When asked if he used a $915.7 million loss in 1995 to avoid paying personal federal income taxes, Trump responded: "Of course I did. Of course I did. ... A lot of my write-off was depreciation." He added: "I pay tax and I pay federal tax too. But I have a write-off; a lot of it is depreciation, which is a wonderful charge. I love depreciation."
What sets Trump apart, however, is that not only did he claim massive, consistent losses, posting a negative adjusted gross income every year from 1985 to 1994, he did so with other people's money. By the mid-1990s, Trump had amassed millions of dollars in personal debt.
He also financed an Atlantic City casino through a bond offering that raised hundreds of millions from the public.
"Depreciation for buildings that are not suffering wear and tear, that is a generous tax benefit, every developer gets that," says Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. "But taking deductions on other people's money, that goes beyond what other real estate developers would do."
Taxpayers don't recognize income when they borrow money. But if the borrower is forgiven some or all of the debt, they need to report the difference as taxable income.
Trump seems to have aggressively worked to avoid reporting taxable income after restructuring debts, says Rosenthal.
By deducting other people's money and not offsetting those deductions at the time his debts were restructured, Rosenthal says, Trump was able to avoid paying taxes by using millions of dollars of net operating losses over several years to soak up future profits -- if there were any.
"He is misdirecting the public by focusing on deductions," says Rosenthal. "Sure, he took deductions. They were probably lawful. But he borrowed money to take those deductions. When loans were forgiven, he never picked up any income."
A question remains about the degree to which he took losses to take advantage of tax breaks. Are year over year losses typical?
"It's only typical if you're a big loser," says Rosenthal.
https://us.cnn.com/2019/05/08/politics/ ... index.htmlAny damn fool can navigate the world sober. It takes a really good sailor to do it drunk
