The story of Trump’s business career, his taxes and his debt

• An explosive New York Times report claims that Trump paid only $ 750 in federal income taxes in 2016, and nothing at all for much of the previous decade, a stark contrast to his self-made billionaire image.
• Trump’s business career shows a series of flashy and ambitious investments that fail, sometimes end in bankruptcy, and Trump comes out of the rubble each time.
• Multiple windfalls reported throughout Trump’s career, from inheriting millions as a child to the millions he began to earn as a reality TV star of ‘The Apprentice’, have given Trump investments a huge boost for decades.
• Arguably another windfall came in 2016, when Trump was elected president.
• Visit the Business Insider home page for more stories.

Visiting my grandmother in Queens in the late 80s and early 90s meant a few things.

There were the M & M’s that he always kept on his coffee table, usually alongside his daily copy of the New York Post. There was a haze of cigarette smoke coming from the parliaments that he always smoked, and somewhere in the ether, Donald Trump was mentioned.

He was everywhere in the tri-state area in those years, long before NBC’s “The Apprentice” made him a national figure. His name covered the Post’s gossipy Page Six and the buildings up and down I-95, from Atlantic City to Central Park West.

In the early 1990s, a series of corporate bankruptcies meant that Trump’s name migrated from the sports and gossip pages to other sections of the newspaper. This set off a long-running series of reports on Trump’s business failures that may have culminated in the New York Times bombing this weekend. Tax records show that Trump claimed chronic losses for much of the last decade, according to the Times, resulting in a federal income tax bill of just $ 750 in 2016, and nothing at all for many of the previous years.

PL Gould / Getty Images

The quirky northeastern story of the distinctive-haired real estate developer has gone national, but the story is remarkably similar to what happened in the tri-state tabloids decades ago: flashy and ambitious investments turning bad, with Trump always moving toward still bets. higher. projects, like running for president.

This is the Donald Trump pattern: giant windfalls, bad investments, huge debt burdens, and yet a rise to power.

Going down the shore

I remember my parents taking me up the New Jersey shore in the summer of 1988 or 1989, right in the middle of Trump’s ambitious program to buy casinos along the Atlantic City boardwalk. His large spending in South Jersey gave him a lot of visibility on television, newspapers, and (in the region at least) in pop culture. For example, when he was a young child fascinated by WWF superstars Hulk Hogan and Ultimate Warrior, they became associated with Trump because Atlantic City’s Trump Plaza hosted Wrestlemania in both 1988 and 1989.

Bill Pugliano / Getty Images

Within a few years, beginning in 1991, Trump began filing companies for Chapter 11 bankruptcy, many of them Atlantic City casinos. In all, he filed six corporate bankruptcies between 1991 and 2009, a record in which Trump has shown pride. “I play by the bankruptcy laws, they are very good for me,” he told Newsweek’s Howard Kurtz in 2011.

In a sense, Trump’s use of the bankruptcy process for companies in trouble is appropriate: Chapter 11 has become a process designed to help companies at a loss negotiate a way to continue operating as going concern.

Almost any businessman looking to keep his business viable would use Chapter 11 to revive a troubled operation, but Trump does not appear to be almost any businessman. The pattern that emerged in Atlantic City was a sophisticated use of the legal system that allowed Trump to put his losses behind him and move on, a pattern the Times reports is similar to his use of the tax code for much of the 2000s. .

Mark Makela / Getty Images

Business Insider and other media outlets, including The Guardian, have reported on how post-Trump Atlantic City has turned into a ghost town.

In its Trumpian heyday, The Guardian reported, its casinos employed 8,000 and accounted for nearly a third of the area’s gambling revenue. In running for president in 2016, Trump said he took “incredible” amounts of money out of Atlantic City. The Times reports that Trump took similarly incredible amounts from his business, citing items such as $ 70,000 to style Trump’s hair for television as expenses and $ 95,464 to style Ivanka Trump’s hair, while his tax records show $ 47.4 million in losses.

The first windfall: inherited wealth

The Trump Organization did not immediately respond to Business Insider’s request for comment on the president’s business career. The White House referred to Trump’s comments from the podium, in which he dismissed the reports as “fake news,” as well as comments from Trump Organization attorney Alan Garten to the Times, saying “the majority, if Not all of the facts “reported by the document” appear to be inaccurate.

Trump was elected to the presidency having relied heavily on his reality TV personality as a self-made billionaire who could rule the country as he did his successful business empire.

Another major Times investigation, from 2018, reported that much of Trump’s big spending in his 1980s heyday and later came from inherited wealth derived from his father Fred, also a developer from the New York City area. Donald pocketed the equivalent of $ 413 million from Fred Trump’s real estate empire since he was a child, according to the Times. More specifically, he was making $ 200,000 per year in today’s dollars when he was 3 years old, and he became a millionaire at 8 years old. Trump had long claimed that he grew a $ 10 billion empire from a $ 1 million loan from his father, which he repaid with interest.

By 1990, the Times reported in 2016, Trump had acquired, among other things, the Plaza Hotel in Manhattan for $ 407 million, an airline for $ 365 million and a yacht for $ 29 million. He needed his own millions to get a foot in the door, but he also went into huge debt, racking up $ 3.4 billion in debt in 1990, being himself personally responsible for $ 832.5 million. Soon, he would need another windfall.

Dennis Caruso / NY Daily News Archive via Getty

In 1997, Donald and his brothers inherited the remaining real estate empire from Fred Trump, providing a financial opportunity in the arm after Donald’s series of mostly Atlantic City-related bankruptcies in the early 1990s. The Times reported that the Trump family claimed that Fred Trump’s buildings were worth $ 41.4 million in tax documents, then sold the portfolio for more than 16 times that amount over the next decade.

As he continued to buy and sell property, Trump’s post-1997 spending spree largely fell within the private and murky realm of the Trump Organization, although it continued to accumulate assets. Golfweek reported in 2015, for example, that Trump had amassed 18 golf resorts around the world, while also having interests in the 1990s and 2000s in the Miss Universe Organization and a modeling agency.

Trump also got a new source of loans after a 1998 meeting with Deutsche Bank. He dealt primarily with commercial real estate bankers Mike Offit, son of writer Sidney Offit, and Justin Kennedy, son of former Supreme Court Justice Anthony Kennedy. Offit was fired in 1999, he told the Times in 2019, and Trump continued to deal with Kennedy for years.

The second windfall: ‘The apprentice’

After the turn of the 21st century, Trump’s starring role in “The Apprentice” was his next big windfall, netting him $ 197.3 million between 2000 and 2018, according to the Times. This figure is further expanded when you factor in sponsorships and licensing agreements that exchanged your “you’re fired” image.

Trump still filed two corporate bankruptcies during this era, in 2004 and 2009, but his asset struggles were largely hidden behind the opaque wall of the Trump Organization when Deutsche Bank became his top lender, lending him $ 2 billion during the next two decades. , according to the Times.

Cases of misleading accounting have surfaced in lawsuits or in reports similar to the Times, such as David Fahrenthold Pulitzer of The Washington Post’s winning paper on the Trump Foundation. Apparently a charity, Fahrenthold reported that the foundation runs on little of Trump’s own dollars, and that Trump had used funds to resolve legal disputes.

The Times concluded in its analysis that Trump has spent much of it on golf courses in recent years, and these assets lose millions, or tens of millions, each year, and their revenue from “The Apprentice” and licensing deals are gone withering.

Since 2000, the Times found, Trump has lost $ 315.6 million on his 15 golf courses in the US, Scotland and Ireland, including $ 162.3 million in losses at his National Doral golf resort in Miami between 2012 and 2018, and $ 63.6 million in its three European golf courses.

The third windfall: the presidency

A new source of income became apparent in the Times’ analysis of Trump’s tax documents: Presidential visitors.

Trump’s “Winter White House,” the Mar-a-Lago club in Palm Beach, Florida, raked in an additional $ 5 million from new members as of 2015, and in 2017, the Billy Graham Evangelistic Association paid at least $ 397,602 to Trump’s hotel in Washington DC.

Also, even though Trump said he would not seek new deals abroad as president, his first two years as president saw foreign revenue reaching $ 73 million.

My grandmother died in 2003, the same year that Trump set a record by selling his stake in the General Motors building for $ 1.4 billion. Trump had purchased the building in 1998 in association with Conseco, a financial services company. When they sold, Conseco was bankrupt, “collapsed under the weight of its debt,” reported the Times.

“It’s a great building in a great location,” Trump said at the time. “I did a great job turning it into a great building.”

Trump contributed just $ 11 million to the initial purchase of the building, the Times reported.

As for my grandmother, she never liked Trump. I remember asking her why, and she replied, “Because she’s a Democrat.”