President's Taxes "Fake News"?

[clean]

"He was able to do so both because many of his businesses report losing large amounts of money — which reduces his taxable income — and because he has engaged in questionable tax practices. Even while declaring losses, he has managed to enjoy a lavish lifestyle by taking tax deductions on what most people would consider personal expenses, including residences, aircraft and $70,000 in hairstyling for television."

EVASION not Avoidance.  Declaring personal residences as investments to expense personal expenses is not Avoidance. 

But What do I know?  Certainly the president would not lie to me and say that his taxes are too complicated for my simple mind to comprehend. 

Hopefully, the New York courts will have an opportunity to investigate whether his tax declarations and loan declarations were fraudulent  (in the one hand showing how little the property was worth to determine taxes, and in the second, how much they are worth as security for the loan).


IF Ivanka was paid as a consultant, then it could be argued that the expense would be appropriate, but it would create a taxable income for her.  (It may be argued that something may need to be shown to document that the money was actually earned - that there was some 'work product' to support the expense)

[dismalist]

"He was able to do so both because many of his businesses report losing large amounts of money — which reduces his taxable income — and because he has engaged in questionable tax practices. Even while declaring losses, he has managed to enjoy a lavish lifestyle by taking tax deductions on what most people would consider personal expenses, including residences, aircraft and $70,000 in hairstyling for television."

EVASION not Avoidance.  Declaring personal residences as investments to expense personal expenses is not Avoidance. 

...

Hopefully, the New York courts will have an opportunity to investigate whether his tax declarations and loan declarations were fraudulent  (in the one hand showing how little the property was worth to determine taxes, and in the second, how much they are worth as security for the loan).


IF Ivanka was paid as a consultant, then it could be argued that the expense would be appropriate, but it would create a taxable income for her.  (It may be argued that something may need to be shown to document that the money was actually earned - that there was some 'work product' to support the expense)

The citation is interesting. It starts with "most people consider ... " What matters is what a tax lawyer thinks, not most people. The tax code drives me crazy, as it was designed to do. Which is why we need lawyers.

I'm guessing that the plane and the haircuts are probably legitimate business expenses, at least in part. The residences may also be, again, at least in part. What part has to be figured out by a lawyer.

[clean]

Interviews with Erik Trump indicate that a property in Up State NY is 'the family compound' but for tax purposes it is an 'investment'. 

Hmmm... IF ONLY I could list my personal residence as an 'investment', it would allow me to deduct the interest expense, property taxes, electric bills, water bills, lawn mowing expenses, seasonal flowers, painting, window washing, maid services, soap, toothpaste,  ....   

But you are right... Maybe one of my children should act as a 'consultant' and help me decide what should be included in the expenses. 

[Anselm]

Yes, the wealthy pay a lower effective rate than most workers.   Why is this news?    Taxes are for the little people as we were once told by  Leona Helmsley.

[kaysixteen]

She went to the slammer, if I recall.

What we gots heah be a total lack of regahd for the law.

[pigou]

The NYT is going to release additional articles over the coming weeks. I guess they want to atone for their incessant coverage of the Clinton emails by covering another non-issue for weeks prior to an election.

[ergative]

"He was able to do so both because many of his businesses report losing large amounts of money — which reduces his taxable income — and because he has engaged in questionable tax practices. Even while declaring losses, he has managed to enjoy a lavish lifestyle by taking tax deductions on what most people would consider personal expenses, including residences, aircraft and $70,000 in hairstyling for television."

EVASION not Avoidance.  Declaring personal residences as investments to expense personal expenses is not Avoidance. 

...

Hopefully, the New York courts will have an opportunity to investigate whether his tax declarations and loan declarations were fraudulent  (in the one hand showing how little the property was worth to determine taxes, and in the second, how much they are worth as security for the loan).


IF Ivanka was paid as a consultant, then it could be argued that the expense would be appropriate, but it would create a taxable income for her.  (It may be argued that something may need to be shown to document that the money was actually earned - that there was some 'work product' to support the expense)

The citation is interesting. It starts with "most people consider ... " What matters is what a tax lawyer thinks, not most people. The tax code drives me crazy, as it was designed to do. Which is why we need lawyers.

I'm guessing that the plane and the haircuts are probably legitimate business expenses, at least in part. The residences may also be, again, at least in part. What part has to be figured out by a lawyer.

I think the article is framed as it is because of the story's political implications, rather than its legal implications. So far, his tax avoidance seems to be legal. He even said in the debates that if he wasn't paying taxes it was because he (=his lawyers and accountants) were very good at taking advantage of legal loopholes, and Ds should have fixed those loopholes when they were in power.

The reason we're talking about it is because of the consequences for his public image. So in the political domain, it does matter whether people consider various business write-offs, such as haircuts, to fall under personal expenses. Tax lawyers' opinions are relevant for when it comes to putting him in jail, but "most people"'s opinions are relevant when it comes to getting him out of the White House.

[financeguy]

The point that I think the public misses on this is what exactly constitutes a business "losing money." If you're deducting expenses in excess of your earnings, you've "lost" but for those involved in real estate, the biggest offset to their income is often in the form of depreciation, the expected decrease in value over the life of an item. (Even if it is in effect maintaining its value or appreciating, although that's another issue...) I'm be surprised if anyone in commercial real estate who has a semi-competent tax professional pays more than $750 in taxes. The code as it is written is so favorable to real estate developers and investors that you just don't need to work too hard to make that happen. If they say he "lost 30MM" for example, this could easily mean that he made 20MM of profits and took 50MM of depreciation. You can call that "poor business skill" but anyone who doesn't have an axe to grind either way will see it as taking advantage of the code as it is written. At this level, 70k deductions on hair styling are less than rounding errors and likely intentionally put there in anticipation of a future talking point.

[Caracal]

"He was able to do so both because many of his businesses report losing large amounts of money — which reduces his taxable income — and because he has engaged in questionable tax practices. Even while declaring losses, he has managed to enjoy a lavish lifestyle by taking tax deductions on what most people would consider personal expenses, including residences, aircraft and $70,000 in hairstyling for television."

EVASION not Avoidance.  Declaring personal residences as investments to expense personal expenses is not Avoidance. 

...

Hopefully, the New York courts will have an opportunity to investigate whether his tax declarations and loan declarations were fraudulent  (in the one hand showing how little the property was worth to determine taxes, and in the second, how much they are worth as security for the loan).


IF Ivanka was paid as a consultant, then it could be argued that the expense would be appropriate, but it would create a taxable income for her.  (It may be argued that something may need to be shown to document that the money was actually earned - that there was some 'work product' to support the expense)

The citation is interesting. It starts with "most people consider ... " What matters is what a tax lawyer thinks, not most people. The tax code drives me crazy, as it was designed to do. Which is why we need lawyers.

I'm guessing that the plane and the haircuts are probably legitimate business expenses, at least in part. The residences may also be, again, at least in part. What part has to be figured out by a lawyer.

I think the article is framed as it is because of the story's political implications, rather than its legal implications. So far, his tax avoidance seems to be legal. He even said in the debates that if he wasn't paying taxes it was because he (=his lawyers and accountants) were very good at taking advantage of legal loopholes, and Ds should have fixed those loopholes when they were in power.

I think some of it is standard. There are other parts that seem highly questionable, and maybe even fraudulent, like hiring your family members  as  consultants and then writing off millions of dollars in payments to them as business expenses. If it turns out those family members didn't really do any work on the projects that would justify those amounts isn't that just tax fraud?

[pigou]

I think some of it is standard. There are other parts that seem highly questionable, and maybe even fraudulent, like hiring your family members  as  consultants and then writing off millions of dollars in payments to them as business expenses. If it turns out those family members didn't really do any work on the projects that would justify those amounts isn't that just tax fraud?

That's a big if. It certainly looks like the family members were (and are) heavily involved in the operations of the organization.

[jimbogumbo]

I think some of it is standard. There are other parts that seem highly questionable, and maybe even fraudulent, like hiring your family members  as  consultants and then writing off millions of dollars in payments to them as business expenses. If it turns out those family members didn't really do any work on the projects that would justify those amounts isn't that just tax fraud?

That's a big if. It certainly looks like the family members were (and are) heavily involved in the operations of the organization.

Maybe Don Jr. not so much?  I guess I'm still confused as to how you can oversee a building project for an organization and get paid a hefty consulting fee while on the payroll.

This topic is a loser for Biden at least as far as the debate goes. Trump will attack him on Hunter, but if Biden tries to use this we're back to tax avoidance is smart business, and we have the added attraction that Biden probably voted yes on the tax legislation that was "utilized". Trump (from what I can see) really pushed the boundaries here and may very well have violated the law. Makes no difference right now.

Now, if there was evidence that Russian or Belarussian  oligarchs really hold the notes then that would be something.

[spork]

I think some of it is standard. There are other parts that seem highly questionable, and maybe even fraudulent, like hiring your family members  as  consultants and then writing off millions of dollars in payments to them as business expenses. If it turns out those family members didn't really do any work on the projects that would justify those amounts isn't that just tax fraud?

That's a big if. It certainly looks like the family members were (and are) heavily involved in the operations of the organization.

[. . . ]

This topic is a loser for Biden at least as far as the debate goes.

[. . .]

I have a different opinion. Bill Clinton's history of infidelity made it impossible for Hillary Clinton to use Trump's history of sexual assault, extramarital affairs, and general misogyny against him. If Trump brings up Hunger Biden and the Ukraine, then Biden can paint Trump and his family as the grifters that they are. E.g., no one in Biden's family ever personally profited from money donated to children with cancer.

Really all that Biden has to do is to keep repeating "Are you better off than you were four years ago, before Trump gave his buddies a trillion dollar tax cut? How many of your relatives, friends, and neighbors have been killed by Trump's mismanagement and lies during the pandemic?"

[clean]

There are certainly valid reasons that Trump would owe no taxes.  Depreciation is certainly one of them.  He lost, 92M IF I correctly recall the number on the Trump Casino.  It is certainly possible that the loss for that one venture could wipe out years and years of profits, assuming that there were not other legitimate expenses (like interest expense and depreciation) that would also wipe out the earnings.

Also, as a finance person, I can certainly tell you that Cash Flow and NOT accounting or taxable income is what matters. 

Can hair care be deductible?  I bet it can!  In his position as a TV personality, it certainly would sound legitimate to me.  Listing your 'family compound' (as Erik called it) as an Investment property is not legitimate


Will it matter?  I really dont think that it will matter one bit!  Those that are the hard core supporters will not change, and those that are voting Against Trump (rather than FOR Biden) wont flip either. 

I could be wrong, but If I recall the poll numbers correctly, this is still pretty far from the election, but the number of undecided is at or near record lows for this time frame. 

[pigou]

Really all that Biden has to do is to keep repeating "Are you better off than you were four years ago, before Trump gave his buddies a trillion dollar tax cut? How many of your relatives, friends, and neighbors have been killed by Trump's mismanagement and lies during the pandemic?"

Between January 2016 and August 2020, a portfolio invested in the S&P 500 has gone up 62% (with dividends reinvested). It's not a great question to ask, because for a whole lot of people, the answers are going to be "yes" and "none." Neither the economic harm nor the deaths are uniformly distributed across the population.

[spork]

Really all that Biden has to do is to keep repeating "Are you better off than you were four years ago, before Trump gave his buddies a trillion dollar tax cut? How many of your relatives, friends, and neighbors have been killed by Trump's mismanagement and lies during the pandemic?"

Between January 2016 and August 2020, a portfolio invested in the S&P 500 has gone up 62% (with dividends reinvested). It's not a great question to ask, because for a whole lot of people, the answers are going to be "yes" and "none." Neither the economic harm nor the deaths are uniformly distributed across the population.

Between January 2020 and now, the unemployment rate, depending on the state, has increased by 2-3 times. How many of the unemployed have a stock portfolio that they can use to feed and house themselves? I'm assuming that at least some of those who are unemployed typically vote in a presidential election, and that some of these live in MAGAland.