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President Trump is defending himself against a New York Times report that says he sustained more than a billion dollars in losses in the late '80s and early '90s. The Times based its report on summaries of federal taxes Trump paid during that period, but Trump said today that reporting big losses on your taxes is common in the real estate business. NPR's Jim Zarroli explains.
JIM ZARROLI, BYLINE: The Times report says Trump lost so much money during the decade that he was able to completely avoid paying taxes in eight of the 10 years from 1985 to 1994, but Trump noted in a tweet this morning that big losses on paper, at least, were common in real estate at the time. He said developers got massive write-offs that allowed them to declare a loss in most cases. It was sport, he said. It's called tax shelter. Tomasz Piskorski, who teaches real estate at Columbia Business School, says that was pretty much true. Real estate developers had lots of legal ways to avoid paying taxes.
TOMASZ PISKORSKI: So it was not uncommon to have a positive profit on your real estate business and at the same time declared to the tax authority that you have a loss. And there's nothing illegal about that. This is completely allowed by the U.S. tax code.
ZARROLI: And Piskorski says the years between 1985 and 1994 were an especially bad time in real estate. A lot of developers lost money. Trump in particular had taken out a lot of loans that he would later default on. Steve Rosenthal is a senior fellow at the Tax Policy Center.
STEVE ROSENTHAL: And he burned through money quickly. He lost spectacularly. Year after year, he lost spectacularly.
ZARROLI: So it's reasonable to think that Trump had real, actual losses as well in addition to paper losses, which would cut his tax bill even more. Trump has never made a secret of the fact that he took advantage of tax laws whenever possible. During his campaign, he often argued that because he knew how to use the tax code, he was in a good position to reform it. He knew which loopholes to close.
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PRESIDENT DONALD TRUMP: It's something I've been talking about for a long time despite, frankly, being a big beneficiary of the laws. But I'm working for you now. I'm not working for Trump.
ZARROLI: But Steve Rosenthal says Trump hasn't pushed through any reforms. Real estate still gets special treatment in the tax code.
ROSENTHAL: Now that he's been president, he's done nothing to close any of the loopholes. His tax bill only opened additional loopholes for real estate developers.
ZARROLI: For instance, Rosenthal says, the 2017 tax law made it harder for most businesses to sell assets without paying capital gains tax, but the real estate industry was exempt from the changes. Developers such as Trump have long benefited from the U.S. tax code, and there's no sign that's changing. Jim Zarroli, NPR News, New York.
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