A section titled “Personal Income Tax Obligations” of a 1995 Division of Gaming Enforcement report on the “Financial Stability of Donald J. Trump” said that, “As of December 31, 1993, DJT had a net operating loss (“NOL”) carry forward of approximately [redacted]. As various lenders cancel all or part of DJT’s debt, he may realize taxable gains. Management has represented that DJT’s NOLs will be more than sufficient to satisfy all anticipated gains.”

In other words, Trump’s losses were large enough to prevent him from owing taxes.

A similar report in 1993 came to the same conclusion about Trump’s tax obligations in 1991. “As various lenders cancel all or part of DJT’s debt, he will in all likelihood realize taxable gains. However, given the [redacted] in carryforward net operating losses (“NOLS”), any tax resulting should be minimal, if any.”

There is nothing illegal about using losses to shield oneself from paying taxes. Indeed, Trump has bragged on the trail that he has leveraged business and tax laws to maximize profits for himself over the years. Nor is it a huge surprise that Trump would not owe significant taxes during the economic slowdown of the early 1990s as his companies teetered near bankruptcy.