Trump Suffers Major Financial Loss
Are things about to get worse for Trump?
Recently, Democrats crossed the lines and released former President Donald Trump’s tax returns. Now some tax experts are saying that several years of business losses suffered by Trump may be a major “red flag” for the IRS.
According to Fox, it was found in Trump’s taxes that there were at least three years where multiple aviation businesses claimed financial losses. That means that these activities could soon be reclassified by the IRS as not-for-profit activities or “hobbies” under their system of rules.
In Trumps taxes there were two big losses:
- DJT Aerospace LLC broke even in 2016 and 2017 and reported losses in 2018-2020.
- DT Endeavour I LLC and DJT Operations II LLC lost money between 2018-2020.
The IRS frowns heavily on multiple years of financial losses by a business. The IRS believes that successful businesses should make a profit in at least 3 out of 5 years of business.
Now the IRS could reclassify Trump’s business losses as a “hobby”. If the IRS decides to do this to Donald Trump that would mean he would still have to report the income however he could not claim expenses. This would result in almost $1.1 million of 2018-2020 business deductions to be transformed into non-deductible hobby expenses.
“If a taxpayer receives income for an activity that they don’t carry out to make a profit, the expenses they pay for the activity are miscellaneous itemized deductions and can no longer be deducted,” the IRS said.
