When the New York Times released to the public that Trump may have only paid $750 in taxes in 2016 and 2017, many were outraged.
In response, Trump tweeted, “that he “paid many millions of dollars in taxes but was entitled, like everyone else, to depreciation and tax credits.”
Even though the report of only paying $750 might be a sign of tax fraud, accountants say this may just be some intense tax planning.
“Ultimately it’s possible we find more information and it might be he’s doing more than dubious things, but it’s possible that this is the end result of some good attorneys, smart [certified public accountants] and a messy tax code,” said Jeffrey Levine, CPA and director of advanced planning at Buckingham Wealth Partners in Long Island, N.Y.
Since his first day at the White House, Trump has refused to release his tax returns, and has even started a legal battle to keep them hidden.
Eugene Steuerle, a tax expert at the Urban Institute, says he wasn’t surprised when he saw Trump’s tax returns, as many commercial real estate developers tend to lower their tax bills by deducting interest payments from their debts as well as moving profits from the sale of a building into the buying of another to avoid capital gains taxes.
“Most tax experts expected you would find little in the way of tax payments by President Trump,” said Steuerle, who served as a Treasury Department official under President Ronald Reagan.
According to the Times report that was released, Trump paid $95 million in taxes over 18 years but was refunded $72.9 million, which means he paid an average of $1.4 million in taxes over 17 years. In comparison, U.S. taxpayers in the top .001 percent of earners pay an average of $25 million annually.
Alan Garten, a lawyer for the Trump Organization, noted that the Times report seemed that “most, if not all, of the facts appear to be inaccurate” and requested to see which documents the Times referenced in their report, to which the Times declined.
“The New York Times’ story is riddled with gross inaccuracies. Over the past decade the President has paid tens of millions of dollars in personal taxes to the federal government,” Alan Garten, a lawyer for the Trump organization, said. “While we tried to explain this to the Times, they refused to listen and rejected our repeated request that they show us any of the documentation they purport to be relying on to substantiate their claims.”
CNBC reports that in some cases, losing money actually pays. The Times discovered that in 1990, Trump lost almost $1 billion and used that loss to save on taxes in 2005. Trump also lost $1.4 billion in 2008 and 2009. In accounting, this is known as net operating loss and is a strategy many business owners use to lower taxes in future years after a great loss.
The Times discovered that in 1990, Trump lost almost $1 billion and used that loss to save on taxes in 2005. Trump also lost $1.4 billion in 2008 and 2009.
In accounting, this is known as net operating loss and is a strategy many business owners use to lower taxes in future years after a great loss.
“Let’s say you had $50 of losses in July and $100 of income in January of the following year,” said Erica York, an economist with the Center for Federal Tax Policy at the Tax Foundation. “You wouldn’t be taxed in the first year due to those losses, but you’d be taxed o
CNN reports that this new information could be pivotal for the swing voters on deciding who to vote for this November.
“I don’t care what his excuses are. It doesn’t pass the smell test. It’s not going to disrupt those people who were for him totally. It’s those people on the fence,” said former Ohio Republican Gov. John Kasich, who is now a CNN political commentator.