In 1995, Donald Trump was in the midst of a spending spree. He had recently bought a 727 jet for personal use, added a skyscraper to his Manhattan real estate portfolio and snapped up properties in Telluride, Colo., and Palm Beach, Fla., financial records show.
That same year, he said he had negative $916 million in “federal adjusted gross income,” a claim that gave him the prospect of avoiding federal income taxes for years to come.
So how could he be thriving and avoiding taxes at the same time?
That’s the central mystery behind the state tax documents filed in New York by Trump for 1995 and disclosed this weekend by the New York Times.
Unlike every major presidential nominee of the past 40 years, Trump has declined to release his tax returns. The 1995 documents offer the most penetrating information yet about Trump’s personal finances and revive long-standing questions about his business practices.
A clue to his claimed losses in 1995 may be related to the intricate backstory of how his Atlantic City gambling empire slid into bankruptcy in the early 1990s.
“Everyone is acting shocked, but the whole world knew he had overleveraged himself and his operating businesses,” said Jack O’Donnell, a former president of the Trump Plaza Hotel and Casino.
The disclosure also raises new questions about the degree of Trump’s personal financial involvement in the Trump Organization’s first four bankruptcies. Though he has repeatedly drawn a distinction between the company’s bankruptcies and his personal finances, the tax documents indicate he may have used losses stemming from his bankruptcies to benefit his personal fortune.
The U.S. tax code allows filers to write off their losses, known as net operating losses, for the year they occurred, and apply them to tax claims for the two years before and as many as 15 years afterward.
Trump’s campaign said in a statement, “Mr. Trump is a highly skilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required.”
Without supporting documents or the full tax filing, which remain confidential, it’s impossible to identify with any precision how the $916 million in claimed losses was generated.
The losses followed a period in which Trump struggled to hold on to his casino and real estate empire.