President Donald Trump fired back Wednesday morning against a stinging news report that cast him as an incompetent, money-losing business disaster, saying massive losses he reported to the IRS decades ago were common tax dodges.
‘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,’ the president tweeted. ‘Much was non monetary.’
‘Sometimes considered “tax shelter,” you would get it by building, or even buying. You always wanted to show losses for tax purposes….almost all real estate developers did – and often re-negotiate with banks, it was sport.’
Trump also said a lengthy New York Times story based on months of investigation was based on ‘very old information,’ and called the result ‘a highly inaccurate Fake News hit job!’
In the span of nearly a decade, the Times found, Trump lost more money than nearly any other individual American taxpayer. A colection of brief transcriptions from Trump’s Internal Revenue Service tax returns, dating from 1985 to 1994, revealed that the future president lost $1.17 billion in 10 years.
President Donald Trump came out swinging on Wednesday against a New York Times report that showed he took massive business losses during the 1980s and 1990s, setting apparent records for losing money as a real estate developer
The president fired back Wednesday morning, saying the massive losses he showed in his tax returns were a common ‘tax shelter’ meant to conceal the health of his business, and ‘it was sport’ at the time
Every year from 1985 through 1994, Trump reported a negative adjusted gross income – gross income minus allowable deductions – on his tax returns.
He lost so much money that he didn’t have to pay income taxes for eight of the 10 years, according to the Times.
In 1985 alone Trump reported losses of $46.1 million from his casinos, hotels, and retail spaces in apartment buildings.
They continued to lose money on paper every year, even as Trump published his now famous memoir and business-advice book ‘The Art of the Deal.’
The Times compared Trump’s tax transcripts to a sampling of high-income earners compiled every year by the IRS.
It found that Trump’s core businesses lost more than $250 million in 1990 and 1991, a figure more than double that of the nearest taxpayers in the IRS’ sampling.
The Times report offers a rare glimpse into a tax history that Trump has fought desperately hard to keep out of the public eye.
Reporter Suzanne Craig told MSNBC’s ‘Morning Joe’ program on Wednesday morning that the president’s financial results were a sign of ‘really bad business.’
‘Those losses are so huge,’ she said, ‘and when you talk to his people they’re like, “Oh, depreciation.” This is not depreciation. These are massive business losses.’
‘We had access to a data bank where we could see other results of high-income earners,’ Craig explained. ‘He was at the top of it for the worst losses year-in and year-out.’
‘This is not like, oh, a lot of people who were in real estate have these types of results.’
In the span of nearly a decade, from 1985 to 1994, Donald Trump lost more money than nearly any other individual American taxpayer, the Times report claims. He is pictured here in 1989
The figures reveal that Trump (pictured here in 1989) lost $1.17billion in the span of 10 years
The Times report does not cover Trump’s most recent eight years of taxes, which Congress has been fighting to obtain from his administration, but does shed new light on the man who made a career from claiming he was a successful self-made billionaire.
The transcripts begin in 1985, when Trump was listed in Forbes as one of the wealthiest people in America with an estimated net worth of $600 million.
It was the first time Trump appeared on the list without his father Fred Trump.
Trump had repeatedly claimed on the campaign trail in 2016 that he turned his father’s ‘very small’ $1 million loan into a billion dollar empire. The Times revealed the loan was closer to $413 million in 2018 dollars.
But back in the mid-1980s, at least in New York’s business world, it appeared Trump was making a name for himself separate from his real estate developer father.
Trump had completed the Grand Hyatt Hotel, Trump Tower, an Atlantic City Casino, and another Manhattan building. He had also become the owner of the New Jersey Generals, a team from the new defunct United States Football League.
Trump (pictured in front of Mar-a-Lago in 1990) lost so much money on paper that he didn’t have to pay income taxes for eight of the 10 years
But Trump was also borrowing money – hundreds of millions of dollars of it – as he purchased a second casino, the Mar-a-Lago country club, a Manhattan hotel, a New York hospital, and an expanse of railroad yards in Manhattan.
Trump’s businesses lost $46.1 million that year. It would be another decade before Mar-a-Lago became profitable. The hospital wasn’t turned into an apartment complex for five more years. And the football league didn’t even make it to 1986.
On top of his building debts, Trump had accumulated $5.6million in loses from the previous years, according to his tax transcripts.
Only three taxpayers who were similarly in the one-third of high-income tax returns had recorded greater loses than Trump that year.
The following year, Trump reported $68.7 million in business losses as he bought a $43million apartment building in West Palm Beach and bought out his partners in Trump Tower and the Trump Plaza Hotel.
In 1987, Trump recorded $42.2 million in business losses as he bought a $29 million yacht and the $407 million Plaza Hotel. The following year, his businesses lost another $30.4 million.
Trump purchased a $365 million shuttle operation from Eastern Airlines in 1989. It never made a profit. That year his businesses lost $181.7 million.
The Times found that Trump’s core businesses lost more than $250million in 1990 and 1991, a figure more than double that of the nearest taxpayers in the IRS’ sampling. Trump is pictured here at his Greenwich, Connecticut home in 1987
The future president’s worst years would come in 1990 and 1991, when he opened the Trump Taj Mahal Hotel and Casino – which was $800 million in debt.
Trump lost a total of $517.6 million during those two years, and another $286.9 million in the following three as he tried to fight off bankruptcy.
But throughout this entire period, Trump’s infamous confidence did not waver. In 1987 he boasted that he had ‘much more’ money than he would ever need. In 1988 he declared: ‘If the world goes to hell in a handbasket, I won’t lose a dollar.’
In 1990, one of his worst years on record, Trump said it had been ‘good financially.’
As his bank account went deeper into the red, Trump maintained his facade as a deal-making tycoon. His 1987 book The Art of the Deal stayed on the top of the Times bestseller list for 13 weeks, helping turn him into a name known beyond the Big Apple’s business circles and Manhattan’s elite.
But Trump was secretly staying afloat thanks in a large part to his father, according to the Times.
In his two worst years, when Trump lost $517.6 million, Fred Trump’s tax returns reveal he had a positive income of $53.9 million.
Fred Trump’s only major loss in those two years was $15 million – which he had invested in his son’s apartment project.
As his bank account went deeper into the red, Trump maintained his facade as a deal-making tycoon. But he was secretly staying afloat thanks in a large part to his father Fred Trump (pictured together in 1987)
DADDY’S FAVORITE: HOW TRUMP GOT $413 MILLION FROM FATHER
During his lifetime, Fred Trump Sr transferred in total more than $1 billion in wealth to his kids.
But last year a New York Times report revealed that Trump received much more than his siblings.
According to the years-long investigation, Trump received at least $413 million in today’s dollars from his father’s real estate empire – $140 million of which was a loan.
At the tender age of three, Trump was earning $200,000 a year in 2018 dollars from his dad’s business empire, becoming a millionaire by age eight.
During his lifetime, Fred Trump Sr transferred in total more than $1 billion in wealth to his kids. But last year a New York Times report revealed that Trump received much more than his siblings
When Trump was in high school, his cut of his father’s profits was about $17,000 in today’s dollars. That number exceeded $300,000 a year soon after he graduated college.
Trump was also receiving the equivalent of $1 million a year from his wealthy father. That amount increased to $5 million a year annually in his 40s and 50s.
According to the Times, Fred Sr did not see his eldest son Fred Trump Jr a viable heir for the family business.
Family members and former employees told the Times that Fred Sr would publicly ridicule his son for drinking too much, being too lazy, too nice and too soft. Fred Sr was also not happy his eldest son didn’t take much of an interest in the family business.
Witnessing his father’s disappointment in Fred Sr, Trump set out to become the opposite of his older brother and soon became known as a ‘brash tough guy with a killer instinct’. The Times reports that Trump was rewarded by inheriting his father’s fortunes.
Fred Sr not only gave Trump portions of his empire, but he made Trump a salaried employee, property manager, landlord, consultant and banker. He gave Trump money for his car, money for his employees and money to buy stocks, according to the Times. Fred Sr helped his son buy different offices in Manhattan and paid for their renovations.
Trump received shares in multiple partnerships, $10,000 checks at Christmas and the laundry revenue from his father’s apartments.
Trump and his father also started businesses together, including a high-rise in East Orange, New Jersey for the elderly in 1972. The Times reports that they took out a nearly interest-free $7.8 million loan that covered nearly all construction costs. Whatever wasn’t covered, Fred Sr paid for out of pocket.
According to the years-long investigation, Trump received at least $413 million in today’s dollars from his father’s real estate empire – $140 million of which was a loan
Trump received most of the profits from the high-rise, including being paid to manage the building and receiving the money tenants paid to rent air conditioners. By 1975, three years after purchasing the building, Trump was earning today’s equivalent of $305,000 a year. In total, he had collected nearly $9 million from his father.
Trump’s biggest payday from Fred Sr came in May 2004, years after his father’s 1999 death, when Trump and his siblings sold his empire. Trump’s share was $177.3 million, or $236.2 million in today’s dollars.
Overall, the Times found 295 streams of revenue that Fred Sr created for Trump. In most instances the outlet found that all of the children benefited equally but Trump’s share gradually increased as he found himself in one financial disaster after another.
According to the outlet, between 1989 and 1992, Fred Sr paid his son $8.3 million in today’s dollars to help Trump out. The outlet also reports that Fred Sr took nearly $50 million out so he could have cash on hand in case Trump needed to be bailed out of a bad business deal.
One instance that money came in handy was in December 1990 when Trump could not afford to pay an $18.4 million bond payment for a Trump Casino.
According to the outlet, Fred Sr gave checks to a trusted bookkeeper and sent him to Atlantic City to purchase $3.5 million in casino chips without placing a bet. Although illegal under New Jersey gaming laws, it helped Trump avoid defaulting on his loans.
In the past, Trump has denied getting hefty payouts from his father insisting his father only gave him one loan for $1 million and he had to pay it back with interest.
Trump also briefly succeeded in painting himself as a corporate raider, acquiring shares in a company and then suggesting that he planned to take it over.
But Trump would instead sell his shares, gaining millions of dollars in profit from the resulting rise on the stock market thanks to his takeover rumors.
Trump used this tactic with the Hilton Hotels, Gillette razor company, and Federated Department Stores, but his tactics didn’t fool investors for long.
In 1989 Trump bought a large stake in American Airlines and once again announced a takeover bid.
This time the stock prices dropped drastically and Trump ultimately lost $34.9 million, nearly half what he had gained from his corporate raider games.
The future president’s worst years would come in 1990 and 1991, when he opened the Trump Taj Mahal Hotel and Casino (pictured) – which was $800million in debt
By the time 1990 rolled along, Trump was on the brink of bankruptcy. The yacht, the airline, the Grand Hyatt stake, all went to lenders.
It is a period of Trump’s life that he has long tried to shield from ruining the reputation that helped turn him into a reality TV star and, then, the president.
Trump is the first president since Watergate to refuse to release any of his tax returns.
Only a few pages had become public before this week’s Times expose.
House Democrats have been fighting to obtain the last six years of Trump’s tax returns to examine possible conflicts of interest posed by his continued ownership of extensive business interests and potential foreign sources of financing.
By the time 1990 rolled along, Trump was on the brink of bankruptcy. The yacht, the airline, the Grand Hyatt stake, all went to lenders. He is pictured here on his yacht with wife Ivana in 1989
WHILE DROWNING IN DEBT, TRUMP PROMOTED THE ART OF THE DEAL
As his bank account went deeper into the red, Trump maintained his facade as a deal-making tycoon.
His 1987 book The Art of the Deal stayed on the top of the Times Bestseller List for 13 weeks, helping turn him into a name known beyond the Big Apple’s business circles and Manhattan’s elite.
Amid revelations from the Times’ report this week, quotes from Trump’s book carry a new air of irony. Here are some of the best:
As his bank account went deeper into the red, Trump maintained his facade as a deal-making tycoon thanks to his 1987 bestseller The Art of the Deal (pictured)
‘You can’t con people, at least not for long. You can create excitement, you can do wonderful promotion and get all kinds of press, and you can throw in a little hyperbole. But if you don’t deliver the goods, people will eventually catch on’
‘I’ve always felt that a lot of modern art is a con, and that the most successful painters are often better salesmen and promoters than they are artists’
‘Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game’
‘I believe in spending what you have to. But I also believe in not spending more than you should’
‘Sometimes your best investments are the ones you don’t make’
‘My style of deal-making is quite simple and straightforward. I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after’
‘The final key to the way I promote is bravado. I play to people’s fantasies. People may not always think big themselves, but they can still get very excited by those who do. That’s why a little hyperbole never hurts. People want to believe that something is the biggest and the greatest and the most spectacular. I call it truthful hyperbole. It’s an innocent form of exaggeration, and a very effective form of promotion.’
‘I never get too attached to one deal or one approach. For starters, I keep a lot of balls in the air, because most deals fall out, no matter how promising they seem at first.’
But on Monday Secretary of the Treasury Steven Mnuchin refused a request by the Democratic chairman of the House of Representatives Ways and Means Committee for Trump’s tax returns.
Mnuchin’s move, which had been expected, is likely to set a legal battle into motion. The chief options available to Democrats are to subpoena the IRS for the returns or to file a lawsuit.
While the Times did not obtain Trump’s actual tax returns, the paper said it received information contained in the returns from someone who had legal access to it.
The Times was then able to match the results with the IRS’ publicly available database on top earners, as well as public documents and confidential Trump family tax and financial records that it had obtained in 2018.
Trump completely ignored the Times report on Tuesday night, instead tweeting about fireworks, and going on a retweeting spree
Charles Harder, one of Trump’s lawyer, has claimed that the tax information is ‘demonstrably false’ and that the Times’ statements about his tax returns ‘from 30 years ago are highly inaccurate’. He did not include any specific errors.
‘IRS transcripts, particularly before the days of electronic filing, are notoriously inaccurate and would not be able to provide a reasonable picture of any taxpayer’s return,’ he added.
Mark Mazur, a former director of research, analysis and statistics at the IRS, said the data used to create these tax transcripts are so trusted that they are used to analyze economic trends and set national policy.
IRS auditors also refer to the transcripts as ‘handy’ summaries of tax returns.
The Times’ source also gave the paper years of unpublished tax figures from Fred Trump. They were identical to his actual returns.
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