October 4, 2016

Megan McArdle produces exactly the article I was looking for.

Thanks for writing "Trump's 1995 Return Shows Good Tax Policy at Work"!
At issue is the “net operating loss”.... When you net out your expenses against the money you took in, it turns out that you lost a bunch of money. However, in tax law, this has a special meaning, because these NOLs can be offset against money earned in other years....

Take a simple example... A meatpacking business loses a million dollars in one year, and then the next year it makes a million and a half. Without the ability to carry forward the losses from year one, then over the two years, it would pay perhaps $600,000 worth of state and federal income taxes, on $500,000 worth of actual money that it could spend to pay those taxes....

“If someone has a $20 million gain in one year and a $10 million loss in the second year, that person should be treated the same as someone who had $5 million in each of the two years,” says Alan Viard, a tax specialist at the American Enterprise Institute, who like all the other experts, seemed somewhat surprised that this was not obvious....
Unfortunately, Trump opponents — notably the New York Times (which presented the tax story as if it's a bombshell) — have been able to play on the emotions of people who don't have the sense or the patience to absorb the basics of tax policy. 

134 comments:

Birkel said...

The truth is still putting its pants on, one leg at a time.

PB said...

Facts don't matter when ideology/religion is involved.

David Begley said...

All of this is too complicated for many people. It sounds "unfair."

The NYT and the Clinton campaign know this. So they play the tax return card because they have nothing else.

rhhardin said...

The NYT target is soap opera women, not accountants.

The story will stay in the media for days, and the accusations Trump has to answer will stay in the media for days.

Soap opera women are used as leverage for the story gatekeeper function.

Karen of Texas said...

This is obvious to anyone with half a brain.

What is at play here, as usual, is the haves verses the have nots. No one who is a "have not progressive" - useful idiots if the progressive haves - sees anything other than the word millions - whether he made them or lost them they don't care. Envy they name is have not.

This entire election is about those who don't have any sense. Screw any patience. They don't *want* to "absorb the basics of tax policy".

Psota said...

This is what I don't like about these kinds of tax "scandals." Hillary and the Dems know that what Trump did was absolutely legal and the smart thing to do. they would do the same in his position. But they go out and put on this political show of outrage for the rubes in their voting blocs.

Meanwhile, no realizes that - if taxes are going to go up on the Evil Rich - they are going to go up for you too.

Brando said...

McArdle as usual makes a solid rational point. There is no question you should be able to carry forward losses from previous years--I did it some years back with a stock I lost money on and took losses for a number of years going forward. The alternative would be, as she notes, something crazy like over 100% tax liability in some years.

I'm not sure there's any real revelation from this leak--I thought it was common knowledge that Trump took a massive loss in the '90s and of course could deduct that loss in later years. Did anybody really think he got out of that unscathed?

The only surprising thing is how inept some of his surrogates have been in handling this. Having your accountants take a common (and necessary) deduction after you post a big loss is not "genius" (hey Rudy, you might want to check with your own accountants if you're so easily impressed) and certainly not something he "owed" to his investors (wasn't this his personal income taxes? What investors own shares of Trump the individual?). Perhaps he should hire McArdle to do his TV appearances instead.

Achilles said...

Also note the super wealthy who use the code to avoid taxes support Hillary.

rehajm said...

What liberals will hear: bla bla bla bla bla bla....Trump cheated!

What really makes me cringe is when supposedly literate financial reporters cannot recognize the difference between a 'deduction' and a 'loophole'.

Dust Bunny Queen said...

play on the emotions of people who don't have the sense or the patience to absorb the basics of tax policy.

Absolutely. People do not have the barest glimmer of understanding our convoluted and arcane tax policy. The media can easily prey on this lack of understanding and spread lies and distortions.

The claim that he hasn't paid "income tax" is the one they use because that is the ONLY tax that most people have to deal with in their personal lives. I don't want to say that the people are dumb, but I will use Gruber's (Obamacare architect) words Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter

However, Trump has paid (probably) millions in other taxes through his various corporations and sub businesses. Some of those corporations while having his name on them are not exclusively owned by Trump.

If I were Trump (I pause to imagine this) I would compile a tally of ALL the taxes that I have paid since 1995 to current date. Property taxes, corporate taxes, local and state taxes, sales taxes paid on purchases, unemployment taxes, company share of FICA for employees. Throw in some of the fees, permits, licenses etc entailed with building and expanding properties. That amount would stagger the mind.

That would be a great move to counter the claim that Trump doesn't pay taxes. Show how much he has paid.

rhhardin said...

It's not even a tax policy thing.

It's how you actually compute income in a business that's not annual in its expenses and income.

It's the evaluation that an investor does, for instance.

rehajm said...

Also note the super wealthy who use the code to avoid taxes support Hillary.

Also, also note the Clinton 42 1993 tax update made no attempt to alter the tax policy Trump followed in 1995.

Karen of Texas said...

While your screed against women is getting old, rhhardin, I admit to often being embarrassed by those of my gender.

In this instance, I'll lay odds that there are close to as many pussified men as soap opera women with which this very NYT tripe resonates.

Nonapod said...

I've always assumed that in large scale real estate development, you generally want to operate at a loss. You borrow a bunch to develop some big project, pay whatever expenses that are incurred, then move on to the next project and do the same thing again. The lenders eventually make their money over a long period, and you keep reporting a loss while moving up to bigger and bigger projects. It's almost like some weird pyramid scheme. I'm sure someone else could explain it better.

Nurse Rooke said...

McArdle is an admirably clear writer who helps educate me on topics that are well outside my expertise. I certainly hope she's reliable as she does so.

YoungHegelian said...

I'm sorry. Why are we even having this conversation?

If someone is so fucking ignorant of the US tax code that he/she doesn't understand carrying forward business losses, why would he/she even say anything at all? This is one of the most standard & settled items of the business tax code, and EVERY business makes use of it.

I just love how the Democrats propagate nonsense like this & talk about the Republican voters as low-information hicks. If I were the Trump campaign, at every venue, including the debates, I'd ask for a show of hands of all the people who volunteered to pay more taxes than they had to.

Brando said...

"However, Trump has paid (probably) millions in other taxes through his various corporations and sub businesses. Some of those corporations while having his name on them are not exclusively owned by Trump."

I don't think it's even relevant--let's assume that the only tax anyone paid was the federal income tax. If you took massive losses in one year, you should be able to carry your losses forward.

If it seems unfair, then maybe we should find a different way to collect revenue--VATs, sales taxes, etc.--rather than just on net income. But society decided long ago that taxes should focus more on how much people got ahead, rather than how much they use the things the taxes pay for.

coupe said...

Trump is doing the right thing.

Americans don't need to know about any candidates tax returns. I think many people don't run for public office because they are expected to share all of their private information.

I think Trump is right. There is no law for him to release his taxes in order to seek office, so fuck you all if you don't get to see his private data.

I think he is brave, and may change the future course on this invasion of privacy.

I for one don't give a shit. I also don't give a shit about the pimps at the New York paper.

Once written, twice... said...

No Ann, what outrages people is that Trump recklessly lost a billion dollars in one year alone, screwed over thousands of hard working people by not paying them, and then went on to personally amass more fortune for himself and live as high-on-the-hog as ever. The fact that he then did not pay Federal income tax for the next twenty years completes the outrage.

What he did in cheating thousands of people while personally continuing to be fabulously wealth might be legal, but people are rightfully outraged that this guy thinks he should hoodwink his way into the White House.

Birkel said...

Brando:

Trump owed a fiduciary duty to his investors. So instead of carrying bad debt on the company ledger, Trump wrote off the debt. That left him on the hook, personally, because of his personal guarantees. So by faithfully executing his fiduciary duties and protecting the interests of shareholders, he took a big personal loss.

I think that is the argument.

Matthew Sablan said...

"They would do the same in his position."

-- The NYT did use the same system, and I believe Clinton has as well.

If someone has legally reduced their taxes, I don't think it is a story. If Clinton doesn't want people to be able to pay lower taxes, come out and say it, and come out against the mortgage deduction, against student loan and charitable giving deductions.

Just pull the trigger on it so we can have a debate on how we determine what someone's fair share is.

rehajm said...

the natural business cycle of a taxpayer may exceed 12 months

Even Congress gets it.

eric said...

I don't think the target audience are people who care about his taxes. The point, I believe, was to indirectly smear Trump as dishonest. This article was posted on my Facebook last night and the comments were along the lines of, "The loss is a fake loss so he won't have to pay taxes".

The idea being that businesses don't have real loses, they make them up so they can generate more tax free income. And this is how I predict this story will morph.

Maybe one of the Clinton apologists will come along this morning and confirm this for us this morning.

Mary E. Glynn said...

Envy they name is have not.
--------------
Nope. Many of us "have nots" have a much better quality of life than the ... progressives.

What you meant was: Envy, they name is have-soooo-much but still less than the true "Haves" and without the independence and freeing lifestyle of the have-soooo-much progressives, but still want more (courtesy of the government = other taxpayers.)

Be careful you label. Often, you're only foisting your own beliefs on others.

Dust Bunny Queen said...

(wasn't this his personal income taxes? What investors own shares of Trump the individual?).

Pass through loses and pass through profits from corporations in which you have a share, partnerships where you are one of many etc, will show up as losses on your personal income tax form. WE do this ourselves being an S Corporation and having been part of a corporation with a business partner.

They had 3 whole pages of that 1995 tax form. I bet the whole package with the K1's, associated schedules for depreciation,amortization etc and the corporate tax forms would be a stack about 4 inches high. It would boggle the mind.

BUT...the American taxpayer and voter that Gruber describes hears what he wants to hear and doesn't stop to think that what he thinks he knows isn't so.

You come to see what you wanna see,
Ah, you come to see but you never come to know.
We come to see what we want to see,
Oh, we come to see, but we never come to know.

tcrosse said...

I'm not convinced that this Tax Scandal changes anybody's mind. Those who already hate Trump for any reason or no reason can use it to rationalize their Hatred. Just as those of us who don't care for HRC can find lots of reasons why.

Sydney said...

Once the government made income taxes required deductions from payroll they created a large population of voters who don't understand how taxes work, or how much they cost. When people had to pay their own taxes quarterly, it was much more obvious to them how taxable income waxed and waned and how much the government actually takes.
As a small business owner, I still have to pay my taxes each quarter. At the beginning of the year, I am given an estimate of my taxes to pay based on the prior year's income. If I make less than I did the year before, I still have to pay the higher rate, then get a refund at the end of the year. Or, if it is really bad, I can estimate what my income will be this year and pay a lower rate, but if I guess too low, I will get penalized. I don't see the problem with Trump's taxes. But if I was someone who had X amount taken out of my check every payday for taxes, I would probably be prone to believe the media's false claims.

Mary E. Glynn said...

I don't want to say that the people are dumb, but I will use Gruber's (Obamacare architect) words Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter
----------------

Personally, I don't think voters are as dumb as some of you women think...

Watch your mouths, or say that you are speaking of the people in your own circles and don't denigrate so broadly?

James Graham said...

There are people at the New York Times who are mortified by the paper's "reporting."

Unfortunately they work in the accounting office and have no influence on the paper's content.

Mary E. Glynn said...

BUT...the American taxpayer and voter that Gruber describes hears what he wants to hear and doesn't stop to think that what he thinks he knows isn't so.
--------------

Gruber was being awfully condescending to the American voter.

Do you think there is much validity in his statement, seriously?

Don't you think that the American majority was correct in rejecting all the false promises of the ACA? "We're not as Dumb as You Thinks We Is..."

and Jon Gruber is the ultimately dummy, who got caught talking trash about the players on his own team... HTH!

Ron Winkleheimer said...

Unfortunately, Trump opponents — notably the New York Times (which presented the tax story as if it's a bombshell) — have been about to play on the emotions of people who don't have the sense or the patience to absorb the basics of tax policy.

Saw headlines to several articles touting that 79% of Trump's backers say that paying taxes is a civic duty. So what? Of course paying your taxes is a civic duty, but nobody pays more than they owe if they can help it. I still think this tax stuff is a big nothing burger. People against Trump are going to cease on it, people who are for Trump think its just confirmation that the MSM is biased and dishonest and the people who don't follow politics closely are going to go along with whatever their friends tell them.

Brando said...

"Trump owed a fiduciary duty to his investors. So instead of carrying bad debt on the company ledger, Trump wrote off the debt. That left him on the hook, personally, because of his personal guarantees. So by faithfully executing his fiduciary duties and protecting the interests of shareholders, he took a big personal loss."

So he transferred his business' loss to his personal account and took that loss? If that's the case he ought to provide evidence of that. Or at least one of the investors could speak up about it in his defense. It'd certainly be better than a lot of what Rudy is doing. (If he's auditioning for campaign spokesman, he's hardly doing better than Pierson).

Of course, the clear response is a lot simpler--took big losses and clawed back over many years, and yes it's normal for people and businesses to carry forward losses because the alternative is fewer businesses being able to operate (some businesses simply can't keep their business cycle within 12 months). No news here, back to campaign issues.

But just as 2012 was the year we learned about strapping dogs to cars, this is the year we're learning about Trump's business background.

rhhardin said...

While your screed against women is getting old, rhhardin, I admit to often being embarrassed by those of my gender.

Hey, only 40% of women are soap opera women.

Unfortunately it's a big voting bloc worth courting.

The 60% of women who vote like men ought to see the advantage in doing away with the women's vote entirely, just to get rid of that bloc.

My compromise suggestion is getting a "Women, you have to up your game" message as the primary one in feminism.

It's like flying in clouds. Discount your emotions and go with what the logical instruments say.

Mary E. Glynn said...

There are people at the New York Times who are mortified by the paper's "reporting."
---------------

LOL -- what, you mean hard-hitting reporting these days isn't waking up to some "anonymously submitted" documents in your mailbox, and putting your own adversarial spin on the issue?

That Journ-O-lism 101!

Chuck said...

And if this all made sense, Professor Althouse, why not release all the returns for all the years and make it part of the campaign early -- like early 2015-early --, so that it is not left as an October surprise just as absentee ballots are going out and early voting begins all across the country?

traditionalguy said...

The real estate losses in the 1989 to 1992 crash were unavoidable for any developer who started his $100 million dollar project before the downturn hit. When the prices have not hit bottom and started back up, real estate cannot be sold except at 10 cents on the dollar.

Trump's guts and acumen was in talking his Banks into writing off his debt after work out Bankruptcy delayed foreclosure done as a package deal with the Banks and buyers. That created the losses he used to shelter his income in the late 1990s, saving $300 million in future taxes.

The Democrat owned media are discussing Trump as a loser of money. No mention is made of the tax paid on developed real estate ad valorem or the sales taxes paid on all building materials or the withholding taxes paid on employees wages that these High Risk projects generated.

bagoh20 said...

There are two kinds of critics of this fact in Trumps returns: 1) People who have done the same thing, but hide the fact or lie about, and 2) People who don't risk money or contribute much to the economy and believe that's a good thing.

If Trump did not take advantage of the tax rule, it would have been disastrous to his employees and probably thousands of associated people who worked for his vendors and those who benefited from his projects and their economic activity. It's exactly what Hillary attacks: "trickle down economics", or as it's been known for centuries: plain old "economics".

Birkel said...

No, Brando. There was no transfer of losses in any meaningful sense. These are arms-length transactions.

As always, I'm not here to educate anybody.

HoodlumDoodlum said...

Too late--the story's out, the narrative is set. Done. Why should the actual facts matter--the Media isn't going to let the facts and that very obvious point actually get out there.

Professor Althouse: I would like to see you address the NY Attorney General's actions against the Trump Foundation. I would specifically like to see you address that with respect to your position cheering the DOJ & FBI not taking action against Hillary Clinton--if I recall correctly you said you were glad they didn't since doing so would have unduly influenced a democratic election. I pointed out that the Democrats rarely seem to engage in that kind of restraint (refusing to use the power of the State to influence elections) any time they had the chance. The NY Attorney Gen's actions seem to support my position. The DOJ & FBI taking action against Clinton would have bothered you--does the NY Attorney Gen taking action against Trump bother you?

YoungHegelian said...

No Ann, what outrages people is that Trump recklessly lost a billion dollars in one year alone, screwed over thousands of hard working people by not paying them

Oh, bullshit, Written.

If the problem is that Trump stiffed workers/vendors than make the case that Trump stiffed people. Don't muddy the waters by talking about him taking full legal advantage of settled tax law.

Even some of those "got stiffed" stories smell. One was on NPR the other day, about the son of a guy who sold some Trump outfit long distance telephone services back when there were long distance "resellers" after the break-up of the Bells. A lot of those guys got stiffed because they massively over-promised & under-delivered, which is why none of them exist anymore, even the big guys like MCI.

bagoh20 said...

I bet if it was all added up, Trump's payment of taxes and fees of all kinds far outstrips what Hillary has contributed to the government in her life, and trump was never on the federal public payroll sucking it back out.

HoodlumDoodlum said...

One part that cracks me up is that people are treating the fact that Trump lost $900M in the 90s as some sort of news--some kind of hidden fact that the Media has bravely uncovered.
Trump talked about it! He has a book called "The Art of the Comeback." What does he talk about coming back from? The giant losses from the real estate bust in the 90s!
There is a passage in that book where he compares himself to a bum on the street and says that the bum is richer since Trump himself has a net worth of negative $900M.

But yeah, great scoop you Media assholes.

Brando said...

"Pass through loses and pass through profits from corporations in which you have a share, partnerships where you are one of many etc, will show up as losses on your personal income tax form. WE do this ourselves being an S Corporation and having been part of a corporation with a business partner."

Ok, that makes sense--though I'd assume this would show up on the business' balance sheet, or maybe some of those investors this helped would be able to speak up.

"And if this all made sense, Professor Althouse, why not release all the returns for all the years and make it part of the campaign early -- like early 2015-early --, so that it is not left as an October surprise just as absentee ballots are going out and early voting begins all across the country?"

That's true--any way you cut it, this is campaign malpractice. I don't think it'll hurt much with votes, but another week off message with Clinton slightly ahead? I can certainly think of better ways this could have been released, much earlier, with ready defenses set up. This doesn't strike me as "brilliant master plan".

The leak though--where did that come from?

rhhardin said...

It's not true that nobody pays more than they have to. It may be too tedious or difficult to figure out a tax basis for a sold asset, so you just write it in as zero and pay the extra tax.

AllenS said...

To get a better understanding of this non-issue about Trump, this is a must read. It's makes the New York Times look like they don't have a clue what they once thought about Trump.

Birkel said...

Too true, HoodlumDoodlum.

Trump recounted a conversation he had with then-wife (I think.) Marla Maples about the beggar in his own book. News from 20 years ago that was self-reported is not new in any sense of the word.

Brando said...

"One part that cracks me up is that people are treating the fact that Trump lost $900M in the 90s as some sort of news--some kind of hidden fact that the Media has bravely uncovered."

I'm still not seeing where any part of this is news. If this had happened to Clinton, they would have been able to say "it's old news!" and unlike the usual scandal, that'd be correct.

Maybe the VP debate will take the media to a new topic.

Achilles said...

"What he did in cheating thousands of people while personally continuing to be fabulously wealth might be legal, but people are rightfully outraged that this guy thinks he should hoodwink his way into the White House."

I had a business go out of business a year ago. We payed hundreds of thousands in taxes but were still losing money. We laid off around 20 people. The government that taxed us out of business didn't lay anyone off. We put in our own capital to start a business and created some jobs just like trump did. Neither of us screwed anyone. We did infinitely more than Hillary did to help people.

One thing I guarantee is that Trump payed off outstanding payroll debts. That is the first thing that gets paid off. But you are ignorant of even this basic level knowledge. You are exactly the kind of idiot that supports Hillary Clinton.

Hillary Clinton has become fabulously wealthy while producing what exactly? The only thing Clinton has produced is corruption. Only a fucking idiot like once written could post something this stupid.

Birkel said...

Achilles:

I disagree. Many of the resident Collectivists could have written something equally or even more stupid that did "once written, twice..."

HoodlumDoodlum said...

Related: NPR this morning, right? Spotlight on Arizona. News mentions it's typically a red state, might be a toss up this year. During my commute I hear several segments including 3 interviewees. Toss up state, remember; normally votes Republican.

Interview 1: a guy from a Navajo reservation. Bernie supporter, willing to vote for Hillary, hates Trump. Says something like "no one I know is voting for Trump." In AZ, remember, but ok.

Interview 2: Rich country-club married couple, run some kind of charity. Democrats, of course--the only Democrats in their social circle apparently. Describe themselves as moderate, think Trump is horrible, would be a disaster, etc. Supporting Hillary; lots of talking down Trump. Wrinkle is the guy won't take the reporter's bait on "Trump's tax problem," says that's normal (although maybe not ethical--which is nonsense). Attacks Trump for stiffing employees & contractors...lots of attacking Trump.

Interview 3: Very Catholic Hispanic woman, younger. Pro-life/abortion issue is big so she can't support Hillary, although no actual criticism of Hillary or Dems (just "so she's out of the question"). Big qualms about Trump, says they're both bad candidates, can't believe that's the choice, etc. Hopeful that the VP debate will give her a reason to vote Republican. Some attacks on Trump, no praise for Hillary.

And there you have it--that's what NPR considers a representative sample of the AZ electorate. In the total of, say 6-9 minutes of interview time I'll bet 4-7 of those minutes were spent attacking Trump. They didn't bother to find or interview any actual Trump supporters even though based not the polls roughly half of that state's population thinks they'll vote for Trump.

What bias? Fuck the Media.

khesanh0802 said...

The simple question which I would like answered is how the Clinton's were paid for their various speeches etc. Someone suggested that they directed payment be made to the Clinton Crime Foundation. Although I imagine that this would be legal ( though I don't know for sure) it certainly smells of using the tax law to avoid paying taxes.

khesanh0802 said...

@ Hoodlum Doodlum Seriously? You are still listening to NPR? Silence is much better for you than having your blood pressure raised to the ceiling by that crew.

JTR said...

Tax newbies. Yeah, but let's not pretend this isn't abused. It is. It's not hard to book losses that aren't real, manipulating real estate investments and the like, and pay close to nothing in taxes despite having tons of money. Easy.

Mac McConnell said...

Trump describes his $900+ million loss in his book "Art Of The Come Back". In it he describes a conversation he had with Marla while walking in NY. Basically he points out a street beggar and tells Marla the beggar is $900+ million richer than him, Trump then says that beggar reminds him he must get back to work.

I've done countless NOLs for small businesses, it saves businesses and families. Almost all the "journalist" in the mainstream media describing NOLs, either show their ignorance or are complete paretican hacks.

Ron Winkleheimer said...

One part that cracks me up is that people are treating the fact that Trump lost $900M in the 90s as some sort of news--some kind of hidden fact that the Media has bravely uncovered.

As I recall there were numerous articles in the media about how broke Trump was at the time. I recall something about him and whichever wife he had at the time being spotted shopping in K-mart or some other big box store. I also recall coverage of whoever was advising him at the time using the "If you own the bank a million dollars you have a problem, if you owe the bank one hundred million dollars the bank has a problem" strategy to keep the creditors from stripping Trump of his assets, thus Trump got to keep his outrageously ostentatious yacht.

Dust Bunny Queen said...

Ok, that makes sense--though I'd assume this would show up on the business' balance sheet,

Brando. Each corporate entity, partnership, LLC etc will have a tax form where they will show the income and expenses (this is a simplified explanation) and also then issue K1s or other forms for each investor or partner to show their proportional share of the net losses or net profits. AKA a 5% owner will get 5% of the loss or profit. The profit shows as "income" and the losses can be deducted against income in the current year and if there are more losses than income in that year the remaining losses can be carried forward against future income for a designated period of time.

Ex You have total actual income of $10,000 for the year from whatever sources (say I sold some property) and one or several of your businesses have loses that your share totals $60,000. Man that year really sucked!!!!

You get to wipe out the $10,000 for that year and then carry forward the $50,000 left for the next several years. So next year you sold some more property and yahoo! the property prices went up and your total profit/income was $100,000. Yay. But you still have that loss so you can write off $50,000 on that year.

The cattle industry is famous for doing this type of NOL carry forward because of the wild fluctuations in costs and income in the cattle markets. SOP for many many businesses.

I sincerely doubt that Trump is operating as anything OTHER than a structured business (Corp or other) and would be gobsmacked if he has anything as a private Schedule C/Sole Proprietor.

His total tax returns for all of those years would probably create a stack several FEET high and take a squad of CPAs to forensically go through it months of time. I would love to see that!

dbp said...

"...who like all the other experts, seemed somewhat surprised that this was not obvious..."

Obama's reelection is a testament to the majority of Americans who cannot see the obvious.

Left Bank of the Charles said...

Was this what made the article exactly what you were looking for: "the tax law surrounding real estate development is an arcane and wonderful thing, and it offers more scope for, let us say, artistic interpretation of your income picture than most industries."

Where Trump's case departs from your simple example is that the $916 million he lost is likely to have been mostly borrowed money not his own money. In other words, Trump got a tax deduction for losing other people's money. His lenders probably got a tax deduction too, when they wrote down Trump's debt to what was actually collectible.

Now there may have been a day of tax reckoning for Trump if the lenders eventually forgave the debt (as opposed to merely writing it down on their tax books), but we don't know that from the tax records we have seen.

Matthew Sablan said...

"It's not hard to book losses that aren't real, manipulating real estate investments and the like, and pay close to nothing in taxes despite having tons of money"

-- Good. If it is so easy, prove he did it. I'm sick of innuendo and accusations being used against Republican politicians that ultimately turn out to be false. Stephens, the VA Governor, Walker, Perry, Romney, McCain -- all were accused of something illegal or unethical that ultimately turned out to be not true, and only existed due to Democrats lying/making things up.

Put up or shut up. I don't like Trump, but I don't like him for verifiable reasons, not made up reasons.

rehajm said...

The leak though--where did that come from?

Top candidates where old tax records could be found:

Federal or State tax authority.

CPA firm.

State gaming commission.

Lending institution where Trump applied for financing.

Trump personal offices.

Someone(s) with political motivation needed to dig them up and coordinate with NYT so they were handled 'properly'.

I'd love to know how much work the NYT did with the tipster before they showed up in the reporter's inbox.








Original Mike said...

Blogger Once written, twice... said..."The fact that he then did not pay Federal income tax for the next twenty years completes the outrage."

Huh???? Where'd you get this "fact"?

Ron Winkleheimer said...

As I recall, the advisor pointed out to the creditors that it was highly unlikely anyone would pay anything close to what it would take to recoup the cost of the yacht and if they took it then they would be liable for the considerable costs of maintaining it, or they could let Trump keep it and let him worry about that.

Birkel said...

Left Bank of the Charles:

You have made the same mistake Brando made above. It's embarrassing. Stop it.

Birches said...

AZ is not going to be a toss up. That is pollster and media delusion. But it's fine with me if Hillary wants to waste money there.

Clayton Hennesey said...

The conventional wisdom seems to be that Hillary has simply descended from Heaven and requires neither income nor food, only occasional sips of water.

There's a very odd vacuum at present where "where has Hillary's income come from?" surely ought to be, from "parleyed $1,000 into $100,000 in the commodities market" to "received government allowance while husband was inserting cigar into intern's vagina".

Have there been any years beyond her earliest in Arkansas when she earned money by doing anything other than collecting a government check or speaking about collecting a government check?

Surely a Trump ad just listing year and source of income repeatedly would have some effect

1997, source of income:
1998, source of income:
1999, source of income:
2000, source of income:

After all, she's provided her tax returns for that purpose.

Michael K said...

I just love how the Democrats propagate nonsense like this & talk about the Republican voters as low-information hicks.

No, I think it is aimed at "undecideds" of which there are many this year. Many may be Democrats revolted at Hillary's corruption. This is an effort to show that Trump is as corrupt as she is. Most Democrats don't run businesses and have no idea of tax code complexity. They are on salary and have taxes withheld. They consider a "tax refund" as a bonanza, not something that is theirs.

"Once written..." shows the mentality of the Democrat voter. No concept of anything complex in business. Some of these people even can do calculus but can't do their taxes.

Dust Bunny Queen said...

the tax law surrounding real estate development

When you are a developer or a business in any large project where the scope of the project covers several years, the income realized may be years down the road while the expenses are immediate and real.

This is why RE developers and many other businesses with business cycles that are not based on a 12 month calendar year use the NOL rules. Each year while you are building the expenses may, and probably will, greatly exceed the income from other completed projects or leases from completed projects. THEN when you sell or lease your completed project (hopefully) you get a big payday. Against that feast and famine cycle to smooth out the years....the past losses can be used against the big payday.

Common procedures for any building project. Think about that the next time you walk through a big shopping mall, medical complex building, hospital, stay at a Marriott Hotel.

Ron Winkleheimer said...

I sometimes wonder if "Once written" is a parody account.

Matthew Sablan said...

"No, I think it is aimed at "undecideds" of which there are many this year."

-- I think it is more aimed at leaners/weak voters to turn them into strong voters. For the last several cycles, the focus has been on energizing your base while depressing the other side.

AllenS said...

Left Bank of the Charles said...
Where Trump's case departs from your simple example is that the $916 million he lost is likely to have been mostly borrowed money not his own money

Key word: "likely". Now, do you have a link to back up that statement?

Mac McConnell said...

JTR said...
"Tax newbies. Yeah, but let's not pretend this isn't abused. It is. It's not hard to book losses that aren't real, manipulating real estate investments and the like, and pay close to nothing in taxes despite having tons of money. Easy."

Yes the IRS never looks into real estate losses. It's easy to cheat, getting away with it is the hard part. It can be done, never borrow money from a bank, only take rent in cash, don't have a checking or savings account, pay all expenses in cash. Lastly don't have utilities at any of your properties, WTF!

Buy a shit load of banker boxes for your reciepts.

Birkel said...

Michael K:

Too true. Look at "Mac McConnell" above. He thinks businesses just manufacture profits and losses at a whim. He thinks the IRS would allow that to happen.

If it weren't so irredeemably partisan, the idea that businesses just scam people for money would be the most cynical thing I could possibly imagine.

Todd said...

Where are the breathless articles bemoaning that the Clinton Foundation spends such a paltry percentage of "collections" for actual charity? Where is the detailed review of the last few years of the Clinton's taxes?

Oh right, this is the Times.

Unlike the Clintons, Trump pays an army of accountants to make sure he pays as little taxes as he can, legally. Hillary just doesn't need to care cause the IRS is in her back pocket.

Birkel said...

Sorry, Mac McConnell.

I meant JTR who you quote in each of our 10:51 AM posts.

Brando said...

Dust Bunny Queen--thanks for the follow up. That may very well be what they're referring to.

And of course if I was running that campaign, I'd have preferably rolled this out months ago, but even at this late date quickly pull up someone from those entities (or even a past investor) to explain that this whole thing kept a lot of their business afloat. Right now, the media is knocking him for his company shares going from something like $35 a share to 17 cents, suggesting he got the tax benefit while the investors got screwed.

rhhardin said...

The Clinton Foundation is going to have big contributions this year owing to Hurricane Matther over Haiti, if they can find a way to make money on it.

buwaya puti said...

Its not about the words, its about the megaphone.
All democratic political rhetoric is shouting "he's poopy!" as loudly as possible, granted the words need to be changed around a bit so people still, sort of, pay a bit more attention.
The most important thing is volume.

Brando said...

""No, I think it is aimed at "undecideds" of which there are many this year."

-- I think it is more aimed at leaners/weak voters to turn them into strong voters. For the last several cycles, the focus has been on energizing your base while depressing the other side."

There aren't really a lot of true "undecideds" these days--as Matthew suggests, it's more like "weak" partisans considering not voting or going third party, and the battle now is about pulling them in and getting them to the polls.

Die hard Trumpists and Clintonites are voting no matter what. Anything that appeals to them alone won't move the needle.

buwaya puti said...

To put it another way, you all are overthinking all of this.

Mac McConnell said...

Left Bank of the Charles said...
"Where Trump's case departs from your simple example is that the $916 million he lost is likely to have been mostly borrowed money not his own money"

If a bank forgives debt, it's income to the borrower. If a bank forgives your debt on a credit card you'll pay taxes on it.

rhhardin said...

I talked to Haiti the other day, HH2AA, who seems to be a helper.

My only other Haiti contact was as my first foreign country as a kid in the early 50s, HH2OT, who was a missionary.

Apparently no regular Haitian has a radio.

Ripe for a Clinton contribution.

William said...

I'm bound to confess that I don't understand oil depreciation allowances, but this isn't a particularly arcane bit of the tax code. I have taken advantage of it, and I'm not some big time biz whiz with brilliant accountants. I don't think the law is unfair, but, if it were, shouldn't your outrage be directed against those who passed the law. Hillary was a Senator for a number of years. Why didn't she lead a crusade to repeal this law?

Diamondhead said...

"The fact that he then did not pay Federal income tax for the next twenty years completes the outrage."

Well, maybe you can be a little less outraged. You don't know he didn't pay tax for the next twenty years. That's pure speculation. All you know is a most likely carried a loss forward, which any halfway competent person would have done.

Todd said...

JTR said...

Tax newbies. Yeah, but let's not pretend this isn't abused. It is. It's not hard to book losses that aren't real, manipulating real estate investments and the like, and pay close to nothing in taxes despite having tons of money. Easy.

10/4/16, 10:36 AM


Yep, sure is. Media companies do it ALL the time. In Hollywood NO movie ever turns a profit. Same thing in the record business.

If there ever looks like there is going to be money left over, they just spend it within their own subsidiaries for highly inflated [costly] services that could have been had much more cheaply on the street.

All [currently] just a legal as what Trump's accountants do.

Dust Bunny Queen said...

This is why RE developers and many other businesses with business cycles that are not based on a 12 month calendar year use the NOL rules. Each year while you are building the expenses may, and probably will, greatly exceed the income from other completed projects or leases from completed projects. THEN when you sell or lease your completed project (hopefully) you get a big payday. Against that feast and famine cycle to smooth out the years....the past losses can be used against the big payday.

BUT BUT>>>>> how can you operate with a loss for a year or even over several years, you may ask?

Well, even if you didn't ask, I'll tell you. Borrowed money. The RE developer borrows from a bank or from private investors. The bank or investors will take collateral in the project or in other assets of the business. During the building time, the developer/company pays the loan payments, just like you would on a house or car, or makes other more interesting loan repayment arrangements. Money from a loan is not counted as income. Interest paid on the loan is an expense and the principle repaid is just that and reduces the liability (loan) on the balance sheet. (Did I mention that I LIKE accounting)

The builder, the investors, the bank are all 'betting on the come'. Betting that the finished project will be valued at more at the end than the money loaned. They are all gambling.

What happens if the project goes bust, if the bottom falls out of the real estate market and the developer cannot sell his project at all or has to sell at cents on the dollar? Everyone loses money....real money. Collateral in a now worthless or greatly diminished asset is not a good thing. So they restructure the deal to recoup as much as they can. Or wait until the project can be sold or operated at a better profit or minimize the losses.

Just like if you cannot repay your truck loan, the bank can repossess your car which is now worth less than the loan and take a loss, or they may decide to redo your loan at more favorable terms and help you to continue to pay them so that no one actually loses.

Donald Trump and other developers are dealing with but on nose bleed levels. Nothing illegal or nefarious about it.

William said...

Hillary has been a politician in public life for a great many years. She knows her income taxes are going to be reviewed. She takes care to pay her taxes and contribute to charity. (The Clinton Foundation, that most worthy of all charities.)........Trump was a real estate developer and casino operator. I don't think he ever expected to get this far in public life. I would bet that he was involved in any number of questionable deals with questionable people. I think his taxes should be measured with a different yardstick. In any event, he made the right decision keeping them hidden. You just know the press would be dredging up every bit of available dirt. If revelation of taxes is such a sine qua non for public office why didn't Senator Hillary press for such a law whilst in Congress.

HoodlumDoodlum said...

By the way, just to say it, the NYTime's whole framing of this "news" is proof positive of their shameful bias. The article and headline say Trump "could have" avoided paying taxes (using the massive loss) for many years. Would Politifact even give that a half true?
If you take Bill & Hillary Clinton's most recent yearly income and divide it by the amount a typical prostitute charges you could put up an accurate headline that said "Clinton's Tax Returns Show They Could Have Employed 30,000 Hookers Last Year." Fair?

Ooh, or how about this: Clinton settled the Paula Jones sexual harassment lawsuit for $800k. Divide the Clinton's 2014 income by $800k and report how many sexual harassment lawsuits they "could have" paid off. Fair?

Fuck the Media.

William said...

During the debate, Hillary dumped on Trump for saying that he was glad the real estate market tanked because it gave him a chance to buy valuable properties at bargain prices. She claimed that he was taking advantage of those poor property owners, many of them undoubtedly widows of war heroes .......Am I the only person in the universe who realizes that if Trump didn't buy those properties at distressed prices someone else would have purchased them at an even cheaper price? Hillary presupposes a fair amount of ignorance on the part of her audience, and it works. She will probably win the election.

Darrell said...

We demand to see politician's taxes because they are drinking from the public trough. When a politician accumulates, say, $250 Million in public service, we all want to know more details. We also want to see if they took a deduction for donations of used underwear. Trump is not a politician. We can demand to see his taxes during his campaign for a second term.

Barry Dauphin said...

Surely, the Trump campaign knew that the Richy Rich card would be played. If Trump can't handle this kind of attack, then how exactly is he a stronger candidate than Romney?

Mary E. Glynn said...

Have the Sulzbergers of NYT ownership fame made their taxes public yet so we all can see how much of their own money they are donating to the US-government-sponsored schemes they so strongly believe in they must be mandated on all of us?

Nevermind private philanthropy.
That does not count anymore. It's all on the working taxpayers now to right the social issues that poor decision-making in the cultural wars have caused...

Reparations anyone?

HoodlumDoodlum said...

khesanh0802 said...@ Hoodlum Doodlum Seriously? You are still listening to NPR? Silence is much better for you than having your blood pressure raised to the ceiling by that crew.

Yeah, I'm in Atlanta and the morning radio here is garbage. There are a few ok AM stations but mornings they seem like wall-to-wall commercials with some traffic reports tossed in, so that's frustrating. About half the mornings now I'll listen to an audiobook, podcast, or YouTube feed (I bought a cheap Bluetooth speaker for my vehicle) and half I'll listen to NPR. Morning Edition is tolerable until they get to politics, and it's nice to get the other side's perspective. I don't mind my local station, really, but their national political coverage just gets worse and worse lately.

Afternoons I listen to NPR's Planet Money some days--it's not bad--and then do streaming Pandora or YouTube or podcasts through my phone.

I have gone to NPR's website to complain about a few egregiously bad pieces this year (one was on guns--just terribly wrong all around) and was amused to see that their comment section was 80% Leftist people cheering, 10% Leftist people arguing the pieces were too conservative, and 10% people mocking the articles (as incorrect & biased).

Original Mike said...

"BUT BUT>>>>> how can you operate with a loss for a year or even over several years, you may ask?

Well, even if you didn't ask, I'll tell you. Borrowed money. The RE developer borrows from a bank or from private investors. The bank or investors will take collateral in the project or in other assets of the business. During the building time, the developer/company pays the loan payments, just like you would on a house or car, or makes other more interesting loan repayment arrangements. Money from a loan is not counted as income. Interest paid on the loan is an expense and the principle repaid is just that and reduces the liability (loan) on the balance sheet. (Did I mention that I LIKE accounting)"


Saw a documentary once on the building of a skyscraper. The claim was made that the limit on how big of a building can practically be built was not engineering, but rather that the bigger the building the longer it takes to build and during that whole time the developer is paying on the loan. At a certain point it just takes too long before you can start generating revenue on the building.

William said...

Although Hillary knew that she was going to release her tax returns and took care to sanitize them, the same cannot be said for those big buck speeches she gave to Wall St. honchos. I have been reliably informed that she promised to pass legislation giving them immunity for sexual harasssment lawsuits initiated by subordinates. It's also a well known fact that for a million dollars, donors could join her husband on orgy island for a party weekend and first choice of any sex slave on the island. She made that offer during her speeches.. Also, she described the OWS protesters as gutter scum who would be drone fodder in her administration. Let her deny these things if she dare.

Mike said...

Ignorance is a badge of honor for the juicebox mafia journolist thumbsucker MSM set. Maybe Vox can lamesplain accounting to the LIVs out there.

Michael said...

But like I said at Megan's, if Progressives cared about how things actually work they wouldn't be Progressives.

Mac McConnell said...

William
It's oil depletion, not depreciation. All business assets are depreciable, it's an expense of the asset over the life of the asset, the assets theoretically being used up. In the case of natural gas or oil it's called depletion.

For example, you strike oil or buy an existing 30 barrel well for $30 (the asset). You pump 1 barrel a year for 30 years. Your yearly depletion is $1 as you expense (use up) the asset. You would also have pumping, transport and marketing expenses.

Same goes for plant and equipment

Mike said...

Hillary is envious because she never had $916B of her own money to risk on real estate development. Let's ask the people who DID invest in Whitewater and Castle Grande how their investments worked out!

And in her fiduciary duty as SecState Hillary "lost" $6B of PUBLIC money. What's up with that? Any curious media going to ask her about it? Ask her about anything she did as SOS?

Chuck said...

Darrell said...
We demand to see politician's taxes because they are drinking from the public trough. When a politician accumulates, say, $250 Million in public service, we all want to know more details. We also want to see if they took a deduction for donations of used underwear. Trump is not a politician. We can demand to see his taxes during his campaign for a second term.


This is a very fair point, and one which has been raised a number of times by other conservative publications, most historically in the context of LBJ, who became a multimillionaire rancher while earning a Congressman's salary during the Depression and WWII. He did it with, among other tricks, radio broadcast licenses in Lady Bird's name.

But as for the argument about whose taxes anybody can demand; who the heck ever dreamed that this would not be a problem for Trump at some point? It's okay, if Trump made the calculation that the hit for actually turning over his returns was going to be worse than the hit for not giving them up. That's a choice. But it was a bad choice, strategically.

JSD said...

McArdle’s article is very good. I assume Trump’s accountants followed the rules, but when you’re forced to explain the tax code, you already lost the argument.

The NOL rules are not optional. Under IRC, the NOL must be carried back 2 years and then forward 20 until it is exhausted. You may elect in the year of the loss to relinquish the carry back period and carry it forward only.

You cannot claim losses greater than your investment cost basis (recourse debt included). Debt forgiveness is income.

The IRS requires large real estate developers to use the completed contract method. Difficult to explain, but you estimate your profit up front, and recognize profit in proportion to the percentage of the project’s completion. Interest costs are capitalized. Generally, there are no losses during the construction phase, unless the project goes to shit before completed.

Mary E. Glynn said...

What's up with that? Any curious media going to ask her about it? Ask her about anything she did as SOS?
------------

She's already on record as stating that she is going to spend more, more, more on foreign infrastructure, education for women in foreign countries, healthcare for girls in foreign countries, free daycare (even for affluent American women with well-paid husbands!), etc etc etc.

She thinks her work as SOS was a success! Millions of refugees disagree... Of course, Hillary will advance a Clinton Plan, akin to a Marshall Plan, for rebuilding the Middle East once we are done destroying it. To free the women and children abroad, of course.

Really, the media should lose this election.
We need to start over in Washington, and electing Hillary Clinton would only solidify the state we are in.

Does anybody want that?
Do the blacks want that?

I don't think so...

Mac McConnell said...

I think Nixon was the last presidential candidate not to submit his tax returns to the public, but then which present candidate is more like "I am not a crook" Nixon.

I see Hillary has been hammering on the Wells Fargo Bank execs, you know the ones that donated a quarter million dollars to her. All will be forgotten after the election, they understand it's just pretend.

Darrell said...

I'd like to know if there are any further leads on the $6 Billion that went missing at the State Dept. under Hillary's watch. If that the money Obama used to pay the Iranians for the hostages? Or for BLM? Or to bail out Soros' losses? Or help the Muslim Brotherhood, getting around Congress?

Unknown said...

Those NYTimes joker products!

What a rag, the faster it goes away the better.

Mac McConnell said...

Why would the public ever know where the $6 billion went? We still are piecing together "Fast and Furious", the weaponizing of the IRS, Benghazi, Emailgate, etc. etc., etc...... scandals of the Obama Admin.. If Hillary is elected expect more of the same, just like Obama and Bill Clinton. Documents withheld, lost, misplaced or stolen.

Rick said...

Dust Bunny Queen said...
Each year while you are building the expenses may, and probably will, greatly exceed the income from other completed projects or leases from completed projects.


Costs (including interest and administrative costs) during the building period are capitalized, considered part of the building cost, and depreciated over decades starting when it is placed in service. Thus these costs do not drive NOLs.

Rusty said...

Mac McConnell said...
William
It's oil depletion, not depreciation. All business assets are depreciable, it's an expense of the asset over the life of the asset, the assets theoretically being used up. In the case of natural gas or oil it's called depletion.

For example, you strike oil or buy an existing 30 barrel well for $30 (the asset). You pump 1 barrel a year for 30 years. Your yearly depletion is $1 as you expense (use up) the asset. You would also have pumping, transport and marketing expenses.

Same goes for plant and equipment


To the left all those things are subsidies.

Michael K said...

For the last several cycles, the focus has been on energizing your base while depressing the other side.

I think this year is different but Brando said it better. Lots of Democrat voters are not very enthusiastic. I lumped them with "undecideds" and should have said "undecided to vote at all.":

Dust Bunny Queen said...

Costs (including interest and administrative costs) during the building period are capitalized

Thanks Rick for the clarification!

Joe said...

In 2015, Hillary Clinton declared a $699,540 long term capital loss, which it then used that year to reduce their tax burden and which will, no doubt, be carried forward.

Joe said...

It's important to note how perverse taxation on gains and losses are since they ignore inflation and associated expenses. Let's say I buy $1000 of a stock and sell it for $1200. That's $200 capital gains, right? Not if I bought the stock in 2000, in which case it's arguably a ~$200 loss due to inflation.

jr565 said...

one of the prime ironies in all of this is that it occured in 1995, when Clinton was president. I'm pretty sure the law that he took advantage of was passed in 1995. So, if it was so bad... why did clinton think it was a good idea to extend period where you can offset losses in taxes? And why is it that his wife doesnt understand the tax code or her husbands role in pushing this law?

tim in vermont said...

The issue here is the IRS leaking tax returns to damage a candidate. Selected tax returns, not all of them, just the one they thought would do maximum damage.

We have members of the IRS taking the Fifth, leaking tax returns to the White House, destroying evidence under Congressional Subpoena, all things Dick Nixon wishes he could have gotten the IRS to do, but they do willingly for the Democrats. It is sickening.

rhhardin said...

It used to be, back in the day, that you had to declare income from even illegal activities.

It was argued that this was requiring self-incrimination.

It was allowed though under the rule that the income tax form could not be used to prosecute or investigate criminal activities, so it wasn't self-incrimination.

What happens to that argument if the IRS leaks tax returns? You no longer have to report illegal income.

That lets politicians off the hook first.

Christy said...

Down here among Les Deplorables it's called income averaging. Who doesn't use it the year of a big promotion? Surely Hillary's college educated female base is familiar with it.

Todd said...

Christy said...

Down here among Les Deplorables it's called income averaging. Who doesn't use it the year of a big promotion? Surely Hillary's college educated female base is familiar with it.

10/4/16, 3:35 PM


To hear them tell it, it is not that big as it is only $0.77 for every $1 the man gets so no need for averaging AND cause of the glass ceiling they are not in senior management (old boy's network and all) so get less due to the junior position to boot...


Come on, that was funny.

Sebastian said...

"who like all the other experts, seemed somewhat surprised that this was not obvious...." Not an expert in prog politics, obviously.

"Unfortunately, Trump opponents — notably the New York Times (which presented the tax story as if it's a bombshell) — have been about to play on the emotions of people who don't have the sense or the patience to absorb the basics of tax policy" Well, that is "unfortunate," isn't it?

readering said...

The quoted paragraphs are only the beginning of the story. NOL is basic tax law. There is a lot more going on in the case of Trump. But one needs to see a lot more his tax returns. For one thing, he could have been audited and the claim disallowed. The problem is reconciling the evidence that he was insolvent in the early nineties (bailed out by the banks and his family), with the evidence that his is worth many billions today. How did he get from there to here, living an opulent lifestyle, without paying taxes? He's obviously concerned about something because he won't release the years before the audit (which goes back to 2009). It's like explaining how charitable foundations collect and spend money to dispel concerns about Clinton.

tim in vermont said...

Well readering, I guess those Democrat operatives at the politicized IRS had better hop to it and release more of these returns!

tim in vermont said...

He's obviously concerned about something because he won't release the years before the audit

But when Hillary deleted tens of thousands of emails, lied to the FBI, and her staff took the fifth, everything was on the up and up!

tim in vermont said...

How did they get to be worth a third of a billion dollars when they worked almost exclusively in public service all of these years?

It's a mystery, I tell you! They are just so darned interesting that people are willing to pay them 300 million dollars just to hear their thoughts on stuff! Nothing else expected!

YoungHegelian said...

@readering,

The problem is reconciling the evidence that he was insolvent in the early nineties (bailed out by the banks and his family), with the evidence that his is worth many billions today. How did he get from there to here, living an opulent lifestyle, without paying taxes?

It's a problem, how? He has a huge loss to bring forward, one that could cover the Trump Corporation's profits for years & years. He pays himself a high-end salary & disbursements from corporate profit (& on that he may pay personal taxes -- it's unclear if the tax forms are for him personally or the Trump Corporation, which is privately held by the Trump family). Over the years, he may be worth billions because the assets of the Trump Corporation are worth billions, & he is the primary owner of the privately held stock.

It's very difficult to evaluate the holdings of privately held corporations. What are the assets worth? Well, what they sell at when they're sold. It's not a problem to determine e.g. the net worth of e.g. Larry Ellison of Oracle, Inc. How many shares of Oracle does Larry own? What's the price per share today? That's Larry Ellison's worth. It's just not that easy with privately held firms, since there is no "objective", public measure of a share's worth.

Jason said...

Libtard stupidity, ignorance and hypocrisy knows no bounds.

Rick and DBQ have it right, and so does Megan McArdle. Megan wrote an even better article on the topic some years back, dealing I think with the pharma industry, which has massive front end costs in drug development before they can ever bring a drug to market. They use the same NOL carryforward provisions.

These aren't "loopholes." This is just a plain common sense provision the IRS uses to help businesses cope with uneven cash flows.

But for the Democrat base of lifelong W-2, 1040 EZ-filing libtards who've never filled out a Schedule C in his life and who have never signed the front of a paycheck or sent a payment to a subcontractor or bought a piece of equipment, thereby taken some risk, any provision of the tax code they haven't used personally is a "loophole."

If they run the country, we are fucked.

tim in vermont said...

How did he get from there to here, living an opulent lifestyle, without paying taxes?


One tax return gets selectively leaked, probably by the same IRS that was caught sending hundreds of tax returns to the White House, the same IRS that has taken the fifth and destroyed evidence that was under Congressional subpoena, one tax return! And readering has him not paying taxes ever in his whole life!

Bad Lieutenant said...

It's all demagoguery, aka boob bait for suckers. This is on a level with claiming that your opponent was a thespian in college and masticates in public!

YoungHegelian said...

@BL,

This is on a level with claiming that your opponent was a thespian in college and masticates in public!

And the very same immoral sonafabitch was known far & wide to have matriculated at Harvard. Matter of fact, he boasts, boasts I tell you, about it!

HT said...

You lost me at he blew a billion in one year.

Bad Lieutenant said...

HT, we lost you at 2+2. Stick to whatever the nice people at the foundling home trained you to do.

Jason said...

You lost me at he blew a billion in one year.

...And another bone-ignorant libtard who has no idea what the hell he/she is looking at self-identifies!

tim in vermont said...

It's boob bait and most of the boobs I know IRL have gone for it hook, line, and sinker.

SukieTawdry said...

The part that frosts me is that Hillary behaves as though the wealthy have an obligation to pay taxes beyond the amount required by the tax code. The fact is that neither she nor any of her wealthy cronies would even consider doing such a ridiculous thing. I wonder how many of her supporters know that.

tim in vermont said...

Hillary took a deduction for used underwear in the past. Just sayin'

Annie said...

Funny how I can't get to the article. I'm getting a 404 error. Anyone else getting that?

Rick said...

readering said...
How did he get from there to here, living an opulent lifestyle, without paying taxes?


There is no evidence he has not paid income taxes between these two points so your belief that is true demonstrates how successfully the NYT mislead you. The 18 years cited by the NYT is how long an NOL can be carried forward according to the law. It has nothing to do with Trump's actual circumstances.