Wed Nov 2, 2016, 07:34 AM
Attila Gorilla (15,046 posts)
A big, dirty secret from Donald Trump’s tax returns has been exposed
It appears Trump gave his creditors shares of his failing businesses to avoid taxes on hundreds of millions of dollars they granted him in debt relief, a practice that has since been explicitly outlawed, the Times explained.
Some had missed Trump's maneuver, Kleinbard said, because they did not think that it would have been allowed at the time.
“The reason nobody thought of it is that nobody thought that it existed,” Kleinbard said. “The real surprise here is that he apparently got away with it.”
For instance, when someone takes out a mortgage, the money is not counted as income, even though the bank has just given the borrower hundreds of thousands of dollars. Mortgages do not actually make borrowers better off, because the borrowers are expected to return the money eventually.
If the bank forgives the loan, however, then the amount that is forgiven does count as income under federal law. A canceled debt is equivalent to a gift from the bank, and it is subject to income taxes.
That is what happened to Trump. When the casino and hotel investments failed catastrophically, Trump's businesses declared bankruptcy, and his creditors were forced to forgive much of the debt.
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Response to Attila Gorilla (Original post)
Wed Nov 2, 2016, 09:30 AM
MeatSandwich (9,419 posts)
2. Notice the verbiage there.
If you are reporting that he did something legal, and that subsequent audits by the IRS have not resulted in anything related to him being in violation, then what's your point here?