How Rich Do You Have to Be to Not Pay Taxes?
Stephen Cohen, a law professor at Georgetown University, says Trump could have declared losses from money he borrowed, as part of a provision in the tax code that favors real-estate developers. Normally, if someone borrows money that they can’t pay back, the lender will sometimes forgive the debt (in whole or in part), but that debt is generally considered taxable income. There are a few exemptions, Cohen says, and the tax code states that someone doesn’t have to pay taxes on forgiven-debt income if it’s related to certain types of real-estate deals. “Let’s say he borrowed $900 million for the Trump casino and it becomes virtually worthless. He could deduct the entire $1-billion-dollar loss, even though he only invested $100 million [of his own money].”