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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, May 8, 2019

NY Times: Decade In The Red — Trump Tax Figures Show Over $1 Billion In Business Losses

New York Times Investigation: Decade in the Red: Trump Tax Figures Show Over $1 Billion in Business Losses:

Newly obtained tax information reveals that from 1985 to 1994, Donald J. Trump’s businesses were in far bleaker condition than was previously known.

The data — printouts from Mr. Trump’s official Internal Revenue Service tax transcripts, with the figures from his federal tax form, the 1040, for the years 1985 to 1994 — represents the fullest and most detailed look to date at the president’s taxes, information he has kept from public view. Though the information does not cover the tax years at the center of an escalating battle between the Trump administration and Congress, it traces the most tumultuous chapter in a long business career — an era of fevered acquisition and spectacular collapse.

The numbers show that in 1985, Mr. Trump reported losses of $46.1 million from his core businesses — largely casinos, hotels and retail space in apartment buildings. They continued to lose money every year, totaling $1.17 billion in losses for the decade.

In fact, year after year, Mr. Trump appears to have lost more money than nearly any other individual American taxpayer, The Times found when it compared his results with detailed information the I.R.S. compiles on an annual sampling of high-income earners. His core business losses in 1990 and 1991 — more than $250 million each year — were more than double those of the nearest taxpayers in the I.R.S. information for those years.

Over all, Mr. Trump lost so much money that he was able to avoid paying income taxes for eight of the 10 years. It is not known whether the I.R.S. later required changes after audits.

New York Times, 5 Takeaways From 10 Years of Trump Tax Figures

https://taxprof.typepad.com/taxprof_blog/2019/05/ny-times-decade-in-the-red-trump-tax-figures-show-over-1-billion-in-business-losses.html

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Comments

Are these real losses, or paper losses solely for tax purposes? Depreciation could fall into the latter category.

Posted by: John Saunders | May 8, 2019 6:47:44 AM

John: "Are these real losses, or paper losses solely for tax purposes?"

I had the same question. Unfortunately, the Grey Lady doesn't provide the facts and figures to answer that. Here's the best they can come up with in the article:

"Some fraction of that ocean of red ink represented depreciation on Mr. Trump’s real estate."

"Depreciation cannot account for the hundreds of millions of dollars in losses Mr. Trump declared on his taxes."

Neither of the articles' authors are tax accountants, nor did they cite any for analysis.

In short, you have to take what they wrote about that on complete faith, because they did not provide the depreciation expense figures.

Posted by: MM | May 8, 2019 7:15:09 PM

So what?

Posted by: Mike Livingston | May 8, 2019 11:08:26 PM

John Saunders is right. To encourage people to 'take a chance' with real estate there are a tax laws that bestow advantages on losses in the field. Some are real. Some are mere paper losses. The NYT chose to portray Trump as a poor businessman. I suspect the same data could have been used to show him as an exceptionally clever one.

Posted by: Michael W. Perry | May 9, 2019 4:44:30 AM

Gosh, I never knew that losing more than a billion dollars over a decade and ultimately declaring business bankruptcy six times are the hallmarks of "an exceptionally clever [businessman]." Here I was thinking the goal of business was to make money and not go bust. Thanks, alternate fact providers!

Posted by: Unemployed Northeastern | May 9, 2019 10:50:22 PM