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NYT Reports Trump Only Paid $750 in Federal Taxes in 2016 and 2017

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NYT Reports Trump Only Paid $750 in Federal Taxes in 2016 and 2017

2020-09-28 18:08:05

By Laura Tucker, Staff writer; Image: Donald Trump (Image source: Screenshot)

 

For four years, Donald Trump has refused to release his tax returns, fighting it in multiple courts, even losing in a Supreme Court decision. It's obvious he's hiding something he doesn't want the country to know. The New York Times received data of the tax returns the president has been hiding. Now we know much more of what he didn't want us to know.

Paramount to what was learned is that Trump, a self-titled billionaire, paid just $750 in taxes the year he first refused to share his tax returns, 2016. He paid the same the next year, the year he was inaugurated as President of the United States. In 10 of the previous 15 years, he paid no taxes at all because he reported losing much more money than he reported earning.

The Times obtained Trump's tax-return data from more than 20 years of returns. Not included are the last two years of returns. The data is from information Trump disclosed to the IRS. This does not show his true wealth.

Alan Garten, Trump Organization attorney, said that "most, if not all, of the facts appear to be inaccurate." He requested the documents the Times based the article on, but the Times declined, wanting to protect its sources.

After the Times's refusal, Garten said in a statement, "Over the past decade, President Trump has paid tens of millions of dollars in personal taxes to the federal government, including paying millions in personal taxes since announcing his candidacy in 2015."

But "personal taxes" appear to be other federal taxes — such as Social Security, Medicare, etc. — Trump has paid and not income tax. Garten also claimed some of what his client owed was "paid with tax credits," which reduce a business owner's income taxes owed for various activities, such as historic preservation.

When Trump hosted "The Apprentice," he brought in a total of $427.4 million, when combined with his licensing and endorsement deals. He invested much of that into golf courses and other businesses. These have been losing income for him instead of making it.

When Trump refused to release his tax returns as a presidential nominee in 2016, he said there was far more useful information in the annual financial disclosures that he is required to file as president.

But those filings only report revenue and not profit. He announced in 2018 he had made at least $434.9 million. However, his tax records show $47.4 million in losses.

With no explanation from the returns, the general and administrative expenses at Trump's Bedminster golf club in New Jersey increased five times over from 2016 to 2017. He has bragged in the past that being able to not pay taxes "makes me smart." But his returns show it's not great business acumen and just throwing more money into his businesses than he's making.

Along with all of that, he has the multiple court cases demanding to see his tax returns, and within the next four years, obligations he is personally responsible for, more than $300 million in loans, will be due.

Trump said when he took office that he would not pursue new foreign deals. Yet, he made $73 million abroad in his first two years in the White House. Much was from his golf courses in Scotland and Ireland, but he also made $3 million in the Philippines, $2.3 million in India, and $1 million in Turkey.

While not paying more than $750 in the U.S., he paid much more in taxes in these other countries. He  paid $15,598 to Panama, $145,400 to India, and $156,824 in the Philippines. The president is cheating his own country out of taxes on his income while paying thousands to other countries.

Without adjusting for inflation, Trump's $750 is comparable to what Richard Nixon paid in 1970. The man that resigned in disgrace paid $792.81 on $200,000 in income.  There were many upset by Nixon's tax payment, and this is when it was decided presidents and presidential candidates would show their taxes.

Trump's losses of income have been noted a few different times before since his run for president began. It was learned that for many years, Trump lost more money than nearly any other individual American taxpayer and that he declared losses of $915.7 million that could have allowed him to avoid federal income taxes for nearly two decades.

It was the business that Trump owns and runs that saved him from having to pay taxes on all his income, including his $427.4 million from "The Apprentice" and affiliated business deals.

Trump paid substantial income taxes for the first time after he made $120 million from licensing deals and endorsements from 2005 through 2007. Then he went on a buying spree. When "The Apprentice" premiered, he had only opened two golf courses. By the end of 2016, he had 15 golf courses and was transforming the Old Post Office in Washington into the Trump International.

He bought the Trump National Doral Resort near Miami for $150 million in 2012. Through 2018, his losses on the property totaled $162.3 million. Tax records show he put $213 million into the place, and his $125 million mortgage is coming due in three years.

His courses in Scotland and Ireland have a combined $63.6 million in losses.  Since 2000, overall, the guy who wrote "The Art of the Deal" has reported losses of $315.6 million at his golf courses. The Washington hotel is suffering as well. Opening in 2016, tax records show losses of $55.5 million through 2018. The Trump Corporation has reported losing $134 million since 2000.

Trump has said the losses are accounting magic and not real losses. He has also said, "I love depreciation." But he lost much of the fortune before depreciation was even factored in. The European golf courses, the Washington hotel, Doral, and the Trump Corporation lost a total of $150.3 million from 2010 through 2018 without depreciation factored in.

The retail and commercial spaces in Trump Tower were much more successful. Since 1983, they have provided more than $20 million a year in profits, a total of $336.3 million since 2000.

Trump is also known for not paying lenders. His tax returns show he hasn't paid back much more money than what has been previously reported. He hasn't paid back $287 million since 2010.

While the IRS considers forgiven debt to be income, Trump avoided taxes on that by reducing his ability to declare future business losses. He took advantage of a bailout from the Great Recession, provided by his nemesis, former President Barack Obama. That allowed him to defer the canceled debt for five years, then spread it out over the next five. He declared $28.2 million in canceled debt in 2014 and paid no federal income tax that year.

Trump paid alternative minimum tax in seven of the years between 2000 and 2017, for a total of $24.3 million. In 2015 he paid $641,931. This was his first federal income tax payment since 2010.

As the president, his potential taxable income in 2016 and 2017 included $24.8 million in profits from sources related to being a celebrity and $56.4 million he didn't repay. The alternative minimum tax would only erase some of his liability.

Trump requested an extension to file and made the required payment to the IRS for income taxes he may owe: $1 million in 2016 and $4.2 million the year after. When he eventually filed, most of the payments were wiped away and applied toward potential future taxes.

He used $9.7 million in business investment credits to cancel those tax bills, some of this was from renovating the Old Post Office and earning a  historic-preservation tax break. There were enough credits to not owe any taxes, but it seems his accountants set it up for a small tax liability for both 2016 and 2017. On the line for income taxes due, it was the same amount for both years: $750.

Michael Cohen, Trump's former personal attorney, told Congress in February 2019 that Trump had shown him a huge check from the U.S. Treasury from years before. He told him "that he could not believe how stupid the government was for giving someone like him that much money back."

Confidential records show that he claimed and received an income tax refund of more than $72.9 million in 2010. This was all the federal income tax he'd paid in 2005 through 2008, plus interest.

Business losses reduce the taxable income elsewhere. What can be used in this way depends on the taxpayer's status. Some can be used for later or used to get a refund for a previous year. In 2009, the coupons could be used to clear taxes going back only two years. But Obama changed the law to refunds of taxes going back four years and 50 percent in the year before that.

While Trump didn't pay income taxes in 2008, this new law meant when he filed his taxes for 2009, he could seek a refund of the $13.9 million he paid in 2007 and also the $56.9 million he paid two years prior. His tax refund grew to $70.1 million plus $2,733.184 in interest. He also received $21.2 million in state and local refunds.

The results of the Trump audit were delivered in 2011. An agreement was reached three years later, but Trump's returns for 2010 through 2013 were added in. The case was sent back to the committee in 2016 when it looked as if Trump may receive the Republican nomination.

It's still there, although the reason for progress not being made on it is unknown. If negotiations were to become deadlocked, it would be moved to federal court and could become public record.

Trump declared more than $700 million in business losses he hadn't been allowed to use previously. He announced in February 2009 that he was quitting the board of directors and told the Securities and Exchange Commission he had "determined that his partnership interests are worthless and lack potential to regain value," hereby abandoning his stake. His phrasing matched the wording of the IRS rules that govern the most beneficial method for business owners to avoid taxes when separating from a business.

This allows a partner who walks away with nothing to then declare all the losses that could not be declared in prior years. If the IRS learns the owner received anything of value, the losses are reduced to just $3,000 a year. Trump received 5 percent of the stake in the new company when he folded his casino business. It's unknown how that factors in.

If his $72.9 million refund is disallowed, he'll have to return the money with interest and possible penalties.

Garten says these facts the Times reported were "incorrect" and didn't explain but did say it was "illogical" to say Trump hadn't paid taxes for those three years just because the money was later refunded.

This wasn't just confined to Trump's personal income. The Trump Organization's tax records show a similar strategy. Trump wrote off around $26 million in "consulting fees" as a business expense on close to all the projects. Many times those fees were one-fifth of his income.

Some of the consulting fees are similar to what Ivanka Trump has collected. She's not identified as a consultant on her closed website. Instead, she was described as a senior executive who "actively participates in all aspects of both Trump and Trump-branded projects."

It's all just more of the same. A Times investigation in 2018 showed that Fred Trump, the president's late father, scammed his way out of avoiding gift taxes on millions of dollars he gave to his children.

One thing is clear: Trump and his three oldest children are heavily involved in this, as Eric and Donald Jr. are managing the business while their father mismanages the country. 

And this is the guy that everyone says is so good with the economy.

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