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Monday, December 09, 2019

Trump Paid Little Tax While Claiming Huge Losses And Dubious Deductions

@DevilsTower

Donald Trump

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On Tuesday evening, the House Ways and Means Committee voted 24 to 16 to release information it has obtained on Donald Trump’s tax returns. Some of that information has already been made available to the public. The report shows that Trump, while running as a successful billionaire, reported massive losses on his business dealings in the years just before entering the White House.

The information released to the public includes the years 2015 through 2020. In that first year, Trump claims almost $77 million loss in the form of “other income” and claims a $21 million charitable contribution in the form of a “conservation easement.” As Laura Clawson reported back in 2020, that easement was actually part of a shady real estate deal in which Trump used one of his typically overvalued assessments to turn a money-losing golf property into a tax break that he could spread out over years of returns. That’s just one in a long list of things that the House committee found questionable in Trump’s 2015 return.

In all, over the six years of returns, Trump reported making money only in 2018 and 2019. He used a combination of reported losses and questionable deductions to keep his tax bills to $750 in 2016, $750 in 2017, and $0 in 2020. Trump did pay $641,935 in 2015, but don’t worry. He still has a “claim for refund” filed for that year based on a claim that he was owed more for “historic restoration.” If that claim is successful, it will return that 2015 money to Trump.

Trump’s taxes were kept low by two factors: reported losses and those big “charitable deductions.” That didn’t just include Trump’s big $21 million “conservation” deduction (generated by theoretically turning the entire property into home lots, assigning a $2 million per value to those lots, then valuing Trump’s contribution as if he had donated 10 of these nonexistent lots).

The nature of Trump’s reported losses is itself more than a little questionable. For example, in 2015, Trump reported that he made money from income, interest, dividends, capital gains, and other gains. Those last two added up to $43 million. Still, he ended up reporting a net loss after reporting $76 million in losses as “other income.” That huge loss was mostly a carryover of reported operating losses in previous years—losses that Trump would keep pressing forward to erase potential income year after year.

Overall, here’s what Trump reported as income year by year.

TRUMP'S REPORTED INCOME

This gives Trump a reported $54 million loss over these six years. In those years when he did pay taxes, he paid effectively four percent of his reported income in 2018, and three percent in 2019. The 2015 numbers involved paying taxes that carried over from the previous year, but Trump is still asking the IRS to reduce that year to no more than $750.

In the short time the returns have been available to the House committee, they’ve identified a number of issues with each year of the returns. That includes not just multiple questionable charitable deductions, but a lot of deductions that are reported as large “cash” payments for which there doesn’t appear to be documentation. The committee also notes the use of Trump’s 500+ sole proprietorship businesses as a means of reporting everyday costs of living, and some expensive hobbies, as if they are legitimate business deductions.

Trump also appears to have written off over $2 million in property taxes as an income deduction; the committee notes that New York law caps that deduction at $10,000.

What’s also striking is that in every single year, including 2018, Trump’s core businesses—his golf courses, hotels, and real estate—operated at a reported loss. If Donald Trump actually makes money at anything, it’s not any of the areas in which he brags about being a success. In his best year, Trump reported that he lost $11 million on real estate.

Whether the discrepancies in Trump’s taxes will lead to fines or charges of tax fraud isn’t certain. What is certain is that with an incoming Republican majority in the House, any investigation into Trump is likely to be completely discarded.

All other presidential candidates over the last two decades have released their own returns during the campaign, but Trump did not. Though the House has a legal right to review the returns of anyone, obtaining these returns involved a multi-year court battle with Trump objecting and appealing at every possible stage to delay the delivery of the returns to the Congress. He almost managed to outlast the Congress … but he didn’t quite make it.

Reprinted with permission from Daily Kos.

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