Billionaire businessman Mark Cuban revealed on Wednesday why Republican presidential nominee Donald Trump “won’t and can’t release his tax returns to the public.”
Using a Trump deposition from 2013 that was uploaded by The Washington Post, Cuban, the owner of the NBA’s Dallas Mavericks and a star of ABC’s “Shark Tank”, laid it out in a series of tweets for everyone to see.
In that deposition, Trump said in response to a question about the development of Trump properties in Las Vegas and Chicago that he set up single-use subchapter S corporations to develop projects. He said he did not use the Trump Organization for those types of projects.
According to the Internal Revenue Service, S-corporation shareholders must “report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates.” And S-corporations are responsible “for tax on certain built-in gains and passive income at the entity level.”
Cuban pointed out the fact that with an S-corporation, “the entire financial performance of his company becomes part of his tax return.”
“His personal tax returns would show the financial performance of his development projects,” Cuban wrote. “Not good given how much he gets sued.”
“It may also explain why reducing pass-through taxes is important to him,” he continued. “I say ‘may’ because taxes are only paid if he makes a profit.”
This is something that Hillary Clinton recently attacked her competitor with. She referred to his tax position on pass-through income as the “Trump loophole” and noted that the tax break would be really beneficial to him.
CNBC’s Robert Frank cast the loophole as the biggest tax break for the wealthy in Trump’s plan.
Although Trump keeps saying he won’t release his tax returns until an IRS audit is finished, and that may not be before the election in November, since 1976, all major-party presidential candidates have made their tax returns public.