The New York Times shook up the presidential race with a report on Trump’s tax records mailed anonymously to the paper in September.
Trump still refuses to release his tax returns; he claims he won’t release his returns while they are under IRS audit. But The New York Times took a step toward solving the Trump tax mystery with a Saturday report on a few pages of 1995 income tax returns:
Donald J. Trump declared a $916 million loss on his 1995 income tax returns, a tax deduction so substantial it could have allowed him to legally avoid paying any federal income taxes for up to 18 years, records obtained by The New York Times show.
…Although Mr. Trump’s taxable income in subsequent years is as yet unknown, a $916 million loss in 1995 would have been large enough to wipe out more than $50 million a year in taxable income over 18 years.
The Times obtained the tax returns under strange circumstances. Someone mailed Times reporter Susanne Craig three pages of Trump’s 1995 tax returns with Trump Tower listed as the return address.
The paper then had Trump’s then-accountant, Jack Mitnick, confirm the authenticity of his signature of the forms. The Times also worked with tax experts to understand how Trump could benefit from reporting such a large loss.
The provision that would have allowed Trump to avoid income taxes for 18 years is called “net operating loss.” The Times explains:
The provision, known as net operating loss, or N.O.L., allows a dizzying array of deductions, business expenses, real estate depreciation, losses from the sale of business assets and even operating losses to flow from the balance sheets of those partnerships, limited liability companies and S corporations onto the personal tax returns of men like Mr. Trump. In turn, those losses can be used to cancel out an equivalent amount of taxable income from, say, book royalties or branding deals.
Regardless of whether Trump avoided income taxes or not, this report is bound to shake up the race.
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