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Trump may still have to answer for his tax records

Since Hillary Clinton and Donald Trump’s first debate last month, new documents have come to light regarding the Republican nominee’s taxes.

Trump has not released his tax returns, as other presidential nominees have done for decades. Last weekend, though, the New York Times published what were apparently several pages from Trump’s 1995 tax return, which were anonymously sent to the paper.

The pages include a startling figure: That year, Trump apparently told the Internal Revenue Service he had lost $916 million — a colossal sum, even for someone of Trump’s wealth. As a result, he would have been able to argue to tax authorities that he was $916 million poorer, and that he should not have to pay taxes on any other income for up to 15 years or until he had made up for that loss.

Clinton and her Democratic allies have argued the loss reflects poorly on Trump’s acumen as a businessman.

“What kind of genius loses a billion dollars in a single year?” Clinton asked on Monday.

That might not be entirely accurate. By 1995, Trump had been losing money on his properties — including casinos, hotels and an ill-advised airline — for several years. The $916 million loss on his return from 1995 could have reflected several years of accumulated losses.

Trump borrowed heavily at steep rates to finance his purchases of marquee properties, including the Plaza Hotel in New York and the Taj Mahal in Atlantic City. The revenue from those properties was not enough to pay the interest on Trump’s loans, and Trump had to put the properties into bankruptcy.

Trump’s defenders have said the loss reflects his knowledge of the tax code. “His tax returns showed he went through a very difficult time, but he used the tax code just the way it’s supposed to be used, and he did it brilliantly,” said Trump’s running mate, Mike Pence, at the vice-presidential debate on Tuesday.

That might not be entirely accurate, either. The tax code is designed to protect entrepreneurs who put their own money into a project and then lose it, as Pence argued – but experts on taxation are skeptical that the money that Trump lost was his.

Rather, experts say it is more likely that the $916 million Trump lost was money he had borrowed, and that Trump then used some combination of loopholes and tax breaks to claim the loss on his own tax return.

“The long and the short of it is he lost other people’s money, one way or the other,” Edward Kleinbard, a legal scholar at the University of Southern California, said in an interview this week.

Real-time fact-checking and analysis of the 2nd 2016 presidential debate

Donald Trump and Hillary Clinton will meet on stage at Washington University in St. Louis at 9 p.m. Eastern.