What deductions or losses did Trump claim to reduce his federal tax liability?
Executive summary
Donald Trump has used a mix of large net operating losses (NOLs), business‑expense deductions, depreciation and other business losses to pare his federal income tax bills, including a cache of NOLs from the mid‑1990s that the New York Times reported could have wiped out decades of taxable income [1]. Public releases by the House tax committee and reporting by PBS show those same themes in later filings: carrying forward business losses, reporting negative qualified business income, and claiming millions in deductions for expenses and depreciation [2].
1. The headline: massive net operating losses from 1995
Leaked pages of Trump’s 1995 state returns showed he reported roughly $916 million of net operating losses that were copied from his federal return, and tax analysts concluded those NOLs could be carried forward to offset tens of millions of dollars of income annually for many years, effectively zeroing out federal income tax liability across long stretches of the 1990s and 2000s [1].
2. Carryforwards and the mechanics of wiping out income
Under ordinary tax rules for pass‑through businesses, NOLs can be used to offset other income and—if not fully used—carried forward for up to 15 years (and back three years under older rules), a mechanism the Times and tax experts say Trump exploited by transferring large losses among entities and applying carryforwards against later income [1]. Changes in law since then have curtailed some NOL uses, but reporting about Trump’s filings focuses on how earlier losses were available to shelter later earnings [1] [3].
3. Business expenses, depreciation and “corporate losses” claimed on personal returns
The documents released to Congress and summarized by PBS show Trump limited his tax bills by offsetting personal and reported income against corporate or business losses and by taking large deductions for business expenses and asset depreciation—standard tax deductions that, when applied at scale across many entities, substantially cut taxable income [2]. For example, in 2020 more than 150 of Trump’s entities listed negative “qualified business income,” and combined with nearly $9 million in carryforward losses they reported over $58 million in qualified losses for that year [2].
4. The short, sharp examples: tiny federal payments in some years
The House committee’s released returns and subsequent press reporting documented that those loss offsets translated into very small federal income tax payments in some election‑cycle years: the committee reported Trump paid $641,931 in 2015 but just $750 in each of 2016 and 2017, figures presented as the outcome of claimed losses and deductions across his businesses [2].
5. Competing narratives, legal context and limitations of the public record
Trump’s campaign pushed back by pointing to other taxes paid—property, state and local, payroll and excise taxes—but did not rebut the central tax‑filing mechanics described in reporting [1]. It is also important to note the public record is partial: leaked 1995 pages and the handful of years released to Congress illustrate the methods (NOL carryforwards, business expense and depreciation deductions, negative qualified business income) but do not by themselves prove the complete history of every deduction or audit outcome, and reporting relies on those available pages [1] [2]. Different outlets emphasize different framing—some stress legal tax‑sheltering techniques; others focus on political implications—so readers should weigh both the tax mechanics and the broader political narratives [1] [2] [4].