How to make a fortune by losing a fortune. Or, no - Donald Trump didn't lose a damned thing.

[OilemFirchen]

Lost in today's kerfuffle about Donald Trump's 1995 taxes is the real lede: Donald Trump didn't actually lose a damned thing.

Specifically, he had structured his business during that period so that he could personally absorb losses and, by doing so, continue to keep his collapsing properties operational. He intentionally overleveraged his business, likely by guaranteeing its debt, because he had an out: a plan to create the publicly-traded Trump Hotels and Casinos and doing an IPO that same year. All of the debt, as well as the now heavily-devalued properties, were purchased by THC, relieving him of his debt liability and allowing for monstrous loss carry-forward while simultaneously maintaining majority ownership of the whole stinking rot. He inked some fascinating income arrangements, tied to the performance of the THC stock - reaping quick rewards in short order, after which the common stock collapsed. The added benefit was an elimination of his tax liability in perpetuity.

Put simply, Trump seized an opportunity afforded by his dismal operation of Trump properties to capitalize on the near-collapse of his enterprises.

How does one individual lose $900 million in personal income in one year? In this case, at least, by actually not.

For background, see How Donald Trump Made Millions Off His Biggest Business Failure.

[Foggyhill]

1. It has been argued that the Trump properties were just front to get investors money quick.

The classic con, you get investors money by presenting a glitzy front just before
the whole thing collapses in a heep and you walk away with the benefits (the future losses) or money.

Seems he did both.

There is also a possibility of a money laundering aspect
in here were some people don't mind taking some loss on a loan/investment
to clean up most of the money. It comes back out clean as a carry forward loss.
I wouldn't be surprised if some "investors" got paid back that way later.


Trump is a confidence man or monstrous proportions.

[OilemFirchen]

3. Yep.

He was down with the O.P.P.

Including, BTW, about a billion dollars in taxpayer subsidies. This is classic Ponzi with a twist: The entire organization can go belly-up (which it eventually did) and the top of the pyramid grows.