldn't be won, by making it a 150 yd minimum shot and setting the tees so the distance would be short.
 
What is frightening about believing that only making money counts is to realise just how much Trump can make by selling our any country stupid enough to make him Head of State.
 
iolo said:
What is frightening about believing that only making money counts is to realise just how much Trump can make by selling our any country stupid enough to make him Head of State.
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He sees a fellow bully in Putin and so wants to get chummy. But the bigger draw is he wants to make a lot of money there.
 
Trump says he knows the tax code better than almost anyone else. I wish someone would ask him if he does his taxes himself or does he hire others to do that for him. I haven't been able to find a good image of his tax forms to determine who actually prepared those form. I believe the preparer has to place their name on the form too. Or am I mistaken?
 
dismal said:
Loren Pechtel said:
Isn't this the debt he sold to Trump Hotels as part of selling the bleeding hotels?
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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.
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From other discussions on this I've learned that people in his sort of position mark-to-market their trading portfolio every year--gains/losses are triggered even without selling it. Two of his hotels were bleeding badly--the source of the loss. However, he transferred ownership to Trump Hotels which then tanked. Somehow I don't think the sale price was honest.
 
ZiprHead said:
Trump says he knows the tax code better than almost anyone else. I wish someone would ask him if he does his taxes himself or does he hire others to do that for him. I haven't been able to find a good image of his tax forms to determine who actually prepared those form. I believe the preparer has to place their name on the form too. Or am I mistaken?
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The preparer has to sign if the preparer is paid to prepare the return, or a portion of the return.

Given Trump's history of withholding payment for work he deems unsatisfactory, perhaps his is the only name on it :cheeky:
 
dismal said:
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.
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Simplistically inaccurate.

Huffington Post had an interesting article on this topic:

The large loss apparently relates to Trump’s sale, in 1995, of New York’s legendary Plaza Hotel to Saudi and Asian investors. Trump acquired the hotel in 1988 for $400 million. He sold it in 1995 for $325 million.
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Sounds like a $75 million loss, right? Except:

As it happens, Trump took out loans against The Plaza to purchase the Eastern Air Lines Shuttle (renamed Trump Shuttle) and to finance the construction of the Taj Mahal casino in Atlantic City.

Indeed, the 1995 purchasers of The Plaza seem to have assumed as much as $440 million in debt along with their purchase at $325 million, making the total purchase price closer to a $765 million value.
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In other articles, there are discussions about him claiming losses on bad debt even though the lenders discounted/forgave some/all of the debt, in which case he should have declared the forgiven amount as income - he didn't.

There is also depreciation - a great way to generate paper losses.

And there is this:

There is also the question of Mr. Trump’s debt. Mr. Trump personally guaranteed $832 million of debt related to his casinos and other assets. Under tax code provisions available to real estate developers, he could take the full amount as a deduction even if he didn’t invest a dime of his own money.
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http://www.nytimes.com/2016/10/03/b...e-tax-code-into-a-giant-tax-shelter.html?_r=0

This is a really good and rather complicated article on the same topic: http://www.thedailybeast.com/articl...s-is-how-trump-lost-916m-and-avoided-tax.html

In short, as the HuffPo article concludes:

So it appears that Donald Trump lost nearly a billion dollars by buying, mortgaging and selling a hotel he didn’t invest in and didn’t really own.
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RavenSky said:
Simplistically inaccurate.

Huffington Post had an interesting article on this topic:

The large loss apparently relates to Trump’s sale, in 1995, of New York’s legendary Plaza Hotel to Saudi and Asian investors. Trump acquired the hotel in 1988 for $400 million. He sold it in 1995 for $325 million.
Click to expand...

Sounds like a $75 million loss, right? Except:

As it happens, Trump took out loans against The Plaza to purchase the Eastern Air Lines Shuttle (renamed Trump Shuttle) and to finance the construction of the Taj Mahal casino in Atlantic City.

Indeed, the 1995 purchasers of The Plaza seem to have assumed as much as $440 million in debt along with their purchase at $325 million, making the total purchase price closer to a $765 million value.
Click to expand...

In other articles, there are discussions about him claiming losses on bad debt even though the lenders discounted/forgave some/all of the debt, in which case he should have declared the forgiven amount as income - he didn't.

There is also depreciation - a great way to generate paper losses.

This is a really good and rather complicated article on the same topic: http://www.thedailybeast.com/articl...s-is-how-trump-lost-916m-and-avoided-tax.html

In short, as the HuffPo article concludes:

So it appears that Donald Trump lost nearly a billion dollars by buying, mortgaging and selling a hotel he didn’t invest in and didn’t really own.
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Ahem.

Someone doesn't know what they're talking about.

Maybe it's best to avoid relying on tax advice from "political satirists"
 
ZiprHead said:
Trump says he knows the tax code better than almost anyone else. I wish someone would ask him if he does his taxes himself or does he hire others to do that for him. I haven't been able to find a good image of his tax forms to
determine who actually prepared those form. I believe the preparer has to place their name on the form too. Or am I mistaken?
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The NY Times tracked down the guy that prepared the 1995 return. He's retired in Florida and confirmed that the filing was legit and even explained why the font on the -$900 million was strange (the tax software wouldn't take a number greater than 7 digits so he had to add the other 2 digits using a typewriter). The guy was a tax attorney who did taxes for wealthy individuals.

Edited to add:

But the breakthrough came when David traveled to Florida and tracked down Jack Mitnick, the semiretired accountant who had prepared and signed Mr. Trump’s tax returns.

Mr. Mitnick was initially reluctant to talk, but he eventually agreed to meet David in a bagel shop.

In a conversation there, Mr. Mitnick not only said the records appeared to be authentic; he also solved the mystery of the digits that did not line up. It turned out that the tax preparation software he had used did not allow him to enter a loss of nine figures. So, he recalled, he had to manually enter the first two digits, using an IBM Selectric typewriter.
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From the NY Times story: http://www.nytimes.com/2016/10/03/i...-donald-trumps-tax-records-in-my-mailbox.html
 
Malintent said:
iolo said:
Thieves don't pay tax - they pay accountants.
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just like how only guilty people exercise their 5th amendment rights, right?
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Trump is a fucking asshole. We already know several assholish things he has done in business (ignoring stiffing subcontractors). He doesn't get the benefit of the doubt here. He has earned nothing to allow anyone to give him the benefit of the doubt.

It is starting to sound like he may have broken some tax laws over the years and that is why he hasn't made his income tax forms public... that and he doesn't pay a dime in Income Tax thanks to either writing off losses or making with depreciation.
 
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