my 2 cents after reading the article:
- he's really good at using the tax code to its fullest extent. having a TV show so that you can write off your haircuts is really sharp.
- he pushes right up to the limit. I'd characterize him as "prudently aggressive," in that he isn't likely to go to jail for most of what I read, even though he might end up paying a lot of penalties and interest. For guys like him, that's the whole game.
- I'm not too bothered by him paying Ivanka; she included the income on her return, so someone paid tax on it.
- The abandonment loss is VERY aggressive; I advised a client a few years ago on abandoning stock of a subsidiary and we ran across those rulings. You simply cannot get anything back....even relief from a partnership liability is problematic, and receiving stock of an entity should kill the ordinary loss.
Finally, and more broadly, his long-term strategy seems to be: use leverage and depreciation to create large tax losses wherever possible to offset income from other sources. The NYT is pointing out that a lot of the leverage is coming due soon, but I suspect his plan is to refinance it and keep the leverage in place for his lifetime. He's building up value in his various properties through real estate appreciation, and that doesn't show up anywhere until you sell it. When he passes away, his heirs will get stepped up basis in those properties, which they can then use to pay down debt without a tax bill. By avoiding the income tax during his lifetime, he allows his heirs to avoid it through the basis stepup at death. It's not at all dumb, and it seems to be working.
