Tuesday, November 1, 2016

Trump used borderline illegal tax loophole

CBC - Trump used dubious tax loophole to avoid casino-related taxes. Quote:

Donald Trump avoided paying potentially hundreds of millions of dollars in taxes in a way even his own lawyers considered questionable, The New York Times reported Monday.

The newspaper said the manoeuvre also may explain how Trump posted a one-year loss of more than $900 million US a few years later, enabling him to avoid paying federal income taxes for perhaps 18 years.

At issue is how Trump was able to cancel hundreds of millions of dollars of debt as his casino empire in Atlantic City went broke in the early 1990s. Cancelled debt generally is treated as taxable income, meaning Trump would have owed the Internal Revenue Service significant money on debt that his creditors forgave.

The Times said it obtained documents from a quarter-century ago showing Trump essentially traded the debt relief for nearly worthless "partnership equity" to avoid any tax liability. In practice, the strategy was almost identical to a tax manoeuvre that was already outlawed, but differed in minor details. Trump's own lawyers advised him the IRS would likely find it improper if he were audited, the paper said, and Congress explicitly outlawed the manoeuvre in 2004.

Hillary Clinton, then a New York senator, was among the lawmakers who voted to close the loophole.

But then again she once had an email server, therefore she's Ernst Blofeld meets Idi Amin, right?

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