Q&A: What we know (and don't know) about Trump's taxes

Unlike all of the other major-party nominees for president over the last 40 years, Donald Trump has declined to release any of his income tax returns. That doesn't mean we don't know anything about his taxes, because numerous reports this year have revealed some of his business dealings and tax payments. Here's what we know so far, and what we are still looking for:

Q: Has Trump released any tax information?

A: No. He said he will release his taxes once the IRS is done auditing his current return. The IRS says that they have no prohibition on Trump from releasing the information. He has released a candidate financial disclosure form — the same form all candidates for federal office have to file — but that only lists assets and income in broad categories.

Q: What else would the tax returns tell you?

A: Three things are of most significant interest. First, obviously, since Trump talks a lot about how successful he has been in business, the tax form would show how much money he actually earned each year. Second, the tax forms would show how much Trump gave to charity, which is a big deal because The Washington Post has written a series of stories suggesting that Trump has not made any significant charitable donations using his own money. The campaign has said he gives away a lot of money; the tax forms would presumably resolve this. And third, the tax forms would show how much tax he paid, which would be interesting given mounting evidence that he may not have paid federal income taxes (see below).

Q: What did The New York Times release?

A:The New York Times obtained three pages from Trump's 1995 tax forms. They showed the top pages of Trump's tax filings for Connecticut, New Jersey and New York, all states where he earned money and paid taxes. The forms showed that that Trump reported losing $913,765,884 in 1995. Tax experts questioned by the Times said Trump could have used legal tax policies to avoid paying income tax for 18 years.

Q: Is it legal to avoid paying income tax for that many years?

A: Yes. Federal tax law allows real estate investors, such as Trump, to declare losses and carry them forward to offset income in future years. “We allow very generous write-offs for real estate investors, and in particular, real estate developers," said Steven Rosenthal, a tax lawyer and senior fellow at the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution.

Q: So what's the big deal?

A: That's pretty much what Trump's supporters ask. Surrogates like former New York mayor Rudy Giuliani were on the Sunday talk shows this weekend arguing that the tax documents simply prove that Trump is a sharp businessmen, taking full advantage of the tax laws for the benefit of his companies and employees. Trump himself said he knows the tax code better than anyone else and thus is best qualified to fix it.

Trump's opponents have a different take: They argue that Trump was making millions of dollars and then using convoluted loopholes to avoid paying even as much in taxes as a regular working American family. So, for example, when he tweeted about the government wasting "our tax money," it wasn't actually his money, they said.

Q: Is there other evidence that Trump did not pay?

A: There have been spotty stories over the years about Trump avoiding taxes in specific circumstances. For example, Politico reported earlier this year that Trump had paid no taxes for two years in the early 1990s because of significant losses in his casino operations. “Welcome to the real estate business,” Trump responded to Politico.

A USA TODAY analysis of court records earlier this year also indicated that Trump’s businesses have been involved in at least 100 lawsuits and other disputes related to unpaid taxes or how much tax his businesses owe.

Q: So, did Trump really pay no taxes?

A. We can't tell what he paid in taxes. The Times story revealed a loss Trump claimed in one year, which could be used to reduce his tax burden for 18 years. But without full tax returns, there is no way to know how much tax he actually paid, or how much he offset with the 1995 losses. Keep in mind that this tax write-off applies to Trump's personal federal income taxes, not other state taxes he might have paid.

The Trump campaign did not dispute the documents and the reported losses in The New York Times story, and when Hillary Clinton suggested in a debate last week that he had not paid taxes, Trump responded "That makes me smart." But after the debate, Trump told reporters, "Of course I pay federal taxes."

But in August he told CBS' Face The Nation, "I fight like hell to pay as little as possible," because the government wastes tax money and also because "I'm a businessman. And that's the way you're supposed to do it."

Copyright 2016 KING


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