Over the weekend, the New York Times published an article that contains copies of parts of Donald and Marla Trump’s 1995 income tax filings.  The pages, mailed to a Times reporter in September and verified as genuine by the accountant who prepared them, contain two items of note:

–during that year, the Trumps had income of about $9 million.  That was more than offset by a loss of $15.8 million generated from “rental real estate, royalties, partnerships, S corporations, trusts…”–which I take as being tax loopholes designed for the real estate industry.  If we assume that this is par for the course, it would mean that the Trumps typically pay no federal or state income tax.

–the Trumps also show that as of that year they had accumulated other losses totaling a stunning $909 million.   This figure is presumably the cumulative result of Donald Trump’s efforts as an investor.  Two points:

—tax losses have a current economic value, which deteriorates as time passes.  In this case, the value in 1995 of the Trump’s loss was about $350 million, and was shrinking in economic worth by, let’s say, $30 million per year.  Logically, the best course of action would have been for the Trumps to use the loss by selling, the sooner the better, something they owned and had a profit on.  The fact that they did not suggests they didn’t have any investment gains at that time–or that they used what gains they had to whittle the loss figure down to $909 million.

—Donald Trump was born into a wealthy real estate family.  He entered the family business with the advice and support of his successful father.  Falling interest rates + the development of New York City as a world financial center made the 1980s a golden age for real estate investing in the region the Trump family had expertise.  Yet the Trump 1995 tax returns suggest that on a net basis Donald not only made no profit during a time when real estate was like a license to print money; instead, he lost nearly a billion dollars.

In a recent Forbes article, John Griffin, a finance professor at the University of Texas/Austin examines Donald Trump’s investing career using publicly available data, both independent estimates and figures self-reported by Trump.  Prof. Griffin concludes that Mr. Trump has made only about half the profits of a typical real estate investor (about 40%, taking the self-reported figures), while taking on a higher than average level of risk.  Mr. Griffin concludes, ” Donald Trump is obviously a skillful presenter and a talented entertainer, but in terms of his investment skills, he is a clear underperformer.”  To my mind, the mammoth loss shown in the 1995 Trump tax return suggests that a less favorable assessment may be warranted.