NYT received Trump tax returns: he has not paid taxes in years
The New York Times received Donald Trump's tax information for over two decades revealing real estate problems, huge write-offs and hundreds of millions of dollars in debt to be paid.
According to the publication, Donald Trump paid only $ 750 in federal income tax in the year he became president. In his first year in the White House, he paid another $ 750. Trump allegedly paid no income tax at all for 10 of the previous 15 years - mainly because he claimed to have lost much more money than he earned.
The tax returns, which Trump has long tried to keep secret, tell a story radically different from the one he sold to American society, the newspaper notes. His reports to the IRS tell of a businessman who makes hundreds of millions of dollars a year, but at the same time suffers from chronic losses, which he actively uses to avoid paying taxes. Now that his financial troubles are mounting, reports show that he is increasingly dependent on making money in businesses, which puts him in a potential and often direct conflict of interest with his job as president.
The New York Times obtained data on tax returns for more than two decades for Trump and the hundreds of companies that make up his business organization, including details for the first two years of his rule. It does not include his personal reports for 2018 or 2019. All information was provided by sources with legal access to it and demonstrates, in the opinion of the publication, that Trump has been more successful as a business tycoon than in real life.
As legal and political battles escalate over access to his tax returns, Trump has often wondered aloud why anyone would want to see them at all. “There’s nothing to learn,” he told The Associated Press in 2016. The annual financial statements required of him as president contain much more useful information, which he pointed to as evidence of his prowess in a thriving and extremely profitable business universe, he said.
In fact, these public records present a distorted picture of his financial condition as they simply reflect revenues, not profits. For example, in 2018, Trump announced that he earned at least $ 434,9 million. Tax reports show a very different picture of his bottom line: $ 47,4 million in losses.
Income from businesses and shows
The Apprentice show, along with licensing and endorsement agreements tied to fame, netted Trump a total of $ 427,4 million. He invested most of that in several businesses, mostly golf courses, which have been steadily absorbing cash ever since. The money he secretly received from his father funded a series of cost overruns that led to his collapse in the early 1990s.
Most of Trump's major businesses - from his golf courses to his Washington hotel - lose millions, if not tens of millions of dollars every year. His income from The Apprentice and licensing deals is dwindling, and a few years ago he sold almost all of the shares that could now help him plug holes in his dysfunctional property. Over the next four years, over $ 300 million in loans must be repaid - obligations for which Trump is personally responsible. His property has become a bag for collecting money directly from lobbyists, foreign officials and others.
At the Mar-a-Lago Club in Palm Beach, Florida, a flood of new members that began in 2015 has allowed Trump to generate an additional $ 5 million a year from the business. In 2017, the Billy Graham Evangelical Association paid out $ 397 to a hotel in Washington, where the group held at least one event during its four-day World Summit in Defense of Persecuted Christians.
When Trump took office, he said he would not pursue any new foreign deals. Despite this, in his first two years at the White House, his foreign revenues amounted to $ 73 million. While most of this money came from golf courses in Scotland and Ireland, some came from licensing deals in countries with authoritarian leaders or complex geopolitics - for example, $ 3 million from the Philippines, $ 2,3 million from India and $ 1 million. from Turkey.
Trump, in turn, said that he paid taxes on a number of his overseas businesses. In 2017, the President's $ 750 contribution to US government operations was less than the $ 15 he or his companies paid in Panama, $ 598 in India and $ 145 in the Philippines.
Transcripts of his primary federal tax form, 1040, from 1985 to 1994, were obtained by The Times in 2019. They showed that Trump has lost more money over the years than almost any other American taxpayer. Three pages of his 1995 returns, anonymously posted to The Times during the 2016 campaign, revealed that Trump had announced losses of $ 915,7 million, which gave him a tax deduction that would have allowed him to evade federal income tax for almost two decades. 5 months later, journalist David Kay Johnston received two pages of Trump's reports for 2005 - then the businessman's fortune grew to such an extent that he paid taxes.
Connection with Russia and the Miss Universe show
No subject has sparked more serious talk about Trump's finances than his connection to Russia. While the tax reports did not reveal previously unknown financial ties - and, for the most part, lacked the specifics needed to do so - they did shed new light on the money behind the Miss Universe 2013 Moscow pageant, the subject of incessant intrigue due to subsequent investigations into the interference. Russia in the 2016 elections.
Records show that the competition was the most profitable during the time Trump was co-owner. In 2013, the competition's gross revenue was $ 31,6 million, the highest since the 1990s, allowing Trump and his co-owner NBC to split the $ 4,7 million profit. By comparison, Trump and NBC shared a $ 2 million loss from a competition a year before the Moscow event and $ 3,8 million from a competition a year later.
Name fee and two successful buildings
Trump's evasion of income tax is one of the most striking discoveries in his tax returns, especially given the huge amounts of income listed elsewhere in those documents. Trump's net income from his fame - his 50 percent stake in The Apprentice, along with fees for using his name (the Trump Organization has over 500 organizations) - was $ 427,4 million through 2018. He earned another $ 176,5 million from investments in two highly successful office buildings.
According to the Times, the iconic skyscraper, located on Manhattan's Fifth Avenue, “reliably brought in more than $ 20 million a year, for a total of $ 2000 million since 336,3.” Trump's stake in two office towers in New York and San Francisco also performed well, reaching $ 176,5 million at the end of 2018, according to the publication.
Analysis of financial statements revealed a pattern in how the president was paid for various projects. Between 2010 and 2018, Trump wrote off an estimated $ 26 million in unexplained "consulting fees" as selling expenses on nearly all of his projects. The president's eldest daughter, Ivanka Trump, appears to have previously received royalties, despite being an employee of the Trump Organization.
Ivanka Trump was the chief executive officer of Trump companies that made profits and paid for advisory services on both projects - meaning that she seemed to be treated like a consultant on the same hotel deals she helped manage as part of her work in her business. father, according to the publication.
Tax Avoidance Scheme
So how did Trump manage to avoid almost all taxes on this fortune? Even the effective tax rate paid by the richest 1% of Americans should have made him pay over $ 100 million. The answer lies in the businesses he owns and runs himself. The collective and permanent losses he reported from them largely exempted him from paying $ 600 million in federal income tax from The Apprentice, trade deals and investments.
This equation is a key element in Trump's finance alchemy: using the profits from your fame to buy and support risky ventures, then using their losses to avoid taxes.
Over the course of his career, Trump's business losses have often accumulated in amounts in excess of what could be used to reduce taxes on other income in one year. But the tax code offers a workaround: with some restrictions, business owners can carry forward remaining losses in order to lower taxes in future years. This situation was the background in Trump's life, the newspaper said. As a previous report from The Times on his 1995 returns showed, nearly $ 1 billion in losses from his collapse in the early 1990s resulted in tax deductions that he could use for 18 years into the future. He used the latter in 2005.
Between 2005 and 2007, licensing and endorsement cash flowed into Trump's bank accounts with a net profit of $ 120 million. With no loss left to cut his taxable income last year, he paid significant federal income taxes for the first time in his life: a total of $ 70,1 million.
Overall, Trump has reported losses of $ 2000 million since 315,6 on golf courses, which are his prized possessions. The hotel in Washington, DC, opened in 2016, was not much better. His tax records show losses of $ 55,5 million for 2018. And the real estate services company Trump Corporation has reported losses of $ 134 million since 2000.
Trump has often argued that his losses were more accounting magic than real money, and that much was "non-monetary."
“I love depreciation,” Trump said during the 2016 presidential debate.
Depreciation is not a magic wand - it is real money spent or borrowed to buy buildings or other assets that are expected to last several years. These costs must be allocated as an expense and deducted over the useful life of the asset. However, Mr. Trump's business tax records show that he lost some of his fortune even before depreciation was taken into account. Three European golf courses, the Washington Hotel, Doral and Trump Corporation reported losses totaling $ 150,3 million. from 2010 to 2018, excluding depreciation as an expense.
Trump was periodically required to pay a parallel income tax called the Alternative Minimum Tax, designed to prevent wealthy people from using huge deductions to pay off their tax liabilities in full. Trump paid this tax from 2000 to 2017 - a total of $ 24,3 million, not including the refund he received after filing the application. In 2015, he paid $ 641, which was his first payment of any federal income tax since 931.
When he settled in the Oval Office, his tax bills were soon back in shape. His potential taxable income in 2016 and 2017 included $ 24,8 million in profits from sources related to his celebrity status and $ 56,4 million in loans that he did not repay.
To cancel tax bills, Trump used $ 9,7 million in business investment loans, at least some of which related to his Washington hotel renovation, which was eligible for a heritage preservation tax credit. His accountants appear to have discounted a small tax liability for both 2016 and 2017. When they got to line 56 of income taxes payable, the amount remained the same every year: $ 750.
An impending storm
Threats converge: growing business losses, impending IRS audit and maturity of guaranteed debts.
When Trump walked down the gilded Trump Tower escalator to begin his presidential campaign in June 2015, his finances needed a shake-up. Its major businesses reported rising losses of more than $ 100 million in the previous two years. The river of celebrity income that had sustained them for a long time was drying up.
The barrage of derogatory remarks about immigrants quickly cost Trump two of his biggest and simplest sources of money - licensing deals with clothing and mattress manufacturers that earned him more than $ 30 million. NBC, its partner for Miss Universe - the source of nearly $ 20 million in profits - announced that it would no longer air the competition and soon sold it.
Trump's tax records now make it clear that he faces a range of threats to his business and financial well-being. Over the past decade, it appears to have filled cash flow gaps with a series of one-off tricks that may no longer be available.
In 2012, he took out a $ 100 million mortgage on a commercial space in Trump Tower. His company paid more than $ 15 million in interest on the loan, but nothing on the principal. The full $ 100 million is due in 2022. In 2013, he withdrew $ 95,8 million from his affiliate account.
And in January 2014, he sold $ 98 million in stocks and bonds, his highest sales volume in two decades. He sold $ 54 million more stocks and bonds in 2015 and $ 68,2 million more in 2016. His financial information, released in July, showed he had only $ 873 in securities left to sell. According to Trump's company, cash on hand in 000 was $ 2018 million, down 34,7 percent from five years earlier.
This time, Trump is personally responsible for loans and other debts totaling $ 421 million, most of which are due in four years. If he is re-elected, his creditors could be in an unprecedented position as they ponder whether to demand recovery from the incumbent.
However, Trump has a tax break. While business owners can use losses to avoid paying taxes, they can only do so up to the amount invested in the business. But by taking personal responsibility for the $ 421 million in debt, Trump will be able to declare that amount as a loss in years to come.
The balances on these loans were not paid by the end of 2018. And the businesses that carry the bulk of the debt - the Doral Golf Resort in Florida ($ 125 million) and the Washington hotel ($ 160 million) - are struggling to fix it. But it is difficult to find a lender willing to refinance it.
An unfinished $ 72,9 million tax filing check hangs over Trump's head.
The state of the economy does not bode well. Stores are in decline across the country and have been very important to Trump Tower, which in turn was very important to Trump. Nike, which rented space for its flagship store in a building adjacent to Trump Tower and paid $ 195,1 million in rent since the 1990s, moved out in 2018.
The president's latest financial statements highlight modest gains in 2019. But that was before the start of the pandemic. His already stranded property had been closed months earlier this year. A Florida resort asked Deutsche Bank to allow deferred loan payments. Analysts predict that the hotel business will not fully recover until the end of 2023.
Trump still has assets to sell. But this can have its own consequences, both financial and related to Trump's desire to always be considered a winner. The Trump family said last year that they are considering selling a hotel in Washington, but not because they are losing money.
According to Trump, any difficulties in his finances were caused by the sacrifices he made for his current job.
Trump and his lawyer's reaction to the NYT report
In response to a letter summarizing the findings of The Times, Alan Garten, a lawyer for the Trump Organization, said that “most, if not all, of the facts appear to be inaccurate” and requested the documents on which they were based. After The Times refused to provide the tapes to protect their sources, Garten only spoke directly about the amount of taxes Trump paid.
“Over the past decade, President Trump has paid tens of millions of dollars in personal taxes to the federal government, including millions in personal taxes since he announced his candidacy in 2015,” the statement said.
With the term "personal taxes," however, Garten seems to combine income tax with other federal taxes paid by Trump - social security, health care, and taxes for his domestic workers. Garten also argued that part of what the president owed was "paid with tax breaks." This is a misleading characterization of loans that deduct a business owner's income tax bill as a reward for various actions, such as preserving heritage, the NYT notes.
According to "Voice of America"Trump himself called the NYT reports "fake" that he had not paid taxes for many years.
“In fact, I paid taxes, and you will see it immediately when my tax returns appear. They are now under verification and it has been going on for a long time, ”Trump said, answering journalists' questions.
He added that the US IRS treat him "very badly."
"The New York Times is trying to create some kind of news ... They only make negative news," the president said.
Joe Biden, the Democratic candidate who is vying with Trump for the presidency in November, did not immediately comment on the New York Times.
But within Biden's electoral team, remarks are circulating that many ordinary Americans pay far more taxes on their income than the $ 750 that Trump paid in 2016 and 2017, according to the New York Times.
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