5 real estate takeaways from 20 years of Trump’s taxes

Trump paid just $750 in income taxes in 2016 and again in 2017; has several hundred million dollars worth of loans coming due, according to Times report

President Donald Trump (Getty; iStock; Trump Organization)
President Donald Trump (Getty; iStock; Trump Organization)

Donald Trump carried forward nearly $1 billion in losses from his 1990s real estate bust to avoid paying virtually all personal income taxes, and then repeated the process with a bevy of money-losing businesses during his second act as a reality TV star.

But the president has expended much of his ability to avoid paying taxes as he has several hundred millions of dollars worth of loans coming due, according to an investigation by the New York Times, which obtained 20 years’ worth of Trump’s tax records.

The data show how the real estate mogul employed losses to reduce his tax liabilities in 10 out of 15 years before he won the presidency. During that time, the effective tax rate paid by the wealthiest 1 percent of Americans would have Trump owing more than $100 million, according to the report. Trump paid just $750 in federal income taxes for the year he won the presidency and again for his first year in office.

An attorney for the Trump Organization refuted the Times’ findings.

“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,” attorney Alan Garten said in a statement to the Times. The newspaper wrote that Garten conflated personal taxes with other federal taxes such as Social Security and Medicare.

Here are five key takeaways from the Times’ investigation:

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1. In much the same way that Trump used money given to him by his father to fund his development empire of the 1980s and 1990s, he used the proceeds from his successful production deal for the Apprentice television show to finance a portfolio of companies such as golf courses, hotels and licensing agreements. Trump’s financial disclosures from 2018 show he earned $434.9 million in revenue, but the data the Times used for its investigation show he lost $47.4 million.

2. The Trump Organization reported losing $134 million since 2000, including large losses for the company’s high-profile Washington, D.C., hotel and golf courses in Ireland and Scotland. Trump personally backstopped the losses with cash that he marked as a loan. In 2016 he converted the loan into a cash contribution.

3. Trump has kept himself afloat with successful investments including the retail space at Trump Tower in Manhattan, which has generated profits of $336.3 million since 2000. Trump also has passive investments in a pair of office towers in Manhattan and San Francisco he co-owns with Vornado Realty Trust that netted him $176.5 million through 2018.

4. Trump’s businesses reported a 40 percent drop in cash on hand between 2013 and 2018 to $34.7 million, and he has used a series of one-shot maneuvers to help offset cash-flow problems. Trump sold most of his stocks and bonds in 2014 and 2015 and withdrew $95.8 million from his partnership with Vornado in 2013. In 2012, he refinanced the commercial space at Trump Tower with a $100 million loan — nearly all of which he took as a payout. The loan is part of a series of obligations totaling $421 million coming due in the next four years.

5. The Internal Revenue Service’s longrunning audit of Trump’s taxes may center around a $700 million claim from his money-losing Atlantic City casinos. If Trump were to use a tax feature called abandonment, he could walk away from the casinos and declare those losses. But it appears Trump didn’t entirely walk away from the businesses: The Times’ tax documents show he got a 5 percent stake in the new company. If IRS auditors find he doesn’t qualify for the abandonment provision, Trump could end up owing more than $72.9 million. [NYT] — Rich Bockmann