Monday 10/31, the NYT ran an article about how tRUMP avoided paying Federal Income Taxes. It surprised me that no one commented on it here, but given the sheer number of his scandals, it is understandable.
http://www.nytimes.com/2016/11/01/us/politics/donald-trump-tax.html?_r=0
Of course, the low technical quality of the comments here regarding the repatriation of “earnings permanently invested overseas” (a term of art, as the lawyers would say) might mean that the tax issue of attributed income for the forgiveness of debt may be difficult. But, good news
@mattybfat,
@Supermoto,
@mntal, et al, we will explain it briefly here!
When the debt of a taxpayer is forgiven by a lender, that taxpayer is required to report income to the extent of the amount forgiven. You feel me? This is symmetrical with the loss deducted by the lender. Symmetry is a guiding principal of the Tax Code and Regs. Fair is fair, right?
The transaction that tRUMP used was to have the lender swap the debt that they held for an equity interest in a real estate partnership that had no value, analogous to a swap for stock, which was banned in 1993. The tax opinion letter that the tax attorney, Wilkie, Farr, issued noted that there were six issues upon which this tax position could be challenged successfully by the IRS. Amazingly, he was never challenged by the IRS for this “dubious” position, which saved him hundreds of millions of dollars that he would have been unable to pay in his then precarious financial straits.
All while most everyone on this board and their parents were paying taxes.
Here’s a simplified version:
