Politics
Trump adviser Jared Kushner (L) and White House Chief of Staff John Kelly (R) listen as U.S. President Donald Trump meets with his Cabinet at the White House in Washington, U.S., August 16, 2018.
- A Saturday report from The New York Times found Jared Kushner, President Donald Trump's son-in-law and senior adviser, paid little to no federal income taxes from 2009 to 2016 using legal tax mechanisms.
- An IRS policy known as depreciation is a deduction Kushner Cos. used to diminish its taxable income on properties largely bought with borrowed money.
- Though not illegal, the filings show how real estate tax codes leave room for profitable maneuvering.
The New York Times found Jared Kushner, President Donald Trump's son-in-law and senior adviser, paid little to no federal income taxes from 2009 to 2016 - without breaking the law.
Times reporters reviewed more than 40 pages of documents that detailed Kushner's family real estate empire's business earnings, expenses, and losses over seven years and found the New York-based real estate firm used a common deduction allowance.
An IRS policy known as depreciation is a deduction to protect property owners from an asset's gradual decline in value. The code can benefit investors as it decreases tax-eligible income, thereby decreasing the amount of taxes paid on a given asset.
The Times found Kushner Cos. used depreciation to its benefit in a series of strategic steps that several loopholes in the tax code allowed.
When initially buying a property, the Times found that Kushner, a former chief executive and current owner at the firm, often used his own money for less than 1% of the purchase price, relying mostly on loans and lines of credit. Though profitable, documents The Times reviewed showed Kushner Cos. have consistently been in the red on paper.
Real estate tax codes allow for companies to report profit losses that cut down on taxes and can even trigger refunds.
In one example from 2015, Kushner made $1.7 million in salary and investments from his family's firm, but listed $8.3 million lost to "significant depreciation" to the company's real estate, which would have diminished the taxes owed.
As a result, Kushner's net worth has risen close to $324 million by using a loss allowance on properties he bought with mostly borrowed money, according to The Times. Over the period covered by the documents reviewed by the Times, Kushner's credit lines from banks rose from $0 in 2009 to $46 million in 2016.
There are no current regulations that govern reported losses' relations to lenders for real estate firms.
A spokesman for Kushner's lawyer Abbe Lowell objected to the Times' creation and review of the documents, and told them "following the advice of numerous attorneys and accountants, Mr. Kushner properly filed and paid all taxes due under the law and regulations," though the report never alleged illegal activity.
"Nothing in the documents suggests Mr. Kushner or his company broke the law," The Times wrote in the story.
The Times' findings on the Kushner Cos. "tax-minimizing maneuver" are in stark contrast to a separate extensive investigation into Trump's family's wealth that found the president employed "dubious tax schemes" in the 1990s, including "instances of outright fraud," to bolster his gains from the family inheritance.
The New York State Department of Taxation and Finance said after the report that it would open an investigation into Trump's family's wealth, as well as allegations of shady business practices.
The Times' deep dive into Kushner's legal maneuvering comes nearly a year after Trump's tax reform bill notably included a provision that allows for multi-million dollar perks for real estate investors - adding another benefit for real estate moguls like Trump and Kushner.