Few Tax Loopholes That Could Save Thousands Of Money

Former President Trump has taken advantage of a few tax loopholes that helped him save thousands of money. In this article, read and find out what are those loopholes that helped several wealthy individuals!

Trump’s Tax Loopholes [Photo: Salon.com]

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Claim Depreciation

According to Csiszar, depreciation is a deduction to recover the expenses of a specific property. In general, a property starts to depreciate when it is placed in service for the first time. However, the Internal Revenue Service (IRS) considers a property ‘placed in service’ only when it is already available and ready to use. The cost of the property is then depreciated over its useful life unless when there is an exception.

Deduct Business Expenses

Business owners who file their taxes can also possibly claim tax deductions for a few business expenses. These tax deductions include those expenses from traveling, vehicles, office equipment, home offices, and even work-related education expenses. However, not every business is entitled to such deductions. To be eligible, a business owner must attempt to gain profit in their business instead of what IRS considers to be just a ‘hobby’.

Carry Over Business Losses

Reportedly, Trump also had a total of $1.4 billion in losses from his businesses in 2008 and 2009. Fortunately, by carrying over these losses, Trump was able to subsequently claim a tax refund worth $72.9 million. Business losses are also known as net operating losses (NOL). In general, an NOL happens when tax deductions exceed the taxable income. However, if an NOL is negative in one year but has been positive in the other years, the loss can be used to lower the taxable income and reduce the tax burdens in another year.

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