Tax Returns Investigation: $1 Billion in Losses, Tax Avoidance Schemes Documented

Overview

Trump claimed to be worth billions and said he was a successful businessman. His tax returns documented that he had declared $1.17 billion in losses over ten years — more than any other individual American in IRS records for that period.

He paid $750 in federal income taxes in the year he won the presidency. He paid $750 the year he served as president. In 10 of 15 years between 2000 and 2015, he paid nothing.

The Losses

The billion dollars in declared losses came primarily from the Atlantic City casinos that were failing and from real estate operations that were underperforming. The losses were real in the sense that the businesses were genuinely bleeding money — but they were also strategically useful, because they could be carried forward to offset future income and eliminate tax liability.

Trump's public presentation throughout this period was of a brilliant, successful businessman whose deal-making skills made him money. His tax returns told a different story: decade after decade of declared losses that resulted in zero federal income tax while he was building the brand of success that eventually carried him to the presidency.

The $750 Years

In 2016 and 2017, Trump paid $750 in federal income taxes. This was not zero — the $750 appears to have reflected a minimum alternative minimum tax payment. But it was the tax contribution of a president whose administration was simultaneously enacting a tax bill that would predominantly benefit the wealthy.

The deductions that produced this outcome included $26 million in unexplained consulting fees, $747,622 in payments to a consulting company that turned out to be owned by Ivanka Trump, and $70,000 for what appeared to be personal hairstyling costs claimed as business deductions.

The Debt

The 2020 investigation documented something beyond the tax avoidance: hundreds of millions in personal debt coming due during Trump's presidency. At least $421 million in personally guaranteed loans, with the largest amounts owed to Deutsche Bank.

A president with hundreds of millions in personal debt, negotiating international agreements and financial policy, was a financial conflict of interest that had no precedent in modern American history. The public would not have known about it if the returns had not been leaked.

The Precedent

Trump was the first presidential candidate in more than four decades to refuse to release his tax returns. Every major-party candidate since 1976 had done so. Trump's refusal, sustained by litigation through two campaigns and his presidency, was itself a democratic accountability failure — voters were asked to judge a man whose financial interests and obligations were systematically hidden from them.

The returns were eventually obtained by the House after years in court. They confirmed what the investigations had found.