David Barstow, Susanne Craig, Russ Buettner and Megan Twohey, Donald Trump Tax Records Show He Could Have Avoided Taxes for Nearly Two Decades, The Times Found. The New York Times, 1 October 2016. ”
Donald J. Trump declared a $916 million loss on his 1995 income tax returns, a tax deduction so substantial it could have allowed him to legally avoid paying any federal income taxes for up to 18 years, records obtained by The New York Times show. The 1995 tax records, never before disclosed, reveal the extraordinary tax benefits that Mr. Trump, the Republican presidential nominee, derived from the financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan.”
Mr. Trump’s refusal to make his tax returns public — breaking with decades of tradition in presidential contests — has emerged as a central issue in the campaign, with a majority of voters saying he should release them. Mr. Trump has declined to do so, and has said he is being audited by the Internal Revenue Service.
At last Monday’s presidential debate [26 September 2016], when Hillary Clinton suggested Mr. Trump was refusing to release his tax returns so voters would not know “he’s paid nothing in federal taxes,” and when she also pointed out that Mr. Trump had once revealed to casino regulators that he paid no federal income taxes in the late 1970s, Mr. Trump retorted, “That makes me smart.”…
On Wednesday [28 September 2016], The Times presented the tax documents to Jack Mitnick, a lawyer and certified public accountant who handled Mr. Trump’s tax matters for more than 30 years, until 1996. Mr. Mitnick was listed as the preparer on the New Jersey tax form.
Mr. Mitnick, 80, now semiretired and living in Florida, said that while he no longer had access to Mr. Trump’s original returns, the documents appeared to be authentic copies of portions of Mr. Trump’s 1995 tax returns. Mr. Mitnick said the signature on the tax preparer line of the New Jersey tax form was his….
…[F]ragmentary as they are, the documents nonetheless provide new insight into Mr. Trump’s finances, a subject of intense scrutiny given Mr. Trump’s emphasis on his business record during the presidential campaign….
…[T]he most important revelation from the 1995 tax documents is just how much Mr. Trump may have benefited from a tax provision that is particularly prized by America’s dynastic families, which, like the Trumps, hold their wealth inside byzantine networks of partnerships, limited liability companies and S corporations.
The provision, known as net operating loss, or N.O.L., allows a dizzying array of deductions, business expenses, real estate depreciation, losses from the sale of business assets and even operating losses to flow from the balance sheets of those partnerships, limited liability companies and S corporations onto the personal tax returns of men like Mr. Trump. In turn, those losses can be used to cancel out an equivalent amount of taxable income from, say, book royalties or branding deals.
Better still, if the losses are big enough, they can cancel out taxable income earned in other years. Under I.R.S. rules in 1995, net operating losses could be used to wipe out taxable income earned in the three years before and the 15 years after the loss.
Related:
Democracy Now!, Does Donald Trump Pay Taxes? Records Given to NYT Show How He May Have Avoided Taxes for 18 Years. Guests are David Barstow and David Cay Johnston. 4 October 2016. “With just over a month until Election Day, The New York Times has dropped a bombshell report that suggests Republican presidential nominee Donald Trump may have avoided paying any federal income taxes for 18 years. Trump’s campaign has not challenged the authenticity of the leaked tax documents used in the story. We get the details from three-time Pulitzer Prize-winning reporter David Barstow, who led the Times’ investigation, and David Cay Johnston, another Pulitzer Prize-winning investigative reporter and author of the new biography, “The Making of Donald Trump.””