Tax records recently published by the New York Times show that Donald Trump may have effectively canceled out paying taxes on income earned over nearly two decades.
In 1995, Trump declared a $915.7 million loss on his tax returns. The Times estimated that amount of losses written off by the GOP presidential nominee would be enough to cover 18 years of combined income for the billionaire real estate magnate — including the $50,000 to $100,000 Trump was paid for each episode of NBC’s The Apprentice, and the $45 million he made between 1995 and 2009 when Trump headed up the company incorporated specifically to manage his properties in Atlantic City, New Jersey.
The leaked tax returns also show that Trump took full advantage of tax loopholes made available to the wealthy, as he declared only $6,108 in wages, salaries, and tips, but declared roughly $7.4 million in income generated in interest, which is taxed at a preferential rate in comparison to actual labor.
The emergence of Trump’s tax records may shed some light on why the GOP nominee is breaking decades of precedent by steadfastly refusing to make his tax returns public. During Monday night’s presidential debate at Hofstra University, Hillary Clinton’s criticized her opponent’s refusal to release his tax returns as evidence that he was hiding something major, like not paying federal income taxes in a given year. Trump cavalierly responded that such a revelation “makes [him] smart,” not a tax cheat.
Trump has kept his tax records closely guarded, and a lawyer representing the real estate mogul threatened the Times with “prompt initiation of legal action,” claiming the newspaper’s publication of Trump’s tax returns without his consent is in violation of the law. The Times maintains the tax return was mailed to the newspaper with Trump Tower as the return address.
The Times verified the tax returns’ authenticity by having them examined by Jack Mitnick, a certified public accountant currently living in Florida, whose name was listed as the preparer on Trump’s New Jersey tax return. In explaining that the tax return was “legit,” Mitnick explained that on line 18, the tax preparation software he used for Trump’s tax return didn’t allow for a nine-figure loss, meaning that he had to manually add in the “-91” before “5,729,293,” to make the total loss show as “-915,729,293.”
Tax experts interviewed by the Times said the staggering loss is common for wealthy families, who spread their wealth through various partnerships, S corps, and other legal entities. The “net operating loss” on a tax return is the combined result of everything from real estate depreciation and business expenses to loss from the sale of business assets and operating losses coming from every existing legal entity owned by the person filing the tax return.
