[ad_1]
By Reuters 
13h ago
Tom bergin
Washington – President Donald Trump has denied a New York Times complaint saying he did not pay income taxes for most of the past two decades, but experts said the methods he reportedly employed to lower his bill They are commonly used by wealthy real estate developers to file zero liability tax returns.
In addition to real estate tax breaks, Trump could also benefit from the wide flexibility available to the super-rich to report personal expenses, such as using their own private jets and vacation homes, as deductible business costs, they say.
“It would be very common for my wealthiest clients in the real estate world to report losses or to recover,” said Robert Keebler, who runs a tax consultancy firm in Green Bay, Wis. That serves high-net-worth clients.
“It’s not something made up in some law firm, it’s something Congress came up with,” he said of the tax breaks that real estate and capital gain investors enjoy.
Real estate investors can deduct about 4% of the purchase value of their buildings from their rental income each year, although buildings do not usually lose value. This means they can report tax losses while making big profits.
Tax activists have long argued that the tax break was a gift that was not necessary to stimulate real estate investment and should be abolished.
Outside of real estate, or in the cases of real estate moguls whose buildings no longer offer large deductions for depreciation, something the Times said could apply to Trump, it is a maneuver that becomes more difficult to pull off.
“Rich people for the most part pay taxes,” said Annette Nellen, a tax professor at the San Jose State University School of Business. She said that if Trump had not enjoyed large depreciation deductions, applied to her earnings from her television show “The Apprentice” and licensing her name to developers around the world, it would have been difficult to pay any taxes.
“You’d think he had some income to pay taxes,” he added.
The White House did not immediately respond to an emailed request for comment.
In a series of posts on Twitter, the Republican president responded to the New York Times report on Monday. “I paid many millions of dollars in taxes, but I was entitled, like everyone else, to depreciation and tax credits,” he wrote.
The United States has not released personal tax returns since a brief period in the 1920s, so it is impossible to know how much the wealthy pay in taxes.
The tax records released in 2012 by then-presidential candidate Mitt Romney were a rare glimpse into the tax affairs of the wealthy.
The documents revealed that he paid a 14% effective federal tax rate on $ 14 million (approximately R238 million) of income. That result was largely due to the low tax rate applied to capital gains and dividends, something successive governments had confirmed in the hope that it could fuel business start-ups, but not with the help of the corporate structure. or the possible deductions someone like Trump enjoys.
In his financial disclosures since 2016, Trump has reported earnings from the sale of stocks and land. Trump has not released his tax documents, contravening a decades-long tradition for US presidential candidates to release their statements.
Beyond his real estate deals, another way that Trump reduced his tax bill was reportedly by shifting personal expenses to his businesses and designating a family estate outside of New York City as a business.
Experts said it was not uncommon for wealthy business owners to claim that vacation homes or hobby farms were businesses whose running costs should be offset by other income, or that private jet flights for weekends in Miami were Commertial expenses.
“They are not alone. We see court cases about this in the United States every year, ”Nellen said.
However, experts said it was impossible to know to what extent Trump’s zero tax bill was due to generous exemptions, tax avoidance (the bending of tax rules to pay less than what the law intended), or the fact that he just didn’t have a great income over the years involved.
At least several of Trump’s properties have suffered losses in recent years, published accounts and property tax records show. A Reuters examination of his golf courses in 2016 found that Trump had invested about $ 1 billion in building a portfolio of assets worth half that value.
Trump questioned that estimate.
The Times said Trump was under increasing financial pressure from ongoing losses in some of his businesses as debt payments are due in the next few years.
[ad_2]
