Russ Buettner and Susanne Craig

Trump was propelled to the presidency, in part, by a self-spun narrative of business success and of setbacks triumphantly overcome. He has attributed his first run of reversals and bankruptcies to the recession that took hold in 1990. But 10 years of tax information obtained by The New York Times paints a different, and far bleaker, picture of his deal-making abilities and financial condition.

The data — printouts from Trump’s official Internal Revenue Service tax transcripts, with the figures from his federal tax form, the 1040, for the years 1985 to 1994 — represents the fullest and most detailed look to date at the president’s taxes, information he has kept from public view. Though the information does not cover the tax years at the center of an escalating battle between the Trump administration and Congress, it traces the most tumultuous chapter in a long business career — an era of fevered acquisition and spectacular collapse.

The numbers show that in 1985, Trump reported losses of $46.1 million from his core businesses — largely casinos, hotels and retail space in apartment buildings. They continued to lose money every year, totaling $1.17 billion in losses for the decade.

In fact, year after year, Trump appears to have lost more money than nearly any other individual American taxpayer, The Times found when it compared his results with detailed information the IRS compiles on an annual sampling of high-income earners. His core business losses in 1990 and 1991 — more than $250 million each year — were more than double those of the nearest taxpayers in the IRS information for those years.

Overall, Trump lost so much money that he was able to avoid paying income taxes for eight of the 10 years. It is not known whether the IRS later required changes after audits.

While The Times did not obtain the president’s actual tax returns, it received the information contained in the returns from someone who had legal access to it. The Times was then able to find matching results in the IRS information on top earners — a publicly available database that each year comprises a one-third sampling of those taxpayers, with identifying details removed. It also confirmed significant findings using other public documents, along with confidential Trump family tax and financial records from the newspaper’s 2018 investigation into the origin of the president’s wealth.

The White House’s response to the new findings has shifted over time.

Several weeks ago, a senior official issued a statement saying: “The president got massive depreciation and tax shelter because of large-scale construction and subsidized developments. That is why the president has always scoffed at the tax system and said you need to change the tax laws. You can make a large income and not have to pay large amount of taxes.”

On Saturday, after further inquiries from The Times, a lawyer for the president, Charles J. Harder, wrote that the tax information was “demonstrably false,” and that the paper’s statements “about the president’s tax returns and business from 30 years ago are highly inaccurate.” He cited no specific errors, but on Tuesday added that “IRS transcripts, particularly before the days of electronic filing, are notoriously inaccurate” and “would not be able to provide a reasonable picture of any taxpayer’s return.”

Mark J. Mazur, a former director of research, analysis and statistics at the IRS, said that, far from being considered unreliable, data used to create such transcripts had undergone quality control for decades and had been used to analyze economic trends and set national policy. IRS auditors often refer to the transcripts as “handy” summaries of tax returns, said Mazur, now director of the nonpartisan Urban-Brookings Tax Policy Center in Washington.

In fact, the source of The Times’ newly obtained information was able to provide several years of unpublished tax figures from the president’s father, the builder Fred C. Trump. They matched up precisely with Fred Trump’s actual returns, which had been obtained by The Times in the earlier investigation.

Donald Trump built a business licensing his name, became a television celebrity and ran for the White House by branding himself a self-made billionaire. Yet the actual extent of his wealth has been the subject of much doubt and debate. He broke with precedent in refusing to release any of his tax returns as a presidential candidate, and until now only a few pages of his returns have become public. Last year’s Times investigation found that he had received at least $413 million in 2018 dollars from his father.

The new tax information does not answer questions raised by House Democrats in their pursuit of the last six years of Trump’s tax returns — about his recent business dealings and possible foreign sources of financing.

But in the granular detail of tax results, it gives a precise accounting of the president’s financial failures and of the constantly shifting focus that would characterize his decades in business. In contrast to his father’s stable and profitable empire of rental apartments, Donald Trump’s primary sources of income changed year after year, from big stock earnings, to a single year of more than $67.1 million in salary, to a mysterious $52.9 million windfall in interest income. But always, those gains were overwhelmed by losses on his casinos and other projects.

The Art of Losing Money

In 1985, Trump appeared to be on top of the world.

He was still riding high from the completion of his first few projects — the Grand Hyatt Hotel, Trump Tower and another Manhattan apartment building, and one Atlantic City casino. He also owned the New Jersey Generals of the United States Football League.

As the year played out, he borrowed hundreds of millions of dollars to fuel a wave of purchases, acquiring a second casino ($351.8 million), a Manhattan hotel ($80 million), the Mar-a-Lago property in Florida ($10 million), a New York hospital he intended to replace with an apartment building ($60 million) and an undeveloped expanse of railroad yards on the West Side of Manhattan ($85 million).

But what the newly revealed tax information makes clear is that, with his vast debt and other expenses on those properties, Trump’s fortunes were already on the way down.

His yearly carrying costs on the rail yards would rise to $18.7 million. He would not be able to convert Mar-a-Lago into a moneymaking club for another decade. The apartments on the hospital site would not be ready for sale, as Trump Palace, until 1990, and another residential project would be stalled for years. The football league would soon fold.

Because his businesses were generally created as partnerships, the companies themselves did not pay federal income taxes. Instead their results wound up on Trump’s personal ledger.

Beyond the $46.1 million loss that his core businesses logged in 1985, Trump’s tax information shows that he carried over $5.6 million in losses from prior years. The IRS data on one-third of high-income tax returns that year lists only three taxpayers with greater losses.

The next years were a time of continued empire building. The information also documents, year by year, a time of gathering loss.

In 1986, he bought out his partners in Trump Tower and the Trump Plaza Hotel and Casino. He bought an apartment building in West Palm Beach for $43 million. His business losses for the year: $68.7 million.

About two weeks before the stock market crash of Oct. 19, 1987, he spent $29 million on a 282-foot yacht. Months later he bought the Plaza Hotel for $407 million. He recorded $42.2 million in core business losses for 1987, and $30.4 million for 1988.

In 1989, he bought a shuttle operation from Eastern Airlines for $365 million. It never made a profit, and Trump would soon pump in more than $7 million a month to keep it airborne, New Jersey casino regulators found.

Trump’s business losses that year soared to $181.7 million.

Then came the Trump Taj Mahal Hotel and Casino, which opened in April 1990 saddled with more than $800 million in debt, most at very high interest rates. It did not generate enough revenue to cover that debt, and sucked revenue from his other casinos, Trump’s Castle and Trump Plaza, pulling them deep into the red.

As a result, 1990 and 1991 represented the worst years of the period reviewed by The Times, with combined losses of $517.6 million. And over the next three years, as Trump turned over properties to his lenders to stave off bankruptcy, his core businesses lost an additional $286.9 million.

The 10-year total: $1.17 billion in losses.

Trump was able to lose all that money in part because most of it belonged to the banks and bond investors who had supplied the cash. And as The Times’ earlier investigation showed, Trump secretly leaned on his father’s wealth to continue living like a winner and to stage a comeback.

This is not to say that Trump never made money on a deal. One that turned out quite well came in 1985, when he bought the Hotel St. Moritz in Manhattan for $73.7 million. Trump has said he sold it for $180 million in 1989. His tax information showed long-term capital gains of $99.8 million, accounting for the vast majority of such gains in the 10 years reviewed by The Times.

But that rich payday was overwhelmed by his business losses, and Trump still paid no federal income taxes that year.

The newly revealed tax information sheds light on how those net operating losses snowballed. By 1991, they had grown to nearly $418 million, accounting for fully 1% of all the losses that the IRS reported had been declared by individual taxpayers that year.

One Huge Payday

As would be expected for a business owner, the line on Trump’s tax returns showing regular wages and salary does not represent the bulk of his income. But one year stands out: 1988, when he recorded $67.1 million in salary — 90% of his total regular wages for the 10 years.

The figure appears to include a payment he received as part of a deal to buy the unfinished Taj Mahal casino from Merv Griffin, the talk show host turned businessman. Griffin’s company had agreed to pay Trump to manage construction of the casino, among other services, and the resolution of a bitter dispute between the two included Griffin’s company paying Trump $63 million to buy out that contract.

That windfall contributed to Trump’s making his biggest income tax payment of the 10 years reviewed by The Times. Even so, his overwhelming business losses meant that he paid only $1.4 million in alternative minimum tax that year.

At Trump’s nadir, in the post-recession autumn of 1991, he testified before a congressional task force, calling for changes in the tax code to benefit his industry.

“The real estate business — we’re in an absolute depression,” Trump told the lawmakers, adding: “I see no sign of any kind of upturn at all. There is no incentive to invest. Everyone is doing badly, everyone.”

Everyone, perhaps, except his father, Fred Trump.

While Donald Trump reported hundreds of millions of dollars in losses for 1990 and 1991, Fred Trump’s returns showed a positive income of $53.9 million, with only one major loss: $15 million invested in his son’s latest apartment project.

This article originally appeared in <a href="https://www.nytimes.com/2019/05/07/us/politics/donald-trump-taxes.html" id="3738dab6-d205-3476-a12f-f866888a0139">The New York Times</a>.

Decade in the Red: Trump Tax Figures Show Over $1 Billion in Business Losses

By the time his master-of-the-universe memoir “Trump: The Art of the Deal” hit bookstores in 1987, Donald Trump was already in deep financial distress, losing tens of millions of dollars on troubled business deals, according to previously unrevealed figures from his federal income tax returns.

The court inquiry stemmed from complaints filed last October, after an investigation by The New York Times found that the Trumps had engaged in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the inherited wealth of Trump and his siblings. Barry not only benefited financially from most of those tax schemes, The Times found; she was also in a position to influence the actions taken by her family.

Barry, now 82, has not heard cases in more than two years but was still listed as an inactive senior judge, one step short of full retirement. In a letter dated Feb. 1, a court official notified the four individuals who had filed the complaints that the investigation was “receiving the full attention” of a judicial conduct council. Ten days later, Barry filed her retirement papers.

The status change rendered the investigation moot, since retired judges are not subject to the conduct rules. The people who filed the complaints were notified last week that the matter had been dropped without a finding on the merits of the allegations. The decision has not yet been made public, but copies were provided to The Times by two of the complainants. Both are involved in the legal profession.

Barry did not respond to emails or telephone messages left at her Manhattan apartment.

Judicial council reviews can result in the censure or reprimand of federal judges, and in extremely rare cases, a referral to the House of Representatives for impeachment.

In retirement, Barry is entitled to receive annually the salary she earned when she last met certain workload requirements. Though the exact figure was not immediately available, it appears to be between $184,500 and $217,600.

The Times’ investigation focused on how the profits and ownership of the real estate empire built by the president’s father, Fred Trump, were transferred to Donald Trump and his siblings, often in ways designed to dodge gift and estate taxes.

A lawyer for the president, Charles J. Harder, said last fall, “The New York Times’ allegations of fraud and tax evasion are 100 percent false, and highly defamatory.”

Barry had been a co-owner of a shell company — All County Building Supply &amp; Maintenance — created by the family to siphon cash from their father’s empire by marking up purchases already made by his employees, The Times investigation found. Barry, her siblings and a cousin split the markup, free of gift and estate taxes, which at the time were levied at a much higher rate than income taxes.

On a financial disclosure form filed in 1999, Barry noted that her share of the All County profits for the previous 17 months totaled just more than $1 million.

The family also used the padded invoices to justify higher rent increases in rent-regulated buildings, artificially inflating the rents of thousands of tenants. Former prosecutors told The Times that if authorities had discovered at the time how the Trumps were using All County, their actions would have warranted a criminal investigation for defrauding tenants, tax fraud and filing false documents.

Similarly, Barry benefited from the gross undervaluation of her father’s properties when she and her siblings took ownership of them through a trust, sparing them from paying tens of millions of dollars in taxes, The Times found. For years, she attended regular briefings at her brother’s offices in Trump Tower to hear updates on the real estate portfolio and to collect her share of the profits. When the siblings sold off their father’s empire, between 2004 and 2006, her share of the windfall was $182.5 million, The Times found.

Barry was nominated to the U.S. District Court in New Jersey by President Ronald Reagan in 1983, after several years as a federal prosecutor. She was elevated to the 3rd U.S. Circuit Court of Appeals by President Bill Clinton in 1999.

In February 2017, shortly after her brother’s inauguration, she notified the court that she would stop hearing cases and give up her staff and chambers. She was then considered a senior inactive judge, a status that did not entitle her to salary increases, but that left her still subject to conduct inquiries. Barry did not announce a reason for the change at the time.

Following the court’s policy of confidentiality, Barry’s name does not appear on the order ending the investigation or the correspondence with the complainants. The order identifies the judge in question as a senior inactive judge in the 3rd Circuit, about whom complaints were filed in October 2018. Under court rules, all complaints are reviewed by a judge, and those with an allegation of misconduct or disability are generally referred to a panel of judges for investigation.

“The complaints allege, on the basis of a news article, that the then-inactive senior circuit judge may have committed misconduct relating to tax and financial transactions,” says the order, dated April 1.

The complaints had been transferred to the 2nd Circuit to avoid conflicts with judges who knew Barry.

Scott Shuchart, a lawyer who filed one of the complaints, said he had done so as a concerned member of the legal profession. He said he found it “galling” that Barry, while still receiving her federal pension, was now immune from judicial misconduct proceedings “just because she changed from one form of retired status to another.”

In an opinion article last October for The Washington Post, Shuchart wrote that he had quit his job at the Department of Homeland Security, where he had served since the Obama administration, because he believed that the Trump administration’s family-separation policy at the southern border was unconstitutional.

Around that time, Shuchart joined the Center for American Progress, a left-leaning public policy and advocacy group, as a senior fellow focused on immigration issues. But, he said, he filed the complaint against Barry on his own, independent of any organized effort.

This article originally appeared in <a href="https://www.nytimes.com/2019/04/10/us/maryanne-trump-barry-misconduct-inquiry.html" id="ebd212fb-ab19-3bbd-a307-e195e71ada7c">The New York Times</a>.

President Donald Trump’s older sister, Maryanne Trump Barry, has retired as a federal appellate judge, ending an investigation into whether she violated judicial conduct rules by participating in fraudulent tax schemes with her siblings.

Sister of Trump Retires From Judgeship, Ending Inquiry Into Tax Dodges

Those buildings have been home to generations of strivers, municipal workers and newly arrived immigrants. When their regulated rents started rising more quickly in the 1990s, many tenants had no idea why. Some heard that the Trump family had spent millions on building improvements, but they remained suspicious.

“I’ve always thought there was something strange going on,” said Jack Leitner, who has lived in the Beach Haven Apartments in Coney Island, Brooklyn, for more than two decades. “But you have to have proof, and it’s an uphill battle.”

As it turned out, a hidden scam lurked behind the mysterious increases. In October, a New York Times investigation into the origins of Trump’s wealth revealed, among its findings, that the future president and his siblings set up a phony business to pad the cost of nearly everything their father, legendary builder Fred Trump, purchased for his buildings. The Trump children split that extra money.

Padding the invoices had a secondary benefit for the Trumps, allowing them to inflate rent increases on their father’s rent-regulated apartments.

“The higher the markup would be, the higher the rent that might be charged,” Robert Trump, the president’s brother, once admitted in a sworn deposition obtained by The Times.

The president and his siblings have long since sold their father’s buildings and moved on with their inherited fortunes. But for tenants, the insidious effects of the scheme continue to this day.

The padded invoices have been baked into the base rent used to calculate the annual percentage increase approved by the city. The sum total of the rent overcharges cannot be calculated from available records. But as a way to appreciate the scope of the impact, a onetime $10 increase in 1995 on all the 8,000 apartments involved would put the total overpaid by tenants at more than $33 million to date, an analysis of approved rent increases shows.

Leitner, a retired computer programmer, was not pleased to learn that his rent had been artificially inflated. Like other tenants interviewed by The Times, he wants that money back.

“If they passed on phony costs to tenants, they should lower our rents,” he said.

The Times’ investigation of the Trump family’s finances, based on a vast trove of tax returns and confidential financial records, found that Donald Trump, contrary to his lifelong claim of being a self-made billionaire, received the equivalent today of at least $413 million from his father.

That fortune was greatly increased by dubious schemes — including instances of outright fraud — designed to dodge gift and estate taxes, the investigation found. Trump was a central player in the formulation of those strategies, which included grossly undervaluing his father’s apartment complexes in tax filings, interviews and records showed. He also received tens of millions of dollars in gifts from his father that were disguised as loans or business investments.

Trump and his brother Robert did not respond to requests for comment for this article. But in a written statement for The Times’ original piece, one of the president’s lawyers, Charles J. Harder, said that “there was no fraud or tax evasion by anyone,” and that Trump had delegated tax matters to relatives and tax professionals.

The most overt fraud uncovered by The Times involved a sham corporation, All County Building Supply &amp; Maintenance, created by the Trumps in 1992. It appeared, on paper at least, to be a purchasing agent for Fred Trump’s buildings.

In reality, the creation of All County did not change how Fred Trump’s business functioned. He and his executives continued to negotiate prices for everything from roofs to window cleaner, but vendors began receiving checks from an All County bank account. Fred Trump’s apartment buildings then reimbursed All County, with an extra 20 to 50 percent tacked on.

All County was owned by Donald Trump, his three siblings and a cousin. In some years, the amounts distributed to each Trump sibling ballooned to nearly $1 million, records obtained by The Times show.

Because All County performed no real work, the transfer of money through the corporation was essentially a gift that evaded the 55 percent tax in place at the time, tax experts told The Times.

Former prosecutors told The Times that the filing of padded invoices with state rent regulators could have led to criminal charges at the time, but that the statute of limitations has long since expired. Civil penalties in cases of fraud remain a possibility, and tax authorities in New York City and New York state have said they are examining issues raised by The Times’ investigation.

Lawyers who specialize in representing tenants say the Trumps’ current and former tenants may have an opening to challenge the decades-old increases, potentially rolling back rents and collecting damages.

Michael Grinthal, supervising lawyer with the Community Development Project at the Urban Justice Center, a nonprofit legal services and advocacy group, said the current owners would be held responsible for any damages, but those owners could have a claim against the president and his siblings.

“If I was talking to those tenants right now, I’d say: ‘Do it. Go,'” Grinthal said. “This case should be fought.”

Regulations generally allow tenants to challenge rent for the past four years. But the state’s highest court has held that tenants can look back further to show their landlord increased rent through fraud, although damages are still limited.

“If they are making false statements about how much it costs, that would be pretty much dead center of the definition of fraud,” Grinthal said.

Although the state Division of Housing and Community Renewal oversees rent-regulated apartments, the responsibility for uncovering overcharges falls mostly to tenants, many of whom are unaware of the rules. Just trying to figure out the codes on rental history forms and discern what drove up their rent can seem daunting.

Susan Shavitz, 73, moved into her two-bedroom at Trump Village in Coney Island with her mother when Fred Trump completed construction in 1964. Decades later, her rent begin to rise more quickly. She believed at the time that the increases were exclusively because the Trumps had switched the building to a different affordable-housing program.

Shavitz obtained her apartment rental history from the state at the request of The Times, but she could not translate the soup of numbers and abbreviations.

“It made no sense to me whatsoever,” said Shavitz, a retired teacher. “I have no idea how much of it was because of the improvements.”

Other records show the state approved a building-wide rent increase in 1997 of almost $1.1 million after the Trumps installed new windows, terrace doors and boilers, which were an early focus of the All County purchases. That project increased Shavitz’s rent by $32 a month. While it is not known how much of that is attributable to All County, the cost of improvements bumped up her rent in five of the last eight years that the Trumps owned the buildings, adding 11 percent in all.

Shavitz said that she was financially comfortable and could afford her rent but would still participate in a lawsuit to win back overcharges.

Like Shavitz and her mother, thousands of tenants once saw moving into a Fred Trump building as a step up the economic ladder, an arrival of sorts. In the postwar era, the president’s father came to own more than 10,000 apartments in New York City, and thousands more elsewhere, often financing the construction through low-interest government loans aimed at creating affordable housing for returning veterans and the booming middle class.

The rules attached to those loans kept rents low, but Fred Trump excelled at keeping costs down, and the empire became enormously profitable. In just one six-year span, 1988 through 1993, Fred Trump reported $109.7 million in total income, the equivalent today of $210.7 million, according to confidential tax records obtained by The Times.

His buildings share a uniform austerity. Most are six-story brick rectangles with incongruously aristocratic sounding names — Saxony Hall, Westminster Apartments, Green Park Essex. His largest projects were sprawling complexes with acres of lawn in and around Coney Island — Beach Haven, Shore Haven and Trump Village.

Folk singer Woody Guthrie took an apartment at Beach Haven in 1950. He wrote a song called “Old Man Trump,” contemplating the morality of paying rent to someone who would not allow blacks to live in the building. The chorus began:Beach Haven ain’t my home!

I just can’t pay this rent!

My money’s down the drain!

And my soul is badly bent!

Leitner, 69, remembers that when he signed his first lease at Beach Haven in 1996, the rent was significantly higher than the one quoted during his apartment hunt.

He recently obtained the official rental history of his apartment from the state at the request of The Times. It shows that his initial rent was $728, an increase of $154 from the prior tenant’s rate. Most of that jump, in fact, was because of the improvement costs.

The effect of those costs was compounded through the years, as every approved rent increase built upon the starting point. And while some portion was certainly legitimate, even a $10-a-month increase because of a padded All County invoice would mean that Leitner had given his landlords at least $3,800 more than they were legally entitled to over the past 22 years.

Housing advocates have long argued that there is widespread abuse of the two programs that owners of rent-regulated apartments use to raise rents based on improvements or repairs. Two Albany lawmakers introduced legislation last August that would end one, known as Major Capital Improvements, or MCI.

“The MCI program has been subject to abuse by landlords for years — the fact the Trump family did it just highlights that,” said one of the lawmakers, state Sen. Michael N. Gianaris, D-Queens. “It’s time to scrap the program.”

Because the increases carry forward, even tenants who moved in years after the Trumps sold the last of their father’s empire in 2004 were affected by the family’s invoice-padding scheme.

“I want it looked at because a lot of tenants may be owed money,” said Angel Castillo, 49, who moved into Beach Haven a few years after the Trump siblings sold it.

He moved out just a few weeks ago. The reason: The current landlord increased his rent by $150 a month.

“They told me I was lucky it wasn’t more,” he said.

This article originally appeared in <a href="https://www.nytimes.com/2018/12/15/us/politics/trump-tenants-taxes.html" id="116b30e2-faec-3d1a-ada9-03b6e56ad8d3">The New York Times</a>.

As the Trumps Dodged Taxes, Their Tenants Paid a Price

NEW YORK — They were collateral damage as Donald Trump and his siblings dodged inheritance taxes and gained control of their father’s fortune: thousands of renters in an empire of unassuming redbrick buildings scattered across Brooklyn, Queens and Staten Island.

Since the 2016 presidential campaign, journalists at The Times and elsewhere have been trying to piece together Trump’s complex and concealed finances. While The Times did not obtain the president’s actual tax returns, it received the information contained in the returns from someone who had legal access to it. The Times was then able to find matching results in the IRS information on top earners — a publicly available database that each year comprises a one-third sampling of those taxpayers, with identifying details removed. It also confirmed significant findings using other public documents, along with confidential Trump family tax and financial records from the newspaper’s 2018 investigation into the origin of the president’s wealth.

Mark J. Mazur, a former director of research, analysis and statistics at the IRS, said that, far from being considered unreliable, data used to create such transcripts had undergone quality control for decades and had been used to analyze economic trends and set national policy. In addition, IRS auditors often refer to the transcripts as “handy” summaries of tax returns, said Mazur, now director of the nonpartisan Urban-Brookings Tax Policy Center in Washington.

Donald Trump built a business licensing his name, became a television celebrity and ran for the White House by branding himself a self-made billionaire. “There is no one my age who has accomplished more,” he told Newsweek in 1987, adding that the ultimate scoreboard was “the unfortunate, obvious one: money.” Yet over the years, the actual extent of his wealth has been the subject of much doubt and debate. He broke with four decades of precedent in refusing to release any of his tax returns as a presidential candidate, and until now only a few pages of his returns have become public. Last year’s Times investigation found that he had received at least $413 million in 2018 dollars from his father.

The new tax information does not answer questions raised by House Democrats in their pursuit of the last six years of Trump’s tax returns — about his recent business dealings and possible foreign sources of financing and influence. Nor does it offer a fundamentally new narrative of his picaresque career.

But in the granular detail of tax results, it gives a precise accounting of the president’s financial failures and of the constantly shifting focus that would characterize his decades in business. In contrast to his father’s stable and profitable empire of rental apartments in Brooklyn and Queens, New York, Donald Trump’s primary sources of income changed year after year, from big stock earnings, to a single year of more than $67.1 million in salary, to a mysterious $52.9 million windfall in interest income. But always, those gains were overwhelmed by losses on his casinos and other projects.

The new information also suggests that Trump’s 1990 collapse might have struck several years earlier if not for his brief side career posing as a corporate raider. From 1986 through 1988, while his core businesses languished under increasingly unsupportable debt, Trump made millions of dollars in the stock market by suggesting that he was about to take over companies. But the figures show that he lost most, if not all, of those gains after investors stopped taking his takeover talk seriously.

In Washington, the struggle over access to Trump’s tax returns and other financial information has sharpened in recent days, amid partisan warfare over the findings in the Mueller report. On Monday, Treasury Secretary Steven Mnuchin said he would not deliver the tax returns to the Ways and Means Committee. And after vowing that “we’re fighting all the subpoenas” from House Democrats, the president has filed lawsuits against his banks and accounting firm to prevent them from turning over tax returns and other financial records.

In New York, the attorney general’s office is investigating the financing of several major Trump Organization projects; Deutsche Bank has already begun turning over documents. The state attorney general is also examining issues raised last year by The Times’ investigation, which revealed that much of the money Trump had received from his father came from his participation in dubious tax schemes, including instances of outright fraud.

The first of the two previous glimpses of the president’s tax returns came from his 1995 filings, pages of which were anonymously mailed to The Times in 2016. They showed that Trump had declared losses of $915.7 million, giving him a tax deduction so substantial that it could have allowed him to legally avoid paying federal income taxes on hundreds of millions of dollars of income for almost two decades. Several months later, journalist David Cay Johnston was mailed pages of Trump’s 2005 returns, which showed that by then he had significant sources of income and was paying taxes.

The year was 1985, and Trump appeared to be on top of the world.

As the year played out, he borrowed hundreds of millions of dollars to fuel a wave of purchases, acquiring a second casino ($351.8 million), a Manhattan hotel ($80 million), the Mar-a-Lago property in Florida ($10 million), a New York hospital he intended to replace with an apartment building ($60 million) and an undeveloped expanse of railroad yards on the West Side of Manhattan ($85 million), where he planned to construct an entire neighborhood, including a 150-story tower envisioned as the world’s tallest.

For the first time, Forbes’ ranking of the wealthiest Americans listed Trump individually, independent of his father — with an estimated net worth of $600 million that included the real estate empire Fred Trump still owned.

“What I have done is build the most beautiful buildings in the best locations,” Donald Trump told the magazine.

Beyond the $46.1 million loss that his core businesses logged in 1985, Trump’s tax information shows that he carried more than $5.6 million in losses from prior years. The IRS data on one-third of high-income tax returns that year lists only three taxpayers with greater losses.

In his letter, Harder, the president’s lawyer, took issue with comparing the tax returns of “a real estate developer to the returns of all taxpayers.” But most of the high-income taxpayers appeared, like Trump, to be business owners who received what is known as pass-through income. (That data does not include businesses, like most large corporations, that pay their taxes directly.)

The next years were a time of continued empire building. The information also documents, year by year, a time of gathering loss. Here is how it added up.

In 1989, he bought a shuttle operation from Eastern Airlines for $365 million. It never made a profit, and Trump would soon pump in more than $7 million a month of his dwindling cash to keep it airborne, New Jersey casino regulators, who closely monitored his finances in those years, found.

Trump was able to lose all that money without facing the usual consequences — such as a steep drop in his standard of living — in part because most of it belonged to others, to the banks and bond investors who had supplied the cash to fuel his acquisitions. And as The Times’ earlier investigation showed, Trump secretly leaned on his father’s wealth to continue living like a winner and to stage a comeback.

Some fraction of that ocean of red ink represented depreciation on Trump’s real estate. One of the most valuable special benefits in the tax code, depreciation lets owners of commercial real estate write down the cost of their buildings.

“I love depreciation,” Trump said during a presidential debate in 2016.

In “The Art of the Deal,” Trump points to one of his Atlantic City casinos to illustrate the magic of depreciation. If the casino’s cost was $400 million, he says, he would be able to depreciate it at a rate of 4% a year, allowing him to shelter $16 million in taxable income annually.

But while this example is intended to show the benefits of depreciation, it also demonstrates that depreciation cannot account for the hundreds of millions of dollars in losses Trump declared on his taxes.

The tax code also lets business owners like Trump use losses to avoid paying tax on future income — a lucrative deduction intended to help troubled businesses get back on their feet. Trump’s losses over the years rolled into the $915.7 million free pass from income taxes — known as net operating loss — that appeared on his 1995 returns.

The newly revealed tax information sheds light on how those net operating losses snowballed. By 1991, they had grown to nearly $418 million, accounting for fully 1% of all the losses that the IRS reported had been declared by individual taxpayers that year. And the red ink continued to accumulate apace.

Because Trump reported a negative adjusted gross income in each of the 10 years, he was not allowed to deduct any charitable contributions. So while he has boasted of making large donations at the time, the information obtained by The Times shows no such itemized deductions. Potential deductions could have been carried over to a future year, should Trump have reported a positive income.

A Vulture’s Appetite

As losses from his core enterprises mounted, Trump took on a new public role, trading on his business-titan brand to present himself as a corporate raider. He would acquire shares in a company with borrowed money, suggest publicly that he was contemplating buying enough to become a majority owner, then quietly sell on the resulting rise in the stock price.

The tactic worked for a brief period — earning Trump millions of dollars in gains — until investors realized that he would not follow through. That much has been known for years. But the tax information obtained by The Times shows that he ultimately lost the bulk of the gains from his four-year trading spree.

The figures do not include an itemization of individual trades. But The Times was able to align the reported total gains with details on trades publicly documented by casino regulators at the time.

As with many things Trump, his adventures in the stock market were more image than substance, helped greatly by news reports quoting anonymous sources said to have knowledge of Trump’s actions. An occasional quote from an associate — including his stockbroker, Alan C. Greenberg — helped burnish the myth.

“He has an appetite like a Rocky Mountain vulture,” Greenberg, the legendary chairman of Bear Stearns, told The Wall Street Journal in 1987. “He’d like to own the world.”

In his actions, Trump was more like a peacock.

An early and profitable gambit came in February 1987, when Trump started buying stock in the company that owned United Airlines. That April, The Times reported that Trump was “believed to own 4.9%” of United and was “believed to have paid” about $50 a share.

Trump takeover speculation set off a rally in the stock. At the end of the month, Trump quietly sold nearly all his shares. The next day, The Journal reported that Trump’s gamble appeared to have netted him $55 million.

It was a gross exaggeration. New Jersey gaming regulators later determined that he had purchased only 2.3% of the company and gained $11 million, before interest and commissions.

The same tactic continued to work through 1988. Trump made a total of $57 million by briefly presenting himself as a takeover threat to, among others, Hilton Hotels, the Gillette razor company and Federated Department Stores, casino regulators found.

In all, from 1986 through 1989, Trump declared $67.3 million in gains from stocks and other assets bought and sold within one year.

By 1989, investors were less fooled by his moves. That September, he bought a large stake in American Airlines and announced a takeover bid.

“I’m very skeptical of everything this man does,” Andrew Geller, then an airline analyst at Provident National Bank in Philadelphia, told The Associated Press.

Trump was rebuffed, and the stock price fell sharply. Though at the time his losses were reported to be modest, the new tax return figures show that in 1990, the year he sold his American Airlines stake, Trump lost $34.9 million on short-term trades, wiping out half his gains from the previous four years.

He appears to have held only one other significant chunk of stock by decade’s close: a 27% stake in the Alexander’s department store company.

Trump had bought those shares for $67.9 million and held on, hoping to gain control of the company’s real estate with a partner. After climbing on the possibility of a takeover, the stock price slid.

Trump ultimately agreed to turn over that stock and most of his other assets — including the yacht, the Trump Shuttle and his stake in the Grand Hyatt — to his lenders. On the day in 1992 when he gave up the stock, it was trading at about $9 a share — which would represent a loss of $55.5 million.

And with that, Trump’s days as a market mover were over.

The only other income tax he was required to pay in those years was $124,344 in 1987, also under the alternative minimum tax, which was created to make sure wealthy people could not avoid all income tax through loopholes and deductions.

An Interest Mystery

One number from Trump’s tax returns is particularly striking — and particularly hard to explain: the $52.9 million in interest income he reported in 1989.

Trump reported $460,566 in interest income in 1986. That number grew to $5.5 million the next year, and $11.8 million the next. Then came the outlier 1989.

Taxpayers can receive interest income from a variety of sources, including bonds, bank accounts and mortgages. High-yield bonds, though less common today, were popular with institutional investors in the 1980s. And to make $52.9 million in interest, for example, Trump would have had to own roughly $378 million in bonds generating 14% a year.

Hard data on most of Trump’s business life is hard to come by, but public findings from New Jersey casino regulators show no evidence that he owned anything capable of generating close to $52.9 million annually in interest income.

Similarly, there is no such evidence in a 1990 report on Trump’s financial condition, prepared by an accounting firm he hired at his bankers’ request and based on his most current tax returns and audited financial statements.

Trump’s interest income fell almost as quickly as it rose: He reported $18.7 million in 1990, and only $3.6 million in 1992.

At his nadir, in the post-recession autumn of 1991, Trump testified before a congressional task force, calling for changes in the tax code to benefit his industry.

This article originally appeared in <a id="3738dab6-d205-3476-a12f-f866888a0139" href="https://www.nytimes.com/2019/05/07/us/politics/donald-trump-taxes.html">The New York Times</a>.

Decade in the red: Trump tax figures show over $1 billion in business losses

The status change rendered the investigation moot, since retired judges are not subject to the conduct rules. The people who filed the complaints were notified last week that the matter had been dropped without a finding on the merits of the allegations. The decision has not yet been made public, but copies were provided to The Times by two of the complainants.

Judicial council reviews can result in the cenure or reprimand of federal judges, and in extremely rare cases, a referral to the House of Representatives for impeachment.

Barry did not respond to emails or telephone messages.

The Times’ investigation focused on how the profits and ownership of the real estate empire built by the president’s father, Fred Trump, were transferred to Donald Trump and his siblings, often in ways designed to dodge gift and estate taxes. A lawyer for the president, Charles J. Harder, said last fall, “The New York Times’ allegations of fraud and tax evasion are 100 percent false, and highly defamatory.”

This article originally appeared in <a id="ebd212fb-ab19-3bbd-a307-e195e71ada7c" href="https://www.nytimes.com/2019/04/10/us/maryanne-trump-barry-misconduct-inquiry.html">The New York Times</a>.

Russ Buettner and Susanne Craig

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