Firstly, MSNBC’s Rachel Maddow should go to jail for impersonating as an investigative reporter. She didn’t share any substantive news that I reported a year ago in another newspaper: that President Donald Trump as a businessman used the legal business, real estate and capital losses tax laws to shelter money from taxation. And the law allows him to “carry over” these losses. We knew this a year ago.

But more importantly, maybe what we did not know was how much he sheltered, saved, and used the tax laws to his benefit.

The Donald sheltered over $100 million. Based on the IRS top tax bracket of 35 percent, he saved over $35 million from taxation.

How did he use the laws to do it in the ways and percentages of the $100 million

• Business Loss:                         35%
• Real Estate Loss:                     42%
• Capital ( Investment) Loss:    23%

So, as I said in my previous article a year ago, and I’ll say it again: Donald Trump’s tax advisor is a legal genius.

Think about it for a second. Haven’t you spent the last week thinking about ways to lower your taxes for both last year and years ahead, trying to get that big tax refund?

And current tax laws, for the most part, seem to be working. The Alternative Minimum Tax (AMT), which many hate, was the tool that made sure Donald still paid a reasonable tax rate. Donald was able, by the lowering of his income above, to lower his “federal tax bite” to three percent. However, the AMT hit him an additional 22 percent, for a total of a 25 percent tax bracket, in which he aided.

Without those “deductibles and credits” above, The Donald would have been in a 35 percent tax bite. So he saved 10 percent, or $10 million.

Now, before you say, “get rid of the deductions,” answer these questions first:

1. If you had a home that cost $300,000 but sold it for $200,000, should you be allowed to deduct the loss?

2. If you purchased your mutual fund or investment at $100 and sold it for $90, should and could you deduct the $10 loss.

3. If you had your own self-employed business that included the use of business equipment, could and should you be allowed to deduct the usage or “depreciation” from it?

4. The tax law says you can!

Real Estate
Yes, it looks like The Donald has been selling property since 1995. He has not paid any federal taxes and has been able to carry over his losses for 20 years, which allowed him to apply for low Income State Tax credits, such as the STAR Tax credit.

Is it legal? Again, isn’t that why you hire a tax person to find the legal methods—not loopholes—that allow to you to lower your tax liability as much as possible?

So, how exactly does “selling property” lower your business taxes?

Investment Losses

• The IRS Form 4797, Sales of Business Property, is where you would report:
• The sale or exchange of property
• The involuntary conversion of property and capital assets
• The disposition of noncapital assets
• The disposition of capital assets not reported on Schedule D
• The gain or loss for partners and S corporation shareholders from certain Section 179 property dispositions by partnerships and S corporations
• The computation of recapture amounts under sections 179 and 280F(b)(2) when the business use of Section 179 or listed property decreases to 50 percent or less
• Gains or losses treated as ordinary gains or losses; if you are a trader in securities or commodities and made a market-to-market election under Internal Revenue Code Section 475(f).

You can elect to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you placed the property in service. This is the Section 179 deduction. You can elect the section 179 deduction instead of recovering the cost by taking depreciation deductions.

Self-Employed
Business Income Limit: The total cost you can deduct each year after you apply the dollar limit is limited to the taxable income from the active conduct of any trade or business during the year. Generally, you are considered to actively conduct a trade or business if you meaningfully participate in the management or operations of the trade or business.

Any cost not deductible in one year under Section 179 because of this limit can be carried to the next year. Special rules apply to a 2015 deduction of qualified Section 179 real property that is disallowed because of the business income limit.

Taxable income.   In general, figure taxable income for this purpose by totaling the net income and losses from all trades and businesses you actively conducted during the year. Net income or loss from a trade or business includes the following items.

Complicated? You bet! But, isn’t that why you hire a financial advisor? To lower your tax liability and get a big refund back?

Anthony Rivieccio is the founder & the CEO of The Financial Advisors Group, celebrating its 20^th year as a fee-only financial planning firm specializing in solving financial problems. Mr. Rivieccio, a recognized financial expert since 1986, has been featured by many national and local media including: Klipingers Personal Finance, The New York Post, News12 The Bronx, Bloomberg News Radio, Bronxnet, Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Bronx News and The Bronx Chronicle.

For financial assistance or a FREE 2016 Income Tax Analysis. Mr. Rivieccio can be reached at (347) 575 5045.

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