What's Hidden in Trump's Tax Returns




Many wonder why the President is going to the wall to prevent his tax returns from being made public. It's fun to speculate what might be in there and why he wants no one to know.

One possibility is that he does not make nearly as much money as he claims. Another is that his net worth is nowhere near the ten billion he claims. Then, there will the possible tax fraud. One bit is a mysterious loan the $50 million that is of extra interest. I'm going to be following that loan.

Investigative reporting shows that he did not pay back a large loan for a Trump Chicago project. Eventually, the company to whom he owned the money settled for about one half of what he owed. The amount not paid was $50 million. There is a $50 million loan on his disclosure filed when he ran for office. When asked about the $50 million, Trump's reply was that it is just a loan to himself which he bought from another company. It's just sitting there he has said. If the loan was written off by the company he borrowed from, why is it now owed to anyone, especially to himself?

The answer lies in the U.S. tax code. When Trump defaulted on the $50 million, Federal Government tax rules require that amount be treated as income. This is logical because all value received needs to be taxed or else wealthy people and corporations would hide all their income and profits in this way.

Rather than treating the loan as defaulted and pay the taxes due, Trump is doing a maneuver that may or may not be legal. He claims to have purchased the unpaid loan to himself so he can claim he has not defaulted. If he had actually defaulted he would owe taxes.

If he made payments to the company he created to "buy" the defaulted $50 million, he would have to pay taxes on that profit. The company seems to have paid nothing for the defaulted loan. Since it paid nothing for the loan anything paid back is taxable profit. By neither admitting he has defaulted and also paying nothing to the shell company he created to "buy" the loan he, apparently, has paid no taxes on this $50 million.

Members of the press who have dug into this have found no public trail of public documents to certify that the loan was actually "purchased."  If in his scheming he did not even make the effort to pretend this was a real transaction it seems all the more fraudulent.

There may ultimately be some explanation that makes this not tax fraud. So far it looks suspicious.

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