Expert Weighs In On Reports Regarding Donald Trump's Taxes
PHILADELPHIA (CBS) -- Monday, GOP presidential nominee Donald Trump briefly talked about his taxes at campaign events, so we spoke to a tax expert about how Trump could possibly have not paid taxes for years.
"Under the 16th amendment, so 1913 (the tax code) been around since then. Literally the concept (for this business tax method) has been around," said Temple's Fox School of Business accounting professor and corporate tax expert David Jones.
"I don't think there is any smoking gun here. It's what's written in the law and that's permitted," he continued.
We spoke with Professor Jones about how Trump possibly did not pay taxes for years after filing a 1995 business net operating loss of more than $900 million.
"There is nothing illegal about this. Congress wrote this specifically in the law to help taxpayers manage a business over a business cycle," explained Jones.
Jones says the purpose of the tax write off is to allow businesses to spread losses over time, so they're not impacted for years is over one year's poor performance.
"It's like digging a hole. If you dug a hole in year one, you can start filling it in two years back and fill in the rest of it 20 years forward and all is good because that is what congress intended to happen in a business cycle," explained Jones.
Jones says everyone from individuals who own small businesses to massive corporations like Ford have taken advantage of this tax code, and he says it's so common the word "loophole" does not apply.
"I chuckle. Because people use the word loophole a lot and the word loophole is really an ambiguity," he said.
