80’s tax returns show major losses on Trump’s taxes
President Donald Trump is known to talk a lot about a lot of topics- except his taxes. Despite insisting for years that he would release his tax returns, he has kept his tax returns a secret. However, reports show that a decade of Trump’s taxes have been uncovered that show the former real estate mogul had a large number of losses.
According to a report from The New York Times, Trump was seen as a wildly successful businessman with the growth of his real estate empire. He owned Trump Tower, Grand Hyatt Hotel, and a casino in Atlantic City. He even briefly owned a football team in the fledgling United States Football League. Trump owned the New Jersey Generals until the league folded in 1985.
However, Trump was deep in debt after borrowing hundreds of millions of dollars for his new business ventures. Trump wanted to open more hotels and casinos. He borrowed $351.8 million to build another Atlantic City casino. Trump also received a loan of $10 million to purchase the famed Mar-a-Lago property in Florida. Tax returns from 1985 show that he lost $46.1 million. The returns from that year also show losses from previous years adding up to $5.6 million.
In 1986, Trump continued his buying spree. He bought out his partners’ shares in Trump Tower and the first Trump Casino. Despite expanding his empire, Trump’s 1986 taxes show losses equaling $68.7 million. In 1987, the year of Black Monday, the large stock market crash in October, Trump’s businesses reported a loss of $42.2 million. In 1988, Trump lost $30.4 million. Barbara Res, a former vice president of the Trump Organization, told NPR that he lost money on the ventures because he overpaid for them.
“He overpaid for all that stuff,” said Res. “Those were not wise decisions. Those were mistakes on his part.”
In 1989, Trump’s taxes show that his businesses shed $181.7 million after he spent $365 million on a shuttle from Eastern Airlines. The purchase never turned into a profit. Trump put $7 million a month into the venture to keep his Eastern Airlines purchase afloat.
90’s debt lead to $1 billion Trump taxes loss
Casinos usually make money, but Trump’s Atlantic City casinos lost massive amounts of money. Trump paid $600 million for the Taj Majal hotel that opened in 1990. The casino was buried in $800 million in debt and declared bankruptcy in 1991. Those years represented the worst losses of the 10 years investigated by the New York Times. Trump’s losses in 1990 and 1991 were a combined $517.6 million. The losses from Trump’s 1985-1994 tax returns, the years that the New York Times investigated, totaled $1.7 billion in losses.
In addition to the losses, Politico also reported that Trump paid little or no taxes in 1991 and 1993. Records from New Jersey’s gaming commission noted that Trump’s losses were so substantial that they could have prevented him from owing taxes for 18 years.
Despite losses, huge paydays on Trump’s taxes
Even though Trump has large losses, he also made large profits as well. He profited in 1987 by investing in the company that owned United Airlines at the time. Investors flocked to buy the airline’s stock amid speculation that Trump was going to buy United. He didn’t, but by the time the stock rose and he sold his shares, he gained $11 million. By seeming to take over corporations and purchasing stocks, Trump netted $67.3 million from sales of stocks bought and sold in a year.
Trump also reported $52.9 million in interest in his 1989 tax report. Though real estate tycoons like Trump could possibly make a great amount of interest through high-yield bonds and bank accounts, there were no reported bonds or assets that could earn that much interest income in 1989.
Trump tax returns no cause for concern, president claims
President Trump responded to The New York Times report about his taxes by saying declaring losses on his tax returns are normal. According to Politico, Trump tweeted about his tax write-offs after The New York Times report. He tweeted that writing down his real estate losses on his taxes, otherwise known as depreciation, was necessary to better negotiate with banks.
“Sometimes considered ‘tax shelter,’ you would get it by building, or even buying. You always wanted to show losses for tax purposes … almost all real estate developers did — and often re-negotiate with banks, it was sport,” tweeted Trump.
Many Democratic presidential candidates criticize Trump for avoiding paying taxes and incurring large losses. However, Trump’s actions are perfectly legal. Businesses can have many tax write-offs. Trump took advantage of them, like depreciation of his assets, to pay little or no taxes. By declaring a decrease in the value of his assets, like his casinos, Trump was able to renegotiate with his debtors.
Trump’s tax laws still have loopholes for real estate
Even though Trump won’t release his current tax returns, the major tax code changes Congress enacted will continue to help Trump. The new laws ensure that other businesses can claim a greater amount of deductions, especially benefit real estate developers like Trump. As NPR reported, real estate businesses don’t have to pay capital gains taxes that other businesses pay when they sell their assets.
Will Trump’s current taxes ever be made public?
Trump has promised to release his current tax returns after the 2020 election. However, many Democratic politicians want him to release them sooner. Vox noted that Democrats in Congress are using Section 6103 of the IRS tax code. They are using the rule to try to compel force Trump to make his taxes public. Democratic members of Congress have also filed lawsuits to reveal Trump’s taxes. Trump’s older returns prove a lot about that complicated U.S. tax code loopholes offer many options for millionaire business owners like Trump.