# So Trump may have avoided paying taxes by carrying over a huge loss. So what? **URL:** \ **Category:** Great Debates\ **Created:** [October 3, 2016, 1:57pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563 "2016-10-03T13:57:42Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![CurtC](https://avatars.discourse-cdn.com/v4/letter/c/ce73a5/32.png) [@CurtC](https://boards.straightdope.com/u/CurtC)\ **Post date:** [October 3, 2016, 5:13pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/41 "2016-10-03T17:13:44Z")
> [@Amateur\_Barbarian](#): > > See above (and news analysis elsewhere): it’s very likely that Trump didn’t lose $900M except on paper, which IMVHO should not be allowed to offset a further billion in real income. I’m not sure what that means. I admit I haven’t studied his 1995 tax return. > [@](#): > > If I gamble for three hours at a Trump casino, starting with $100 and walking out with $200 but at one point having $1M in chips on the table, I’d didn’t “lose a million dollars” and nobody owes me nothing because of it. But is that what happened with Trump? In the casino situation you’ve described, the IRS would treat it as a $100 gain. The only way to count it as losing $999,800 would be to count it as _gaining_ $999,900 in a different year (as far as I’m aware). If he did that, and paid taxes on the gain, then it’s OK with me if he uses the loss as offset against other income. Again, please don’t think I’m here to defend Trump. We just have so much valid material - use that! ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [October 3, 2016, 5:14pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/42 "2016-10-03T17:14:46Z")
> [@CurtC](#): > > Except those laws in particular aren’t unfair, and they’re not loopholes. If you lose a giant pile of money so that your income is negative, you don’t have to pay taxes that year, and you can carry over the loss to offset your profits in future years. > > Godammit, I hate being in the position of sounding like I’m defending Trump. Just criticize him for something valid; lord knows you have plenty of material. I don’t think many here are reporting that it was illegal or unfair, only that this is more evidence on what a huuuge liar Trump is about his worth and his monumental hypocrisy and the reprehensible way he uses the money that most likely has thanks to those legal tax maneuvers. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 3, 2016, 5:25pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/43 "2016-10-03T17:25:45Z")
> [@Blaster\_Master](#): > > What does it say about his view on taxes? IMO, nothing. Read this tweet: [Link.](https://twitter.com/realDonaldTrump/status/172772609627394049?ref_src=twsrc%5Etfw)Trump was pissed off that 50% of Americans do not pay any Federal income tax despite “crippling government debt.” (They still pay payroll taxes, property taxes, sales taxes, etc. – but the tax laws are such that in any given year, they do not pay the Federal income tax, in the vast, vast majority of cases because they aren’t making enough money to do so or receive family tax credits that wipe out what they owe.) It is entirely plausible – some may say likely – that at the exact time he posted the tweet, he was one of those Americans who paid no income tax. Do you truly believe that it says “nothing” about his view on taxes that he finds poor people paying not enough in income taxes to reduce the national debt to be an annoying thing; but if he pays nothing in income taxes, he is being “smart?” I’m not asking you for the legalities of the tax code, I’m asking if his statements are not illuminating to you in the slightest on how he thinks the country should tax its people. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [October 3, 2016, 5:27pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/44 "2016-10-03T17:27:20Z")
> [@CurtC](#): > > I’m not sure what that means. I admit I haven’t studied his 1995 tax return. [This guy has.](https://www.washingtonpost.com/news/wonk/wp/2016/10/02/the-most-shocking-part-of-donald-trumps-tax-records-isnt-the-916-million-loss-everyones-talking-about/) > [@](#): > > But is that what happened with Trump? In the casino situation you’ve described, the IRS would treat it as a $100 gain. The only way to count it as losing $999,800 would be to count it as _gaining_ $999,900 in a different year (as far as I’m aware). If he did that, and paid taxes on the gain, then it’s OK with me if he uses the loss as offset against other income. I read the above and other sources (who admit they are going on partial evidence but speaking from experienced viewpoints) as saying the $900M was no actual loss of Trump’s, but a paper loss created by certain interpretations of the situation. I agree that substantial business losses, if actual, can be used to offset equivalent amounts of income. That appears not to be the case here; Trump looks to have used an essentially phantom loss like my gambling analogy to claim exemption on nearly a billion in other income. All he has to do is release his taxes like every other candidate for decades… but he won’t. How very strange of him. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [October 3, 2016, 5:30pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/45 "2016-10-03T17:30:29Z")
> [@CurtC](#): > > I’m not sure what that means. I admit I haven’t studied his 1995 tax return. You won’t find it there. The detailed explanation for the loss was not in the return sent to the Times. BTW, the article in the Times about this today said that if the loss was forgiven it would then count as income, and be taxable. Did that happen? We’d have to see the later returns to know for sure. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [October 3, 2016, 5:33pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/46 "2016-10-03T17:33:40Z")
> [@CurtC](#): > > Except those laws in particular aren’t unfair, and they’re not loopholes. If you lose a giant pile of money so that your income is negative, you don’t have to pay taxes that year, and you can carry over the loss to offset your profits in future years. > > Godammit, I hate being in the position of sounding like I’m defending Trump. Just criticize him for something valid; lord knows you have plenty of material. The losses in part come from special loopholes given to real estate developers. Trump claims he wants to close some loopholes - but not the ones that benefit him. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [October 3, 2016, 5:36pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/47 "2016-10-03T17:36:05Z")
> [@puddleglum](#): > > What is the difference between a paper loss and an actual loss? > > The speculation that I have heard is that he probably got much of the 900 million loss forgiven and so he was not able to claim the entire loss in subsequent years. The stories have all said that Trump may not have paid any taxes since the loss, not that he has not paid any taxes. If he got much of the loss forgiven, then he has probably been paying taxes depending on how much he actually earned and how much was forgiven. > It is impossible to know until more recent tax returns are made public. You might want to think about why Trump is so dead set about not releasing his returns if they would show him to be an upright citizen. Forgiven losses, by the way, count as income. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [October 3, 2016, 5:38pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/48 "2016-10-03T17:38:38Z")
> [@octopus](#): > > Some risks don’t work out. That’s why they are called risks. Was Coca-Cola stupid for bringing out New Coke back in the day. Yes. What about George Lucas and Jar Jar Binks? Perhaps. Does that mean the corporation and people making these decisions are terrible at business in general? > > You know I wonder how many people on SDMB own businesses. I’d suspect most business owners who have just lost a relative bundle and who have almost gone broke don’t keep up the limos, penthouses, and jets. ---
**Author:** ![CurtC](https://avatars.discourse-cdn.com/v4/letter/c/ce73a5/32.png) [@CurtC](https://boards.straightdope.com/u/CurtC)\ **Post date:** [October 3, 2016, 5:50pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/49 "2016-10-03T17:50:07Z")
> [@Ravenman](#): > > It is entirely plausible – some may say likely – that at the exact time he posted the tweet, he was one of those Americans who paid no income tax. Just to be clear - this hypocrisy is perfectly valid political fodder. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [October 3, 2016, 5:51pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/50 "2016-10-03T17:51:50Z")
> [@Amateur\_Barbarian](#): > > But Benghazi and EmailGate keep you up nights? > > Trump’s whole campaign is being run on how incredibly wealthy he is based on how incredibly sharp a businessman he is, bolstered by his claims of large-scale donations to charity. > > So if his tax returns show him to be of much more modest wealth, created as much by financial manipulations, tax breaks and bankruptcies as by being such a brilliant deal-broker, and charitable donations matching those around the upper 99%'s… not to mention gleeful, willing use of every tax loophole instead of paying the substantial returns that both the Obamas and Clintons pay… what again is the basis for making him President? Not only that, Trump has deliberately not provide his tax returns, something every candidate has done for the past 30 years. So it further paints him as someone with something to hide. That he would say “because I’m smart” during the debate further paints Trump as a narcissist who is out of touch with the common folk. Also, I think people would give him more of a pass if he wasn’t such an arrogant asshole. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [October 3, 2016, 6:05pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/51 "2016-10-03T18:05:05Z")
> [@CookingWithGas](#): > > According to a Trump tax return obtained and authenticated by the [New York Times](http://www.nytimes.com/2016/10/02/us/politics/donald-trump-taxes.html?_r=0), Trump declared a huge loss in 1995. This loss could be carried over to subsequent years to offset income, and possibly have excused him from paying taxes for 18 years, according to analysts engaged by the Times. But their analysis saidI do not understand the bookkeeping gymnastics involved in stating his business losses as a personal loss for tax purposes, but it appears to be all legal. It would not surprise me if this were a common practice among people at his income level. Its really only a common practice among people of his income level that have lost a shit ton of money. > [@](#): > > I don’t know why this is such a pungent point of criticism against Trump. He is not a tax evader; he is simply using our broken tax system against itself. Warren Buffet, one of the richest men in the world, famously stated that [his effective tax rate is lower than his secretary’s](https://en.wikipedia.org/wiki/Warren_Buffett#Taxes). He was not boasting but rather pointing out the inequities in the tax code. But he did not write a check to the U.S. Treasury to square it all up, and his morality was not impugned. Yeah, sure. Noone has a moral obligation to pay more than due. > [@](#): > > _Disclaimer: I am not posting this in support of Trump the person. I am not a Trump supporter. I think that electing him as president would be an unmitigated disaster. I am posting this because I simply don’t understand how this is a valid criticism. There is so much else to criticize._ $900 million is a lot of money to lose in a year. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 3, 2016, 6:05pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/52 "2016-10-03T18:05:15Z")
> [@CurtC](#): > > Just to be clear - this hypocrisy is perfectly valid political fodder. I generally have no time for arguments about hypocrisy, so I see this as a simple issue of values: its clear that Trump thinks poor people should pay more in taxes and the rich should not. (That he proposes tax policies that would benefit him in particular isn’t especially surprising to me, of course.) For many, many years, Dems have criticized fiscal conservatives who argue for cutting taxes on the basis that these conservatives have a thinly-veiled agenda of raising taxes on the poor and cutting them for the rich. I actually think that many fiscal conservatives do not have this intention: they don’t want to see taxes raised on the poor or middle class, they just believe as a matter of dogma that cutting taxes on the rich will boost economic growth, lower the deficit, end global warming (if it is ever proven to exist), stop terrorism go back in time and kill Hitler before he does anything bad – there’s just literally nothing that lower taxes cannot accomplish! Now we have a major party candidate who literally believes the exact thing that Dems have been accusing trickle-downers of for so many years: the poor should pay more, the rich should pay less. It should be shocking to our conscience that someone would actually think this, along with the idea that it is the poor, and not the mega-rich, who get all the breaks in life. But that’s Trump. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [October 3, 2016, 6:20pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/53 "2016-10-03T18:20:14Z")
> [@Damuri\_Ajashi](#): > > Yeah, sure. Noone has a moral obligation to pay more than due. > > $900 million is a lot of money to lose in a year. [Here’s a better takedown](http://www.thedailybeast.com/articles/2016/10/03/art-of-the-steal-this-is-how-trump-lost-916m-and-avoided-tax.html) of how Trump made a series of horrible “deals” that lost that billion through poor management, and managed to keep filling his pockets while others went flat broke or out of business, and then managed to convert that loss (spread among many) into a billion in gains (for himself). Yeah, just the smart dealer we want f\*cking with national policy. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [October 3, 2016, 6:26pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/54 "2016-10-03T18:26:37Z")
> [@puddleglum](#): > > > [@Amateur Barbarian](#): > > > > There is well-supported speculation (based on the incomplete tax return) than the $900B+ was NOT a cash or asset loss, but paper losses. If that’s true, Trump got to write off taxes on nearly a billion in income because of an essentially phantom business loss. > > > > Welcome to the world of the 0.001%. > > What is the difference between a paper loss and an actual loss? I’d also like to know the answer to this. Regards, Shodan ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [October 3, 2016, 6:53pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/55 "2016-10-03T18:53:01Z")
> [@iiandyiiii](#): > > You’re right. It’s not reasonable to question someone running on their business skills about failures in their businesses – we should just accept that they’re good at business because they say so. > > Shame on those reporters for questioning the Word of Trump! That’s uncharacteristically harsh of you! No. All that I’m saying is that you don’t judge a business or a coach by the results of a few decisions taken in isolation. Is Nick Saban a bad coach because he loses a few games? Is Microsoft dumb for infusing Apple with cash and keeping a rival alive? ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [October 3, 2016, 6:54pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/56 "2016-10-03T18:54:45Z")
> [@RickJay](#): > > “The Phantom Menace” made a billion dollars. Literally. So, no, Lucas didn’t fail on that particular risk. Let’s not get bogged down in technicalities. ---
**Author:** ![iiandyiiii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/iiandyiiii/32/7924_2.png) [@iiandyiiii](https://boards.straightdope.com/u/iiandyiiii)\ **Post date:** [October 3, 2016, 6:58pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/57 "2016-10-03T18:58:57Z")
> [@octopus](#): > > That’s uncharacteristically harsh of you! > > No. All that I’m saying is that you don’t judge a business or a coach by the results of a few decisions taken in isolation. Is Nick Saban a bad coach because he loses a few games? Is Microsoft dumb for infusing Apple with cash and keeping a rival alive? Okay. But this loss was enormous – literally [almost 2% of the entire country’s reported operating losses of 1995](http://www.vox.com/2016/10/3/13147520/trump-tax-loss). It seems entirely reasonable that such a monumental loss should reflect more poorly on someone’s business record then a more typical business loss. As to the harshness, all I said was that perhaps such a big loss during a good economic period should lead to some skepticism of his claims of business genius. I thought your dismissal of this deserved some prime snark. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 3, 2016, 6:59pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/58 "2016-10-03T18:59:25Z")
> [@octopus](#): > > Let’s not get bogged down in technicalities. Although knowing Hollywood accounting, I am curious if the studio claims that the Phantom Menace made a profit despite all those ticket and DVD sales. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [October 3, 2016, 7:06pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/59 "2016-10-03T19:06:15Z")
> [@Ravenman](#): > > Now we have a major party candidate who literally believes the exact thing that Dems have been accusing trickle-downers of for so many years: the poor should pay more, the rich should pay less. It should be shocking to our conscience that someone would actually think this, along with the idea that it is the poor, and not the mega-rich, who get all the breaks in life. But that’s Trump. Depending on where the exemption line would be drawn, advocates of a flat tax believe this. It’s not hypocritical to say that lower income folks should pay more, and higher income folks should pay less, if the goal is to peg the income tax burden at a certain percent. I personally think that the amount of people that pay no federal income tax is too high. There is a moral hazard when a person does not need to contribute to the things they are pushing for. ---
**Author:** ![Peremensoe](https://avatars.discourse-cdn.com/v4/letter/p/ce7236/32.png) [@Peremensoe](https://boards.straightdope.com/u/Peremensoe)\ **Post date:** [October 3, 2016, 7:06pm UTC](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563/60 "2016-10-03T19:06:53Z")
> [@CurtC](#): > > Except those laws in particular aren’t unfair, and they’re not loopholes. If you lose a giant pile of money so that your income is negative, you don’t have to pay taxes that year, and **you can carry over the loss to offset your profits in future years**. How is that fair? Most people pay taxes based on their net income in each individual tax year. [Previous page](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563.md?page=2) [Next page](https://boards.straightdope.com/t/so-trump-may-have-avoided-paying-taxes-by-carrying-over-a-huge-loss-so-what/767563.md?page=4)