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Tue Oct 4, 2016, 02:46 PM

A couple of notes about the Trump tax return from personal experience

Although I am not sure the losses were under the same rules - the time I am familiar with was in 1982, a lot earlier than Trump's 1995 return - here is my personal experience with carry back/forward rules:

In 1982 my husband and I had several small businesses. Although they were doing OK some things happened that threatened our cash flow. Ronald Reagan's IRS tightened the rules on writing off losses from "hobby" businesses against other income. The Florida state legislature passed a anti-paraphernalia law. A couple we had thought were friends stole a chunk of money from us.

My horse breeding business had been holding even but without right offs I could not maintain it. One of our major businesses was a head shop - while we joined the suit against the paraphernalia law, we could not afford to be arrested over the situation. Another business shared the store front and if we closed the head shop, it could not pay the rent. We lost money on the business that the "friends" stole money from us.

We had a third party company do an audit of our entire financial situation. The advice - close down the horse breeding business, close the head shop and any other business we did not want to personally work in full time. The second business in the store front could stay open if we didn't have any employees and if we were willing to work six days a week - it might have made a profit of $15,000a year. That was Plan A.

Plan B was to close all the businesses, sell off most of my broodmares and keep some personal horses, carry back our losses and get a big fat check from the IRS - enough money to restore our cash flow and take a breather while we though what to do next.

This was a no brainer - we got the advice in late November, had "Going out of Business" sales at the stores, bought out the lease on the store front, shut down our other businesses, and started selling mares. By December 31st we were no longer in business. I only had a few horses of my own. (A year or so later I began boarding other peoples' horses and that business continued until about 2000. I bred my horses as a hobby but not as a business.)

According to what one of the accountants told my husband the rules under which we could carry back the losses had been passed to benefit Ross Perot. Looking back at the history, EDS had lost a lot of money in the 1970s but when Ross Perot sold it about 1979 it was worth about a half billion dollars. Perot lobbied Congress to pass the carry forward provision. That meant when he sold the company, he could write off a lot of his gain in the sale of the company against his previous losses.

I don't know if this claim is true - it's too far back to find easily on the internet. When my husband heard the story,the sale of EDS was only a few years back, though, so the accountant could have been very aware of story.

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