Trump’s Taxes


The lawyers or business people here can correct me. but it seems to me that Trump is being treated badly in the matter of his taxes by what Giuliani IMO correctly called the Clinton campaign branches at CNN. MSNBC, the NY Times. etc.  Giuliani was being abused at the time by Jake Tapper.

According to the wiki linked below on the Trump Organization (TO), this business entity is privately held, is a holding company for Trump's many assets  and is 100% owned by Donald Trump.

That being the case the TO can be organized in a couple of ways:

1.  As a sole proprietorship.  In that case the income and liabilities of TO are an extension of his household and solely his personal tax responsibilities.

2.  As an S-corporation.  This would provide him with some liability protection in operations but would treat all revenues and losses as his and require him to accept these as personal income and losses to be settled at the end of each tax year.

In the context of the disintegration of the casino industry in Atlantic City, New Jersey in the mid-90s,  it is not difficult to understand how he could have had a loss of $913 million in one year,

US tax law allows a business owner to carry over "unused" losses from one tax year to the next for 18 years.  The remaining "unused" losses are applied in the following years' tax returns until exhausted or time runs out.

This is not rocket science.  What was he supposed to do, eat the loss?

Remember I am a supporter of the Libertarian ticket.  pl

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140 Responses to Trump’s Taxes

  1. Allen Thomson says:

    To the limited (close to zero) extent I understand this, it’s a case of “The scandal is not what is illegal, it’s what’s legal.
    “Typically, for federal returns, such net operating losses can be carried backward for two years to offset past income and then kept on a taxpayer’s books for 20 years going forward, though Mr. Trump’s losses could only qualify for a 15-year carryforward under the law at the time.
    “Also, real-estate developers can generate losses more easily than other taxpayers. First, they can take deductions for depreciation of their property. Second, they deduct the interest when they borrow. And third, unlike investors in other businesses, they can use those losses to offset their other income.”
    I,e., it appears as if developers can, somewhat uniquely, use carried loses on real estate to offset not just future income-in-kind (real estate), but *any* income.
    Anyway, it being October 2016, the legality of this probably takes second place to the optics.

  2. turcopolier says:

    Allen Thompson
    Really? IMO fair is fair and I say again what was he supposed to do? Eat the loss? Are you a business person? Is there any proof or even indication that the $913 million loss was bogus? “Optics” is propaganda BS. pl

  3. Matthew says:

    Col: “Survive to ’95” was always the plan. It will be interesting to find out who actually leaked this particular return. For one interesting theory, see
    Survive to 95 is well documented. See
    Finally, as to Allen Thompson’s “optics,” if Trump dribbles out later returns showing massive income, it will make this “leak” look really, really shady.
    Followed by, “Hillary where are you emails?”

  4. turcopolier says:

    what does “survive to 95” mean? pl

  5. The Porkchop Express says:
  6. BabelFish says:

    Agree on the optics. If he would have gotten in front of this instead of the stonewalling on his tax returns, he could have dealt with it long ago and made it a non-issue. Tactical error there. My concern is that he just doesn’t see that.
    The MSM? What else is there to say? The are gleeful in their attempt to destroy him.

  7. Matthew says:

    Col: When the real estate market crashed in about 1990, Trump said his plan was to survive to 1995. If he could make it until 1995, then he expected the market to rebound. And it–and he–did.

  8. Eric Newhill says:

    Sir, IMO, all that Trump did was legal and understandable. Survive to ’95 was, indeed, a common strategy during the real estate/S&L collapse.
    I am sure he carried those losses forward as allowed by law. Why wouldn’t he?
    This is just Hillary Clinton’s team to trying to confuse simple voters. I suspect part of the smear is, “Successful businessman huh? Look how much he lost” as much as it is anything else.
    The Trump team could handle this appropriately and come out of it ok. Or they could react badly and get damaged.

  9. rakesh wahi says:

    live by the media die by the media. whining is not allowed in Presidential politics. who asked him to hide his tax returns?

  10. Fred says:

    There are plenty of big players carrying tax losses forward and this one isn’t sending jobs to Mexico (this time around):
    At least they didn’t get directly bailed out like WallStreet and GM.

  11. Allen Thomson says:

    > “Optics” is propaganda BS.
    We’re in the middle of an intense propaganda war for the next five weeks. How things play with the voters, who are being heavily propagandized from both sides, is what matters up to November 8. Pity that, of course.
    We’ll see. Obviously the Clinton campaign is going to lean heavily on the optics: not paying federal income taxes while being very rich probably doesn’t look good to many voters no matter what the details of the tax code.

  12. Allen Thomson says:

    > Tactical error there.
    I tend to agree. If this carried-losses thing is actually the reason he’s not disclosing his tax returns, it seems like a mistake. Especially since, as everybody agrees, it’s perfectly legal and is a standard tax strategy used by many of the better-off. On first glance, it looks bad to ordinary tax-payers and is being spun to look worse, but could have equally well have been spun in the opposite direction by the Trump campaign with a bit of forethought.

  13. mike allen says:

    1995 was a good economic year for me – the economy boomed, Dow Jones went over 4000 for the first time ever, my modest home gained mega-equity because of the real estate boom, granted that was not in Atlantic City…..but how did he lose a Billion $ in a casino where he put little of his own money? He borrowed most of it. He went to bankruptcy court over his casinos in NJ four times and each time got the bondholders to accept less and less money instead of taking a total loss. So he stiffed the lenders as much or more thn he stiffed the small contractors.
    PS – I admire Libertarian foreign policy. But not so much their domestic and economic policies.

  14. Stuart Wood says:

    The optics are bad even though the write-offs are legal. After all, you get the tax rules your lobbyists pay for. Having owned farm land, the amount you can write off etc. would make those who cannot fill out a long form 1040 totally p***** off. Those who cannot do the long form 1040 are the majority of the voters.

  15. Allen Thomson says:

    P.S.: Perhaps my use of “optics” was obscure. What I meant was
    2. (used with a plural verb) the way a situation, action, event, etc., is perceived by the public or by a particular group of people:
    [Example]: The optics on this issue are pretty good for the Democrats.
    [Example]: Administrators worry about the bad optics of hiring new staff during a budget crisis.

  16. turcopolier says:

    Stuart Wood
    “After all, you get the tax rules your lobbyists pay for.” Did your lobbyists write the tax code? Did you create your tax advantages? pl

  17. Jonathan House says:

    possibly ignorant question and possible answers
    Question: Was there an actual loss Trump had to eat
    Possible answers:
    1. Yes
    2. No. The loss – some/all – discharged by the bankruptcy but nevertheless carried forward as a loss against future income for tax purposes.
    If (2) is approximately accurate, perhaps it would seem less strange if one analogized the loss by bankruptcy to loss by depreciation – e.g. I took depreciation on my office furniture and my computer which, according the rules, went to zero some years ago but I am still using the furniture and the old computer. If the analogy holds, Trump is ‘still using’ the loss although he may not be out of pocket. I actually paid for my furniture and computer and couldn’t value them for depreciation at more than I paid. From the little I know (from patients) about real estate on a big scale, the money lost by Trump was not calculated on the basis of how much he invested but on the value of his investment calculated in the interesting ways that are the rule in such real-estate ventures in which using paper losses for tax purposes are just one of the hedges available. All quite legal, but perhaps it diminishes pity (or the schadenfreude) one might otherwise have.

  18. turcopolier says:

    mike allen
    When you set up a business you seek to borrow both initial capitalization and operating costs money. Banks are eager to lend you the money but you still owe them the money with interest. If revenues are not sufficient to cover costs, then you go in “the hole” big time and quickly. that is how he could lose that much money. Been there, done that. pl

  19. turcopolier says:

    Jonathan House
    “No. The loss – some/all – discharged by the bankruptcy but nevertheless carried forward as a loss against future income for tax purposes.” IMO that would be a federal criminal matter. Is there any proof or evidence of that? BTW your depreciation argument is irrelevant. We are not talking about depreciation in his taxes. I have an eleven year old Escalade that belongs to my single proprietor consultant business. It was long ago depreciated to zero but I continue to use it. So what! pl

  20. mike allen says:

    That is way over my head. I’ll take your word for it. But I think that argument is way over the head of the average voter as well as mine. In any case he still used it to stiff both his lenders and his contractors. I don’t believe you did that.

  21. Swami Bhut Jolokia says:

    It’s titillating news but there’s a lot we don’t know, because Trump has refused to make his returns public. In my mind the biggest question is whether or not his reported loss was real i.e. he (his businesses) actually incurred losses.
    If the loss was real, he can carry the loss forward and mitigate future income taxes. if not, for example the ‘losses’ were a result of debt forgiveness then they not losses in the view of the IRS. And there are schemes in between. See, for example,
    So the bottom line is: we don’t have enough information to come to any conclusion.

  22. turcopolier says:

    “If the loss was real, he can carry the loss forward and mitigate future income taxes. if not, for example the ‘losses’ were a result of debt forgiveness then they not losses in the view of the IRS.” this would clearly be criminal fraud. Do you think the IRS likes him, especially now? pl

  23. michael brenner says:

    The man is not now a financial wheeler dealer who skirts the corrupt laws of the land. He is offering himself to be President of the United States. So he should own up to the unfairness and bias of existing tax policies and pledge to correct them if elected.
    I suggest that all those unhappy with Hillary just stay home or vote for some marginal party candidate. I frankly don’t se the point in eliding the awful truth that one of our parties has nominated a psychopathic, crypto-fascist to be its Presidential candidate – Or that between 55 and 60 million Americans will vote for him.

  24. There is absolutely nothing illegal about Trump not owing/paying federal taxes in this way. If there was, the IRS would have found it in one of its audits of Trump’s tax returns. Most US citizens would probably do the same if they could. If we could all manage to do this, we could starve the Borg into impotence. No taxes would mean no NSA/FBI to spy on us and no military machine to engage in foreign adventures. We also wouldn’t have all those bothersome veterans lining up for their gimme-dats. (I only dare say this here because I am one of those bothersome veterans.)
    I don’t have a problem with the poor legally not paying taxes. I do have a problem with Trump not paying taxes while he bellows about how much he cares about the troops and the veterans. If he stuck to bragging about being a savvy businessman interested only in maximizing his wealth, I still wouldn’t like him, but I wouldn’t find him as two-faced as he now appears.

  25. turcopolier says:

    mike allen
    They were not my businesses nor my money. I was simply a well-paid janissary running things. I know how these things work having arranged them. Having been pursued by banks large and small, public and private, state governments begging you to let them give you massive tax advantages, recruiting and training for free for your work force, giant electric companies offering concessionary rates for a promise of long tern contracts, US members of Congress offering helpful write-ins for infrastructure in appropriation and other bills, I have some idea how creation of capital works. BTW, almost all the various banks’ reps contacted me privately to offer kick backs if my principals could be persuaded to take their money. Did I stain myself and my honor? I did not, but as I was told a number of times, “you are not a businessman.” pl

  26. scott s. says:

    I would think “bankruptcy” mainly involves assets and liabilities, while income comes from revenue and expenses. I can see that a liability can be discharged (including AP), and in turn assets liquidated, but I don’t really see how you discharge a “loss” (unless you “claw-back” an expense). As far as NOL treatment vs NLTCL that another poster brought up, I note that NLTCL can only be used against ordinary income to the amount of $3000 (MFJ) per annum. I also note that passive activity losses (concept created by Tax Reform Act of 1986) can result in carryover.
    As far as the personal income tax in general, there are three numbers of significance, gross income, adjusted gross income, and taxable income. These are abstract accounting and legal concepts, and shouldn’t be confused IMO with reality. That’s why many favor consumption taxes, as the numbers are bit more transparent.
    There’s a saying along the lines of “an income statement is an opinion, but a cash flow statement is reality”.

  27. turcopolier says:

    scott s
    OK. That is your opinion. Where is the IRS driven prosecution? pl

  28. turcopolier says:

    Michael Brenner
    “a psychopathic, crypto-fascist,” IMO it is cruel and possibly misogynistic to write of HC that way. pl

  29. turcopolier says:

    mike allen
    “In any case he still used it to stiff both his lenders and his contractors. I don’t believe you did that.” His treatment of employees and creditors seems typical to me of the many rich people like him I dealt with in business. No, I did not but I was thought a fool for not doing so. When I left he corporate world I reduced my expenses to very low and worked out of the house. i have never had employees in my consultancy, preferring to use consultants to whom I owe nothing but fee and expenses. pl

  30. turcopolier says:

    Allen Thomson
    He probably has other things on his tax returns that he does not want disclosed. I am increasingly impressed with the notion that he might resign in office. IMO the problems of insulating the TO from the president are insurmountable.
    Someone wrote to say that HC has released her tax returns. Ho Hum! IMO it is now obvious that Comey has been directed to stop investigating the Clinton Foundation and especially its Canadian affiliate. pl

  31. MRW says:

    In any case he still used it to stiff both his lenders and his contractors.
    Sez you. What do you know about the process? He didn’t do Chapter 7. He did Chapter 11, a reorganization, and in case you don’t know, an independent government-appointed and paid-for trustee (probably plural) was running the businesses until the companies got out of the woods. From the moment they declare bankruptcy, the company has no more control over who gets paid or when. The bankruptcy court–which is a specific court–is running the show.
    If the creditors were “secured” they got paid first. Usually in full. Unsecured creditors get shafted. Happens in every personal bankruptcy as well.
    Banks are usually the first ones to force a company in distress to declare Chapter 11, whether the company wants to or not. They are secured lenders and they want to get their money back.

  32. michael brenner says:

    HRC is just a garden variety ego-maniac.
    How would you characterize Trump?

  33. michael brenner says:

    No Social Security. No Medicare. No enforcement of safety, child labor laws, organized crime. No roads, no airports. etc. etc.
    Do the poor pass the laws and set the rules to favor themselves?
    Is Trump, in your conception, just a fair-minded successful man who wants to level the playing field so as to end abuse of the very rich?
    As the kids say: let’s get real.

  34. MRW says:

    Tax avoidance is 100% legal. Tax evasion is not.
    After having gone through a complicated commercial Chapter 11 in the 90s that lasted three years, I can tell you that federal regs and rules about it are so complicated and byzantine and opaque it defies imagination. It’s like descending into Dante’s Inferno. Furthermore, specialized bankruptcy attorneys have to handle it, who charge a fortune and get paid first by the Trustee. If you make one little mistake, you’re in the slammer. If you miss one deadline, you’re dead. If you falsify one piece of critical information, the Trustee can recommend jail time to the Judge.The Trustee runs the show. He says who can run the company while bankruptcy is going on, who does the accounting, who pays the bills, and who can buy the materials.
    And all of these records are public. Any decent reporter on the East Coast could look up the cases on the docket and request the whole damn file on the case from the government’s archives, usually buried at an Iron Mountain site. Trump’s organization would have had to submit countless financial documents, personal tax returns included. The approved losses–yes, those losses they’re bitching about now were approved by the Trustee and Judge in court–are the only ones the debtor can legally claim, and someone with a fierce knowledge of IRS and bankruptcy rules working for the court not Trump would have gone over them with a fine-toothed comb, and submitted them to the court under oath. A debtor can’t just write out his losses on a napkin and claim them subsequently. No can do, or you go to the slammer for this as well for violating a court order. Furthermore, the IRS would have disavowed all losses without that court order.
    Hillary’s claim about what he did or did not do is prevailing upon the ignorance and emotion of voters and has no basis in legal fact. She apparently knew enough about cows to make a fortune in cattle futures. But her knowledge of real estate developer bankruptcies is non-existent.

  35. Bobo says:

    To lose and write off 915 million you first need to have that amount. Today DT claims a worth of 10 billion while Forbes says close to 4 billion, it’s obviously someplace in between. To earn those sums it takes a heck of a lot of American workers. It also takes a heck of a lot IRS personnel to make sure those numbers are correct. As DT says IRS audits are a way of life for me. I certainly would not desire to see my tax filings in the news nor do I imagine DT is please to see his in the NY Times.
    Trumps aims with Trade and Illegal Immigration policies mean American jobs. Clinton’s aims with Global Warming and a change to alternative power mean American job losses, just ask the coal miners, just ask the oil workers in a decade if she is successful.
    Taking away the ability for entities to write off losses and utilize bankruptcy court will stop the creativity and investment in this country. Trump is the perfect example of our society. You get hit once-you get up, you get hit twice-you get up,you get hit a third time and more- you get up. Granted he keeps rubbing it in our face but without the Trumps of this world the USA would be a third world country.

  36. MRW says:

    As an example here are the US Trustee rules for Region 8 (Tennessee) for a debtor-in-possession. (NYC is Region 21) Skim them to give you an idea of what’s usually required. People who file Chapter 11 are debtors-in-possion meaning that if the reorganization succeeds, they get to keep the company. Unlike Chapter 7, which is a complete wipeout.

  37. MRW says:

    I can’t see it yet, but I think I wrote NYC is Region 21. It’s Region 2.

  38. Freudenschade says:

    if you have a business that does well, you employ a tax attorney rather than an accountant. That way you are covered by attorney-client privilege if the IRS or state revenue comes calling. If you are in private equity (like Mitt Romney), you can take advantage of lots of incentives to reduce your taxes. If you are in real estate like Donald Trump, you’d be a fool to pay any taxes.
    Two points:
    1. While this is all legal, it doesn’t necessary play well with your neighbor.
    2. Between his foundation and some of the debt shuffling that seems to have gone on in the wake of his AC bankruptcies, there may be some actual fraud at work here. Talk to an SEC attorney and they’ll tell you that these sorts of financial crimes can be very hard to prov and explain.

  39. turcopolier says:

    1. The documents were evidently obtained illegally from the state governments. 2. For you the absence of evidence and IO played to the groundlings is good enough. how sad. Who sent you here? pl

  40. MRW says:

    Where are the posts this refere to? Doesn’t make much sense on its own.

  41. turcopolier says:

    “To lose and write off 915 million you first need to have that amount.” Not really. You need to have that much debt. pl

  42. MRW says:

    Between his foundation and some of the debt shuffling that seems to have gone on in the wake of his AC bankruptcies, there may be some actual fraud at work here.
    Not in the bankruptcy court. Highly unreasonable to assume that. The court determines what you walk away with. Including allowable losses. See previous posts once they’re up.

  43. turcopolier says:

    michael brenner
    “No Social Security. No Medicare. No enforcement of safety, child labor laws, organized crime. No roads, no airports. etc. etc.” Hysterical nonsense. How much of that has he actually said and how much reflects your personal demons? What is he? He is a businessman and that is why I do not support him. pl

  44. turcopolier says:

    OK. Let’s see the charge… Where is it? pl

  45. kao_hsien_chih says:

    I don’t think tax matters will necessarily sink Trump, but I suspect it will prob be what denies him the winning margin.
    In terms of legality, I doubt there is anything wrong and may even have been the business-savvy thing to do (like Trump says, he is the “king of debt”–who can somehow use other people’s money and not have to pay up–apparently including Uncle Sam). As many others have said, this kind of worldview will not enjoy much sympathy among the common voters. These are, in most people’s perception, the kind of privileges that the super wealthy with well-heeled tax lawyers and accountants can afford. Being a legal scofflaw, so to speak, is not really something most people admire, I don’t think. “Taxes are for little people” is not something that little people want to hear, even if implicitly.

  46. turcopolier says:

    Trump has repeatedly said that the federal tax code and the lobbying industry suck. pl

  47. Laura says:

    Amen, Michael.

  48. turcopolier says:

    Oh, bullshit. None of you fantasists from the academic world know anything about Business. pl

  49. Jay M says:

    Myself, have a high order of cynicism regarding tax payments
    the code is written and signed by who exactly, political creatures?

  50. Freudenschade says:

    1. Yes, the documents were likely obtained illegally. I think we are in violent agreement here.
    2. At this point there is some evidence of illegal activity at the foundation, which the NY AG is investigating. There is no evidence that there is any fraud on his debt restructuring; it’s pure speculation on my part. But given in how tight a spot he was after his AC collapse, I’m very curious how this plays out in the next few years.
    Who sent me? You did. I’ve been a fan of yours since your commentary during the Iraq war.

  51. turcopolier says:

    Fanhood is not something that interests me, but welcome if you are here on your own. “there is some evidence of illegal activity at the foundation, which the NY AG is investigating” Good! I hope he pays a whopping fine for excessive trickiness but that has nothing to do with his corporate taxes. pl

  52. Freudenschade says:

    Not in the bankruptcy court, correct. What I’m curious about is whether he’s trying to get two bites at the apple, with debt forgiveness (which counts as revenue) and losses. I’m curious to see more of his business dealing uncovered. Time will tell.

  53. steve says:

    What he did was probably legal, but hard to know for sure with the limited information we have. It does demonstrate that there are different rules for the wealthy. Not everyone can declare bankruptcy and have their debt written off. Not everyone gets to carry forward all of their capital losses. This is just another form of privatized gain and socialized loss. (You would think that if he is an honorable guy and he is really worth $10 billion, he would go back and pay those people who got stiffed during the casino days. Would still leave him with $9billion-$9.5 billion. And yes, people actually do that, granted not many real estate people.)

  54. turcopolier says:

    “Not everyone can declare bankruptcy and have their debt written off. Not everyone gets to carry forward all of their capital losses.” No? Tell me which owner of a business cannot do that? pl

  55. Freudenschade says:

    Perhaps “fan” is the wrong term. I’ve found your analysis and commentary interesting an illuminating.
    First, I’m not trying to convince anyone to vote for or against Trump with these comments. I’m suggesting there is a pattern of behavior here, namely that, like a lot of big real estate developers, he and his companies sail a little close to the wind much of the time.
    Whether it’s the self dealing of the Trump foundation, the dubious business in Cuba, or the complex debt and tax ball of yarn, I think we can expect a lot more of these revelations.

  56. Jack says:

    Trump has been audited for many years. The IRS has being going over his tax returns and all the supporting documentation with a fine toothed comb. Anyone who has had to deal with the IRS knows an audit is worse than a root canal and they’ll rake you over the coals if you’re lying. In light of the fact that these returns are from 1995, it is obvious these losses have been thoroughly examined by the IRS and accepted by them.
    This is an example of how the establishment and the MSM are doing everything possible including hyperventilating and making legitimate financial declarations as something dubious. Dirty tricks are considered part and parcel of contemporary political campaigns. It is clear to me that the Borg is petrified of a Trump win. Why? There’s something that really concerns them as their campaign against him is rather unprecedented.
    That’s why I believe if Trump pulls this off we’re gonna see an epic meltdown. The Borg just can’t handle that.

  57. turcopolier says:

    Don’t kid yourself. Real estate developers are no different from any other entrepreneurial businessmen. pl

  58. Iron Knee (upgrading soon to titanium) says:

    Well, at the very least Trump is a “genius,” according to Christie, Guiliani and Trump’s campaign, as evidenced by his tax derring-do.
    I wonder if Trump does his own taxes?

  59. gowithit says:

    Trump has tweeted many times his criticism about others not paying tax. Complaining that Obama only paid 20% and that 49% of US citizens paid no tax, crippling the nation’s debt. Take a look:

  60. Freudenschade says:

    as a businessman myself for over 20 years, with over 50 employees and a long history of providing services in a lot of industries, including startups in commercial real estate, I have a perspective.
    Each industry and sub industry has its own culture. I stand by my claim that big real estate developers sail closer to the wind than most.

  61. Jack says:

    Bankruptcy is written in our Constitution. Congress has passed the laws that govern it and a federal court system has been established to adjudicate it.
    The penalties for lying under oath in bankruptcy procedures are severe.
    All citizens and businesses can avail themselves of these laws. Donald Trump just like the Clintons and millions of Americans including businesses take advantage of these laws. The problem is the law is too big and complex and riddled with exemptions, deductions, credits and other loopholes. They are designed for those with access to tax accountants and attorneys to minimize their tax liabilities. The Borg doesn’t want to simplify the tax code. Whenever politicians have proposed flat rates with no deductions the left in particular scream. Then they complain when guys like Trump take advantage of the law.

  62. turcopolier says:

    what kind of business do you run? pl

  63. Brunswick says:

    Not really.
    I learned the hard way to never do business with Developers or Lawyers.

  64. Freudenschade says:

    Just sold it, so I’m temporarily retired. But from 1994 on it was software product development. From 2010 on it was focused on medical device software development. Worked with startups, middle market and Fortune 500.

  65. Jose says:

    No selling of favors to donors of the Clinton foundation….
    Evidence is coming from Julian…

  66. michael brenner says:

    I must admit to being baffled by the casual manner in which most SST participants seem to treat the Trump phenomenon – in all its unsavory aspects. Is this really just a another episode in the frolic that has become American electoral politics? Or there is there something far more serious abroad in the land. I believe it fair to say that if a Trump-like character were to ascend to the threshold of power in Russia, China or Germany we would be filled with dread and rebuke for the people who lifted him there. But we Americans give ourselves an exemption from the norms we apply to others. Doesn’t it strike you as odd that after years of inveighing against American exceptionalism as manifest in our arrogant actions abroad, we accord ourselves privileges denied everyone else when it comes to our political deformities at home? Deep down, we are certain that nothing really bad can happen here. It can, it is, and it is likely to get worse.
    The rich variety of explanations/excuses for what has been going on give pride of place to the legitimate feelings of grievance experienced by the “little man” in fly-over America who has been so mistreated by pointy-headed intellectuals. (Fly-over” America apparently now includes luxury townhouses on the Upper East side of Manhattan and posh resorts in Boca Raton). These salt-of-the-earth characters ask nothing more than that the entire country defer to their bigotry, celebrate their ignorance, bow to their God, and bless their patriotic virtue. But exactly what is it that these pointed-headed intellectuals have done to offend them? The Obama administration has followed Bush security policies, it has deepened and extended his domestic police apparatus to root out the bad guys, it has expelled hundreds of thousands more Latino rapists and murders that Bush ever thought of, it has been so ruthless in performing this service that families are broken up and untold numbers cast into warehouse-like camps where they are routinely abused by profit-making private companies rather than cossetted by the Gument. Domestically, Obama has been to the Right of Richard Nixon – look it up; that includes civil liberties. He has placed Wall Street predators and other business tycoons to positions at the pinnacle of so-called regulatory power in Washington. Via his sequester plan, he has managed to cut government – by any measure – more than any other President in history.
    Of course, he is not as pigment-challenged as they are.
    Trump is a mirror on America – take a close look.

  67. Freudenschade says:

    Just in case my reply didn’t get through:
    I just sold, so I’m temporarily retired.
    Until 2010, we did software product development. From 2010 on we did medical device software.

  68. MRW says:

    Two bites at the apple? You’re assuming that Trump sits down and does his taxes himself starting at the end of the year and then personally files. I’m pretty certain he hires licensed tax attorneys and accountants who would have their licenses yanked for double dipping, or malfeasance. Why would they risk it?
    Debt forgiveness is revenue for who? In terms of the bankruptcies, the court would determine the amount of debt forgiveness that ALL Creditors would be obligated to accept. The secured creditors first; the unsecured creditors second. Debt forgiveness isn’t revenue for the debtor-in-possession. Secured lenders can write off their losses as well. All creditors have the opportunity to make their case in court to the judge for whatever reasons they deem important to be made whole 100%. Most small businesses doing business with behemoths don’t bother to demand that their payments are secured in the event of a business failure or bankruptcy, but they could. Then they could slap a lien on the behemoth for lack of payment, just like contractors on your house.
    The losses to the company can be an aggregate of these plus can include approved capital losses for the debtor-in-possession, if applicable, and again, court assessed, determined, and approved. The federal Bankruptcy Court system is so highly specialized that it exists as a separate legal system within our federal court system. These guys have seen every level of bullshit and fraud and attempt to scam them for 200 years. Bankruptcy laws are statutory, and the Judge and Trustee have tremendous discretionary power to mete out punishment in just one unfortunate day in court. Kaboom. These laws were started with the creation of the constitution: Article 1, Section 8, Clause 4.
    I think this concentration on his business practices is ridiculous, and the absolutely wrong question. The federal government isn’t run like a business. I want to know if he understands how federal accounting works. That will be his purview as a US president.

  69. MRW says:

    I don’t understand the question.

  70. MRW says:

    The commercial real estate developer world changed dramatically with 1033 Exchanges.

  71. Larry Kart says:

    Some thoughts from Australian fund manager John Hempton about Trump’s possible “dept parking” in this affair:
    Decades ago — before I was a fund manager — I was the resident expert on tax avoidance working for the Australian Treasury. That was where I started to hone the accounting skills sometimes shown on this blog.
    I very rarely do anything in tax, but now I think it is time.
    The New York Times has published a story … about Donald Trump’s tax returns over two decades ago. The money-quote is this:
    ‘Donald J. Trump declared a $916 million loss on his 1995 income tax returns, a tax deduction so substantial it could have allowed him to legally avoid paying any federal income taxes for up to 18 years…’
    According to the New York Times the losses came
    … through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business, and his ill-timed purchase of the Plaza Hotel in Manhattan.
    There is an issue here.
    Donald Trump did not repay all the debt associated with those investments.
    the loss is a real loss and the Donald was really was out of pocket by $916 million (in which case he has legitimate NOLs)
    or the loss was passed on to someone else by The Donald defaulting on debt — in which case Donald Trump should be assessed for income from debt forgiveness.
    After all if the debt is forgiven it is not Donald Trump’s loss. The loss is borne by the person who lent Donald money and did not get it back.
    That … is why most income tax systems assess debt forgiveness as income.

    Okay – I do not know whether Donald Trump had the wherewithal in 1995 to bear $916 million of losses personally. But I doubt it. (If he did his financial career is different from what is popularly accepted.)
    So the alternative is the debt was forgiven in some way. But then the story the New York Times is running is wrong — because the $916 million of losses would not have survived the debt forgiveness and hence would have wiped out his NOLs and thus he would not be allowed to shelter his income for the next 18 years.
    Unless that is there is an avoidance scheme the New York Times has not worked out. Those schemes go by the name of “debt parking”.
    Here is how debt parking works. Suppose the debtor (in this case The Donald) is going to get his debt cancelled for (say) 1c in the dollar. When he gets the debt wiped out, the debtor (i.e. The Donald) will have to report assessable income equal to the debt wiped out (in this case 99 percent of $916 million).
    The alternative though is for the debtor to set up a dummy party. The dummy party might be his wife or children or some company or trust set up by them or more likely some completely opaque offshore trust.
    And that dummy party goes and buys the debt for say 1.1 cents in the dollar. Then they just sit there.
    They don’t force the debtor (i.e. The Donald) to repay. They don’t make a profit or loss on the debt. And because the debtor never has his debt forgiven he never gets the assessment on debt forgiveness, and he gets to keep his NOLs even though the losses did not come out of his pocket.
    Every tax system worth its salt has some rules on “effective debt forgiveness” to prevent debt parking. And — from my experience which is now over twenty years old — none of them work entirely.
    Now if Donald really has all those tax losses, it’s pretty clear that the debt must be parked somewhere.
    There is a vehicle out there (say an offshore trust or other undisclosed related party effectively controlled by Donald Trump) which owns over $900 million in debt and is not bothering to collect it.
    I do not have the time or energy to find that vehicle. But it is there…
    There is a Pulitzer prize for whoever finds it. Just give me a nod at the acceptance ceremony.

  72. Tel says:

    The same people who blame Trump because some of his businesses were not successful, also blame Trump for being honest with the IRS and documenting the fact that some of his businesses have not been successful.

  73. Larry Kart says:

    A seemingly significant response to John Hempton’s blog post, the last paragraph below in particular.
    I’m a US CPA, and have been doing tax audits for over 30 years. A couple of points you [i.e. Hempton] neglected to touch on:
    1. Depending on what kind of entities those losses came from (and I’m guessing they were flow-through [1065, 1120S], my guess is there wasn’t sufficient basis for Mr. Trump to even claim any of those losses.
    2. Bankruptcy has its benefits, it also has its negatives. Any liabilities lifted by the bankruptcy courts eliminates those losses from being claimed on your tax return. You don’t get the one without the other.
    I suspect what the NYT got was the un-audited, originally filed return. The audited one reduced that $916 mill NOL by at least half, if not more.

  74. Sam Peralta says:

    Between the two major party candidates, only one is actually responsible for the deaths of hundreds of thousands and the displacement of millions.
    What is that? Psychopathic? Crypto-fascist? All good?
    Which candidate has blood on their hands? Is that the candidate you intend to vote for? All those that support that candidate should stop lecturing the rest of us about genocide and war crimes.

  75. Sam Peralta says:

    Trump is likely a lying, weasel of a businessman but he doesn’t have blood on his hands unlike Crooked Hillary. Those that support her are supporting a proven warmonger and destroyer of people’s lives! They should then get off their high horse and stop whining when more death and destruction gets rained.

  76. Will Smith says:

    Donald and Hillary Go Into A Bakery on the Campaign Trail
    As soon as they enter the bakery, Hillary steals three pastries and puts them in her pocket.
    She says to Donald, “See how clever I am? The owner didn’t see anything and I don’t even need to lie! I will definitely win the election.
    The Donald says to Hillary, “That’s the typical dishonesty you have displayed throughout your entire life, trickery and deceit. I am going to show you an honest way to get the same result.”
    Donald goes to the owner of the bakery and says, “Give me a pastry and I will show you a magic trick.” Intrigued, the owner accepts and gives him a pastry. Trump swallows it and asks for another one. The owner gives him another one. Then Donald asks for a third pastry and eats that, too.
    The owner is starting to wonder where the magic trick is and asks, “What did you do with the pastries?”
    Trump replies, “Look in Hillary’s pocket.

  77. trinlae says:

    Depreciations and net operating losses are separate line items for S corp and 1040. I.e., K-1 asset/stock statement form has misc slots for 137 depreciations taken up front or misc declaration if taking yearly, or as pure write off.
    I agree that the delay is due to other specific items or privacy issues more generally. In which case he will delay until more probability of assuming office is apparent. (Did he fathom even last year that he would get this far?)

  78. kao_hsien_chih says:

    It may be that Trump has made multiple statements about how rotten fed tax code is, but, at least relative to his public persona, his views (and prev actions) with regards taxes are not known to most of the public. This is, most likely, the first time they hear about the details of his past associations with taxes, and many of them will have misgivings for one reason or other.
    One conclusion they might reach is that Trump is not such a successful businessman, after all, to have lost nearly billion dollars in a pretty good market.
    The other possibility is that he didn’t really lose that much money, but he was able to slip through by using legal machinery available only to the wealthy and/or privileged (this is where “taxes are for little people” angle could play a role).
    If Trump’s appeal is grounded on his image as a competent businessman who stands for the little guy, one or the other, or even both of these factors could hurt his chances. I do not believe that the impact will be big–many people who already support Trump will not be so impressed. But Trump needs converts more than HRC does and this complicates the effort to convince those who are not yet convinced of Trump even if they aren’t thrilled with the Clintons.

  79. trinlae says:

    Not business owners, but prospective future business owners (and customers) in the form student loan debtors cannot (at least directly).

  80. trinlae says:

    The whole affair could be a jujitsu goad to rebound attention on to Clinton Foundation. I don’t think the public considers Trump to be much of a chess player, but as a businessman he would have learned at least to use apparent weaknesses of himself and his opponents to his own advantage.
    Whatever suspicions cast on Trump Organization, at least he, like Dick Cheney, didn’t try to pass off his financial and business affairs as charity. This boils down now to a media propaganda mudslinging war. Clintons & DNC have most of the MSM locked down. But much of the public is less enamored of MSM than ever before. The question is how much. What makes it most interesting to me is that the usual sources of indicators, namely primary voting numbers, have been profoundly compromised (putting it politely-recall MSM declined to run exit polls in CA), at least for the Dems. Now over there nobody has any reliable (public) voter data, boo hoo hoo.

  81. Tidewater says:

    Tidewater to Michael Brenner,
    I’ve had some damaging experience with psychopaths. Basically, you could say they more or less won quite a few rounds, if you will, before I managed to remove myself safely (and I still wonder in one case) away from their eerie ability to get inside one’s gravity field and become a part of one’s life after they have become, for whatever reason, somehow obsessively (though you don’t know that) preoccupied with you. The subtle menace comes later. You are their victim, ultimately. In the end you feel like you are, or were, a damned fool. They are far more intelligent, charming, and far more perceptive than people who have never dealt with them realize. It is a cliche about them: “They spend a lot of time thinking about you.” You don’t expect that and you don’t think about other people in that way. They will do things you would not believe. They bring Trouble. I have paid close attention to some of the comments here, as for example’s Walrus’s disturbing accounts of dealing with psychopaths in business.
    As for the folks on the inside of prison, I have also known, over more than a decade, a number of inmates, most now dead, with Borderline Personality Disorders, who were locked up, but a couple of whom could still reach out and make some trouble. (Small, nuisance, pro se lawsuits which are shakedowns.) You might think that Death Row is all psychopathy, but that’s not true. (Actually what most have in common is sexual abuse.) There are guys in prison who are badly shaken at what they see in their psychopathic peers. I have a little library of books on personality disorders and the surprising thing to me is that every now and then I will still grab one of these, throw myself down on the sofa, and go right back to reading about a particular incident that is still bothering me, hoping to work it out in the context of a clinical text.
    And I think, again and again, if only, so many years ago, I knew what I knew now. If only!
    Donald Trump “a psychopathic cryptofascist?” Or, to put it another way, simply, a man with some sort of personality disorder, then? (I’ll skip the ‘cryptofascist’ part, reminds me of Gore Vidal and William F. Buckley!)
    I’ve thought about that, too. Just off the top of my head, there are a couple of things I have noticed that might be a bit reassuring, though I am simply hazarding a guess. Trump is surely not that impulsive, one of the signs. He simply could not have held his business together for this length of time if he had a serious personality disorder. In other words, he knows when to hold them and when to fold them. He doesn’t have much debt now. Interesting. That is prudent and a BPD is anything but prudent because there is a need for EXCITEMENT that probably comes from a slow-fever kind of depression (dysthemia.)
    Trump has very good blood pressure for a man his age, and height, actually remarkable. This would indicate he is probably not a secret drinker or drug taker. I don’t see how he would not have gotten into drugs or alcohol (and who would notice or care) given the life he has led in Manhattan. A man with a severe personality disorder would almost certainly have been attracted to alcohol and drugs. That is, in part, because the person with a personality disorder has a very bleak and disturbed inner landscape, and needs somehow not only excitement but also ESCAPE from depression. Being drunk in a roaring crowd of good-buddies that you don’t really know very well, is one very common solution. (For some reason I think of Villon of the Testaments.)
    The man with a BPD, or the full blown psychopath, doesn’t care much about other people, including his own family. It’s actually quite horrible. I’ve known, from a distance, about the very young wife of a man I suspected of being a violent psychopath, who committed suicide. It didn’t need to happen. I would guess that the psychopath got inside her mind, and she took the blame. But then I am reminded of the teenager in one of the Ripley series by Patricia Highsmith who studies Ripley, listens to him, walks with him –Ripley is only there on a visit– and the teenager suddenly breaks away and runs and jumps off a cliff. (She was a fag-hag and gay and knew whereof she wrote on psychopathology. )
    The BPD or psychopathic guy does not get along well with, or often enough, not at all, with his sons. That is an important rule of thumb which is not widely recognized. His sons will usually become his worst enemies. And his sons will often fail badly. Further, he will be clever enough to avoid any serious scrutiny of his part in their ruin. It will be because of their own weakness. This may sound crazy, but the success of a son can be seen by a psychopath as a threat. He thinks it makes him look bad. And he cannot dominate. Particularly, if, as is often the case, the man with the BPD has not done as well in business as people around him have been led to believe–because of his impulsiveness, say, or his inability to be alone for long bouts of time studying important documents and the numbers. The psychopath may indulge his daughters and treat them more appropriately as a counterbalance to his ugly, toxic relation with his sons; but this will serve also as a punishment of the sons and as revenge. And the daughters will always be supportive, always agreeable, always will hide any hits they or their families might suddenly take. And the toxic hostility, in the beginning, can be, often enough, turned on and off at will, leaving the son, finally destabliszed and devastated, until he finally understands that he must simply go away. Which can be heart-breaking to the mother, if she has been so crippled by the abuse within her marriage, overt but also subtle, that she has ended up almost without a will of her own and simply now must live on in depression and occasional grief, as at Christmas, noting the missing.
    Clutching at straws then? Well, I think Trump seems, as far as I can see, to be a genuine family guy. The sons are constantly present on public occasions, often they seem shoulder to shoulder, giving the impression of a Scottish family phalanx? He seems to work well with them. He bought the property that Mr. Kluge and his well-known wife, Patricia, built here in C-Ville. One of his clan was on hand to close the deal and had a few words for Channel 29. So, Trump seems OK with his sons. That is a hopeful sign.
    You might compare Trump and his sons with J. Paul Getty. The son, I think he might have been a lawyer, who worked closest with his father, killed himself. With a knife.
    If Trump has a personality disorder, it’s one that doesn’t keep him from functioning pretty well in certain chosen areas. I’ve gone out of my way to look at the lobby of the Trump tower, and to think of getting something like that up in the air is beyond me. And Trump got the air rights from the city for a few more floors, and swapped for them the city’s right to own and run some kiosks along the entrance to the building, so that’s quite reasonable, and seems to me to be an example of ‘the art of the deal’, even though the book was ghosted by a now repentant writer.
    As to the tax deals, I recall that Paul Reichmann and his brothers, who built up Olympia and York in Toronto, and then built Canary Wharf in London–again, to do that…!
    And when in 1992 Reichmann got into trouble, it was real trouble– 20 billion dollars worth! And they restructured the whole thing, O&Y lost most of what they had, but not everything, the game could go on, and now, many years later, they are back, once again a billion dollar business. And there’s a new Tube line extension that may be opened now out to Canary Wharf. I just looked at some “images” and how beautiful it is! Maybe the government wants to help these crazy master builders out some? After all, does any society have all that many people who can DO this kind of thing?
    Nevertheless, I understand what you are saying.

  82. rusti says:

    If what Trump did was legal, it seems that the Clinton campaign has absolutely zero authority to complain. Legal by the letter of the law is the standard that they have set on a ton of issues.

  83. Will Smith says:

    Trolls always come in pairs, the 2nd commenting on the first.

  84. MRW says:

    Jay M,
    Only Congress can write taxes. The IRS might request certain changes, but it has to go before Congress to get it passed.
    Have you ever had the experience of calling the IRS to ask for specific help for a specific problem, something that goes beyond website FAQs? And you get the runaround. You leave your number and they don’t call you back. I spent eight months trying to reach a real person. At one point, I called one second after my district office opened every morning for four weeks to get past the busy signal. Nada. Nothing.
    Then I finally got an appointment two months out at the district office and drove out of state to attend it. They had no record of the appointment when I got there, and I had confirmed it. I hit the roof. When I got home I got a senior supervisor’s number, called and complained. I was livid. The issue I needed addressing was time-dependent and serious. I traveled eight hours, rented a motel, and took two days off work. The supervisor said, “Let me close the door, and I need to get something out of my vault.”
    When she got back on she said, Look I’m not supposed to tell you this, but the only group the IRS is afraid of–used those exact words!–is Congress. Here’s what you do: write a letter to your local Congressman, copy the DC office, and use these five words indicating the distress the iRS is causing you, and the damage you’re experiencing. I wish I could remember those five words, but it’s in my copy of the letter somewhere. And I’m going to send you a copy of a small internal booklet that we use that I keep in the vault, you’ll need it, but you can never say you got it from me, you got that. Give me your address.
    I did it. The Congressman’s 24-year-old assistant called the IRS and reamed them a new asshole. It wasn’t even the Congressman doing the 911. I had return calls from the IRS for two months. Solicitous as hell, with follow-ups. Every single one of those messages I left was returned. The situation was cleared up beyond my expectations. The Congressman’s assistant made sure they’d helped me, called them back. Open Sesame. I’m passing this along to everybody who might ever be in similar situation.
    The tax code is full of special interest groups pressuring Congress since the start of the country, tariffs to benefit certain industries, business interests twisting congressional arms, presidents and religions doing social and nanny engineering, and sin control. One thing after another, bit by bit. they just pile it on. The commercial real estate lobby is a powerful and rich voter base, more so since Volker moved Federal Reserve headquarters to New York in 1979. They work tirelessly to get the code changed to their liking with each new financial banking instrument invented that they can take advantage of-the 1033 Exchange in the late 80s is an example—and they can frame it so that the congressman thinks he’s responding to the industry and the nation’s progressive needs.

  85. turcopolier says:

    OK. In my experience you would have been a vendor of services we would have used to build out our operating infrastructure using other people’s money. we would have paid you with other people’s money. I have been talking about people who approach a development market for creation of an industrial or other similar project, like hotels, casinos, etc. Such people have a track record somewhere else and that leads to all the blandishments I wrote of before. How did you capitalize your business originally? pl

  86. Stuart Wood says:

    I like your analysis.

  87. Fred says:

    His lawyers.

  88. Fred says:

    How much did Detroit stiff it’s bondholders out of? How about GM?

  89. Fred says:

    Dr. Brenner,
    You left out all the public funding of schools and colleges and all the associated staff payroll.
    “Do the poor pass the laws and set the rules to favor themselves?”
    For example if you get free college in exchange for a vote for a politician that’s four years of laws in your favor. If you can trust the politician to keep his/her word.

  90. Fred says:

    “Not everyone gets to carry forward all of their capital losses. ”
    Like Solyndra?

  91. Eric Newhill says:

    Larry Kart,
    Thanks for your comments and…..that is why I think that Clinton brought this to light through the NYT only to make Trump look like a giant loser. As far as any tax based crime, there is nothing there. However, we now get to talk about how Trump is a crazy irresponsible man who loses huge sums of money. He’d probably bankrupt America too, etc., etc., etc.

  92. MRW says:

    1031 exchanges, not 1033. I am forever making that mistake.

  93. MRW says:

    1031, not 1033.

  94. Sam Peralta says:

    Obviously it was legal. Otherwise the IRS would have charged him for fraud. People seem to forget that this was a tax return from 1995. That is now long past the statute of limitations.
    Where is the media scrutiny of Crooked Hillary’s foundation returns? The FBI seems to have made a political decision to pass on any investigation.

  95. Sam Peralta says:

    Everyone seems to conveniently forget that this was Trump’s 1995 return. It would be ridiculous to believe that the IRS is still auditing those returns. Clearly, the IRS has not filed criminal charges against him for his 1995 return. That would mean that the final audited return has been accepted by the IRS and whatever losses are in that final return are legitimate at least in the eyes of the IRS.
    This whole thing is classic media slamming of Trump to create doubt in voters mind. Let’s call it what it is. The MSM is part & parcel of Crooked Hillary’s campaign. And so are the establishment of both parties as well as the majority of the big money. They don’t want Trump and are doing everything in their power to insure he can’t win. Why are they so scared? Too many skeletons?

  96. LeaNder says:

    TPE, that’s a much more limited amount. … Although, yes the same no doubt.
    I witnessed some expert handling of matters as a student working in the office of tax consultants and auditors over here. Real Estate purchases often were used to reduce income.
    But maybe Trump was too big to fail too? The sum suggests it somewhat. Besides the banks love you, the more you owe them. Besides, I doubt others didn’t exploit the same legal framework.
    I just checked, our laws seem to have been changed under the category of tax equality. Now the deduction is limited forward and backward for one year and a certain amount. (1 mio single, 2 mio couple) and the following year only 60% of the amount above can be deduced. Not that this changes matters essentially, if they left a loophole and you can still use the law frequently, limiting the “loss” to that amount. Maybe? New rules, new expert reflection on approaches to use and/or misuse them, with the best having their price? 😉
    I seem to remember it was five years last time I advised an artist friend a little. Minor matters, for sure. Thus the larger context might be more complex and strictly the laws are for everyone. With bigger players, business owners and the self-employed versus the employees at a slight strategical advantage, maybe?

  97. mike allen says:

    Don’t forget bankruptcies of the city of Stockton CA and Jefferson County AL and the 600 or so other municipalities and counties that have have declared bankruptcy. Why point out just one?
    As for GM, I own some of their stock and am the proud owner of a Chevy Impala. And they paid back every cent plus interest to the government.

  98. Sam Peralta says:

    And what do you think Crooked Hillary and her supporters mirror?

  99. Boston Bob says:

    Slightly OT: Here’s a quick, 1-minute, interview with Mark Cuban on Bloomberg discussing Trump releasing his taxes. He pretty much backs up Trump but it’s interesting to hear what a billionnaire’s taxes are like. Based of Cuban’s description of his filing taxes, there is no way Trump could even be seriously involved in the process. I guess he has teams of tax attorneys and CPAs who handle it all. Maybe they give him a rundown of their work and what they plan to do and Trump signs off on it. This world is something us TurboTax filiers can’t comprehend (though we dream about it :).

  100. Edward Amame says:

    According to (Clinton supporter) Mark Cuban, perhaps we should not assume that Trump’s almost $ billion 1995 loss was the result of his failed casinos. Cuban suggests that Trump might have “bought an insurance company instead of doing something in real estate and he took a huge tax write-off to offset income.” Cuban said that in the ’90s, “there were accounting companies, accounting agencies, and tax shelter companies coming to me, offering me ways to offset my income so I didn’t have to pay taxes.”
    The only way to know for sure what went on in 1995 is to look at Trump’s federal returns.

  101. michael brenner says:

    Thank you for the professional insights.
    As to fascist, I use the term not as name-calling but descriptively. Trump matches the profile very closely. Some time ago, I posted a long commentary on this here. For reference there is Umberto Eco’s now classic disquisition on UR FASCISM published in the New York Review of Books in 1995

  102. gowithit says:

    We’re likely to both be under a bridge when “either or ” is elected!

  103. Former 11B says:

    Yep.Watch the “we came, we saw he died” video again and if you don’t feel a sense of shame for even saying what you said, you cant be reached. Inability to understand hypocrisy is one trait of the authoritarian mindset.
    I don’t want that psycho’s (Killary) finger near any red buttons.

  104. MRW says:

    Yeah, since 2005. First the banks got the federal government to let them handle the federal student loan program commercially. Then they got the federal government to guarantee those loans 100%. In other words, absolutely no risk loans. But they still charged risk-based interest rates. Then, to cement these guaranteed profits on the backs of the country’s future generation of doctors, lawyers, professionals, teachers, and workers, they got Cheney, et al, to change the bankruptcy laws to make sure those 100% guaranteed loans couldn’t be discharged in bankruptcy, creating a generation of indentured slaves. Senator Biden was a big supporter.

  105. Former 11B says:

    Trump is the a-hole boss I love to hate. That said, Hillary has a record. I want no part of the status quo she represents, that is leading to our doom. I am not FOR Trump, I am against Hillary and the DLC and the status quo and hippy punching and triangulation.. Samantha Powers tirade at the UN is it for me.Putin is through taking it and I don’t blame him.THE most important thing in the whole wide world is getting rid of the Neo-Cons and the status quo.
    I expect Trump to at least understand that he can’t enjoy a crazy night of passion with that fine wife of his if he is dead, she is dead, everybody is dead.

  106. turcopolier says:

    mike allen
    That was the price of their bail out. pl

  107. Freudenschade says:

    Bootstrap plus line of credit later on.

  108. Croesus says:

    So he had a $913 million loss.
    He gets to write that off, that is, not pay income tax on that amount over a period of 18 years, or until it’s used up.
    If his tax rate is 38%, he still has to eat $566 million.

  109. Freudenschade says:

    There was also a little accounts receivable financing in there, which dried up well before the 2008 crash.
    We typically worked with companies that were looking to launch a new or second generation product. Just as an example, physicians and commercial real estate developers both present cultural challenges, but physicians as a general rule tend to be ethical in their professional conduct (though not always in their personal conduct). Culturally, commercial real estate development is a particularly odious subspecies of financial services.

  110. Anna says:

    Here is a story of Marc Rich’ pardon by Clinton;
    One of the juicy morsels: “In all, Denise Rich [Marc Rich’ ex-wife] made at least $1.1 million in contributions to Democratic causes, including $70,000 to Hillary’s Senate campaign and PACs, and at least $450,000 to the Clinton foundation…” The Clinton library “refuses to release more than 300 pages of Clinton’s records relating to the pardon.”

  111. Fred says:

    Very good points. You also have a multitude of college and university employees whose livelihood is dependent upon an unending stream of people needing credentials at ever inflating costs. (the education part is debatable)

  112. Fred says:

    They didn’t pay off all the bondholders or suppliers in full.

  113. kao_hsien_chih says:

    All the talk about Trump’s tax write offs almost makes me sympathetic to his situation: the tax laws are set up such that the rich really are subject to practically different set of laws, regulations, etc. from the regular people and they are practically professionally obliged to take advantage of them. But the legal and the financial are not the same as the political. A lot of people are unhappy precisely because the rich and the poor are subject to different rules in all sorts of things and much of Trump’s appeal is a mixture of the disgust at blithe acceptance of those differences as “normal” by today’s professional elites (of both parties). Legal or not, professionally wise or not, Trump still looks like a hypocrite.
    Could he turn things around? Maybe. He has been frank about how, in the past, he’d been one of the awful rich too, but he has reformed and he’ll use his inside knowledge and experience to help the little guys. If he is really good at using rhetorical jujitsu, he should use this (and whatever is in his tax returns) to be frank that he was indeed using financial-legal trickery back then…but imagine what he could do if he could use his skills on behalf of the American people? Trump, instead, has been defensive and evasive. Not exactly a sign of that good a PR person, even, but an insecure person with fragile ego.

  114. Boston Bob says:

    Don’t worry Mr. Brenner, Americans never really will have the choice to vote in an outsider, or someone not kosher to the globalist cabal. They are now pulling out ALL stops. NY Atty General Eric Schniederman issuing the cease and desist order against Trump’s fundraising in NY claiming slight errors in the application, The Washington Post calling Trump a domestic terrorist, et al. Even Michael Reagan has blasted Trump and said he’d vote for Hillary today.
    It’s sad to think many good, God-fearing Americans really believed they could try to preserve their country from the globalist devolution and destruction of the America they knew and loved. But Hillary Clinton winning the election has been arranged. So no need to blow your cover.

  115. pj says:

    Judge Learned Hand – “Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the
    treasury. There is not even a patriotic duty to increase one’s taxes.
    Over and over again the Courts have said that there is nothing sinister
    in so arranging affairs as to keep taxes as low as possible. Everyone
    does it, rich and poor alike and all do right, for nobody owes any
    public duty to pay more than the law demands.”

  116. Swami says:

    I don’t think the IRS likes anyone, regardless of status and where they are in the political cycle.
    As I said, there are schemes in between. Mostly legal. For example, setting up a shell corporation to buy your debt at pennies on the dollar then never collecting on it.
    Of course, few people are asking the meta-question: what does it say about Trump’s self-proclaimed expertise in business that he personally had to take a loss of close to $1B?

  117. robt willmann says:

    The three pages from the three different state tax returns published in the New York Times are all for the calendar year 1995, and seem to be about personal income. The income relates to Donald and Marla Trump. The only type of business of which I am aware that directly produces personal income is a sole proprietorship, usually done with an assumed name, “doing business as” [some name], or d/b/a. The tax returns do not seem to be for a type of legal business entity, a “legal person”, or “fictional legal person”, such as a corporation, limited liability company, etc. that has to have its own federal tax ID number. A sole proprietorship uses the person’s social security number.
    I have not taken the time to try to match up the various numbers with their line descriptions for the three tax returns. I know very little about income tax law; I had a tax lawyer do the tax returns. What all the talk seems to be about is the number on the Connecticut tax return, line 1, which says, “Federal Adjusted Gross Income”. Trump and Marla put [minus] -$915,729,293. This is for the calendar year 1995. Thus, somehow, a big loss got to be characterized as personal income, or as affecting personal income, whether as a “net operating loss” (NOL) or something else.
    From the three biographies of Trump that I have — “Trump, the Deals and the Downfall” (1992), “Lost Tycoon, the Many Lives of Donald Trump” (1993), and “Trump Nation, the Art of Being The Donald” (2005) — a lot of his financial problems were worked out with the creditors without going to bankruptcy court. An article from Vanity Fair magazine from 29 June 2015 says that Trump businesses have declared bankruptcy four times–
    The article states that the bankruptcies were: in 1991, Trump’s Taj Mahal in Atlantic City; in 1992, Trump Plaza Hotel in Atlantic City; in 2004, Trump Hotels and Casinos Resorts; and in 2009, Trump Entertainment Resorts.
    So, where did the $915+ million dollar loss come from that could be counted against personal income? If it came out of bankruptcy court, it would have been from the 1991 and 1992 hotel/casino bankruptcies. But maybe it came from some of the private workouts or settlements, or both.
    MRW is right that a bankruptcy trustee has significant power, but with so many cases to oversee, the trustee is not really aware of what is going on in a case unless it comes up at the meeting of creditors, or the lawyers involved bring it to the attention of the court or the trustee. I doubt that there was any monkey business coming out of the bankruptcies, because the court documents are all public, the bankruptcy financial disclosures are detailed, and the creditors’ lawyers and the IRS would know what is going on. If there was a loss that could be applied to personal income that was determined in the 1991 and 1992 bankruptcies, I would say it was legally legitimate. If part or all of it came from the private workouts done with creditors, it is hard to know.
    I think that Trump made the right decision to not release his tax returns, at least at this time. Look at all the yakety yak that has been promoted just over a loss shown for adjusted gross income for 1995. Besides, the Obama administration has controlled the IRS for 8 years, and the IRS has proven, once again, that it can be politically manipulated. And yet, the IRS has taken no legal action against Trump. If the complaint is about 1995, any civil or criminal action might be barred by the statutes of limitation.
    On the other hand, the NY Times and all other alleged media have not run a lead story about Charles Ortel’s detailed analysis of the fraud in the Clinton Foundation and its associated organizations. A public document filed by a donor shows a large contribution, and the Clinton Foundation’s public filing shows that it got millions of dollars less that the donor said it gave. Right there on the face of the documents! And then there is the huge amount of money that was to go to Haiti via the Clintons, and very little got there.
    Dady Chery was born in Haiti and interviewed Ortel–

  118. rjj says:

    Eco’s article still applies. Our predicament is that a psychopathic crypto-fascist looks saner than a Russian roulette playing cabal of fucking crazies.

  119. gowithit says:

    And…It seems Trump is giving the MSM enough ammo “… to ensure he can’t win …”. Week after week he goes off on tangents feeding the BORG’S BEAST. Any other Republican, even Cruz, would by now be sending Hilary to a knitting circle.

  120. Larry Kart says:

    I didn’t say that the IRS was still auditing Trump’s 1995 returns. The point of the post from John Hempton that I quoted was that he thought that Trump had been engaged in “debt parking,” that if so the NYT’s story had missed this, and that the rules that are devised by regulatory agencies like the IRS to prevent debt parking don’t work that well.
    I also quoted a CPA who responded to Hempton’s blog post and added this FWIW:
    “I suspect what the NYT got was the UN-AUDITED [my emphasis] originally filed return. The audited one [probably] reduced that $916 mill NOL by at least half, if not more.”
    I’m neither a former (albeit Aussie) regulator like Hempton nor an American CPA like the other guy, but I would guess that some of what went down here is this:
    If we could get a look at Trump’s audited returns over the years, we would see (a la that CPA’s speculation) that Trump’s NOL claims were reduced a good deal by the IRS on a number of occasions. As for why things were left to rest there if dubious or beyond dubious debt parking was engaged in by Trump, it might have been beyond the investigatory capacity and/or will of the IRS at the time to establish/legally prove this. Further, while those who are quite familiar with both the IRS and the level of government above the IRS would know far better that I do, I would guess that it was in the interests of no one in those realms to do anything more than try to rein in Trump’s fast-and-loose maneuvers (if they were such) to some degree (.e.g. by significantly reducing the value of his NOL claims in course of the auditing process) rather than to attempt to do anything harsh and definitive that might have put him out of business or worse. If so, I would imagine that Trump was far from the only prominent mogul or would-be mogul of that era who has been treated in a similar manner by the IRS.

  121. turcopolier says:

    robert willman
    If the TO is a single proprietor company like a small business, I do not understand his thinking back in 1995. Did he and his wife file a joint personal 1040 that included the business? Why would he do that? Why would he expose his wife to the liability involved? pl

  122. Edward Amame says:

    Not sure he’s for turning things around so much. From what I understand, the original Trump tax plan is extremely beneficial to the wealthy and blows up the national debt.

  123. Tidewater says:

    Tidewater to michael brenner,
    I am not a licensed professional at all, though I do have a doctorate in English lit. and prior newspaper experience.
    I took a quick glance at the Eco article in New York Review of Books and know a little about him from his novel ‘The Name of the Rose,’
    the monastery book. Hmmmm. A fifteen point checklist for fascist ideas. Interesting. (A little bit like C.S.Lewis’s ‘The Screwtape Letters’?) Good to know if one is a bit off course. I already have an issue with Eco in re the Spanish Falangist war-cry “Viva la Muerte” being integral to the character of fascism. I think it has more to do with the character of the Spanish Foreign Legion, and was a one-shot, off-beat thing. Wiki is great on Unamuno’s famous Salamanca confrontation with that extraordinary founder of the Spanish Foreign Legion. I think it means, as in that old Roman saying “Dulce et decorum est…” But for Espana.
    I will look for your comments on Eco and Ur Fascism, thanks.

  124. Harry says:

    The Clinton tax return I saw was striking by the absence of investment income. I saw 10mn approx of speaking fees but almost no investment income. Given the reports of a net worth between 50 and 150mn that means there must be another entity which houses their investments. My guess is that it’s probably the family foundation.
    Trumps large loss is also indicative of a potentially questionable tax arrangement because I find it hard to believe that he could sustain a 900mn loss without more problems. Which makes me think he may have transferred some debt to a third party entity which he nominally does not control but which he owes money to. He is taking a risk lifting up his skirt this much.

  125. Mark Kolmar says:

    Often a particular topic (or scandal) becomes a triggering event around which discussion (or spectacle) takes place. The initial focus becomes only one element of the mix in a cluster of issues, with new information and insights later. The New York Times article got traction, which built long-overdue talk about Trump’s finances.
    Trump could have taken a different course. Many of his rivals in the primary advocated for a simpler, flatter tax code. Months ago, he could have tied the issues of his finances into his tax proposals, and tried to get ahead of these questions that the public should expect the candidate to address and vice-versa.
    Trump would have been better off if his finances saw more scrutiny earlier in the primaries, which in the best case would have aired all these issues before the last few weeks of the general election. He and his campaign can use this time instead to explain. They already have many resources devoted to that type of work. (I don’t mean to give them advice.)
    The city newspaper recently published an article that a local official had not paid income taxes to this state in several years. That treatment is shabby in some respect, although a less sympathetic story for Trump as a billionaire candidate for president, compared to a garden variety rich guy.

  126. Jay M says:

    well I think all the tax breaks for the schlubs have conveniently
    disappeared . . .
    that category might work a way into the top 10% (schlub)
    property development is what made this nation great (think all those rectangular flyover states)
    no surprise there are all kinds of depreciation, interest deduction, loss back and forward against net income, etc
    dividing up the land, along with slavery, created a propertied class

  127. Harry says:

    And there precisely is the rub. I don’t think Trump had that much to lose and still stay alive back then. So I think he did something some friends of mine did. I think he capitalized some equity and services and wrote it back add debt to himself. Then he transferred the debt to another vehicle which is remote for tax purposes but under his influence. A trust in his wife’s name for example. I doubt he had been servicing that debt.

  128. optimax says:

    What person doesn’t take all the legal deductions he can? I don’t pay any state income tax because my railroad pension is exempt. I would have to lie to pay state taxes since there is a line that has you fill in your non-taxable income.
    I can’t vote for either of the mean girls. The big story should be about the State Department losing 6 billion dollars, much of it while Hillary was in charge. That’s our money and is more important than the money Trump personally lost. And how many times did Henry Ford fail before he succeeded?
    I might vote for Gary Johnson just because he could appoint Tommy Chong to head the DEA to straighten out that department.

  129. Stephen Calhoun says:

    We don’t what income the carried losses negated, because he hasn’t released his returns. So, we don’t know what he had to eat or what his tax rate was.
    Trump’s casino dealings in the 90’s have been rehashed many times. They do not represent a stirring tale of leadership and acumen.

  130. Stephen Calhoun says:

    10-20% of voters in six large, toss-up, swing states. (FL-OH-NC-VA-PA-CO) Those are the ‘swayables.’ Those states are the belle of the ball.

  131. Stephen Calhoun says:

    Waving away all the smoke, Trump has sketched out a handful of initiatives that constitute the basis of his making the American economy work for the middle class. This would be in concrete effect, a revival and to some extent a restoration.
    There are two problems: one, his biography does not tell the story of a man who has walked that talk ever, and, two, he has not supplied the details. That he has spelled out a supply-side tax cut conforms with the dreams of the GOP elite, not main street. In this, Trump is Reaganesque, a spend-and-borrow Republican.
    However, Trump has said that his experience being successful in the rigged system is key to his being able to fix the rigged system. It would be valuable to know a bit more about what he is talking about here. He has a handle on the symptoms but is quiet about the underlying pathology, except for the trade part.
    Yet, Mr. Sanders did have a narrative about the rigged system, and it involved fundamentally typical wealthy elites, oligarchs of our sort, being able to pay for the kind of favorable government their money could “buy.” This is the analytic case, variously, from the right and the left.
    I wonder if Mr. Trump is for, or against, for example, unfettered elite donor classes, pouring megabucks into PACS, candidates’ funds. The curious general aspect revolves around the idea that some of the most wealthy citizens just want to get richer and richer and why not structure a favorable politics to that end? Main street? Factory jobs? Middle class? Who needs ’em? This is a sentiment that can lean left or right. Koch bros, Larry Summers–you get the idea.
    I am fairly confident that Trump cares not a single iota about the middle class, except as a vehicle to help him get to be the most powerful CEO on the planet.
    Somebody told me he isn’t self-funding anymore. True?

  132. robt willmann says:

    I did not make the first paragraph of the comment clear enough and it is kind of confusing. Sorry about that.
    The point I was trying to make is that the state tax returns seem to be for personal income, and explicitly say that they are filed as “married, filing joint return”.
    What is interesting to me is that somehow a negative $915,729,293 was applied to personal income, or was allowed to affect the amount of personal income that might be subject to income tax.
    I should have made the part of the first paragraph about a sole proprietorship and other types of “legal persons” (starting with the third sentence) into a separate paragraph. It sounded as if I was thinking that the Trump Organization may have been operating as a sole proprietorship. Like you, I do not think that he would set his business up as a sole proprietorship, because then he would be personally liable for everything involved in the business, and depending on what New York law said about property and debts existing in a marriage, Marla might have been liable as well.
    Because the state tax returns appear to not be a tax return for one of the “fictional legal persons”, such as a corporation, then the income declared would be personal income, and not income that was initially earned by a corporation, limited liability company, etc. A corporation, as the “legal person”, would earn money, and then the employees of the corporation, including the chief executive officer or president, would get paid a salary and other compensation by the corporation from money or other thing of value that it earned or had. That would then be personal income to the CEO or other corporate employee. The corporation would have its own federal tax ID number and file its own federal tax return.
    Trump, especially by 1995, would want to set things up so that he had little or no personal liability for business debt or other business liabilities. This would mean that he would not act as a sole proprietor and would try to avoid also signing a business loan in his personal, individual capacity.
    The Connecticut tax return has for line 1 the federal adjusted gross income from the IRS Form 1040. I assume that would be the (negative) dollar number from the individual federal Form 1040 tax return for Donald and Marla, done as married, filing a joint return.
    Thus, somehow a $915+ million dollar business loss was applied to Trump’s personal income, even though he almost certainly was not operating as a sole proprietor. Since I know very little about income tax law, as I mentioned, I do not have any idea what in the tax law allowed him to say that he could apply a $915+ million business loss to his personal income, which would then likely mean that he paid no individual income tax.
    That answer to that question would be in the federal tax returns for him individually (jointly with his wife when married), and for the “legal entities” that had a separate federal tax ID number in which Trump had an ownership interest or from which he received something of value.

  133. rjj says:

    I question the descriptive accuracy of “psychopathic crypto-fascist.”
    As for appeal — nobody knows the numbers of FU versus pro-Man on Horseback voters.

  134. kao_hsien_chih says:

    Nobody really knows what Trump’s plans are. The original plans, which nobody seems to mention, were straight out of supply side economics gospel. Since then, no serious details came out, other than that Trump does not subscribe to conventional wisdom and might do something different, with emphasis on “might.” He has built up expectations that he is somehow different and people who trust him do so because of his “style” (for the lack of better word) than details of his plans. But his tax situation is, whether he likes or not, part of his “style” now. Could he do something to make it work to his adv? Seems theoretically possible–but Trump does not seem to have the ability to pull it off.

  135. Edward Amame says:

    Stephen Calhoun
    Trump is not self funding.
    From OpenSecrets: he has raised $205,860,765.
    $165,853,281 comes via his campaign committee, and another $205,860,765 from outside groups.

  136. Edward Amame says:

    I think the clues to Trump’s tax plans are right out in the open. This article in Bloomberg Mag lays out how Paul Ryan’s June 2016 tax plan moved very close to Trump’s original tax plan.
    “…both repeal Obamacare, gut the Dodd-Frank financial reforms and block climate-change regulations. Some differences remain, including over entitlement programs, which Ryan would cut and Trump would not.
    On taxes, though, they are moving ever closer. This was especially apparent on Friday when Ryan unveiled the sixth and last of the blueprints that make up the House Republican agenda and, by implication, its 2017 game plan, assuming the party retains control of the House on Nov. 8…”

  137. Fred says:

    What does it say about Hilary’s ethics that she left the White House in debt for millions but is now a multi-millionaire for doing what, exactly, other than speeches to Wall Street?

  138. kao_hsien_chih says:

    I am not describing Trump’s tax plans, which will have very little impact on the elections, but describing the voters. The key word in my description is “nobody” (with slight exaggeration) not “Trump’s tax plans.”
    I mean literally most people don’t know what Trump’s tax plans are. I am sure he has some plans, details of which are known to people who know. But the most of the public does not, and even then, they don’t really care that much.
    Many of the same voters supporting Trump voted for GWB and Romney. A surprising proportion of (not a very large fraction, but larger than people think, imputed from demographic/electoral data) Trump voters voted for Obama in 2008–then sympathized with (not many actually voted for, based on turnout numbers) Tea Party types in 2010. Did they vote on the basis of tax policy, NO. The impression created by Trump carries more weight than the details of his plans, whatever they are, and that is that Trump is some sort of guile hero who is standing up for the little guy, whatever the “truth” might be. His campaign focuses on the “crookedness” of Clinton carries weight quite frankly because she is not exactly seen as a friend of the little guy either, for good, legitimate reasons (yes, this will start flame war that she is putatively better than the “real” Trump. Then again, very few people know “real Trump” either–neither me nor you have personally known the Trumps or the Clintons. The only elected officials I even vaguely know personally never made it past US House).
    The mistake that the Democrats are making, if I were advising HRC campaign, is that they keep trying to attack the “real Trump.” The real Trump is irrelevant in the campaign. He is selling his public persona which is totally different from whatever his real self and real plans are. The tax business exposes the flaws in his public persona and can expose his weaknesses further, especially for those who are still sitting on the fence. But his public persona isn’t so weak that he has no room to cover things up, if he is as good at the PR game as he thinks he is (which I don’t think he is.)
    Electoral politics is half a game of illusions. Forget the “real” Trump. You’re fighting a ghost. Try thinking like a ghostbuster. If your first reaction is, “there ain’t no ghost,” then you’re on the path towards losing, because, in this universe, there are actual ghosts and some of them can be pretty powerful.

  139. Cold War Zoomie says:

    My family has owned real estate for over 20 years, although not even close to Trump’s level (we had almost 30 rental units at one time). The concept is pretty much the same regardless of scale: find the best price for a property versus income and always, always, always use “other people’s money” to purchase it. Then let your renters pay the mortgage and take every stinking tax deduction your CPA can find. The goal is to have $0 or less of income per year on paper after deductions. Yes, ZERO or LESS.
    It’s not rocket science.
    Trump did exactly as he should have done. I don’t like him, but that doesn’t make what he did wrong.

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