Write-Off: The Tax Blog

In Defense of Losses – The Hill

Saturday October 10, 2020 • Jeff Hoopes, UNC

This article is from an article in The Hill by Andrew Belnap and Jeff Hoopes.

What do Barack ObamaElizabeth WarrenHillary ClintonKamala HarrisJimmy Carter and Franklin Roosevelt all have in common? They are all losers. So are Dick CheneyNewt GingrichJeb Bush and George W. Bush. At least, according to their tax returns.

All of these politicians have attempted to generate income through trading stock, renting real estate or conducting a trade or business but, in at least one year, have failed to post a profit associated with these undertakings, and instead generated a loss. And, just like more than one million U.S. taxpayers in 2018 have done, all have claimed some type of loss as a deduction on their tax return.

The recent revelation of Trump’s tax returns has started a national discussion regarding the deduction of losses. The tone of most news coverage seems to regard deducting a loss as if it were some shady tax planning scheme that requires a Swiss bank account and an expensive accountant in the Cayman Islands. Claiming losses, whether generated by rental real estate, as part of a business, or resulting from the sale of stock, is a fundamental part of our tax system. If you don’t make money, you don’t pay taxes.

Read the rest of the article at The Hill.

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