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I’ve noticed a lot of misinformation circulating around about Trump’s taxes. This thread is going to be completely apolitical. THREAD
First, no one should be alleging Trump committed tax fraud - at this point - that $750 in income taxes could very well be perfectly legal.
How is this possible? Trumps businesses had a “net operating loss.”
Let’s say that I start a business, I put $1 million into this business. Then, over a year, I only make $500,000. I have a net operating loss of $500,000, so I wouldn’t pay taxes on the $500,000 I made because I’m in debt $500,000.
Additionally, there are carry forward losses. This means you can carry a pervious years loss into the next year for up to 20 years. Essentially, I could continue to add that $500,000 to my losses until I start to make a profit.
This is by design, the government doesn’t want to punish individuals for taking a risk. They want people to constantly be reinvesting their money. This is how our economy grows.
Donald Trump has currently been under audit for the past 10 years. Normally, audits don’t last this long - even for wealthy individuals -
The IRS can’t audit somebody forever, these things have deadlines. However, the IRS and the individual can agree to an extension of they think they can reach a settlement. This could mean he’s trying to make sure it gets settled out of court.
So far, the most controversial thing is Trumps casino business. Under U.S. tax law, one can claim an “abandonment loss.” Essentially, if I own a company, and I deem my shares to be worthless, I can abandon them. This abandonment can be written off entirely.
If I sell the shares -get something in exchange- then it can only be written off for up to $3000 per sale.
Allegedly, when Trumps casino business was going under, he claimed abandonment, but had a 5% stake in a separate company.
The IRS doesn’t allow somebody to claim an abandonment loss and get something in return for that abandonment. If the above is true, this would constitute tax fraud, and is probably the main thing the IRS is investigating.
Why won’t Donald Trump release his tax returns? First, there is no law that states somebody under audit cannot release their returns.
So there could be a variety of reasons he isn’t releasing them. This is just speculation, but I think, if he did, it would shatter his reputation as a great business man. Seeing as he has never made money on any of his businesses, except the apprentice.
I hope this all makes sense, and I hope it helps navigate this whole tax return story. Of course, don’t take me as an authority on this and do your own research.
