I’ve read that some people would like to believe that Rachel Maddow got played. I’ve read tonight that some people are comparing it to Al Capone’s vault. I respectfully disagree.
What we have are the first two pages of his 2005 tax returns, and Rachel put a lot of time into covering this, with my hero, Pulitzer Prize-winning investigator, David Cay Johnston, who received these pages in the mail.
First, it showed us that he did earn a ridiculous amount of money that year, and that he paid taxes. His returns from 10 years earlier show no tax paid. Here he earned and paid a lot.
It showed us that he had Interest income and dividend income and it would be good to know from where.
This just scratches the surface. We need the schedules, particularly Schedule D and Schedule E, pages one and 2. Line 13 shows he made $32 million dollars in capital gains. Did he sell stock to make this profit? That’s a lot of profit to make on stocks if he has only $314K of dividends. What did he sell?
Line 17 shows he had $67 million from Partnerships or S-Corporations. And possibly from Trusts. And/or as a landlord. We don't know what they are. If they are partnerships, who are his partners? That's a YUGE question.
Line 12 shows $42 million as a sole proprietor. Why on earth would he do that? Why not at least have the money come from an LLC or an S-Corp? I mean, there are reasons that I could think of, but not good ones. And what is/are the sole proprietorship(s) that earned him this much money?
It raises many more questions than it answers, and it could well have been sent by Donny boy to show his YUGE wealth.
If I was a betting man, I would bet that this is his best year financially, and that’s why that year’s information was sent out to Mr. Johnston. I would bet that it was sent out in part as a boast, knowing it would be reported on, but just the two summary pages so that no questions could be answered.
Wednesday, Mar 15, 2017 · 2:18:14 PM +00:00 · David B
UPDATE:
David Cay Johnston’s blog on this is very instructive. I did not mention the $103 million Net Operating Loss (NOL) that finally was exhausted with this tax return. Which means that the 2004, 2003, 2002, 2001, 2000, 1999, 1998, 1997 and 1996 returns showed no tax paid. Which is why we have not seen them.
It also means that if he had “only” $100 million in income during 2005 instead of $150 million, the loss would have wiped out the gain and there would have been no tax to pay.
Johnston also noted that Trump has about 500 S corporations and partnerships, which would mean that the back-up documentation for line 17, coming from Schedule E, page 2, would be extensive.
Also, each S-Corporation likely has a treasure trove of information in and of themselves. Does he own 100%? If not, who are his co-owners and partners? These corporations can hide all sorts of income, losses and loans, similar, in a sense, to what Enron did to get losses off of their balance sheet. Here, though, the net is income of over $67 million, and there are 500 corporations to sift through.