According to the latest bombshell report from Newsweek writer Kurt Eichenwald, the recent report from the New York Times that GOP presidential nominee Donald Trump took a massive financial hit in 1995 was not his first brush with business failure.
Over the weekend, the New York Times was able to obtain tax documents showing Trump took a $915 million loss in 1995, which would have allowed him to possibly avoid paying income taxes for 18 years.
According to Eichenwald, at the same time that Trump and his surrogates are attempting to spin those losses as an example of Trump’s “genius,” documents show Trump had to be bailed out years earlier by his father who was forced to set up a $35 million credit line for his son at Chase Manhattan Bank.
Based upon files found at Division of Gaming Enforcement for the New Jersey Department of Law and Public Safety, Trump applied for a gaming license in 1980 which led to a state investigation into his background.
What they uncovered was the fact that Trump had suffered a series of financial setbacks as a developer in the late 70’s that forced him to turn to his father for financial help in the form of a $38 million credit line at the bank — which Trump promptly maxed out.
As Eichenwald explained:
A number of Trump’s New York rental properties—on Third Avenue, Fifth Avenue, East 56th Street, East 57th Street, East 61st Street and East 67th Street—all were financial flops; Trump was forced to pay his own money for the operations of the properties because rental income failed to cover the cost. Partnership investments—Park Briar Associates, Regency Lexington Partners and 220 Prospect Street Company—contributed even more red ink. The interest owed to Chase Manhattan on Trump’s massive use of his credit line topped off the dismal financial performance.
According to the Eichenwald, the preceding years saw Trump spending freely while showing little in income.
Unsurprisingly, given Trump’s bad business decisions, Donald’s taxes for 1978 showed personal losses of $406,379—that’s $1.5 million in present-day dollars—according to the information filed to the casino regulator. (The filing does not show full tax returns, but does include figures for personal income/loss and the amount of tax paid.) Things grew worse in 1979, when he reported an income of negative $3.4 million, or $11.2 million in constant dollars. Trump did not have millions of dollars set aside to deal with these financial catastrophes. His banking records showed he had an average annual balance in his Chase Manhattan savings account of $378,000—a large amount to be sure, but not even enough to cover his 1978 losses. His checking account at the same bank had an average annual balance of $22,500; in accounts at two other banks, Trump had total savings of $14,000. Other than family trusts, that was it.
Moreover, the tax records show that, even in the years leading up to Trump’s first big losses, Trump’s personal income failed to rise above the level of comparatively miniscule. He reported $76,210 in income to the Internal Revenue Service for 1975; $24,594 in 1976; and $118,530 in 1977. In other words, his losses in 1978 totaled almost twice his combined income from 1975 through 1977. His 1979 losses were 15 times his combined income for those three years.
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