Once again the New York Times attempts to make an issue out of President Trump’s real estate holdings working as a tax shelter and reducing income taxes.
In the article the Times completely obfuscates the way income taxes are strategically offset by depreciation, mortgage interest and the entire reason why real estate ownership is viewed as a business.
John Carney writing for Breitbart gets it:
[…] So imagine our guy took out an $8 million mortgage at five percent, paying $2 million cash. Now he’s got to pay $400,000 in mortgage payments. He wants to make at least that much so he charges tenants an aggregate of $425,000, which after upkeep comes out to $410,000 of net income. (Remember, if the bank didn’t think he could make more in rent than the mortgage payment, it probably wouldn’t have lent him the money.) The interest payment on the loan–let’s call it $390,000–is deductible from his income, leaving him with $20,000 in net income. He gets to keep that and pay no taxes on it, however, because he still gets to apply the $370,000 depreciation charge. He tells the IRS he lost $350,000.


