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.
That would be correct. The original poster also misunderstands the difference between business losses, the effects of a bankruptcy, and what happens when a loan is forgiven.
When a loan is forgiven, the net amount forgiven is a gain to the debtor, and hence income. It is a matching loss to the creditor.
In bankruptcy, in general, the amount of debt discharged is not considered income, but it does represent a loss for the creditor. This makes sense from a public policy point of view. If discharged debt was considered income then the broke debtor would exit bankruptcy with a huge debt to the government, re-creating the same situation the bankruptcy was intended to cure.
Without knowing exactly what led to the losses reported by Trump it is hard to know what the source of the losses was.
The whole issue is ridiculous. Anyone who has net losses, either in a tax year, or a tax year where the losses can be carried forward (or back) doesn't owe taxes, because under our law we tax "income" not "losses"
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 is an important point which is lost in all the noise on this Trump tax business.
Every business entity owned by Trump, and Trump personally, need to file tax returns.
If Trump were to fully release all tax returns, the liberals would cherry pick certain business entities which showed losses, or pick apart how certain Trump businesses are incorporated, or pick on some aspect of the business structures to make their half assed political statements.
I hope that some discussion of all of this occurs, namely, that there is a difference between Donald Trump’s personal tax returns for Trump as an individual, and tax returns for the various businesses he’s owner/part owner/partner in.