Paul L. Caron

Wednesday, March 15, 2017

Donald Trump's 2005 Tax Return (Form 1040)

Trump 2005 Tax Return (Clip)


Adam Chodorow (Arizona State), The Sliver of Trump’s Tax Return That MSNBC Obtained Tells Us Almost Nothing About His Finances. Demand More.:

On Tuesday evening, MSNBC began to tout what seemed to be a major scoop: It had a Trump tax return. The investigative journalist David Cay Johnston had received documents in the mail, and Rachel Maddow would tell all at the appointed hour. A previous leak during the campaign, to the New York Times, suggested that Trump had taken a $1 billion tax loss in the 1990s under circumstances that suggested aggressive tax planning at the best and flat-out cheating at the worst. However, we didn’t have the full returns to figure out what had actually happened.

Would this be the moment that we finally learned about Trump’s dealings with Russians, which might explain his solicitude to Vladimir Putin and Russian interests? Would we discover that, contrary to his claims, Trump has made very little in income or paid no income tax? After all, there must be some reason he refused to release his returns. Here, it was tempting to hope, was the moment it might all become clear.

Sadly, what Johnston received was not actually a complete copy of Trump’s tax returns, but rather his two-page Form 1040 from 2005. This is still big news in that we now know more than we did—assuming it is authentic, which the White House seemed to confirm in a statement Tuesday night—but it answers precious few of the questions many people have.

So, what did we learn? For one thing, we learned that Trump actually has earned substantial amounts over the years. Only about $100 million of the nearly $1 billion in losses from the early 1990s was still available in 2005, meaning Trump must have earned about $$900 million (about $81 million per year) in the intervening years, assuming no additional losses. Based on this slice of the return, we can rule out the theory that, at least up until 2005, Trump wanted to obscure his income because it was far less than he would otherwise have us believe. Of course, he likely paid precious little in taxes on that income because of the aforementioned losses.

We also now know that he has actually paid some taxes, contrary to some speculation (speculation he has only fueled by refusing to release his returns). We learned he would have would have owed only about $5 million in taxes on about $150 million in income (about 3 percent) but for the Alternative Minimum Tax (or AMT).  As it was, he paid about $36 million in income taxes, representing a rate of about 25 percent, far lower than the regular statutory rate. This might help explain his proposal to eliminate the AMT. ...

Tuesday’s leak is certainly a step in the right direction for those interested in transparency and the important norm that presidents should make clear to the American people where their interests lie so that we can evaluate their motives. Nonetheless, it falls far short of what one might hope for. The leak simply reinforces Trump’s claim that he has made a lot of money without answering any of the questions about his financial dealings and potential conflicts of interest.

Tax | Permalink



Is it possible for you to write any number of words on this blog without conspicuously avoiding the issue at hand or direct questions related thereto? I've observed that MO of yours for years, literally. Never mind, I forgot I was talking to a career lawyer...

Posted by: MM | Mar 20, 2017 8:55:17 AM

Mr. MM: "That's a great excuse for anybody who committed a felony with regard to tax return disclosures." Yes, it is. Thank you. Just as an aside, is it possible for you to write more than 50 words without a personal attack?

Posted by: Publius Novus | Mar 18, 2017 6:32:46 PM

Real class, David Cay Johnston.


After the host-anchor [on MSNBC's “The Last Word With Lawrence O’ Donnell”] raised the issue of the Trumps listing wages and salary income on their 2005 tax return, the subject of an epic-fail NBC expose, Johnston replied “(Melania) worked as a model.”

“Right,” O’Donnell replied. “She’s on here, but she was never at that league.”

“She did do very sneaky porn,” hissed Johnson before being interrupted.

Posted by: Woody | Mar 17, 2017 12:34:16 PM


That's a great excuse for anybody who committed a felony with regard to tax return disclosures. Perhaps Mr. Johnson is engaged in CYA, and talking out of both sides of his mouth. Here he says "clearly he [Trump] didn't leak":

I thought you Democratic hacks were all about facts, logic, and evidence? Sorely lacking, but I'm not surprised...

Posted by: MM | Mar 17, 2017 10:33:21 AM

Mr. MM: “President Donald Trump may have leaked his own 2005 tax return, according to the Pulitzer Prize-winning investigative reporter David Cay Johnston.” CNBC interview, Mr. 15, 2017 @ NB: Mr. Trump’s denial that he leaked his own return is worth about as much as his promise that he would release his tax returns to the public.

Posted by: Publius Novus | Mar 17, 2017 7:31:56 AM

Whatever you may think of President Trump, the media leaking people's tax returns without their consent sets a very troubling precedent. Voters were willing to elect him without seeing his returns, and there's no law mandating public disclosure--to the contrary, there are laws making leaks illegal.

And his wife, whose name and information also appear on the return, isn't even a public official.

Posted by: privacy | Mar 16, 2017 4:56:11 PM


Like it or not, the White House denied that the President or anyone else authorized the disclosure. Mr. Johnson said in an interview he didn't think Trump leaked the pages, which were stamped "client copy".

So, in the absence of evidence of authorization by the tax filer, what is the penalty under 7213 with respect to the press?

Posted by: MM | Mar 16, 2017 9:19:15 AM

Mr. MM: You have jumped to an unwarranted conclusion. There are several other possibilities. First, there is speculation that Mr. Trump himself, or someone working on his behalf (I doubt he can run a 21st Century copier), sent the document to Mr. Johnston. That would not trigger 26 U.S.C. §§ 6103 or 7213. Likewise, if Mr. Trump had provided a copy of his return to a bank or other potential creditor as part of a loan application process, that would not trigger §§ 6103 or 7213. Third, Mr. Trump’s filings with the NJ casino regulators, as well as numerous regulatory filings with foreign countries where he has built, attempted to build, or branded hotels could be a source if such filing contained taxpayer-supplied tax return copies. None of these possibilities would trigger application of §§ 6103, 7213, or 7216.

Posted by: Publius Novus | Mar 16, 2017 7:48:45 AM

After his $103MM of NOL, and his itemized deductions, Trump had $31.5MM of taxable income and owed $38MM of tax.

Posted by: Kneave Riggall | Mar 15, 2017 9:24:30 PM

While it's pleasing to see that the President paid a high effective tax rate and took all legal deductions he could 10 years ago, it does beg the question: As various high profile members of the media have publically asked that the President's tax returns be leaked, a felony absent permission of the tax filer, what might be the penalty for publishing such materials?

26 U.S. Code § 7213 Unauthorized disclosure of information
(3) Other persons: "It shall be unlawful for any person to whom any return or return information (as defined in section 6103(b)) is disclosed in a manner unauthorized by this title thereafter willfully to print or publish in any manner not provided by law any such return or return information. Any violation of this paragraph shall be a felony punishable by a fine in any amount not exceeding $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution."

I'm no lawyer, but either the statute is an unconstitutional violation of freedom of the press, though there's no prior restraint at issue since the returns were discloses, or the penalty applies to members of the press as it would to myself or any other private citizen...

Posted by: MM | Mar 15, 2017 7:12:40 PM

Seems to me highly likely that Trump himself leaked the return. Nothing negative here, a lot positive: paid $38 million in taxes, paid at 25% rate, made lots of money. What's not to like? Who, then, would be leaking this information? Has to be DJT, directly or indirectly, i.e., giving the go-ahead. Any bets?

Posted by: Gerald Scorse | Mar 15, 2017 3:39:39 PM

Most of the people Trump first met 29 years ago nobody ever heard of. Johnston is known by a small sliver of Americans who care deeply about how much tax other people pay.

Posted by: Mike Petrik | Mar 15, 2017 11:33:46 AM

Soooo the White House confirms that the tax return was real and then Donnie twits that it is "FAKE NEWS"? Alright then. Also David Cay Johnston first met Trump 29 years ago, despite Trump twitting that "nobody ever heard of" him.

Posted by: Unemployed Northeastern | Mar 15, 2017 8:21:30 AM

Eric Rasmusen -
Copyright law most definitely does not cover tax returns.

Posted by: AwesomeName | Mar 15, 2017 8:04:19 AM

David, now that tax voyeurism is the rage, how about getting someone to “leak” Nancy Pelosi's and Diane Feinstein's tax returns?

Posted by: Dale Spradling | Mar 15, 2017 6:13:11 AM

Anything available on the legality of publishing someone's tax returns? Does copyright law cover tax returns? What would damages be? Just from general interest: does copyright law allow prior restraint of journalists about to infringe it?

Posted by: Eric Rasmusen | Mar 15, 2017 5:59:57 AM

The interesting part is that he paid 34 million in tax on 46 million in AGI, for a 75% tax rate. That means that his NOL was an AMT preference item. That's a huge difference: a 100 million NOL and close to zero AMT NOL. How does that happen?

Posted by: Jpe | Mar 15, 2017 4:27:17 AM