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New York Times published its report Sunday on President Donald Trump’s taxes

Donald Trump 300x208 1 jpg

Blackrose Accountants found out that The New York Times published its report Sunday on President Donald Trump’s taxes from more than two decades. The New York Times report said. “his tax records show he appears to be responsible for loans totalling $421 million, most of which is coming due within four years.”

“In the 1990s, Mr. Trump nearly ruined himself by personally guaranteeing hundreds of millions of dollars in loans, and he has since said that he regretted doing so,”

Trump’s tax returns also showed most of his major business ventures typically operating at a loss, contradicting the image of success Trump touted during his 2016 presidential campaign. Among the losses: $315 million on his golf courses since 2000 and $55 million the Trump International Hotel in Washington D.C.

There are a number of issues with this interpretation of his financial records.

1) When a company takes out a loan to purchase a property in order to protect the investors from the owner doing something shady/stupid with the property, they often require the owner to personally guarantee the loan. So that fact he has $421M of personal guarantees means he must have assets worth more than that.

2) I do not know the extent of his business portfolio but in accounting, you have revenue, net profit, taxable profit and free cashflow. The first three are a fictional number created by accounts the last one is real. So what does it mean that his golf courses have lost $315M in 20 years, NOTHING!. What you need to know is what was it free cashflow over that same period?

3) They have not said the total the of debt of Trump’s businesses or the realisable market value of his assets or his % share of those businesses. This is the way to calculate the net wealth of a businessman.

4) The fact that he has avoided paying taxes on his property business is not uncommon. Property development is capital intense with a lot of upfront costs. We don’t know what tax avoidance strategy he is using in the US, but if you develop a building costing $300m and amortise it over 20 years, then add in expenses such as maintenance and overheads, it is possibly that building could show a tax loss for a number of years while the business is generating net cash flow for the owners.

However Blackrose Accountants believes that just reporting a personal guarantees and taxable losses as a reflection of wealth can be construed as fake news!

Blackrose Accountants are specialises in providing bookkeeping, accountancy, taxation, payroll services and business development and advisory services  The areas we cover include

  • Wembley
  • Brent
  • Willesden
  • Harrow
  • Kingsbury
  • Kenton
  • Pinner

For a free consultation contact us at

      Blackrose Accountants  – Wembley, Harrow, Kenton

  • Croydon
  • Thornton Heath
  • South Norwood
  • Crystal Palace
  • Selhurst Park.
  • Beckenham
  • Streatham

For a free consultation contact us at

Blackrose Accountants  – Croydon, South Norwood, Thornton Heath

https://www.linkedin.com/in/godwin-adebowale-a19862b/

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