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

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

Joe Raedle | Getty Images

When former President Donald Trump’s tax returns were released publicly on Dec. 30, some news reports suggested he hadn’t donated his salary in 2020 — breaking a rift campaign promise – because tax returns showed $0 in charitable donations.

However, available data doesn’t say whether or not he broke his promise because certain information is reported on tax returns, accountants said.

Here’s why: Trump reported negative adjusted gross income in 2020, his last year in office. He paid no federal income tax because he had no taxable income.

Trump’s adjusted gross income of -$4.8 million in 2020 came largely from reported $15.7 million in business losses that year from revenue streams like certain real estate, partnerships and suburban businesses, the company said tax returns. The House Ways and Means Committee released six years of Trump’s return — 2015 to 2020 — after a long struggle to make them public.

More from Personal Finance:
How Trump May Have Bypassed the $10,000 SALT Withdrawal Cap
12 million people received an IRS refund for a 2020 unemployment benefit tax break
Trump’s tax returns do not show any income from Social Security benefits

Taxpayers who itemize their tax deductions (instead of claiming a standard deduction) generally receive a tax credit for their charitable contributions. However, this is not the case if you report negative income and pay no income tax; You cannot get a tax deduction if you cannot deduct income.

However, taxpayers can “carry forward” this unused tax credit to future years – effectively with earlier charitable donations to reduce their tax burden later.

Trump may have done so in 2020 – although again it’s unclear. This “carry-forward” tax maneuver is generally reported on a statement separate from the Schedule A form that outlines the annual itemized deductions, accountants said.

And that statement — typically a supporting document that accompanies the tax return — wasn’t among the publicly released tax forms, said Hal Terr, a Princeton, NJ-based certified financial planner and tax partner at accounting firm Withum, Smith and Brown.

Here's how to get the most out of your charitable donation

Without this form, it’s unclear if Trump reported a charitable deduction in 2020 and plans to use the associated tax benefit in years to come.

“If you look at the rate of return, you can’t tell if he did it or not without looking at the transfer plan,” Terr said.

A Trump spokesman did not respond to a request for comment on this story. Trump had donated his $400,000 annual salary in previous years while in office.

IRS generally limits tax deductions for charitable gifts

The IRS in general limits the value of tax deductions for charitable donations, depending on the type and value of the gift and what type of eligible organization you give it to. Taxpayers can typically deduct the value of gifts up to 60% of their AGI if, for example, they donate money to a public charity. The limit is 30% for tangible assets such as stocks held for more than one year.

Taxpayers can enjoy unused tax benefits for up to five years.

How those transfers appear on tax returns can vary slightly depending on the tax preparer and tax-filing software, accountants said.

For example, in 2017, Trump also reported negative adjusted gross income of -$12.9 million. This year, his Schedule A records $1.86 million in charitable donations in cash or by check. He couldn’t deduct those gifts because of his negative income, but the tax return references “STMT 16” — an apparent reference to an attached statement outlining a transfer of those donations.

There’s no similar tax return reference to Trump’s 2020 tax return — but that doesn’t mean the carryover didn’t happen.

“I think the difference is that there are two different tax providers [and] as they prepare to return,” said Terr.

https://www.cnbc.com/2023/01/11/did-trump-donate-his-salary-in-2020-tax-returns-dont-tell-full-story.html Did Trump donate his salary in 2020? Tax returns don’t tell the whole story


Pechip.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@pechip.com. The content will be deleted within 24 hours.

Related Articles

Back to top button