, Columnist
The Tangled History of Business-Loss Tax Write-Offs
At first, U.S. law didn't let taxpayers use losses to reduce future taxes. Then it did. Then it didn't. And so on.
Long before Trump, there was a banker named Morgan.
Photograph: New York Daily News Archive/Getty ImagesThis article is for subscribers only.
The details of Donald Trump’s taxes are a bit of a mystery, even with the unauthorized release of a single tax return from 1995. Still, the evidence suggests that the real-estate magnate and presidential candidate may have used a staggering loss of $916 million to avoid paying income taxes for many years afterward.
As plenty of tax authorities have pointed out, this gambit is perfectly legal. The Internal Revenue Service calls it a “net operating loss carry-forward,” which can run as long as 20 years. (That includes a “carry-backward” provision that allows deductions of losses over two previous years.)