The story, c/o Vice:
Donald Trump said Wednesday that his businesses purposely lost more than $1 billion over the course of a decade as a way of avoiding paying taxes and gaming the system.
“You always wanted to show losses for tax purposes….almost all real estate developers did — and often re-negotiate with banks, it was sport,” Trump tweeted.
The U.S. president was responding to a bombshell New York Times report published Tuesday evening that explained how Trump’s businesses lost $1.17 billion between 1985 and 1994.
The report, which was based on a review of printouts from Trump’s official Internal Revenue Service tax transcripts, said that in 1990 and 1991 alone, Trump lost more than $250 million, which appeared to be more than double what any other U.S. taxpayer lost that year. He lost so much money in his casino, hotel, and real estate businesses that he was able to avoid paying income taxes in eight of the 10 years covered by the transcripts.
But it was all on purpose, the president claimed Wednesday:
“Real estate developers in the 1980s & 1990s, more than 30 years ago, were entitled to massive write-offs and depreciation which would, if one was actively building, show losses and tax losses in almost all cases.”
While depreciation is a completely legal and common way for real estate developers to lower their tax bills, Trump’s use of the tax break to justify $1 billion in losses goes well beyond what could be considered normal.
Over the years, Trump has made no secret of his fondness for using depreciation as a way to lower his tax bill. As a private citizen in 1991, he lobbied Congress on the benefits of depreciation, and defended his use of the tax break in a presidential debate in 2016.
When asked if he used a $915.7 million loss in 1995 to avoid paying personal federal income taxes, Trump responded: “Of course I did. Of course I did. … A lot of my write-off was depreciation.” He added: “I pay tax and I pay federal tax too. But I have a write-off; a lot of it is depreciation, which is a wonderful charge. I love depreciation.”
What sets Trump apart, however, is that not only did he claim massive, consistent losses, posting a negative adjusted gross income every year from 1985 to 1994, he did so with other people’s money. By the mid-1990s, Trump had amassed millions of dollars in personal debt.
He also financed an Atlantic City casino through a bond offering that raised hundreds of millions from the public.
“Depreciation for buildings that are not suffering wear and tear, that is a generous tax benefit, every developer gets that,” says Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. “But taking deductions on other people’s money, that goes beyond what other real estate developers would do.”
Taxpayers don’t recognize income when they borrow money. But if the borrower is forgiven some or all of the debt, they need to report the difference as taxable income.
Trump seems to have aggressively worked to avoid reporting taxable income after restructuring debts, says Rosenthal.
By deducting other people’s money and not offsetting those deductions at the time his debts were restructured, Rosenthal says, Trump was able to avoid paying taxes by using millions of dollars of net operating losses over several years to soak up future profits — if there were any.
“He is misdirecting the public by focusing on deductions,” says Rosenthal. “Sure, he took deductions. They were probably lawful. But he borrowed money to take those deductions. When loans were forgiven, he never picked up any income.”
Yeah, I’ll just bet he loves depreciation. That’s why his flagship tower in NYC is such a fucking dump, amirite? And if he’d bothered with the upkeep of it, he’d have had to spend money. And to do so, and to be able to write a cheque that didn’t bounce like one of those rubber balls from the gum machines, he’d also have to report his forgiven loans as income, and make sure his own books reflect the fact. And we all now know how allergic he is to actually having an income, when he just lives to fool around with money and never pay up on what he owes…as his prior dealings with contractors show all too clearly.
Is he a shitty businessman, a fraud, or both? I know which of them my money’s on…
The real question is, why is this motherfucker still squatting in the Oval Office?