Although President Donald Trump has long been called upon to release his income tax records, that is still official, leaving a lot of people wondering exactly how his federal taxes looked in recent years. However, earlier this week, the New York Times reported that President Trump paid $750 in income tax both in 2016 and in 2017 based on his research. And, according to the Times report, Trump paid nothing in income tax in 10 out of the 15 years before being elected president.
We still have no official access to Trump’s tax returns, so the information discussed here is based solely on a New York Times report. The chairman also insists that the report is ‘false news,’ which he actually paid more taxes than what is alleged. During a presidential debate with Joe Biden on 29 September, he insisted that his tax bill for the years in question exceeded $750.
However, the fact that the President may have received this small tax bill underlines the fact that real estate developers have a lot of leeway in capitalizing on tax breaks.
The advantages of being an immobilizer
President Trump was an immobilizer long before he was elected to the US, and business transactions could have created a situation in which his tax liability was extremely low. In fact, all property investors and developers can benefit from certain key tax advantages, including those like President Trump with massive property holdings.
The first tax break is depreciation, which refers to the loss of value of a property over time. Those who invest in immobilization can write down the costs of buildings, construction equipment, furniture, etc. But here is the thing: while furniture can lose value over time in practice, buildings tend to value over time. But from a tax point of view, they can be treated the other way around — as if their value falls year after year and is a tax break.
The second break in tax is the 1031 exchange, which allows developers such as President Trump to defer tax liability on the sale of investment properties using the revenue for new property purchases. Normally, selling an investment property could trigger capital gains taxes. However, under a 1031 exchange, investors do not receive the gains, so they are not liable for taxes.
To be clear, these strategies are not unlawful; real estate investors always use them. We also can not know how far he used depreciation and/or 1031 exchanges, without really seeing a copy of Donald Trump’s tax returns, which he claims are bound in an audit. But if the figures reported are true, it is fair to say that President Trump worked the taxation system definitely for his benefit, as many in the real estate world try to do.
This new Trump Tax Return report is, of course, capable of highlighting shortcomings in the tax code that legislation can attempt to adapt or revise in the future, so that real estate investors too will have to look for.
Meanwhile, President Trump ‘s pressure is on to officially release his tax returns despite the audit he refers to, but he will certainly do it anytime soon. As such, we must all use a grain of salt for the above-mentioned report. While the New York Times is a trusted source for a long time, we can not know what its tax bill looked like in 2016 or 2017 without seeing Trump’s own taxes. But it is fair to assume that being an immovable developer has worked for him.
Unfair advantages: How to Billionaire Factory Real Estate
You know probably that the real estate has long been a playground for the rich and well-connected, and that it has been also the best investment in modern history according to recently published information. And it’s no surprise why with a set of unfair advantages that are totally unheard of with other investments.
But in 2020 the barriers collapsed-and now it is possible to build REAL wealth through property at a fraction of what it used to cost, so that people like you can have unfair benefits now.