Is the news about Trump's personal income tax or corporate tax?

[micky]

Is the news referring to Trump's personal income tax or corporate tax?

They make it sound like the 3 pages that were publicized refer to
personal tax, but he talks about fiduciary duty. To himself? That
makes no sense.

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[Stuart O. Bronstein]

micky <NONONO...@bigfoot.com> wrote

> Is the news referring to Trump's personal income tax or
> corporate tax?
>
> They make it sound like the 3 pages that were publicized refer
> to personal tax, but he talks about fiduciary duty. To himself?
> That makes no sense.

I looked and was unable, within a reasonable time, to find the actual
return pages that were leaked. I did see some photos of the pages,
and they are from his and Marla's personal tax return.

--
Stu
http://DownToEarthLawyer.com
https://www.etsy.com/shop/studiobethdesigns

[Alan]

On 10/8/16 2:32 PM, Stuart O. Bronstein wrote:
> micky <NONONO...@bigfoot.com> wrote
>
>> Is the news referring to Trump's personal income tax or
>> corporate tax?
>>
>> They make it sound like the 3 pages that were publicized refer
>> to personal tax, but he talks about fiduciary duty. To himself?
>> That makes no sense.
>
> I looked and was unable, within a reasonable time, to find the actual
> return pages that were leaked. I did see some photos of the pages,
> and they are from his and Marla's personal tax return.
>

It was IT-201, the New York state income tax return for 1995.

[ira smilovitz]

On Saturday, October 8, 2016 at 6:29:50 PM UTC-4, Alan wrote:
> On 10/8/16 2:32 PM, Stuart O. Bronstein wrote:
> > micky <NONONO...@bigfoot.com> wrote
> >
> >> Is the news referring to Trump's personal income tax or
> >> corporate tax?
> >>
> >> They make it sound like the 3 pages that were publicized refer
> >> to personal tax, but he talks about fiduciary duty. To himself?
> >> That makes no sense.
> >
> > I looked and was unable, within a reasonable time, to find the actual
> > return pages that were leaked. I did see some photos of the pages,
> > and they are from his and Marla's personal tax return.
> >
> It was IT-201, the New York state income tax return for 1995.
>
> --

And the front page of the NJ-1040NR and CT-1040 NR/PY. You can see them here: http://www.nytimes.com/interactive/2016/10/01/us/politics/donald-trump-taxes.html

Ira Smilovitz, EA

[Taxed and Spent]

On 10/8/2016 2:02 PM, micky wrote:
> Is the news referring to Trump's personal income tax or corporate tax?
>
> They make it sound like the 3 pages that were publicized refer to
> personal tax, but he talks about fiduciary duty. To himself? That
> makes no sense.
>

If he was part owner of a piece of property, and managing that for the
other owners, he could have a fiduciary duty. Sounds like a piece of
property declined in value and they decided either to dump it, or to
sell it as a tax loss harvest (same activity, motives may differ, same
result).

A pretty common occurrence, though not with such large numbers.

[Retired]

On 10/8/16 5:32 PM, Stuart O. Bronstein wrote:
> micky <NONONO...@bigfoot.com> wrote
>
>> Is the news referring to Trump's personal income tax or
>> corporate tax?
>>
>> They make it sound like the 3 pages that were publicized refer
>> to personal tax, but he talks about fiduciary duty. To himself?
>> That makes no sense.
>
> I looked and was unable, within a reasonable time, to find the actual
> return pages that were leaked. I did see some photos of the pages,
> and they are from his and Marla's personal tax return.
>

Did you see the 3 complete pages at:

http://www.nytimes.com/interactive/2016/10/01/us/politics/donald-trump-taxes.html

They are personal state forms, not Fed.
NY Resident, NJ & CT Non-resident

[Stuart O. Bronstein]

ira smilovitz <ira.sm...@gmail.com> wrote

> Alan wrote:
>> Stuart O. Bronstein wrote:
>> > micky <NONONO...@bigfoot.com> wrote
>> >
>> >> Is the news referring to Trump's personal income tax or
>> >> corporate tax?
>> >

>> It was IT-201, the New York state income tax return for 1995.
>

> And the front page of the NJ-1040NR and CT-1040 NR/PY. You can
> see them here:
> http://www.nytimes.com/interactive/2016/10/01/us/politics/donald-
> trump-taxes.html

Thanks, Ira.

--
Stu
http://DownToEarthLawyer.com
https://www.etsy.com/shop/studiobethdesigns

[Barry Margolin]

In article <u9jivbll8nik96gud...@4ax.com>,

micky <NONONO...@bigfoot.com> wrote:

> Is the news referring to Trump's personal income tax or corporate tax?
>
> They make it sound like the 3 pages that were publicized refer to
> personal tax, but he talks about fiduciary duty. To himself? That
> makes no sense.

It's his personal tax. But as the owner of a real estate company, he's
able to pass the company's Net Operating Losses through to his personal
taxes. Which makes his claim that he did this because of fiduciary duty
a big fat lie, since it didn't benefit the company or shareholders at
all.

--
Barry Margolin
Arlington, MA

[Taxed and Spent]

On 10/8/2016 9:38 PM, Barry Margolin wrote:
> In article <u9jivbll8nik96gud...@4ax.com>,
> micky <NONONO...@bigfoot.com> wrote:
>
>> Is the news referring to Trump's personal income tax or corporate tax?
>>
>> They make it sound like the 3 pages that were publicized refer to
>> personal tax, but he talks about fiduciary duty. To himself? That
>> makes no sense.
>
> It's his personal tax. But as the owner of a real estate company, he's
> able to pass the company's Net Operating Losses through to his personal
> taxes. Which makes his claim that he did this because of fiduciary duty
> a big fat lie, since it didn't benefit the company or shareholders at
> all.
>

You don't know that. He may have had partners or others involved to
whom a fiduciary duty was owed.

[micky]

In misc.taxes.moderated, on Sun, 9 Oct 2016 00:38:43 EDT, Barry Margolin

<bar...@alum.mit.edu> wrote:

>In article <u9jivbll8nik96gud...@4ax.com>,
> micky <NONONO...@bigfoot.com> wrote:
>
>> Is the news referring to Trump's personal income tax or corporate tax?
>>
>> They make it sound like the 3 pages that were publicized refer to
>> personal tax, but he talks about fiduciary duty. To himself? That
>> makes no sense.
>
>It's his personal tax. But as the owner of a real estate company, he's
>able to pass the company's Net Operating Losses through to his personal
>taxes. Which makes his claim that he did this because of fiduciary duty
>a big fat lie, since it didn't benefit the company or shareholders at
>all.

That's what I was thinking.

Let me know if anything here is off-base.

A program, or parts of 2 programs, on Blumberg Radio, which is over the
air in DC and I just listened to in Baltimore, said that he was in a
partnership and I see that fwiw there are indeed fiduciary duties to
partners,
http://www.legalmatch.com/law-library/article/fiduciary-duties-in-partnerships.html
http://www.nolo.com/legal-encyclopedia/fiduciary-duties-partnerships.html
http://business-law.lawyers.com/small-business-law/general-partnership-and-fiduciary-duties.html

But once the income or loss is "distributed" and a partner is filing his
own personal taxes, that's irrelevant. No one has a duty, fiduciary or
otherwise, to take deductions on his personal income tax.

OTOH, it's reasonable for someone with really bad years and really good
years to want to average his income, but OT3H income averaging for a
regular taxpayer was abolished about 1986, when the maximum tax was
lowered and they said averaging wasn't necessary anymore. (Because
iiuc, a very high income one year can't push one into the 60 or 70%
bracket anyhow, because it no longer existed. After his deductions, he
won't pay more than, what, 30-something percent in any year.)

But OT4H, Blumberg radio said that because the real estate business was
doing badly, they made an exception for real estate, in about in 1996
iirc. Of course it's had 20 years to recover, so maybe they should get
rid of the exception, don't ya think?

But more importantly, the person on the radio said that it was very
unlikely that Trump lost his own money. He said what most likely
happened is that he borrowed, say, 500G (or 900G) from a bank or
investor, then went bankrupt, and then negotiated with the lender that
so he wouldn't have to return the money, because he*** had no money to
return. Normally a forgiven loan like that becomes taxable income, but
there is some exception (Maybe this is the exception, or part of the
exception, in the previous paragraph.) But for some reason, for him it
did not become taxable income; and it wasn't even neutral, non-taxable
income. It remained a loss, which could cancel out income, but he
didnt' lose his own money. Yet he will use the loss to cancel out
income in following years. Is this possible? Did the Blumberg guy
fail to ask how could this be possible?

Does this all sound accurate? I think of Blumberg Radio as being
pro-business, but OTOH Blumberg himself doesn't like Trump, but OT3H,
one would hope the stuff they broadcast is accurate anyhow and also not
influenced by editorial slant except when it's clearly an editorial^^,
but OT4H maybe there is no one there well informed enough to know if
this guy was accurate or not, and it wasn't the radio station that was
fudging, just this one guy. I wish I'd gotten his name.


***How can someone in a partnership be insolvent? When he supposedly
has a billion of his own money. Corporations can go bankrupt and
thus avoid debts, but he wasn't running a corporation or he couldn't
pass the Net Operating Loss through to his personal taxes.

^^I don't listen enough to know if Blumberg Radio has editorials.


Repeating Trump's tax forms. Thanks, Ira:
http://www.nytimes.com/interactive/2016/10/01/us/politics/donald-trump-taxes.html

Another interesting thing is that Guiliani and Christie used many of the
same words to describe all this, as if it were scripted and rehearse,
including calling Trump a "genius" when he had a tax accountant who
would have been the "worst accountant ever, really the worst, the worst
ever" if he didn't know about this deduction.

[Taxed and Spent]

would you vote for someone who was so foolish he did not use us NOL
carryforwards?

RThat is really no different than claiming your withholding taxes when
filing your tax return.

I have used NOL carryforwards. Shame on me???

>
> OTOH, it's reasonable for someone with really bad years and really good
> years to want to average his income, but OT3H income averaging for a
> regular taxpayer was abolished about 1986, when the maximum tax was
> lowered and they said averaging wasn't necessary anymore. (Because
> iiuc, a very high income one year can't push one into the 60 or 70%
> bracket anyhow, because it no longer existed. After his deductions, he
> won't pay more than, what, 30-something percent in any year.)
>
> But OT4H, Blumberg radio said that because the real estate business was
> doing badly, they made an exception for real estate, in about in 1996
> iirc. Of course it's had 20 years to recover, so maybe they should get
> rid of the exception, don't ya think?

I don't know that this is an exception. I think it has been the case
for many years.



Here is a for instance:

year 1: NOL $1,000
year 2: net income $1,000

year 1 and 2 net: zero

using NOL, taxable income for years 1 and 2 is zero.

without using NOL, taxable income for years 1 and 2 is $1,000. But
there is no actual income from which to pay the taxes.

Look, like it or not, the government has decided for you that you have a
partner. Now people are saying the partnership should be "heads I win,
tails you loose". Is that the kind of partnership that makes any sense
at all?

[BignTall]

On 10/9/2016 8:51 AM, Taxed and Spent wrote:
> On 10/8/2016 9:38 PM, Barry Margolin wrote:
>> In article <u9jivbll8nik96gud...@4ax.com>,
>> micky <NONONO...@bigfoot.com> wrote:
>>
>>> Is the news referring to Trump's personal income tax or corporate tax?
>>>
>>> They make it sound like the 3 pages that were publicized refer to
>>> personal tax, but he talks about fiduciary duty. To himself? That
>>> makes no sense.
>>
>> It's his personal tax. But as the owner of a real estate company, he's
>> able to pass the company's Net Operating Losses through to his personal
>> taxes. Which makes his claim that he did this because of fiduciary duty
>> a big fat lie, since it didn't benefit the company or shareholders at
>> all.
>>
>
>
> You don't know that. He may have had partners or others involved to
> whom a fiduciary duty was owed.
>

I really doubt that fiduciary obligations had any influence on
Trump's behavior. He also had a fiduciary duty to the shareholders
of public companies he ran and drove into bankruptcy. All available
information indicates a many who ignores fiduciary duties and looks
out only for himself.

[Arthur Rubin]

On Sunday, October 9, 2016 at 6:57:07 AM UTC-7, micky wrote:
> But more importantly, the person on the radio said that it was very
> unlikely that Trump lost his own money. He said what most likely
> happened is that he borrowed, say, 500G (or 900G) from a bank or
> investor, then went bankrupt, and then negotiated with the lender that
> so he wouldn't have to return the money, because he*** had no money to
> return. Normally a forgiven loan like that becomes taxable income, but
> there is some exception (Maybe this is the exception, or part of the
> exception, in the previous paragraph.) But for some reason, for him it
> did not become taxable income; and it wasn't even neutral, non-taxable
> income. It remained a loss, which could cancel out income, but he
> didnt' lose his own money. Yet he will use the loss to cancel out
> income in following years. Is this possible? Did the Blumberg guy
> fail to ask how could this be possible?

We're pushing the limits of this group, but Trump never had a (recorded) personal bankruptcy, so that scenario seems improbable. However, he could have borrowed the money to contribute to DJT, LLC, which went bankrupt.

[Stuart O. Bronstein]

Arthur Rubin <ronni...@sprintmail.com> wrote

> micky wrote:

>> But more importantly, the person on the radio said that it was
>> very unlikely that Trump lost his own money. He said what
>> most likely happened is that he borrowed, say, 500G (or 900G)
>> from a bank or investor, then went bankrupt, and then
>> negotiated with the lender that so he wouldn't have to return
>> the money, because he*** had no money to return.
>

> We're pushing the limits of this group, but Trump never had a
> (recorded) personal bankruptcy, so that scenario seems
> improbable. However, he could have borrowed the money to
> contribute to DJT, LLC, which went bankrupt.

I'm curious about the possibilities of Trump getting a deduction for
money that wasn't his. With real estate you can get a depreciation
deduction even for loans that are not "at risk." But other things
I've heard commentators speculate about don't make any sense to me.

If someone borrows a lot of money and fails to pay it, even if he
doesn't incur tax for cancellation of debt, I find it hard to
believe that a creditor would forego efforts to collect nearly a
billion dollars.

So what (other than an actual, out of pocket loss) could cause that
kind of deduction?

--
Stu
http://DownToEarthLawyer.com
https://www.etsy.com/shop/studiobethdesigns

[ira smilovitz]

My understanding of one of the ways he could have generated such a large NOL is the following:

He borrowed $1billion for real estate projects (all numbers are for illustration only). The project went bust. He had a loss of $1billion. Since he is a real estate dealer, it's an ordinary loss. Of course, he still owes $1billion to his creditors. He convinces the creditors to cancel the loans (or take pennies on the dollar). Under the tax code in place in the early 1990s, cancellation of debt was not reportable income. This was changed around 2001 to make CoD reportable and may be one of the reasons Trump has changed his primary business operations to licensing his name.

Ira Smilovitz, EA

[micky]

In misc.taxes.moderated, on Sat, 8 Oct 2016 19:21:24 EDT, Retired

<Ret...@home.com> wrote:

>On 10/8/16 5:32 PM, Stuart O. Bronstein wrote:
>> micky <NONONO...@bigfoot.com> wrote
>>
>>> Is the news referring to Trump's personal income tax or
>>> corporate tax?
>>>
>>> They make it sound like the 3 pages that were publicized refer
>>> to personal tax, but he talks about fiduciary duty. To himself?
>>> That makes no sense.
>>
>> I looked and was unable, within a reasonable time, to find the actual
>> return pages that were leaked. I did see some photos of the pages,
>> and they are from his and Marla's personal tax return.
>>
>
>
>Did you see the 3 complete pages at:
>
>http://www.nytimes.com/interactive/2016/10/01/us/politics/donald-trump-taxes.html

Yes, thanks. I also saw on the NBC news an interview with Jack
Mitnick, the Trump accountant for taxes from the 60's to 1996, who said
that the forms looked authentic. He even explained why the first two
digits of the 900 million number were in a different typeface and not
aligned with the other digits, and that was that their computer woudln't
print numbers that large and those two digits were filled in with a
typewriter. He may be 80 y.o. (only a decade older than I) but his
memory is good.

>
>They are personal state forms, not Fed.

Right, though the important numbers are presumably copied from a federal
form.

>NY Resident, NJ & CT Non-resident

Right. Just like the news made it sound.

[ira smilovitz]

On Sunday, October 9, 2016 at 6:40:03 PM UTC-4, Stuart O. Bronstein wrote:

If he didn't personally guarantee the loans, there could be nobody to collect from. That's one of the advantages that he, as a large, well-known real-estate developer, had that you and I would not have had.

Ira Smilovitz, EA

[micky]

In misc.taxes.moderated, on Sun, 9 Oct 2016 10:38:02 EDT, Taxed and

Why would that make him foolish? That would not stop me from voting for
someone. There are many people who give money to the federal
government, in their will and, I suppose, some do when they are alive.
And I suppose some give to state governments too.

But you've misread my post if you think I was criticizing him for taking
a later NOL deduction. What I asked about was whether the tax referred
to was personal or corporate, and how could there be an issue of
fiduciary duty. An Issue Mr. Trump brought up but which seems totally
inapplicable. Unless there be some way iti is applicable after all, he
could be confused, or he could have brought up an iirelevancy as a
misdirection and because "fiduciary duty" sounds good. This is a real
possibility because he often replies to questions with statements
unrelated to the question.

>RThat is really no different than claiming your withholding taxes when
>filing your tax return.
>
>I have used NOL carryforwards. Shame on me???

Again, you misread my post. Didn't I write "OTOH, it's reasonable for

someone with really bad years and really good years to want to average
his income,"
>
>
>>
>> OTOH, it's reasonable for someone with really bad years and really good
>> years to want to average his income, but OT3H income averaging for a
>> regular taxpayer was abolished about 1986, when the maximum tax was
>> lowered and they said averaging wasn't necessary anymore. (Because
>> iiuc, a very high income one year can't push one into the 60 or 70%
>> bracket anyhow, because it no longer existed. After his deductions, he
>> won't pay more than, what, 30-something percent in any year.)
>>
>> But OT4H, Blumberg radio said that because the real estate business was
>> doing badly, they made an exception for real estate, in about in 1996
>> iirc. Of course it's had 20 years to recover, so maybe they should get
>> rid of the exception, don't ya think?
>
>I don't know that this is an exception. I think it has been the case
>for many years.

Whether it's an exception or not is not determined by how long it's been
in effect but how it compares with other sources of income.

>Here is a for instance:
>
>year 1: NOL $1,000
>year 2: net income $1,000
>
>year 1 and 2 net: zero
>
>using NOL, taxable income for years 1 and 2 is zero.
>
>without using NOL, taxable income for years 1 and 2 is $1,000. But
>there is no actual income from which to pay the taxes.
>
>Look, like it or not, the government has decided for you that you have a
>partner. Now people are saying the partnership should be "heads I win,
>tails you loose". Is that the kind of partnership that makes any sense
>at all?

What does "partnership" have to do with one's personal income tax?
The partnership agreement determines how much each partner gets to keep
from income, and how much loss is attributed to each partner , and then
each partner files his own income tax.

[Barry Margolin]

In article <7d067fac-f180-4fd9...@googlegroups.com>,

ira smilovitz <ira.sm...@gmail.com> wrote:

> My understanding of one of the ways he could have generated such a large NOL
> is the following:
>
> He borrowed $1billion for real estate projects (all numbers are for
> illustration only). The project went bust. He had a loss of $1billion. Since
> he is a real estate dealer, it's an ordinary loss. Of course, he still owes
> $1billion to his creditors. He convinces the creditors to cancel the loans
> (or take pennies on the dollar). Under the tax code in place in the early
> 1990s, cancellation of debt was not reportable income. This was changed
> around 2001 to make CoD reportable and may be one of the reasons Trump has
> changed his primary business operations to licensing his name.

The explanation I heard (NPR interviewed the guy who wrote "The Making
of Donald Trump") is that there's another loophole: if you choose not to
depreciate the property, you don't have to report the cancellation of
debt as income. So that's what Trump did.

Then he took his business public, and the shareholders got saddled with
all the damage he'd left in his wake, while he could still use the 18
years of NOL carry-over.

Other financial experts have weighed in on the "fiduciary duty" issue.
Businesses don't have a fiduciary duty to minimize taxes and maximize
profits at any cost. Many businesses perform charity, or choose
sustainable energy options, provide worker benefits, etc. -- these can
all hurt the bottom line. They've never been found guilty of violating
fiduciary duty. You certainly can't use that excuse for mismanaging a
company so much that it goes bankrupt, just because it generates a tax
benefit as well.

--
Barry Margolin
Arlington, MA

[micky]

In misc.taxes.moderated, on Sun, 9 Oct 2016 09:51:22 EDT, Taxed and

Spent <nospam...@nonospam.com> wrote:

>On 10/8/2016 9:38 PM, Barry Margolin wrote:
>> In article <u9jivbll8nik96gud...@4ax.com>,
>> micky <NONONO...@bigfoot.com> wrote:
>>
>>> Is the news referring to Trump's personal income tax or corporate tax?
>>>
>>> They make it sound like the 3 pages that were publicized refer to
>>> personal tax, but he talks about fiduciary duty. To himself? That
>>> makes no sense.
>>
>> It's his personal tax. But as the owner of a real estate company, he's
>> able to pass the company's Net Operating Losses through to his personal
>> taxes. Which makes his claim that he did this because of fiduciary duty
>> a big fat lie, since it didn't benefit the company or shareholders at
>> all.
>>
>
>
>You don't know that. He may have had partners or others involved to
>whom a fiduciary duty was owed.

I dealt with that in my second post: Once the income or loss, as the
case may be, is "distributed" and a partner is filing his own personal
taxes, any fiduciary duty he had to partners or others is irrelevant.
It's his money now, his income or loss, and no one has a fiduciary duty

to take deductions on his personal income tax.

[micky]

In misc.taxes.moderated, on Mon, 10 Oct 2016 00:07:22 EDT, ira smilovitz

<ira.sm...@gmail.com> wrote:

>On Sunday, October 9, 2016 at 6:40:03 PM UTC-4, Stuart O. Bronstein wrote:
>> Arthur Rubin <ronni...@sprintmail.com> wrote
>> > micky wrote:
>>
>> >> But more importantly, the person on the radio said that it was
>> >> very unlikely that Trump lost his own money. He said what
>> >> most likely happened is that he borrowed, say, 500G (or 900G)
>> >> from a bank or investor, then went bankrupt, and then
>> >> negotiated with the lender that so he wouldn't have to return
>> >> the money, because he*** had no money to return.
>> >
>> > We're pushing the limits of this group, but Trump never had a
>> > (recorded) personal bankruptcy, so that scenario seems
>> > improbable.

The radio scenario didn't include a personal bankruptcy.

>> > However, he could have borrowed the money to
>> > contribute to DJT, LLC, which went bankrupt.

But the loss was attributed to his personal taxes. I don't think there
is any doubt about that.

I googled Bloomberg Trump Net Operating Loss hoping to find an
article by the same person, saying the same thing as he did on the
radio. I didnt' seem to find one by him, but I found several other
articles on the same topic.*** but then, even though it's called
Bloomberg Radio, I thought to add Youtube to the search and I came up
with this: https://www.youtube.com/watch?v=5n4qQ7uut64 by Robert Frank.
broadcast on the Nightly Business Report, which is a tv show or segment
on CNBC. I'm 95% sure this is what I heard on the radio. (and they do
broadcast other tv shows on this radio station, namely, one or more of
the Sunday morning tv news shows.)

One thing of interest and directly related to my questions is that he
says the Trump campaign said he had a "fiduciary duty to his business,
his family, and his employees to pay no more tax than legally required".
I think they are using a legal term of art and applying it where the law
does not apply it. Is that not right? In addition, taking a later NOL
deduction seems to me not to benefit his business or employees, only his
family, and if I'm right, those two parts woudl be false altogether.
So their reference to "fiduciary duty" seems like misdirection to me.

***Print articles on the topic by other writers.
https://www.bloomberg.com/view/articles/2016-10-03/trump-s-1995-return-shows-good-tax-policy-at-work
http://www.bna.com/speculation-trump-engage-n57982078116/
and more

>> I'm curious about the possibilities of Trump getting a deduction for
>> money that wasn't his. With real estate you can get a depreciation
>> deduction even for loans that are not "at risk." But other things
>> I've heard commentators speculate about don't make any sense to me.
>>
>> If someone borrows a lot of money and fails to pay it, even if he
>> doesn't incur tax for cancellation of debt, I find it hard to
>> believe that a creditor would forego efforts to collect nearly a
>> billion dollars.
>>
>> So what (other than an actual, out of pocket loss) could cause that
>> kind of deduction?
>>

>> Stu

>
>My understanding of one of the ways he could have generated such a large NOL is the following:
>
>He borrowed $1billion for real estate projects (all numbers are for illustration only). The project went bust. He had a loss of $1billion. Since he is a real estate dealer, it's an ordinary loss. Of course, he still owes $1billion to his creditors. He convinces the creditors to cancel the loans (or take pennies on the dollar). Under the tax code in place in the early 1990s, cancellation of debt was not reportable income.

Yes, this is how the guy on the radio described it.

But he also thought somehow it could be a NOL to offset future income,
and apparently whatever the details of the loss, DD thought so too. I
wonder. Maybe the IRS should look into it.

> This was changed around 2001 to make CoD reportable and may be one of the reasons Trump has changed his primary business operations to licensing his name.

So they took my suggestion, " Of course it's had 20 years to recover, so
maybe they should get rid of the exception, don't ya think? ", and not
only that, they took it before I made it. I think it's quite an
impressive suggestion if it's even effective retroactively.

[lotax]

[u]"Under the tax code in place in the early 1990s, cancellation of debt was not reportable income."[/u]

Huh?

[ira smilovitz]

On Tuesday, October 11, 2016 at 3:30:39 PM UTC-4, lotax wrote:
> [u]"Under the tax code in place in the early 1990s, cancellation of debt was not reportable income."[/u]
>
> Huh?
>
> --

In simple terms. If you owe money on a credit card, you tell the credit card company you can't pay, and the credit card company writes off the balance, the amount forgiven is income to you. It hasn't always been that way in the tax code.

Ira Smilovitz, EA

[lotax]

According to the IRS, "In general, if you have cancellation of debt income because your debt is canceled, forgiven, or discharged for less than the amount you must pay, the amount of the canceled debt is taxable and you must report the canceled debt [as income] on your tax return for the year the cancellation occurs."

Is this a recent development? When did the law change? It probably made headlines. I wonder how I missed those headlines...

[BignTall]

On 10/11/2016 6:44 PM, lotax wrote:
> According to the IRS, "In general, if you have cancellation of debt income because
> your debt is canceled, forgiven, or discharged for less than the amount you must
> pay, the amount of the canceled debt is taxable and you must report the canceled
> debt [as income] on your tax return for the year the cancellation
> occurs."
>
> Is this a recent development? When did the law change? It probably made headlines.
> I wonder how I missed those headlines...
>

One of the better speculations about Trump's big tax loss and a possible
reason Cancellation of Debt may not have generated income under Trump's
particular circumstances is in an article by Josh Barro in Business
Insider.
http://www.businessinsider.com/why-did-trump-pay-so-little-tax-2016-10

The Barro article has a number of references that you can use as a
starting point for more digging if you are so inclined.

[ira smilovitz]

On Tuesday, October 11, 2016 at 7:48:31 PM UTC-4, lotax wrote:
> According to the IRS, "In general, if you have cancellation of debt income because your debt is canceled, forgiven, or discharged for less than the amount you must pay, the amount of the canceled debt is taxable and you must report the canceled debt [as income] on your tax return for the year the cancellation occurs."
>
> Is this a recent development? When did the law change? It probably made headlines. I wonder how I missed those headlines...
>
> --

I believe it changed in 2001 for the sorts of deals Trump would have been involved with. Prior to the change, certain cancellation of debt did not result in taxable income.

Ira Smilovitz, EA

[MTW]

On Wednesday, October 12, 2016 at 8:10:34 PM UTC-7, ira smilovitz wrote:

> I believe it changed in 2001 for the sorts of deals Trump would have been
> involved with. Prior to the change, certain cancellation of debt did not
> result in taxable income.

I was actively practicing at that time and I don't remember any major change. And I don't recall any time when the cancellation of debt - especially in a business context - didn't have a tax consequence. But it does seem that the emphasis used to be on downward basis or carryover adjustments, whereas in more recent times COD income has become a line item separate from related assets. Just sayin'... ;-)

[ira smilovitz]

On Thursday, October 13, 2016 at 9:52:03 AM UTC-4, MTW wrote:
> On Wednesday, October 12, 2016 at 8:10:34 PM UTC-7, ira smilovitz wrote:
>
> > I believe it changed in 2001 for the sorts of deals Trump would have been
> > involved with. Prior to the change, certain cancellation of debt did not
> > result in taxable income.
>
> I was actively practicing at that time and I don't remember any major change. And I don't recall any time when the cancellation of debt - especially in a business context - didn't have a tax consequence. But it does seem that the emphasis used to be on downward basis or carryover adjustments, whereas in more recent times COD income has become a line item separate from related assets. Just sayin'... ;-)
>
> --

See the Business Insider article referenced in BignTall's post earlier in this thread. According to that article the change was in 2002 explicitly because there was an unintended loophole in the existing law as written. That article references another article which explains in tax/accounting-speak detail exactly how it could have occurred and what the loophole was.

Here's a link to the technical explanation: http://www.taxanalysts.org/content/news-analysis-donalds-double-dip

Ira Smilovitz, EA

[lotax]

"If you owe money on a credit card, and you tell the credit card company you can't pay, and the credit card company writes off the balance, the amount forgiven is income to you." Some say, see above, that it "hasn't always" been that way in the tax law.

That has always been the general rule of debt forgiveness. And there have always been exceptions to that general rule. The Gitlitz loophole was a huge, glaring, egregious and almost certainly unintended exception to that general rule, and it - the Gitlitz loophole - was *slammed* shut by Congress shortly after the Supreme Court pointed it out to them.

I'm not saying that the Gitlitz glitch in the law might or might not have been involved in Mr. Trump's end run around $909,000,000 of otherwise taxable income. I'm just saying that debt forgiveness has, as a general rule, been included in gross income for, oh, maybe about a hundred years.

[Stuart O. Bronstein]

MTW <mtwi...@yahoo.com> wrote

> ira smilovitz wrote:
>
>> I believe it changed in 2001 for the sorts of deals Trump would
>> have been involved with. Prior to the change, certain
>> cancellation of debt did not result in taxable income.
>
> I was actively practicing at that time and I don't remember any
> major change. And I don't recall any time when the cancellation
> of debt - especially in a business context - didn't have a tax
> consequence. But it does seem that the emphasis used to be on
> downward basis or carryover adjustments, whereas in more recent
> times COD income has become a line item separate from related
> assets. Just sayin'... ;-)

Cancellation of non-recourse debt isn't and hasn't been considered
taxable income. But it used to be that deductions were allowed for
losses funded with non-recourse debt. That's not the case anymore.

--
Stu
http://DownToEarthLawyer.com
https://www.etsy.com/shop/studiobethdesigns

[bh2...@gmail.com]

On Saturday, October 8, 2016 at 5:03:39 PM UTC-4, micky wrote:
> Is the news referring to Trump's personal income tax or corporate tax?
>
> They make it sound like the 3 pages that were publicized refer to
> personal tax, but he talks about fiduciary duty. To himself? That
> makes no sense.

I believe it is depreciation expense.

bw

[Stuart Bronstein]

bh2...@gmail.com wrote:
> micky wrote:

>> Is the news referring to Trump's personal income tax or corporate
>> tax?
>>
>> They make it sound like the 3 pages that were publicized refer to
>> personal tax, but he talks about fiduciary duty. To himself?
>> That makes no sense.
>
> I believe it is depreciation expense.

That would mean he'd have to have purchased a $55 billion building.
There's no evidence that, at that time, he had enough assets to make
even a down payment on a building of that size.

Stu

[John Levine]

>> I believe it is depreciation expense.
>
>That would mean he'd have to have purchased a $55 billion building.
>There's no evidence that, at that time, he had enough assets to make
>even a down payment on a building of that size.

In 1995 Trump was trying to take his casinos public. I like the
theory that they were casino writedowns to clean up the books before
publishing them as part of the IPO.

R's,
John