NYT: Trump, Taxes and Being A Rubbish Businessman

NYT: Trump, Taxes and Being A Rubbish Businessman May 8, 2019

The New York Times report on trump taxes have been all the talk of the news today on the American side of the pond. And rightly so. The reports comment IRS tax transcript show that Donald Trump lost $1.17bn  from 1985 to 1994.

That’s not very good business acumen. That myth he has tried to perpetuate has been blown out of the water. One year alone, he recorded 1% of the total countries losses.

Just wow.

These documents show that, as mentioned, Donald Trump is not a very good businessman, as well as showing that he relied hugely on his father to remain afloat and that he simply doesn’t pay any tax. I’m here, and this gets very interesting, Trump is shown to have had a 50 million dollar income from interest. But there is no information about how he came by this. And this would have been by far and away the biggest declaration of it’s kind of that year in terms of interest income. This look exceptionally dodgy.

These are, of course, only tax transcripts and not the whole picture (i.e. full tax returns) but they are very revealing indeed.

The question you have to ask here is why has Donald Trump started suing Deutsche Bank, Capital One and his own accounting company so that his tax returns are not made public? If someone didn’t have something to hide, would this be there behaviour?

Is absolutely no doubt that something is rotten in the state of Donald Trump.

Here, some tax experts, including the Pulitzer Prize-winning author of the report, give their opinions:

The key desire from these experts is that they find out the sources of his income as this is not always clear. The not so subtle hints are that Russia is now underpinning his income, as according to the commentators above. Whether this is indeed the case will be interesting to see, if we ever get to find out such details.

Interesting details from The New York Times report are as follows:

The new information also suggests that Mr. Trump’s 1990 collapse might have struck several years earlier if not for his brief side career posing as a corporate raider. From 1986 through 1988, while his core businesses languished under increasingly unsupportable debt, Mr. Trump made millions of dollars in the stock market by suggesting that he was about to take over companies. But the figures show that he lost most, if not all, of those gains after investors stopped taking his takeover talk seriously….

In New York, the attorney general’s office is investigating the financing of several major Trump Organization projects; Deutsche Bank has already begun turning over documents. The state attorney general is also examining issues raised last year by The Times’s investigation, which revealed that much of the money Mr. Trump had received from his father came from his participation in dubious tax schemes, including instances of outright fraud….

Mr. Trump was able to lose all that money without facing the usual consequences — such as a steep drop in his standard of living — in part because most of it belonged to others, to the banks and bond investors who had supplied the cash to fuel his acquisitions. And as The Times’s earlier investigation showed, Mr. Trump secretly leaned on his father’s wealth to continue living like a winner and to stage a comeback.

This is not to say that Mr. Trump never made money on a deal. One that turned out quite well came in 1985, when he bought the Hotel St. Moritz in Manhattan for $73.7 million. Mr. Trump has said he sold it for $180 million in 1989. His tax information showed long-term capital gains of $99.8 million, accounting for the vast majority of such gains in the 10 years reviewed by The Times.

But that rich payday was overwhelmed by his business losses, and Mr. Trump still paid no federal income taxes that year….

The figure appears to include a payment he received as part of a deal to buy the unfinished Taj Mahal casino from Merv Griffin, the talk show host turned businessman. Mr. Griffin’s company had agreed to pay Mr. Trump to manage construction of the casino, among other services, and the resolution of a bitter dispute between the two included Mr. Griffin’s company paying Mr. Trump $63 million to buy out that contract.

That windfall contributed to Mr. Trump’s making his biggest income tax payment of the 10 years reviewed by The Times. Even so, his overwhelming business losses meant that he paid only $1.4 million in alternative minimum tax that year.

The only other income tax he was required to pay in those years was $124,344 in 1987, also under the alternative minimum tax, which was created to make sure wealthy people could not avoid all income tax through loopholes and deductions.

Returning to the rather suspicious interest income mentioned earlier, The New York Times reports:

One number from Mr. Trump’s tax returns is particularly striking — and particularly hard to explain: the $52.9 million in interest income he reported in 1989.

Mr. Trump reported $460,566 in interest income in 1986. That number grew to $5.5 million the next year, and $11.8 million the next. Then came the outlier 1989.

Taxpayers can receive interest income from a variety of sources, including bonds, bank accounts and mortgages. High-yield bonds, though less common today, were popular with institutional investors in the 1980s. And to make $52.9 million in interest, for example, Mr. Trump would have had to own roughly $378 million in bonds generating 14 percent a year.

A conundrum that I would surely like answered.


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