NY Times reporters Jesse Drucker and Emily Flitter are definitely off the Trumpanzee Christmas card list. They did a fascinating expose on how real estate developers— like Kushner (and, no doubt, his crooked father-in-law)— avoid paying taxes. “Over the past decade, Jared Kushner’s family company has spent billions of dollars buying real estate. His personal stock investments have soared. His net worth has quintupled to almost $324 million. And yet, for several years running, Mr. Kushner— President Trump’s son-in-law and a senior White House adviser— appears to have paid almost no federal income taxes.
His low tax bills are the result of a common tax-minimizing maneuver that, year after year, generated millions of dollars in losses for Mr. Kushner, according to the documents. But the losses were only on paper— Mr. Kushner and his company did not appear to actually lose any money. The losses were driven by depreciation, a tax benefit that lets real estate investors deduct a portion of the cost of their buildings from their taxable income every year.In 2015, for example, Mr. Kushner took home $1.7 million in salary and investment gains. But those earnings were swamped by $8.3 million of losses, largely because of “significant depreciation” that Mr. Kushner and his company took on their real estate… [T]he allowance often represents a lucrative giveaway to developers like Mr. Trump and Mr. Kushner.The law assumes that buildings’ values decline every year when, in reality, they often gain value. Its enormous flexibility allows real estate investors to determine their own tax bills.The White House last year championed a sweeping revision of the nation’s tax laws that expanded many of the benefits enjoyed by real estate investors, allowing them to reap even larger deductions.“The Trump administration was in a position to clean up the tax code and promised to get rid of some of the complexity that certain taxpayers use to their advantage,” said Victor Fleischer, a tax law professor at the University of California, Irvine. “Instead, they doubled down on those provisions, particularly the ones they have familiarity with to benefit themselves.”…Kushner’s father appears to have benefited from the same tax deductions, the documents indicate. The experts interviewed by The Times said Charles Kushner most likely avoided paying federal income taxes from at least 2012 to 2016.The tax code affords real estate investors great leeway in how they calculate their depreciation — flexibility that often is used to inflate their annual deductions. Among the tactics used by many developers: Their tax advisers prepare studies arguing that much of a property’s value is attributable to things like appliances and parking lots, which under the law can be depreciated more quickly than the building.Such strategies are almost never audited, tax professionals say. And the new tax law provides even more opportunities for property investors to take larger deductions.Developers might have to pay capital gains taxes if they sell their properties. But the Kushners, like others in the real estate business, often avoid that tax, too, by using the proceeds of sales to buy more properties within a certain time window.At least in part because of that perk, the Kushners’ property sales in the period covered by the documents— totaling about $2.3 billion, according to Real Capital Analytics, a research firm— generated little or no taxable income for Mr. Kushner.Last year’s tax legislation eliminated that benefit for all industries but one: real estate.
Because the super-wealthy contribute to the careers of crooked politicians, these kinds of benefits are written into tax laws. These are benefits unavailable to working families of course. When Bernie talks about these wealthy people paying their fair share, this is precisely the kind of thing he’s talking about— and why elites, even inside the Democratic Party disparage him.
