Donald Trump at the New York Stock Exchange in 1995. (Kathy Willens/AP)

In 1995, Donald Trump was in the midst of a spending spree. He had recently bought a 727 jet for personal use, added a skyscraper to his Manhattan real estate portfolio and snapped up properties in Telluride, Colo., and Palm Beach, Fla., financial records show.

That same year, he said he had negative $916 million in “federal adjusted gross income,” a claim that gave him the prospect of avoiding federal income taxes for years to come.

So how could he be thriving and avoiding taxes at the same time?

That’s the central mystery behind the state tax documents filed in New York by Trump for 1995 and disclosed this weekend by the New York Times.

Unlike every major presidential nominee of the past 40 years, Trump has declined to release his tax returns. The 1995 documents offer the most penetrating information yet about Trump’s personal finances and revive long-standing questions about his business practices.

The tax code allows real estate developers or managers to use special tax breaks and benefits that the rest of us can’t. Here’s how that works. (Daron Taylor/The Washington Post)

A clue to his claimed losses in 1995 may be related to the intricate backstory of how his Atlantic City gambling empire slid into bankruptcy in the early 1990s.

“Everyone is acting shocked, but the whole world knew he had overleveraged himself and his operating businesses,” said Jack O’Donnell, a former president of the Trump Plaza Hotel and Casino.

The disclosure also raises new questions about the degree of Trump’s personal financial involvement in the Trump Organization’s first four bankruptcies. Though he has repeatedly drawn a distinction between the company’s bankruptcies and his personal finances, the tax documents indicate he may have used losses stemming from his bankruptcies to benefit his personal fortune.

The U.S. tax code allows filers to write off their losses, known as net operating losses, for the year they occurred, and apply them to tax claims for the two years before and as many as 15 years afterward.

Trump’s campaign said in a statement, “Mr. Trump is a highly skilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required.”

Without supporting documents or the full tax filing, which remain confidential, it’s impossible to identify with any precision how the $916 million in claimed losses was generated.

The losses followed a period in which Trump struggled to hold on to his casino and real estate empire.

By 1990, his casinos, hotel and other assets had piled up more than $3 billion in debt, according to a confidential document produced at the time by Kenneth Leventhal & Co., which was retained by Trump during his financial crisis. Trump had personally guaranteed $832 million of that amount on the casinos alone, according to New Jersey Casino Control Commission documents.

In August 1990, unable to pay interest on his loans, Trump persuaded his bankers and bondholders to extend the terms of his loans and agree not to hold him personally responsible until 1995. Still, his three casinos, Trump’s Castle, Plaza and Taj Mahal, as well as his Plaza Hotel in New York, sought bankruptcy protection in 1991 and 1992.

In each of the casino bankruptcies, Trump gave up 50 percent of his equity to lenders, a stake that could have been worth more than $1 billion, according to a Washington Post review of the Leventhal accounting and regulatory documents.

In the early 1990s, Trump began telling a story that he included in an interview for a Fortune magazine piece, in The Post and in his book “Trump: The Art of the Comeback.” As he told it, Trump walks past a panhandler on the street near Trump Tower and stops to remark on his own plight.

“He’s a beggar, but he’s worth about $900 million more than me,” the book quoted Trump as saying.

But in “The Art of the Comeback,” Trump also said that 1995 was a banner year for his business. He had reduced his debts in the wake of his bankruptcies and was back on a path to success, including sealing a deal for his landmark tower at 40 Wall Street.

By 1993, Trump wrote in the book, “my personal debt of $975 million had been reduced to $115 million, and I had two years to finish cleaning it up. There was no way to deny that things were going really great.”

He wrote that it was “a time when I knew I was coming on strong. This went on for about two years. I call it the period of the unknown. I sold some assets . . . but for the most part, I kept everything I’d had in the first place, and just reduced debt.”

Abe Wallach, the former head of acquisitions for the Trump Organization, said Trump by 1995 had stanched his major losses and was back making money.

“If these forms were dated 1990, I could see where he had $916 million in debt,” Wallach said. “Things were going well by the mid-’90s. He had gotten rid of some of the debts on some of the properties and had income coming in.”

Some of the claimed losses on Trump’s tax documents came from $15.8 million in losses listed under real estate, royalties, trusts, partnerships and “S corporations.” Tax experts said those losses probably came from a deduction offered to real estate developers, like Trump, that allows them to subtract from their income on the basis that buildings depreciate in value over time.

Trump has used those real estate deductions to pay no federal income taxes in previous years. According to summaries of Trump’s 1978 and 1979 tax returns, submitted to New Jersey regulators as part of an application for a casino license, Trump claimed that his combined income during those two years was negative $3.8 million, allowing him to pay no taxes.

The bulk of his 1995 losses, or roughly $909 million, was listed only as “other income.” A note, written on the return next to the loss, refers to a statement that could provide more explanation, but it was not included in the pages sent to the Times.

It’s unclear what happened to the $916 million in debt after 1995. If the debts were forgiven or written off in bankruptcy court, tax experts said, Trump would have typically been required to count the forgiven debts as income in later tax returns, minus the value of any assets surrendered to the lenders.

In 1993, Congress added an exception to the tax code that allows investors to write off forgiven debts if they are financially insolvent, meaning their assets are less valuable than their liabilities. If insolvent, Trump could probably have dodged tax payments on the forgiven losses altogether.

Trump was back to celebrating after filing his 1995 tax returns. In 1996, Forbes returned Trump to its list of the 400 wealthiest Americans for the first time since 1990, saying he was worth $450 million.

The magazine had kicked him off its “rich list” amid the bankruptcies, estimating that Trump was worth negative $900 million when the casino-regulator documents em­erged. But even the $450 million estimate in 1996 was not enough for Trump. He argued to Forbes that year that his net worth was actually more than $2 billion.

Michael Kranish and Alice Crites contributed to this report.