It's the $916 million question in Donald Trump's leaked tax returns.
How did the Republican presidential nominee rack up nearly $1 billion in losses in 1995? That's what he reported in partial state returns, provided to The New York Times, which he could then use to avoid paying taxes in subsequent years.
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It's not surprising that Trump would use the break, technically known as net operating losses, to cut his tax bills. But his are so large that they amount to almost 2 percent of all such deductions claimed that year.
Experts say it's impossible to tell from the returns how he generated such eye-popping losses, only adding to the mystery surrounding Trump's taxes — and surely upping the pressure on him to finally release his full returns.
"The idea of one person, all by himself, having $1 billion in net operating losses? That's something most tax lawyers and accountants don't see in a lifetime," said Alan Cole, an economist at the Tax Foundation.
It could be the product of a number of factors.
Trump may have simply lost a ton of money, thanks to bad investments in casinos, hotels and the Trump Shuttle airline. It could be the result of him taking advantage of the particularly generous treatment the tax code affords the real estate industry. He could also be gaming the system, with aggressive moves to reduce his tax bill.
"As a 40-year tax guy, I looked at it and I thought, 'Well, the numbers are interesting, but I have no idea what's going on,'" said Dave Kautter, a tax lawyer at the accounting and consulting firm RSM.
Trump has steadfastly refused to release his tax returns in the face of complaints that he's bucking a decades-old tradition by White House contenders to voluntarily disclose their returns.
Hillary Clinton pounced Monday on The Times' report.
"What kind of genius loses a billion dollars in a single year?" she asked at a campaign stop in Ohio. "How anybody can lose a dollar, let alone a billion dollars, in the casino industry is kinda beyond me, right? It's just hard to figure."
Trump also addressed what he called "an alleged tax filing from the 1990s."
He said it came "at the end of one of the most brutal economic downturns in our country's history." For real estate developers, Trump said, it was "almost as bad as the Great Depression of 1929, and far worse than the Great Recession of 2008."
"Many of my competitors and some of my friends were not able to survive," Trump said.
The Times reported over the weekend that it had anonymously received in the mail the first page of Trump's 1995 tax returns for three states: his New York state resident return and nonresident returns for New Jersey and Connecticut. In them, he claimed a $916 million loss, which he could use to avoid paying taxes on income up to $50 million annually for 18 years, though it's unknown whether he actually did.
First, a bit of background: the government taxes businesses on their profits. If they don't make money, they don't pay taxes. Also, the government allows companies to carry forward losses to offset income in future years.
That's a long-standing feature of the tax code, dating to the Revenue Act of 1918, in recognition of the fact that business cycles don't always line up with the calendar-year tax-filing schedule. Some businesses earn lots of money one year and lose money the next, and net operating losses are used to help smooth those variations.
Thousands claim them, but rarely do individuals claim ones as large as Trump reported. In 1995, 505,303 tax returns claimed net operating losses worth a total of $49.3 billion, so Trump's deductions amounted to 1.9 percent of the nationwide total.
The partial New York return provided to The Times refers to an attachment explaining the loss, but that document was not part of the leak.
Experts who have examined the documents say Trump undoubtedly lost a lot of money. Real estate is particularly volatile, and Trump had a number of businesses crater in the 1990s, including three Atlantic City casinos.
But people also want to report big losses to the IRS, in order to reduce their incomes and therefore their tax bills. And the real estate industry enjoys loads of breaks that can be used to do just that, thanks to its popularity with politicians.
"How many congressional districts are there?" asked Steve Rosenthal, a business tax law expert at the Urban Institute. "Four hundred and thirty-five. And how many of those have real estate brokers, real estate developers and real estate agents? Four hundred and thirty five."
Real estate developers can depreciate their properties and, if they use borrowed money to buy them, they can deduct those interest costs as well. They pay a lot in real estate taxes and those are deductible, as are their maintenance costs.
A simplified example of how those breaks can add up: You buy a apartment building for $10 million, after borrowing the money. It produces $2 million in rental income annually. You depreciate the building, and also deduct the interest costs. That might mean a $3 million deduction, so even as you collect $2 million in income, you report a $1 million loss to the IRS. And you can do that even if the value of your building is actually appreciating.
It's also possible Trump used more aggressive tax-avoidance techniques to inflate his losses and downplay his income, though it's impossible to tell from the three leaked pages, which represent a tiny fraction of the returns he would have filed that year.
Many suspect the size alone of Trump's loss would trigger an IRS investigation.
"A $916 million loss is basically a sign that says, 'Audit me,'" said Cole. Whether the IRS ultimately accepted that figure is unknown.
It's conceivable that's still being investigated if Trump has rolled over those losses in recent years to reduce his income.
"We have no idea how much of that is true economic losses and unsuccessful enterprises," said Rosenthal. "Did Mr. Trump gin up tax shelters?"
"I can't tell whether he's done that here" and "we have no way to know," said Rosenthal. That's why, he added, "Mr. Trump should release his taxes."