Much Ado About Nothing

by Jim Quinn

The left wing MSM is breathlessly reporting Trump’s massive losses from 1985 through 1994. They seem to have no concept of how the US tax code works. Trump is a real estate mogul. When you own real estate, you are entitled to huge depreciation write-offs on your tax returns. Big tax losses are the norm for real estate investors.

Since he was one of the biggest real estate moguls in the country, it would make sense he would have huge tax losses. There was also a massive real estate collapse during the 1990/1991 recession. That accounts for his bigger losses then. The tax code also allows for Net Operating Loss Carryovers, so future tax profits would be eliminated. That is why he would pay little or no taxes for a decade or more.

The IRS gets their taxes when a real estate investor sells their property and has to recapture all the depreciation taken cumulatively. As a failed condo real estate investor I experienced it in 2018. Even though I sold my condo at an $85,000 loss after 12 years of ownership, I had to report a capital gain on my tax return due to the recaptured depreciation.

So Trump’s tax losses are a tempest in a teapot and another nothing burger. 

Trump claimed over $1 billion in financial losses from 1985-’94: report

Donald Trump reported massive financial losses to the IRS totaling more than $1 billion over a 10-year span when his reputation as a dealmaker was peaking, the New York Times reported late Tuesday. Citing figures acquired from IRS tax transcripts, though not the actual tax returns, between 1985 and 1994, the Times found Trump appeared to have lost the most money over that span than any other single American taxpayer.

“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 IRS information for those years,” the Times said. The losses were so big that Trump did not have pay any federal income tax for eight of those 10 years, the Times found. Trump was apparently in far worse financial shape at that time than he had let on, and reported negative adjusted gross income for all 10 of those years, ranging from losses of $4.5 million to $918.5 million. In all, Trump’s losses totaled $1.17 billion, the Times said. A lawyer for Trump told the Times that the figures were incorrect, but cited no specific errors.

 

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