Trump explains his businesses lost so much because he was avoiding tax

Donald Trump has responded angrily to reports his businesses recorded more than $1bn in losses, explaining they did so to avoid paying tax.

In early morning tweets, the US president appeared to confirm much of what was detailed in an explosive report about his financial losses between 1985 and 1994, and claimed avoiding taxes among real estate developers was then considered "sport".

"Real estate developers in the 1980’s & 1990’s, more than 30 years ago, were entitled to massive write offs and depreciation which would, if one was actively building, show losses and tax losses in almost all cases," Mr Trump tweeted.

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"Much was non monetary. Sometimes considered 'tax shelter,' you would get it by building, or even buying. You always wanted to show losses for tax purposes....almost all real estate developers did - and often re-negotiate with banks, it was sport.

"Additionally, the very old information put out is a highly inaccurate Fake News hit job!"

Mr Trump's outburst followed a New York Times story which detailed how tax information obtained by the newspaper showed the self-proclaimed billionaire paid no income tax for eight out of 10 years detailed in the documents.

The newspaper said Mr Trump reported business losses of $46.1m (£35.4m) in 1985, and a total of $1.17bn (£900m) in losses for the 10-year period.

The records - printouts from Mr Trump's Internal Revenue Service (IRS) tax receipts - represent the most detailed look into the president's personal taxes yet, after years in which Mr Trump had sought to keep the documents private.

According to the report, Mr Trump's losses mostly came from his business holdings in casinos, hotels, and retail apartment space in his buildings.

It alleges he lost more money than almost any other American individual taxpayer during that time, according to a comparison of his taxes to an annual comparison of high income earners compiled by the IRS.

Mr Trump's defence of his financial behaviour cited "depreciation", which is a special benefit in the US tax code that lets owners of commercial real estate take a deduction from taxable income for a building's natural loss in value.

As reported by Forbes, although the term implies loss, in real estate investing it is a positive with regards to income. Even though the building itself - including the toilets, sinks, rooves etc - depreciates in value, the land does not depreciate.

That means the owner of the asset can take a deduction for the building's depreciation, while simultaneously seeing the value of their real estate investment increase.

Shape Created with Sketch. The Democrat challengers to Trump in 2020 Show all 13 left Created with Sketch. right Created with Sketch. Shape Created with Sketch. The Democrat challengers to Trump in 2020 1/13 Joe Biden The former vice president - poised to be a frontrunner - has announced his run. He recently faced scrutiny for inappropriate touching of women, but was thought to deal with the criticism well EPA 2/13 Bernie Sanders The 2016 runner-up has announced that he will be running again in 2020 Getty 3/13 Pete Buttigieg The Indiana mayor and war veteran will be running for president. If elected, he would be the first openly LGBT+ president in American history Getty 4/13 Beto O'Rourke The former Texas congressman formally launched his bid for the presidency in March. He intends to run on a progressive platform, stating that the US is driven by "gross differences in opportunity and outcome" AP 5/13 Elizabeth Warren The Massachusetts Senator has formally launched her bid for president in 2020. A progressive Democrat, she is a major supporter of regulating Wall Street. Reuters 6/13 Cory Booker The New Jersey Senator has announced that he will be running for the presidency in 2020. If he secures the nomination he said finding a female vice president would be a priority Getty 7/13 Wayne Messam Mayor of the city of Miramar in the Miami metropolitan area, Wayne Messam has announced his bid. He intends to run on a progressive platform against the "broken" federal government. He favours gun regulations and was a signatory to a letter from some 400 mayors condemning President Trump's withdrawal from the Paris Climate Accord Vice News 8/13 Kirsten Gillibrand The New York Senator formally announced her presidential bid in January, saying that “healthcare should be a right, not a privilege” Getty 9/13 Kamala Harris The former California attorney general will be running for president in 2020. Introduced to the national stage during Jeff Sessions’ testimony, she has endorsed Medicare-for-all and proposed a major tax-credit for the middle class AFP/Getty 10/13 John Delaney The Maryland congressman was the first to launch his bid for presidency, making the announcement in 2017 AP 11/13 Tulsi Gabbard The Hawaii congresswoman announced her candidacy in January, but is likely to face tough questions on her past comments on LGBT+ rights and her stance on Syrian President Bashar al-Assad Getty 12/13 Andrew Yang The entrepreneur has announced his presidential candidacy, and has pledged that he would introduce a universal basic income of $1,000 a month to every American over the age of 18 Getty 13/13 Julian Castro The former San Antonio mayor announced his candidacy in January and said that his running has a “special meaning” for the Latino community in the US Getty 1/13 Joe Biden The former vice president - poised to be a frontrunner - has announced his run. He recently faced scrutiny for inappropriate touching of women, but was thought to deal with the criticism well EPA 2/13 Bernie Sanders The 2016 runner-up has announced that he will be running again in 2020 Getty 3/13 Pete Buttigieg The Indiana mayor and war veteran will be running for president. If elected, he would be the first openly LGBT+ president in American history Getty 4/13 Beto O'Rourke The former Texas congressman formally launched his bid for the presidency in March. He intends to run on a progressive platform, stating that the US is driven by "gross differences in opportunity and outcome" AP 5/13 Elizabeth Warren The Massachusetts Senator has formally launched her bid for president in 2020. A progressive Democrat, she is a major supporter of regulating Wall Street. Reuters 6/13 Cory Booker The New Jersey Senator has announced that he will be running for the presidency in 2020. If he secures the nomination he said finding a female vice president would be a priority Getty 7/13 Wayne Messam Mayor of the city of Miramar in the Miami metropolitan area, Wayne Messam has announced his bid. He intends to run on a progressive platform against the "broken" federal government. He favours gun regulations and was a signatory to a letter from some 400 mayors condemning President Trump's withdrawal from the Paris Climate Accord Vice News 8/13 Kirsten Gillibrand The New York Senator formally announced her presidential bid in January, saying that “healthcare should be a right, not a privilege” Getty 9/13 Kamala Harris The former California attorney general will be running for president in 2020. Introduced to the national stage during Jeff Sessions’ testimony, she has endorsed Medicare-for-all and proposed a major tax-credit for the middle class AFP/Getty 10/13 John Delaney The Maryland congressman was the first to launch his bid for presidency, making the announcement in 2017 AP 11/13 Tulsi Gabbard The Hawaii congresswoman announced her candidacy in January, but is likely to face tough questions on her past comments on LGBT+ rights and her stance on Syrian President Bashar al-Assad Getty 12/13 Andrew Yang The entrepreneur has announced his presidential candidacy, and has pledged that he would introduce a universal basic income of $1,000 a month to every American over the age of 18 Getty 13/13 Julian Castro The former San Antonio mayor announced his candidacy in January and said that his running has a “special meaning” for the Latino community in the US Getty

The documents obtained by the NYT do not cover the years of interest to congressional Democrats, who are set to engage in a legal battle with the Trump administration after the Treasury refused to release the president's tax returns.

However, they do provide valuable insight into Mr Trump's business history, and further damage his long-cultivated image as a self-made billionaire with a history of business success.

A lawyer for the president said the tax information was "demonstrably false", and reporting "about the president's tax returns and business from 30 years ago are highly inaccurate". He did not say what specifically was wrong.

The House Ways and Means Committee has asked the IRS to provide Mr Trump's personal and business returns for 2013 through to 2018.

Treasury Secretary Steven Mnuchin, who oversees the IRS, refused to do so on Monday, saying the panel's request "lacks a legitimate legislative purpose".

His move, which had been expected, is likely to set a legal battle into motion. The chief options available to Democrats are to subpoena the IRS for the returns or to file a lawsuit.

Mr Trump is the first president since Watergate to decline to make his tax returns public.