Doc­u­ments: Kush­ner paid al­most no fed­eral taxes for years

The Charlotte Observer (Sunday) - - Insight - BY JESSE DRUCKER AND EMILY FLITTER New York Times

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 son-in-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 taxmin­i­miz­ing 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 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.

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