Did Trump donate his salary in 2020? Tax returns don’t tell the whole story

Former President Donald Trump arrives at his Mar-a-Lago home on December 31, 2022.

Joe Rydle | Getty Images

When Former President Donald Trump’s Tax Returns Were Released publicly on 30 DecemberSome news reports suggested he didn’t donate his salary in 2020 – causing a breakdown campaign pledge – Because $0 of charitable gifts is shown on the tax return.

However, it is not clear from the available data whether he kept his promise or not because of how some information is recorded on tax returns, the accountants said.

Here’s why: Trump Reported a negative adjusted gross income in 2020, his final year in office. He didn’t pay federal income tax because he had no taxable income.

Trump’s -$4.8 million adjusted gross income in 2020 largely stemmed from $15.7 million in reported business losses, which were incurred from income sources such as certain real estate, partnerships, and S corporations. Tax Returns, House Ways and Means Committee issued six years Trump’s returns – from 2015 to 2020 – followed a long battle to make them public.

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Taxpayers who itemize their tax deductions (instead of claiming standard deduction) are generally tax exempt for their charitable contributions. But this is not the case if you report negative income and do not pay income tax; If there is no income from which the deduction can be made, you cannot get the tax deduction.

However, taxpayers can “carry forward” unused tax breaks to future years — effectively using past charitable donations to lower their tax bill later.

Trump may have done so in 2020 – though, again, it’s not clear. The accountant noted that this “carry forward” tax maneuver is typically reported on a statement that is separate from the Schedule A form that outlines the annual itemized deduction.

And that statement — usually a supporting document attached to a tax return — was not among the publicly released tax forms, says Hal Terr, a Princeton, New Jersey-based certified financial planner and tax partner at the accounting firm Witham, Smith & Brown. he said .

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Without that form, it’s unclear whether Trump reported a charitable deduction in 2020 and plans to use the related tax benefit in future years.

“Looking at the comeback, you can’t say what he did or didn’t do without seeing the schedule going forward,” Terr said.

A spokeswoman for Trump did not respond to a request for comment on this story. Trump had Donated his $400,000 annual salary in prior years in office,

The IRS generally limits tax deductions for charitable gifts.

IRS generally limits the value of the tax deduction For charitable donations, the amount depends on the type and value of the gift and the type of qualifying organization you give it to. Taxpayers can generally deduct the value of gifts up to a total of 60% of their AGI when they donate cash to a public charity, for example. The limit is 30% for non-cash assets such as stock held for more than a year.

Taxpayers can avail any unutilized tax benefits for up to five years.

Accountants said how these carryforwards are shown on tax returns can vary somewhat depending on the tax preparer and tax return software used.

For example, in 2017, Trump also reported a negative adjusted gross income of -$12.9 million. That year, he has Schedule A charitable gifts of $1.86 million made by cash or check. He could not deduct these gifts because of his negative income, but the tax return references “STMT 16″—an apparent reference to the attached statement outlining the carryover of those donations.

The tax statement on Trump’s 2020 return doesn’t have a similar reference — but that doesn’t mean the carryover didn’t happen.

“I think the difference is that there are two different tax providers [and] How do they generate returns,” Ter said.

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