Taxing patience

Man contemplating $1 billion loss

MITT ROMNEY, at least, knew it was coming. “I think we have good reason to believe that there’s a bombshell in Donald Trump’s taxes,” the 2012 Republican nominee warned in February. On October 1st the New York Times revealed Mr Trump’s 1995 state tax returns, which had been sent to the newspaper anonymously. They show a $916m loss—entered part-manually, because, his accountant said while confirming the leak’s authenticity, the figure was too big for his software to process. Set against later income, the loss could have allowed Mr Trump not to pay federal income taxes for many years.

Unlike any other major-party nominee since 1976, Mr Trump has kept his returns under wraps. His fondness for so-called “pass-through” businesses explains this. These shunt profits and losses directly onto their owners’ tax returns (in contrast to corporations, which file their own papers). Pass-throughs have become curiously common in America. According to one recent study, such firms now account for over half of all business income.

Pass-through firms, like...Continue reading

from United States http://ift.tt/2duSc7X
via https://ifttt.com/ IFTTT