"How Did Trump Live So Large While Reporting Such Huge Losses?"

[Honeycombe8]

Here's a background tweet by Trump, to remind us what Trump has said about his yuge losses:

Real estate developers in the 1980’s & 1990’s, more than 30 years ago, were entitled to massive write offs and depreciation which would, if one was actively building, show losses and tax losses in almost all cases. Much was non monetary. Sometimes considered “tax shelter,” ……

— Donald J. Trump (@realDonaldTrump) May 8, 2019

But here is a good article that explains a few things about Trump's so-called "paper losses" in this tax returns.
http://fortune.com/2019/05/15/trump-tax-losses/

Real-estate developer Donald Trump in 1992 lived in a New York luxury apartment, traveled by limousine and had personal bodyguards. That year, he also reported a negative $750 million adjusted gross income to the IRS.

How the future president could live so large while reporting such huge losses has been a question since the New York Times revealed a decade of Trump’s tax information last week. While the president claims there were paper losses that could be chalked up to real-estate activities, four tax experts said that for the president to have claimed such a giant negative income, his businesses must have bled money for years.

(snip)
To have achieved a billion dollars in losses, Trump would have had to lose actual money. And the fact that he continued to live in high style even after such failures means he would have had to either lose someone else’s money or get cash injections from another source.

(snip)
Yet even those deductions aren’t enough to explain Trump’s losses, according to Blattmachr and three other tax attorneys. The losses in the Trump core businesses in the decade through 1994, would have required Trump and his companies to own billions of dollars more in real estate than he did.

(snip)
It’s much more likely that the failure of Trump’s companies in the 1980s and 1990s generated hundreds of millions in losses, said Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. As the businesses failed, their losses flowed through to Trump’s own returns, and he used them to offset any income he made elsewhere.

Trump also appears to have tried to stretch the tax code to magnify those benefits even more, Rosenthal said. “Was Trump worse off after a decade of red? Not really because it was other people’s money,” Rosenthal said.

Here's Trump's now famous statement about using OPM ("other people's money" ) at about 1:30. Remember how Trump used his charitable foundation to commission a portrait of himself and to pay off lawsuit settlements?

[underpants]

1. Not to argue with the article but, he didn't have his business apart from himself?

That’s standard just for “corporate personhood” liability reasons. He could collect a salary but the corporate losses would be aside from him personally. Isn’t that how he declared bankruptcy in specific businesses 4 or 5 times?

[Honeycombe8]

2. You'll have to take that up with the four tax experts and real estate tax specialists in the art.

His businesses aren't corporations, I think, but the article doesn't say. He has separate business entities, including a few partnerships.

[marylandblue]

13. Mostly they are limited liability corporations.

Which can act like partnerships or sole proprietorships, but offer the liability protection of corporations.

[Honeycombe8]

16. Yes, there are those. And corporate ventures. And everything else that exists...

except maybe corporations (which I think have a higher tax rate).

[unblock]

5. not sure i understand the question.

if i invest in a business and the business losses money, sure, i may have cleverly set it up as a corporation so that i can't lose any *more* than what i put into it, but i'll still have losses *up to* the amount i put into it.

yes, several of his businesses have gone bankrupt, and in fairness, that is part of the business model and that's exactly why you do many real estate projects, each with its own corporate entities. statistically, you expect one or two to go bust and you don't want it to take down any other project.

i think donald fraud actually filed personal bankruptcy. i haven't read all the articles, but my recollection is that banks were losing patience with him and wouldn't do deals anymore unless he personally had "skin in the game", so he put his own assets up, resulting in, of course, a personal bankruptcy.

my recollection, also, is that he convinced his creditors that his name was the most valuable asset remaining and that he needed to live an ostentatious lifestyle in order to maintain the "brand".

[underpants]

6. Ok you're right. I skipped a step.

His investments in them showed a loss. Thanks.

[marylandblue]

12. I think he never declared personal bankruptcy.

He was taking money of his businesses for salary and personal expenses while he was driving his businesses into the ground. His banks out a limit on how much he could take out so the businesses could remain solvent.

The news reported it as if they were personal bankruptcies, but whatever they were, it was clearly a sham because he always had plenty of money after each bankruptcy. I assumed he hid it all in a Swiss bank account, but apparently he was just hiding it a complex financial web.

[Cary]

3. Catch Me If You Can

https://en.m.wikipedia.org/wiki/Catch_Me_If_You_Can

[Wellstone ruled]

4. He has been running one of the most

lavish Ponzi Schemes known to man kind. It is called keeping all your balls in the air and preventing any hitting the table.

[slater71]

7. Remember John Gotti the Teflon don?

This is Trump. It appears that nothing sticks to him. Gotti died in jail of cancer and that`s karma .

[ananda]

8. Money laundering Russian loans I guess.

nt

[struggle4progress]

20. +

[Tommy_Carcetti]

9. I asked myself that question back in the 1990s.

I was a lot younger but even then I realized something was not adding up with the guy.

[dixiegrrrrl]

10. Trump claims that Herbert Ross arranged 450,000 a MONTH income for him

during/after his casinos went bankrupt.

Ross was a partner in a Cyprus bank.

Now, of course, he is Trump's Commerce Sec.
and does the cutest impression of the dormouse in Alice In Wonderland.

[Totally Tunsie]

15. Source?

WILBUR Ross is the Commerce Secretary. He was, at one time, connected to a Cyprus bank, but I can't find any commentary regarding the $450K payments.

Is this who you're referring to?

[dixiegrrrrl]

18. same guy....

Ross, back then, was involved in handling bankruptcies for high profile businesses.

He was handling the Tag Mahal bankruptcy FOR the shareholders, but ended up also helping Trump survive his bankruptcy.

Wilbur Ross became rich investing in faltering businesses like steel mills and coal mines, finding a fortune in blue-collar industries that others dismissed as beyond saving.

But before he was scooping up Rust Belt factories, the banker was sizing up another troubled asset: Donald Trump. More than two decades ago, Ross represented bondholders who were gunning for Trump after he failed to pay back the high-interest loans he had taken out to build his casino empire.

When Ross arrived in Atlantic City, N.J., for negotiations in 1990, he found a throng of journalists and curious onlookers eager to catch a glimpse of Trump, according to "The Vulture Investors," by Hilary Rosenberg. For the quiet Ross, the scene inspired a revelation: Trump's flashy image had resilience.

Ross embarked on a strategy that helped Trump avoid a personal bankruptcy that could have derailed his unlikely trajectory from real-estate mogul to reality television star to president-elect.

Another article about the same thing:https://www.forbes.com/sites/chasewithorn/2016/12/08/trump-and-his-commerce-secretary-wilbur-ross-a-look-at-25-years-of-connections/#769f5582f820

The monthly figure was in one of the several trump books I have read, I think it was by Tim O'Brien.
TrumpNation: The Art of Being the Donald
https://www.latimes.com/politics/la-na-pol-wilbur-ross-commerce-20161208-story.html

[Totally Tunsie]

19. Thanks! Those are interesting reads.

I appreciate the references as I couldn't make the connection with what I had found.

[dixiegrrrrl]

21. I've gotten a lot of information thru searches

because today we have the advantage of pulling up old articles and stories about someone.

Right now, reading Fire and Fury, with astonishment at the lack of the most basic skills of day to day operation.
There was a story, early on, that Trump and his team could not even make the lights turn in the Oval Office.
I laughed, thinking it was a cute exaggeration.

It wasn't.

Kushner and Ivanka have the same bullshit way of "acting like" they know anything, but they don't, they are as superficial as Trump.

[sarabelle]

11. People love a con.

[treestar]

14. Living off the cash in the business

and not paying its debts. Also his inherited funds could be kept apart.

Right wing capitalists don't like government regulation, but I've thought of the argument - corporations limit liability, so if you are so willing to take responsibility for your decisions, why don't you become a sole proprietor? Why are you in favor of the existence of corporations? They are creatures of the evil government. The government can regulate them as such.

[Honeycombe8]

17. Only if he could fix it so the cash is under the table.

His businesses had money coming in every month, of course. But didn't cover the liabilities. He has to show all the income on his returns....unless, of course, he was able to get a substantial amount of that in cash, under the table. That's a lot of cash to get regularly.

A lot of Russians came in after one of his bankruptcies in the 90s, and rented a LOT of his properties, giving his businesses a lot of incoming rental or purchase cash. But again, it'd have to be under the table, for that not to be accountable in his tax returns.

These tax guys in this article are saying that there are too many losses for the amount of properties he owned. He'd have to own a lot more in property to get those amounts of losses.

This gets us to a point raised in the Cohen hearing - that Trump exaggerated the values of properties, in order to evade taxes and to make insurance claims.

Even so...the article states he was getting cash (unaccounted for) from somewhere. Exaggerating values doesn't put cash in your pocket to fund a lavish lifestyle.

You can do so many things when you own businesses. So many ways to hide income and assets.

He's a con man.

[sunonmars]

22. There is no other answer than he is owned and worth nothing, someone else's money.

He's the storefront with the criminals in the back counterfeiting.

[DeminPennswoods]

23. Living off his father's inheritance

NYT story on this last year showing just how much all the Trump siblings were getting from Fred Trump's estate and using various shady schemes to hide that income from taxation.

[misanthrope]

24. Because he's a standard American deadbeat

Staying one step in front of collectors, leaving all of his mess for others to clean up.

Hey, Reagan Era, that karma your ethos spawned? It's here and it has some bills in tow.