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Trump runs for POTUS / Trumped Up! Part V

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Darat said:
Out of curiosity if the almost a billion loss was from one of his bankruptcies surely he wouldn't then be able to use it as a tax right off for future businesses?
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Yes. And if this is the scandal that finally does him in, as opposed to the myriad of legit scandals, enjoy the karma Donald.
 
Darat said:
Out of curiosity if the almost a billion loss was from one of his bankruptcies surely he wouldn't then be able to use it as a tax right off for future businesses?
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Don't quote me (or I'll bill you) but this could be his personal or company stake in the bankrupt businesses. That would be his loss. A pleasing thought, isn't it? Wish I'd been the one to tell him about it.

This calls for a Downfall Parody. :)
 
Darat said:
Out of curiosity if the almost a billion loss was from one of his bankruptcies surely he wouldn't then be able to use it as a tax right off for future businesses?
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Apparently he would be able to apply the tax credits for losses against his personal income tax liability thanks to some of the tax loopholes Congress has created over the past thirty years. They're known as "tax cuts for fat cats." This is from the Times article.
The provision, known as “net operating loss,” or NOL, allows a dizzying array of deductions, business expenses, real estate depreciation, losses from the sale of business assets and even operating losses to flow from the balance sheets of those partnerships, limited-liability companies and S corporations onto the personal tax returns of men like Trump. In turn, those losses can be used to cancel out an equivalent amount of taxable income from, say, book royalties or branding deals.

Better still, if the losses are big enough, they can cancel out taxable income earned in other years. Under IRS rules in 1995, net operating losses could be used to wipe out taxable income earned in the three years before and the 15 years after the loss. (The effect of net operating losses on state income taxes varies, depending on each state’s tax regime.):
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The article mentions the losses could have been used to allow Trump to avoid paying tax on income received from sources like book royalties or money he was paid for appearing on the TV show The Apprentice.

At least it proves the accuracy of one statement Trump constantly makes: the system is rigged. It sure is -in favor of people like him! :(
 
CapelDodger said:
Don't quote me (or I'll bill you) but this could be his personal or company stake in the bankrupt businesses. That would be his loss. A pleasing thought, isn't it? Wish I'd been the one to tell him about it.

This calls for a Downfall Parody. :)
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But other reports say that he made money on the casinos personally even as he took the corporations into bankruptcy. So can he take a personal deduction or credit for losses suffered by his companies?
 
Side issue, maybe for separate discussion: What's the justification/rationalization for allowing unlimited deductions for business losses? If someone makes a bad investment or business decision, why should he, in effect, be able to charge it off to all of us who are paying taxes? Does that encourage unreasonable risk-taking? Should it maybe be limited to one or two tax years, rather than 18?
 
In the big picture, those tax laws are designed to be fair.

If you lost $1 million in 2015, then made $1 million in 2016, is it not fair for you to pay no tax for that 2-year period where you basically broke even? That's the logic of carrying losses forward, and that's not so much a loophole as an attempt at a fair system.

This all assumes his huge losses in one year were legitimate. If they were not, that's a different matter.

Full disclosure - as a result of struggling and/or failing businesses, I've taken advantage of "carried forward" losses on a couple of occasions, and never felt I was "playing" the system when I did so.
 
Bob001 said:
But other reports say that he made money on the casinos personally even as he took the corporations into bankruptcy. So can he take a personal deduction or credit for losses suffered by his companies?
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The IRS seem to think so, and the NY Times's tax experts. Has anybody ever published the definitive story of that whole affair?
 
Fast Eddie B said:
In the big picture, those tax laws are designed to be fair.

If you lost $1 million in 2015, then made $1 million in 2016, is it not fair for you to pay no tax for that 2-year period where you basically broke even? That's the logic of carrying losses forward, and that's not so much a loophole as an attempt at a fair system.

This all assumes his huge losses in one year were legitimate. If they were not, that's a different matter.
Full disclosure - as a result of struggling and/or failing businesses, I've taken advantage of "carried forward" losses on a couple of occasions, and never felt I was "playing" the system when I did so.
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And that's the problem isn't it? What if his claim was that the business went bankrupt and he had invested 100 million because of his name?
 
Fast Eddie B said:
In the big picture, those tax laws are designed to be fair.

If you lost $1 million in 2015, then made $1 million in 2016, is it not fair for you to pay no tax for that 2-year period where you basically broke even? That's the logic of carrying losses forward, and that's not so much a loophole as an attempt at a fair system.

This all assumes his huge losses in one year were legitimate. If they were not, that's a different matter.

Full disclosure - as a result of struggling and/or failing businesses, I've taken advantage of "carried forward" losses on a couple of occasions, and never felt I was "playing" the system when I did so.
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This might sound weird. What does it mean in this case to "lose" money?
 
Fast Eddie B said:
Full disclosure - as a result of struggling and/or failing businesses, I've taken advantage of "carried forward" losses on a couple of occasions, and never felt I was "playing" the system when I did so.
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Quite so. There's nothing illegitimate about this, but it can be made to sound pretty awful. "Paid no tax for 18 years" is what people hear.
 
Bob001 said:
But other reports say that he made money on the casinos personally even as he took the corporations into bankruptcy. So can he take a personal deduction or credit for losses suffered by his companies?
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No. The casinos paid him, both a salary and a bonus plus bought water for all the mini-bars (to the tune of millions) from Trump Ice.

A "loss" of that magnitude could only come from him personally mis-investing or taking a big hit on his share values. We don't see the itemization, just the totals. I can't think it was from the IPO, which was only in '95 and the stock didn't start taking a hit until '96. His share value wouldn't have decreased during fiscal '95.

Maybe from some of his other misadventures? When he was forced out of daily management of the Plaza, he kept his shares. He sold it for 325 mil in '95, against a cost of 400 mil seven years earlier. He and his creative accountants may have jacked that 400 million up to write-down a bigger loss, but I don't think they could triple the value like that to come up with the loss of nearly a billion. Besides, he only held 51 points in the Plaza.

But - a few other properties in similar straits? Yeah, he could've taken a major beating. (Trump Resorts & Casinos went public. His other investments did not, although they were covered by incorporation laws, of course.)

ETA: I hit send instead of Save....

To continue.... Since he wasn't a publically traded company, much of the debt he'd accrued around the Taj Mahal bankruptcy (estimated at that time to be about three billion) may have been rolled into that Chapter 11 filing and could've hit him with a personal loss.
 
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I think these tax credits for business losses go back at least to the 1960s or 1970s. Originally they were valuable in assisting American corporations remain afloat, companies like railroads or manufacturers. That they not wind up so strapped for cash that they begin skimping on things like safety or regulatory compliance. Or pull out of markets altogether which could have a big impact on the economy.

The big corporations also argued there was an element of fairness. The Ohio Steel Company earns $25 million in 1979 and pays taxes on that income. In 1980 they lose $25 million and obviously pay no income tax. But take a longer view: in 1979-1980 they earned no income. Why did they have to pay income tax for that period? Why not allow them to "use" the loss and carry forward a tax credit for the loss? Back when these laws were put in place many American businesses were having a tough time of it and it made a certain amount of sense.

A recent example would be the airline industry suffering huge operating losses in the wake of 9/11. Losses so great as to put their survival at risk. But as a nation we don't want an airline industry that cuts corners, that skimps on safety because of a cash flow problem. We don't want them to become insolvent and wind up with a government-operated national airline. So give them tax credits for their losses and let them regroup. In the long run we're all better off.

The problems have come in when the original laws have been amended again and again. Until you have someone like Donald Trump who makes lousy business decisions and uses his powers of persuasion to get people to invest. His business essentially collapses and the investors are pretty much wiped out. But Trump was able to structure his investment in such a way that he gets personal tax credits for his losses.

In this way the law works in reverse of the way in which it was intended to work. It doesn't really protect the economy or the greater good -- visit Atlantic City -- it allows someone like Trump to go on making lousy business decisions.
 
newyorkguy said:
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The problems have come in when the original laws have been amended again and again. Until you have someone like Donald Trump who makes lousy business decisions and uses his powers of persuasion to get people to invest. His business essentially collapses and the investors are pretty much wiped out. But Trump was able to structure his investment in such a way that he gets personal tax credits for his losses.

In this way the law works in reverse of the way in which it was intended to work. It doesn't really protect the economy or the greater good -- visit Atlantic City -- it allows someone like Trump to go on making lousy business decisions.
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What you have written above is complete nonsense. Confusing tax credits with tax deductions is the least of your problems, but it is certainly telling.
 
Trump's attitude is taxes are for everyone else. The other guy or gal. But this isn't surprising.

I can't remember a person, let alone a Presidential party nominee who shamelessly has more double standards than Trump.

"Miss Universe is fat"
Has this a-hole looked in the mirror?

"Miss Universe is a sleaze, she did a sex tape"
She didn't of course. Did he notice his wife doing lesbian sex photo shoots?

"Clinton Foundation is a slush fund"
It's NOT, but the Trump Foundation actually is.

Trump runs a charity, but personally is NOT CHARITABLE having not donated to it for at least 6 years.
OTOH, the Clintons have donated 10 to 20 percent of their own income to charity for decades.

"Ted Cruz is lying Ted"
Every other word out of Trump's mouth is a lie.

Bill Clinton chased women while he was married to Hillary.
Trump cheated on all of his wives.

Trump thinks NONE of the rules apply to him.
 
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