By Steven J. Harper:
The tax code allows taxpayers to depreciate the cost of a commercial building over its assumed life of 39 years. Each year, one thirty-ninth of the cost gets deducted from income. When you deal in big buildings, even small ownership slices translate into big tax depreciation deductions. It doesn’t matter that most buildings last a lot longer than 39 years. Properly structured, depreciation and other deductions relating to the ownership of commercial property pass through to individual taxpayers. Throw in taxes and other deductions, and the amounts get even larger.
Likewise, if a taxpayer loses money on a business venture — and Trump has ample experience there as well — those losses also offset current income. If total deductions and losses in a year exceed income, they carry-forward to offset income in future years.
“He’s going to pay the smallest amount of taxes possible,” Lewandowski said in reframing the entire issue. “Every deduction possible. He fights for every single dollar. That’s the mindset you want to bring to the government.”
Don’t be surprised if Trump’s personal effective tax rate turns out to be surprisingly close to zero. It’s probably a lot lower than what most of his supporters pay. I guess that makes Trump a winner. It makes those supporters something else.
The Full Story (May 25, 2016)
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