After Losing Nearly a Billion Dollars, Trump Might Have Avoided Paying Taxes for Almost Two Decades

In 1995, the New York Times reports, Donald Trump declared a $916 million loss on his income tax returns—a deduction so great it might have entitled him to wait as long as 18 years before paying any federal income taxes. Three pages of Trump’s tax returns were sent to a Times reporter in the mail.



A declared loss of that size does not necessarily suggest that Trump was insolvent or bankrupt, as the revenue generated by his various holdings would have covered the debts. However, the tax 1995 records, obtained by the Times, show how Trump’s accountants exploited loopholes in the tax code to allow the real estate developer protect his wealth at a time when casino regulators described the Trump Organization as being in “dire financial straits.”

Tax experts hired by The Times to analyze Mr. Trump’s 1995 records said that tax rules especially advantageous to wealthy filers would have allowed Mr. Trump to use his $916 million loss to cancel out an equivalent amount of taxable income over an 18-year period.

Although Mr. Trump’s taxable income in subsequent years is as yet unknown, a $916 million loss in 1995 would have been large enough to wipe out more than $50 million a year in taxable income over 18 years.

The $916 million loss certainly could have eliminated any federal income taxes Mr. Trump otherwise would have owed on the $50,000 to $100,000 he was paid for each episode of “The Apprentice,” or the roughly $45 million he was paid between 1995 and 2009 when he was chairman or chief executive of the publicly traded company he created to assume ownership of his troubled Atlantic City casinos. Ordinary investors in the new company, meanwhile, saw the value of their shares plunge to 17 cents from $35.50, while scores of contractors went unpaid for work on Mr. Trump’s casinos and casino bondholders received pennies on the dollar.