What specific tax avoidance strategies did the New York Times allege Trump used in 2020?
Executive summary
The New York Times’ 2020 investigation alleged that Donald Trump relied on a suite of aggressive tax-reduction techniques — most prominently the repeated use of massive carried‑forward business losses and other deductions — that allowed him to report little or no federal income tax in many years, including paying just $750 in 2016 and 2017, and no income tax in 10 of the prior 15 years [1] [2]. The reporting tied those strategies to specific mechanisms such as net operating losses, depreciation and other write‑offs, and flagged older, dubious maneuvers involving debt relief and partnership equity that legal and tax experts called borderline or unlawful [3] [4] [5].
1. Carried‑forward losses and “net operating loss” claims
The Times emphasized that Trump’s most consequential tax tool was the use of huge business losses carried forward to offset later income — so‑called net operating losses — which the paper said allowed multi‑year losses to erase taxable income in profitable years and thereby sharply reduce federal income tax liability [3] [1]. Those carryforwards dated back to massive losses in the 1990s and further loss declarations in 2008–2009; experts cited by outlets reporting on the Times story described the losses as “exceptionally aggressive” and far more persistent than typical for wealthy business owners [5] [3] [1].
2. Depreciation, write‑offs and itemized deductions
The NYT reporting also highlighted common but powerful accounting techniques such as accelerated depreciation and large deductible expenses that businesses can claim to lower taxable income in particular years, which in Trump’s case were used repeatedly across highly complex and intertwined real‑estate and licensing entities [3] [6]. Those write‑offs — while often legal — were presented by the Times as part of a broader pattern of aggressive tax planning that, when combined with losses, produced prolonged low federal tax bills [1] [6].
3. Older, legally questionable maneuvers involving debt relief and partnership equity
Beyond contemporary deductions, the Times reported on a decades‑old scheme in which Trump allegedly traded debt relief for nearly worthless “partnership equity,” a move his own lawyers reportedly called risky and that later prompted Congress to close the loophole in 2004; the Associated Press summarized the Times’ finding that the strategy was “almost identical” to a maneuver already outlawed and would likely have been improper if audited [4]. Business reporters and tax specialists told the Times that some of these tactics “stretched” legal doctrines well beyond ordinary practice and, in at least some instances, were considered dubious even by Trump’s advisors [5] [4].
4. Audits, disputed refunds and investigations cited by the Times
The NYT’s series noted an ongoing IRS audit over a $72.9 million refund that could produce substantial liabilities if resolved against Trump, and outside scrutiny — including a New York attorney general probe into property valuations tied to deductions — which the reporting presented as corroboration that parts of his tax strategy were contested or under legal review [2] [7]. The Times framed these official reviews as evidence that the scale and persistence of Trump’s tactics attracted not only journalistic attention but formal government scrutiny [2].
5. Counterarguments and framing: aggressive planning vs. abnormal behavior
The Times’ allegations prompted immediate pushback and debate: critics and some tax professionals argued that wealthy individuals routinely deploy complex, legal tax strategies — like like‑kind exchanges and sophisticated timing of deductions — and that Trump’s pattern reflected extreme but not necessarily unique tax planning among the very wealthy [8] [9] [6]. The Times, however, presented expert voices and documents portraying Trump’s combination of carryforwards, write‑offs and earlier questionable transactions as unusually persistent and aggressive, a characterization supported by subsequent coverage and fact‑checks that described the maneuvers as “exceptionally aggressive” [1] [5].