Kush­ner paid al­most no taxes for years

Doc­u­ments show very low tax bills.


Over the past decade, Jared Kush­ner’s fam­ily com­pany has spent bil­lions of dol­lars buy­ing real es­tate. His per­sonal stock in­vest­ments have soared. His net worth has quin­tu­pled to al­most $324 mil­lion.

And yet, for sev­eral years run­ning, Kush­ner — Pres­i­dent Don­ald Trump’s sonin-law and a se­nior White House ad­viser — ap­pears to have paid al­most no fed­eral in­come taxes, ac­cord­ing to con­fi­den­tial fi­nan­cial doc­u­ments re­viewed by The New York Times.

His low tax bills are the re­sult of a com­mon tax-min­i­miz­ing ma­neu­ver that, year af­ter year, gen­er­ated mil­lions of dol­lars in losses for Kush­ner, ac­cord­ing to the doc­u­ments. But the losses were only on pa­per — Kush­ner and his com­pany did not ap­pear to ac­tu­ally lose any money. The losses were driven by de­pre­ci­a­tion, a tax ben­e­fit that lets real es­tate in­vestors deduct a por­tion of the cost of their build­ings from their tax­able in­come ev­ery year.

In 2015, for ex­am­ple, Kush­ner took home $1.7 mil­lion in salary and in­vest­ment gains. But those earn­ings were swamped by $8.3 mil­lion of losses, largely be­cause of “sig­nif­i­cant de­pre­ci­a­tion” that Kush­ner and his com­pany took on their real es­tate, ac­cord­ing to the doc­u­ments re­viewed by The Times.

Noth­ing in the doc­u­ments sug­gests Kush­ner or his com­pany broke the law. A spokesman for Kush­ner’s lawyer said that Kush­ner “paid all taxes due.”

In the­ory, the de­pre­ci­a­tion pro­vi­sion is sup­posed to shield real es­tate de­vel­op­ers from hav­ing their in­vest­ments whit­tled away by wear and tear on their build­ings. In prac­tice, though, the al­lowance of­ten rep­re­sents a lu­cra­tive give­away to de­vel­op­ers like Trump and Kush­ner.

The law as­sumes that build­ings’ val­ues de­cline ev­ery year when, in re­al­ity, they of­ten gain value. Its enor­mous flex­i­bil­ity al­lows real es­tate in­vestors to de­ter­mine their own tax bills.

The White House last year cham­pi­oned a sweep­ing re­vi­sion of the na­tion’s tax laws that ex­panded many of the ben­e­fits en­joyed by real es­tate in­vestors, al­low­ing them to reap even larger de­duc­tions.

“The Trump ad­min­is­tra­tion was in a po­si­tion to clean up the tax code and promised to get rid of some of the com­plex­ity that cer­tain

‘If I had to live my life over again, I would have been in the real es­tate busi­ness. It’s fan­tas­tic. You get tax de­duc­tions for things you don’t pay for.’

JONATHAN BLATTMACHR Pi­o­neer Wealth Part­ners

tax­pay­ers use to their ad­van­tage,” said Vic­tor Fleis­cher, a tax law pro­fes­sor at the Univer­sity of Cal­i­for­nia, Irvine. “In­stead, they dou­bled down on those pro­vi­sions, par­tic­u­larly the ones they have fa­mil­iar­ity with to ben­e­fit them­selves.”

The doc­u­ments, which The Times re­viewed in their en­tirety, were cre­ated with Kush­ner’s co­op­er­a­tion as part of a re­view of his fi­nances by an in­sti­tu­tion that was con­sid­er­ing lend­ing him money. To­tal­ing more than 40 pages, they de­scribe his busi­ness deal­ings, earn­ings, ex­penses and bor­row­ing from 2009 to 2016. They con­tain in­for­ma­tion that was taken from Kush­ner’s fed­eral tax fil­ings, as well as other data pro­vided by his ad­vis­ers. The doc­u­ments, mostly cre­ated last year, were shared with The Times by a per­son who has had fi­nan­cial deal­ings with Kush­ner and his fam­ily.

Thir­teen tax ac­coun­tants and lawyers, in­clud­ing J. Richard Har­vey Jr., a tax of­fi­cial in the Rea­gan, Ge­orge W. Bush and Obama ad­min­is­tra­tions, re­viewed the doc­u­ments for The Times. Har­vey said that, as­sum­ing the doc­u­ments ac­cu­rately re­flect in­for­ma­tion from his tax re­turns, Kush­ner ap­peared to have paid lit­tle or no fed­eral in­come taxes dur­ing at least five of the past eight years. The other ex­perts agreed and said Kush­ner prob­a­bly didn’t pay much in the three other years, ei­ther.

Peter Mir­i­ja­nian, a spokesman for Kush­ner’s lawyer, Abbe Low­ell, said he would not re­spond to as­sump­tions de­rived from doc­u­ments that pro­vide an in­com­plete pic­ture and were “ob­tained in vi­o­la­tion of the law and stan­dard busi­ness con­fi­den­tial­ity agree­ments. How­ever, al­ways fol­low­ing the ad­vice of nu­mer­ous at­tor­neys and ac­coun­tants, Mr. Kush­ner prop­erly filed and paid all taxes due un­der the law and reg­u­la­tions.”

Mir­i­ja­nian added that, with re­gard to the tax leg­is­la­tion, Kush­ner “has avoided work that would pose any con­flict of in­ter­est.”

Rep­re­sen­ta­tives of the White House and Kush­ner’s firm, Kush­ner Cos., didn’t re­spond to re­quests for com­ment.

The rev­e­la­tion about Kush­ner’s min­i­mal tax pay­ments comes as his fa­ther-in­law’s taxes are un­der re­newed scru­tiny. A Times in­ves­ti­ga­tion pub­lished this month found that Trump par­tic­i­pated in out­right fraud that shielded his fam­ily’s for­tune from es­tate and gift taxes.

Trump has bro­ken with decades of tra­di­tion by re­fus­ing to re­lease his tax re­turns. But por­tions of a 1995 tax re­turn pre­vi­ously pub­lished by The Times show trends sim­i­lar to the one vis­i­ble in the doc­u­ments de­tail­ing Kush­ner’s fi­nances. Trump at the time re­ported nearly $916 mil­lion in losses, which could have per­mit­ted him to avoid any fed­eral in­come taxes for al­most two decades.

The sum­maries of Kush­ner’s tax re­turns re­viewed by The Times don’t ex­plic­itly state how much he paid. In­stead, the doc­u­ments in­clude dis­clo­sures by his ac­coun­tants that es­ti­mate how much tax he owed for the year just ended — called “in­come taxes payable” — and how much he paid dur­ing the year in an­tic­i­pa­tion of taxes he would owe, called “pre­paid taxes.” For most of the years cov­ered, both were listed as zero.

Peter Buell, who runs tax ser­vices for the real es­tate prac­tice of the ac­count­ing firm Mar­cum, said the lack of pre­pay­ments in­di­cated Kush­ner most likely didn’t owe in­come taxes in those years. Buell said he was es­pe­cially con­fi­dent that Kush­ner had no tax li­a­bil­ity be­cause the doc­u­ments also re­port no “in­come taxes payable.”

Kush­ner Cos. — where Kush­ner was chief ex­ec­u­tive and re­mains an owner — has been prof­itable and has thrown off mil­lions of dol­lars in cash an­nu­ally for Kush­ner and his fa­ther, Charles, ac­cord­ing to an anal­y­sis by the com­pany that was in­cluded in the doc­u­ments re­viewed by The Times.

But as far as the In­ter­nal Rev­enue Ser­vice is con­cerned, the Kush­n­ers have been los­ing money for years.

Kush­ner Cos., like many real es­tate firms, passes on any tax obli­ga­tions to its own­ers, in­clud­ing Kush­ner and his fa­ther, who in­cor­po­rate them into their per­sonal tax re­turns.

Un­like typ­i­cal wage earn­ers, the own­ers of such com­pa­nies can re­port losses for tax pur­poses. When a firm like Kush­ner Cos. re­ports ex­penses in ex­cess of its in­come, the re­sult is a “net op­er­at­ing loss.” That loss can wipe out any taxes the com­pany’s owner oth­er­wise would owe. Depend­ing on the size of the loss, it can even be used to get re­funds for taxes paid in prior years or elim­i­nate tax bills in fu­ture years.

Kush­ner’s losses, stem­ming in large part from the de­pre­ci­a­tion de­duc­tion, ap­peared to wipe out his tax­able in­come in most years cov­ered by the doc­u­ments.

He is re­port­ing the losses even though he bought his prop­er­ties with bor­rowed funds. In many cases, Kush­ner kicked in less than 1 per­cent of the pur­chase price, ac­cord­ing to the doc­u­ments. Even that small amount gen­er­ally was paid for with loans. Kush­ner’s credit lines from banks rose to $46 mil­lion in 2016 from zero in 2009, the doc­u­ments show.

The re­sult: Kush­ner is get­ting tax-re­duc­ing losses for spend­ing some­one else’s money, which is per­mit­ted un­der the tax code. De­pre­ci­a­tion de­duc­tions are avail­able in other in­dus­tries, but they gen­er­ally don’t get to take losses re­lated to spend­ing with bor­rowed money.

“If I had to live my life over again, I would have been in the real es­tate busi­ness,” said Jonathan Blattmachr, a well-known trusts and es­tates lawyer, now a prin­ci­pal at Pi­o­neer Wealth Part­ners, who re­viewed the Kush­ner doc­u­ments. “It’s fan­tas­tic. You get tax de­duc­tions for things you don’t pay for.”

One of the only years in which Kush­ner ap­peared to have owed any­thing was 2013, when he re­ported in­come taxes payable of $1.1 mil­lion. Ac­cord­ing to the doc­u­ments, Kush­ner has filed tax re­turns sep­a­rately from his wife, Ivanka Trump — a rel­a­tively com­mon prac­tice among wealthy cou­ples who want to avoid en­twin­ing their com­plex per­sonal fi­nances.

Kush­ner’s fa­ther ap­pears to have ben­e­fited from the same tax de­duc­tions, the doc­u­ments in­di­cate. The ex­perts in­ter­viewed by The Times said Charles Kush­ner most likely avoided pay­ing fed­eral in­come taxes from at least 2012 to 2016.

The tax code af­fords real es­tate in­vestors great lee­way in how they cal­cu­late their de­pre­ci­a­tion — flex­i­bil­ity that of­ten is used to in­flate their an­nual de­duc­tions. Among the tac­tics used by many de­vel­op­ers: Their tax ad­vis­ers pre­pare stud­ies ar­gu­ing that much of a prop­erty’s value is at­trib­ut­able to things like ap­pli­ances and park­ing lots, which un­der the law can be de­pre­ci­ated more quickly than the build­ing.

Such strate­gies are hardly ever au­dited, tax pro­fes­sion­als say. And the new tax law pro­vides even more op­por­tu­ni­ties for prop­erty in­vestors to take larger de­duc­tions.

De­vel­op­ers might have to pay cap­i­tal gains taxes if they sell their prop­er­ties. But the Kush­n­ers, like oth­ers in the real es­tate busi­ness, of­ten avoid that tax, too, by us­ing the pro­ceeds of sales to buy more prop­er­ties within a cer­tain time win­dow.

At least in part be­cause of that perk, the Kush­n­ers’ prop­erty sales in the pe­riod cov­ered by the doc­u­ments — to­tal­ing about $2.3 bil­lion, ac­cord­ing to Real Cap­i­tal An­a­lyt­ics, a re­search firm — gen­er­ated lit­tle or no tax­able in­come for Kush­ner.

Last year’s tax leg­is­la­tion elim­i­nated that ben­e­fit for all in­dus­tries but one: real es­tate.


Kush­ner Com­pa­nies owns this build­ing in the Wil­liams­burg neigh­bor­hood of New York. Con­fi­den­tial doc­u­ments re­viewed by The New York Times in­di­cate that Jared Kush­ner, Pres­i­dent Don­ald Trump’s son-in-law and ad­viser, prob­a­bly paid lit­tle or no in­come tax from 2009 to 2016.


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