President Trump has said the losses his business made in the eighties and nineties were “for tax purposes”.
He was tweeting in reply to a New York Times (NYT) article claiming that from 1985-95 he made losses of over $1bn.
The newspaper said that Mr Trump’s property empire from 1985 “continued to lose money every year, totalling $1.17bn in losses for the decade”.
Mr Trump tweeted “You always wanted to show losses… and often re-negotiate with banks, it was sport.”
….you would get it by building, or even buying. You always wanted to show losses for tax purposes….almost all real estate developers did – and often re-negotiate with banks, it was sport. Additionally, the very old information put out is a highly inaccurate Fake News hit job!
— Donald J. Trump (@realDonaldTrump) May 8, 2019
What did the NYT say?
The NYT said that while Mr Trump has always described himself as a successful property tycoon he was for at least a decade during the eighties and nineties making huge losses on his core businesses, largely casinos, hotels and retail space in apartment buildings.
It wrote: “Year after year, Mr Trump appears to have lost more money than nearly any other individual American taxpayer, The Times found when it compared his results with detailed information the [Internal Revenue Service or I.R.S.] compiles on an annual sampling of high-income earners.
“His core business losses in 1990 and 1991 — more than $250m each year — were more than double those of the nearest taxpayers in the I.R.S. information for those years.”
“Overall, Mr Trump lost so much money that he was able to avoid paying income taxes for eight of the 10 years.”
How did Trump respond?
Apart from calling the NYT story old, inaccurate and “Fake News”, Mr Trump claimed that : “Real estate developers in the 1980’s & 1990’s, 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.
“Much was non monetary. Sometimes considered ‘tax shelter,’ you would get it by building, or even buying.”
Is the president right?
Steve Rosenthal, a tax lawyer and policy analyst, explained that tax relief for property development in the US was, and still is, very generous.
Mr Rosenthal said Mr Trump borrowed heavily and used tax relief available on income generated by borrowed funds. But when Mr Trump defaulted on those borrowings and re-negotiated his loans that relief should, in theory, have ended.
Mr Rosenthal wrote a paper called Protecting Trump’s $916 Million of NOLs (net operating losses). In it he said: “Documents filed in the bankruptcy court suggest that Trump aggressively stretched the law to side-step hundreds of millions of dollars of taxable income from restructuring his public debt.”
Mr Rosenthal tweeted his response to the president: “Sure, Trump operated his businesses at a spectacular loss. But he borrowed, spent, and deducted money from other people. And, after he defaulted on the funds he borrowed, he did not report income.”
How did the NYT get the information?
The NYT has said it was unable to obtain Mr Trump’s tax returns but received the information contained in them from someone who had legal access to it.
The NYT said it “was then able to find matching results in the I.R.S information on top earners — a publicly available database that each year comprises a one-third sampling of those taxpayers, with identifying details removed.”
President Trump has consistently refused to publish his tax returns and Treasury Secretary Steven Mnuchin on Tuesday refused a request from Democratic lawmakers for Mr Trump’s more recent returns. Mr Mnuchin said the request “lacks a legitimate purpose,” and raised constitutional questions and threatened taxpayer privacy.
What else has the NYT written about Trump?
The NYT has been unapologetically critical of Mr Trump’s presidency and in June 2017 published an article entitled: “Trump’s Lies: The Definitive List”.
In September last year, the paper published an anonymous piece called “I am Part of the Resistance Inside the Trump Administration” which claimed that there were officials within the President’s White House who had “vowed to thwart parts of his agenda and his worst inclinations”.
In October last year, the NYT published an article detailing how Mr Trump had inherited hundreds of millions of dollars from his father’s real estate empire through “dubious tax schemes”, contradicting the President’s claims that “I built what I built myself.”
What does Mr Trump say about the NYT?
Mr Trump calls the NYT The Failing New York Times.
After the publication of the “Resistance” piece in the NYT Mr Trump called for the paper to reveal the identity of the writer which the paper said “is known to us”.
Mr Trump described the article in a tweet as “TREASON?”
Then in a follow up tweet, he wrote: “If the GUTLESS anonymous person does indeed exist, the Times must, for National Security purposes, turn him/her over to government at once.”