The ONLY thing the democrats want to do with Trumps tax returns is to stir greed and envy that he makes a lot of money and shoulda paid more of it in taxes
No facts. No sane discussion, is warranted here - it is a no-win issue
We will be electing a president in just over 30 days and there are serious issues to discuss
Btw Trump surrogates should make this go viral
“ do you prefer a guy who lost $1 billion of his own money - or a woman who while Secretary of State, lost $6 billion of YOUR money? “
Almost all investors suffer losses. These are used to off-set income. Tax laws restrict the off-set to something like $2,000 of ordinary income. So, mostly the off-set of investment losses is against investment gains.
Somebody who losses millions of dollars might not have current investment income to off-set the loss. The laws allow you to carry-forward losses (up to a certain number of years). If Donald Trump was able to fully use his huge losses, it would be because he made equally big investment gains during the years allowed.
This is the probable reason Trump is subject to audit every year. The IRS wants to see that he isn’t converting ordinary income into investment income, so that he pays income tax on his ordinary income. The same thing is true for his creditors during the time he was in a bind. They got into his personal finances. They wanted his companies to pay as much as they could on their debts.
Nowadays, Trump has a clean balance sheet. He has a tiny amount of debt on properties, and this is long-term, low-interest rate debt. He has made one of the biggest turnarounds in the history of business, and without a government bailout.
I put him just below J.P. Morgan (who was instrumental in the bankruptcy and reorganization of some of the greatest railroads of the country toward the end of the 19th century). But, even there, Morgan was the banker, while Trump was the owner, in these turnarounds.
The Banks got ownership and lost money in the recession years, but made all their money as the economy regrouped. Basicly Trump lost his ownership but got hired as a manager of the banks properties. So years later when they made a bunch of money he got paid too.
Lots of banks just take control of real estate, then they lose even more under their own poor management. But Trump made them the big deal. He explained that if they just let him manage through the big NY land recession they would make far more than foreclosing on him. They got ownership and he got a big bonus if he made them money. And everyone won in the end.
Let's look at the BIG picture....Millions of people across the nation take the mortgage deduction. And now you can go one step further....and take an equity loan....and deduct the interest on that.
And if you INVEST in a business and take a loss, you get the same tax benefits as every other businessman.
Many years ago, you could deduct ALL/ANY medical expenses...AND ALL of the interest on your credit cards.
Donald's casino empire collapsed...he did just right. Why should he pay taxes on a loss?
And did you know Bill Gates filed bankruptcy on one of his ENERGY adventures.
What’s this got to do with Russia invading Aleppo, or what does it have to do with the failed V.A. in our Country, or the millions of Americans who have given up looking for work???
Or how about the selling of our Natural Resources to Russia by Hillary???
Trump’s taxes shouldn’t even be an issue on FR...
It was decades ago....it was legal...who flipping cates
He didn’t sell uranium to the Russians. He didn’t take pay for play money from foreign governments. He didn’t leave Americans to die at Benghazi......
Come on focus on the important stuff already
What is a ‘Net Operating Loss - NOL’
A net operating loss (NOL) is a loss taken in a period where a company’s allowable tax deductions are greater than its taxable income. When more expenses than revenues are incurred during the period, the net operating loss for the company can generally be used to recover past tax payments. The reasoning behind this is that corporations deserve some form of tax relief when they lose money, so they may apply the net operating loss to future income tax payments, reducing the need to make payments in future periods.
BREAKING DOWN ‘Net Operating Loss - NOL’
An NOL makes a company unprofitable for tax purposes. For example, Company A has taxable income of $500,000, tax deductions of $700,000 and a corporate tax rate of 30%. Its NOL is $500,000 - $700,000 = -$200,000. Because Company A does not have taxable income, it does not pay taxes that year. Otherwise it would have paid $250,000 x 30% = $75,000 in taxes. Because the company had an NOL the previous year, it may put the NOL toward the current year’s tax bill or apply it against taxable income in previous years.
Rules for Applying an NOL
A business may carry the taxable amount back to the two previous years and apply it against taxable income for a refund. For example, an NOL occurring in 2015 may be used for lowering tax payments in 2013 or 2014. Because the time value of money shows that tax savings at that time is more valuable than in the future, this is the more beneficial choice. However, if the business did not pay taxes in prior years, or the owner’s income is expected to substantially increase in the future and raise the company’s tax rate, the business may also carryforward the amount over the next 20 years, reducing the amount of taxable income during that time.
If a business creates NOLs in more than one year, they are to be drawn down completely in the order they are created before drawing down another NOL. Because any remaining NOL is canceled after 20 years, this reduces the risk of the NOL not being used
Read more: Net Operating Loss - NOL Definition | Investopedia http://www.investopedia.com/terms/n/netoperatingloss.asp#ixzz4MDWgZJLX
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Simple question for you:
Who was charged with re-writing the tax code in 1995?
I doubt it. When a bank writes off a loan as bad debt, the amount of the write off is considered income to be taxed by the person who had the debt forgiven
I.e. I have a loan for 100k. Bank forgives debt... I now owe taxes on 100k I never made.
I believe that it is the banks that receive those write-offs, not Trump, for they are the ones that suffered losses. Also, Trump has never declared bankruptcy, it was companies of his that declared bankruptcy. His losses with regards to his personal taxes came as a direct result of his personal investments either in his companies of possibly even other companies. At least that is what I believe to be the case. Of course I am no CPA so I could be wrong.
But the bottom line, is that the tax returns of his businesses are filed separately from his personal tax returns. He does not included his businesses in his personal tax filings. That is the whole purpose of incorporating, to shield personal finances from liabilities of the business(es) ventures.
This laudatory NYT article from 1995 suggests Trump was one of the few real estate developers who survived the down turn.
To the extent that a taxpayer is currently solvent, debt forgiveness does create taxable income. In the case of insolvency, however, that is not necessarily the case. This is because debt forgiveness creates income for tax purpose only to the extent that it makes the taxpayer solvent.
Example: Taxpayer A is currently insolvent in the amount of $100,000 and owes a debt of $150,000. If the entire debt of $150,000 is forgiven, then Taxpayer A would recognize $50,000 in income for tax purposes due to the fact that he or she would then be solvent to the extent of $50,000.
By definition bankruptcy proceedings typically involve an insolvent individual, corporation, etc. Depending on the facts and circumstances, there is usually some discharge, forgiveness, or reduction of debts owed by the bankruptcy estate. It is common knowledge that Donald Trump has gone through these proceedings multiple times and I expect this was the scenario as it relates to the question in your post.
Nobody is saying that anything Trump did was illegal. If you don’t like the ridiculously complicated tax laws, change the ridiculously complicated tax laws. If he followed the law, you simply can not blame him for any of it.
The income from debt relief would decrease current year losses and carryover losses. So no, debt relief would not have any direct connection to the loss.
First, it is unclear what the deduction for 9 billion was for. A safe assumption is that it is carryover losses. Losses on real estate are not uncommon when the developer is accumulating properties and creating properties. The reason is depreciation. The owner can write off part of his investment each year and using certain component depreciation rules some parts of the building can be written off in as little as 3 years.
I assume these losses occurred over time as Trump accumulated his real estate portfolio. If he is consistently reinvesting his profits he may still have a YUGE loss carryforward for tax purposes. Once he slows down his investing the taxable income will come roaring in and use up those losses quickly.
From a tax planning aspect the amount of the loss he has could be a nightmare. There is a 20 year clock in which he needs to use it or lose it. If he continued generating (paper) losses from his real estate there is a real concern he might lose those benefits. I assume his subsequent tax planning included a plan to create profits on investments by selling low basis properties to generate taxable gains. It is also a waste of the benefit to drag out the use of the loss. Using a loss today has much more value than using the loss 20 years later.
I also assume the fact that he is under audit for most of the current years that this loss has been used up for some time. Otherwise the IRS has little to gain by adjusting his current years income. The tend not to waste resources.