Celebrity Tax Problems - How President Donald Trump Pays Less Taxes

President Trump's Tax Return Raises a Lot of Questions, Learn How He Owed So Little Money

Over the weekend, The New York Times released the findings of a very deep and lengthy investigation into Donald Trump and his tax returns. They determined that Trump paid very little, if anything over the past decade in taxes. Not only that, he had huge refunds for other years. As a tax attorney my goal is to help my clients realize all the expenses they can validly claim under the current tax code. It's not for me to say whether his deductions are right or wrong. However, I want to point out what he has done to pay so little in taxes.

Losses

If you lose money, you generally don't have to pay taxes. This could not be more true of the President. Business only pay taxes when they generate a profit. the definition of a profit is a "financial gain especially the difference between the amount earned and the amount spent in buying, operating, or producing something else. The President claims a profit with some real estate investments and the TV show "The Apprentice." However, his golf courses have lost $315 million, his hotel in Washington has lost $55 million. With these losses, he can carryforward the losses to future years to offset his profits.

Payroll

President Trump obviously employs a lot of people, no question about it. Payroll also significantly reduces the profit as well. The interesting aspect of his payroll is not what, but who is on the payroll. He has put relatives on the payroll and calls them consultants. This is a very common strategy that different tax preparers utilize to reduce tax liability. Even the magazine Entrepreneur, composed an article encouraging this type of tax relief. If you plan to utilize this strategy, make sure you stay in compliance with the rules of hiring a son, daughter, wife, etc.

Other Deductions

A conservation easement "is a voluntary, legal agreement that permanently limits uses of the land in order to protect its conservation values. Also known as a conservation restriction or conservation agreement, a conservation easement is one option to protect a property for future generations." The President has used this to claim a charitable deduction as he agreed not to develop pieces of land.

The report also states that President Trump owes hundred of millions of dollars in debt. To whom is unclear at this time. This is another tactic he uses in reducing his profits as previously explained.

These are a few of the tricks of the trade that the President used in reducing his tax liability to almost zero. Hopefully, some of these might be helpful to you as well. Make sure you consult a specialist such as an accountant or an attorney if you believe you would qualify for some of these deductions as well.

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Sep 30, 2020