The shallowness of the press seldom is as evident as it was on Monday following the New York Times breaking news from 1995 that Donald Trump lost nearly a billion dollars and -- gasp -- did not have to pay federal income taxes on it.Sources say NYTimes working on another bombshell scoop: Trump once drove a car 50 mph in a 50-mph zone.— Ann Coulter (@AnnCoulter) October 3, 2016
Finance columnist Rick Newman of Yahoo showed he knows not of what he speaks in a piece entitled, "Want a tax break like Trump’s? Good luck with that."
Legal tax deductions are a beautiful thing: You get to keep more of your money while still doing right by Uncle Sam.
But hardly any Americans will ever get the sort of tax breaks Donald Trump has enjoyed. Because he’s a real-estate developer, the Republican presidential nominee benefits from some of the most generous tax breaks on the books. And because he lost a staggering amount of money in the early 1990s, Trump was able to claim a $916 million loss in 1995 that helped him slash tax payments in future years. It’s possible Trump hasn’t paid any federal income tax in decades.
Can ordinary people claim losses in one year in order to trim their tax bills in the future? Legitimate business owners can, but most taxpayers have no such option. “The law puts a very high hurdle on regular folks with salaries doing things they say are a business,” say Lee Sheppard, contributing editor at Tax Analysts. “There are certain parts of the law the IRS polices, and this is one of them.”
It’s routine for businesses to use operating losses in one year to reduce taxes in future years. But few businesses can withstand a loss of nearly $1 billion, as Trump’s did. Most businesses that endure steep losses go bankrupt or just close.That's misleading and maybe even a lie. Individuals can write off business losses from losing money on a house or a stock. Writing off losses is quite common. I know a 90-year-old woman who did so and she made less than $15,000.
I don't recommend it.
Trump had to lose $916 million to get what, $300 million written off his taxes?
Ryan Ellis at Forbes explained what the fools don't know:
To state the obvious, political reporters don’t know a damned thing about taxes. I know this–believe me (to channel my inner Donald). Part of what I do for a living is prepare people’s taxes in the Washington, DC area. As an Enrolled Agent, I run into all sorts of clients. The most political (that is, horse race/hot take) clients compete with performing artists for the least amount of knowledge when it comes to taxes. I’ve even had some of them forget to bring their W-2s to a tax session.
That ignorance was on display in vivid colors over the weekend. We were told that this tricky NOL was some sort of “loophole” that only super-rich bad guys like Donald Trump got to use. We were told that this relieved him of having to pay taxes for 18 years, a laughably arbitrary, made up number that is the tautological output of simple arithmetic and wild assumptions.
In fact, a net operating loss is very common in businesses. As Alan Cole of the Tax Foundation pointed out this morning, about 1 million taxpayers had an NOL in 1995. It results from business deductions exceeding business income in a particular year. Under tax rules, this loss can be carried back up to two years, and carried forward up to twenty years. If this is a “loophole,” what are these political reporters suggesting? That a business loss should simply be eaten by the taxpayer? That Uncle Sam should be a full partner in your profits but not in your losses? How is that fair?
The reason reporters know so little about money is they get paid so little. Social Justice Warriors are dirt cheap, which is why media misers hire so many of them.
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