In 1995, Donald Trump reported losses of almost $1 billion dollars, and it was at least the second time he'd reported large losses in just five years. You might expect that Trump would have been hunkering down, selling off assets, looking for ways to stem the bleeding.
Except he did the exact opposite.
In 1995, Donald Trump was in the midst of a spending spree. He had recently bought a 727 jet for personal use, added a skyscraper to his Manhattan real estate portfolio and snapped up properties in Telluride, Colo., and Palm Beach, Fla., financial records show.
How could Trump be reporting such large losses at the same time he was making enormous investments and splurging on luxuries like a private 727? It appears that Trump borrowed, borrowed, and borrowed again against his Atlantic City casinos.
The disclosure also raises new questions about the degree of Trump’s personal financial involvement in the Trump Organization’s first four bankruptcies. Though he has repeatedly drawn a distinction between the company’s bankruptcies and his personal finances, the tax documents indicate he may have used losses stemming from his bankruptcies to benefit his personal fortune.
Donald Trump intermingled his personal and business assets together in a way that only works because of Trump’s position in real estate. He found a loophole he could literally fly a 727 through.
And while private Trump was reporting huge losses, public Trump was bragging about huge gains.
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In the early 1990s, Trump began telling a story that he included in an interview for a Fortune magazine piece, in The Post and in his book “Trump: The Art of the Comeback.” As he told it, Trump walks past a panhandler on the street near Trump Tower and stops to remark on his own plight.
“He’s a beggar, but he’s worth about $900 million more than me,” the book quoted Trump as saying.
But in “The Art of the Comeback,” Trump also said that 1995 was a banner year for his business. He had reduced his debts in the wake of his bankruptcies and was back on a path to success, including sealing a deal for his landmark tower at 40 Wall Street.
Public Trump was stating that he had reduced his debt well before that 1995 filing.
By 1993, Trump wrote in the book, “my personal debt of $975 million had been reduced to $115 million, and I had two years to finish cleaning it up. There was no way to deny that things were going really great.” ...
The bulk of his 1995 losses, or roughly $909 million, was listed only as “other income.” A note, written on the return next to the loss, refers to a statement that could provide more explanation, but it was not included in the pages sent to the Times.
The losses that Trump reported in 1995 aren’t listed as losses where you might expect, under real estate and partnerships. They’re just … other.
There’s one possibility: they could have been foreign debt that Congress allowed to be written off during bankruptcy. If so, then Donald Trump was in debt to foreign sources more deeply—and earlier—than anyone suspected.
But while private Trump was sliding $900+ million of “other” to the IRS, public Trump was crowing.
[Forbes] had kicked him off its “rich list” amid the bankruptcies, estimating that Trump was worth negative $900 million when the casino-regulator documents emerged. But even the $450 million estimate in 1996 was not enough for Trump. He argued to Forbes that year that his net worth was actually more than $2 billion.
From $900 million in the hole to $2 billion in less than a year? That’s quite a turnaround. But it’s not the story Trump has been telling.