At an Oct. 3 rally in Pueblo, Colo., Donald Trump defended his alleged 1995 tax return that shows a $916 million business loss which could have enabled him to skip paying federal income taxes for 18 years. (Monica Akhtar/The Washington Post)

Donald Trump on Monday launched an aggressive defense of a massive business loss in the 1990s that would have enabled him to skip paying federal income taxes for 18 years, while also wading into a new controversy by suggesting that soldiers and veterans with mental health problems are not “strong” and “can’t handle it.”

“When people come back from war and combat, and they see things that maybe a lot of folks in this room have seen many times over — and you’re strong and you can handle it — but a lot of people can’t handle it,” Trump said at a Monday morning town-hall event with veterans in Northern Virginia.

At an afternoon rally later here in Colorado, the GOP presidential nominee responded to a New York Times report this weekend on his 1995 tax return showing a $916 million loss that would have allowed him to pay zero federal income taxes for 18 years.

Trump said he “brilliantly used” tax laws to his advantage and bounced back from the loss while others in his field fell flat in the 1990s. Trump said he has a “fiduciary responsibility” to“pay as little tax as legally possible” — although these were his personal taxes — and that the political class should be blamed for creating a “complex” and “unfair” tax system.

Trump also pitched himself as an underdog who has overcome obstacles time and again in his career and, now, on the campaign trail.

In Toledo, Ohio, on Monday, Hillary Clinton sharply criticized Donald Trump for losing money and pocketing tax savings. (Brian Snyder/Reuters)

“While I made my money as a very successful private businessperson, following the law all the way, Hillary Clinton made her money as a corrupt public official,” Trump said.

He riffed on other issues at the rally as well, saying the country is growing more divided with “race riots on our streets on a monthly basis,” complaining about the quality of his microphone at the first debate and calling the Commission on Presidential Debates “a joke.”

Clinton, the Democratic nominee, focused on Trump’s 1995 tax return during a campaign stop in downtown Toledo, on Monday afternoon, sharply criticizing him for losing money and pocketing tax savings while ordinary Americans pay their fair share.

“What kind of genius loses a billion dollars in a single year?” Clinton asked a crowd, with a hint of amusement in her voice, referring to arguments from Trump surrogates that the tax records proved Trump was a “genius.”

Clinton argued at last week’s first presidential debate that Trump has hidden his returns from the public to avoid revealing that he is not as wealthy as he has claimed or that he has not paid federal income taxes.

“After he made all those bad bets and lost all that money, he didn’t lift a finger to protect his employees, or the small businesses and contractors he’d hired, or the people of Atlantic City,” Clinton said. “They all got hammered, while he was busy with his accountants figuring out how he could keep living like a billionaire.”

At a rally in Pueblo, Colo., Oct. 3, Republican presidential candidate Donald Trump slammed the U.S. tax code as "unfair," but vowed to use his own understanding of it to fix it for Americans. (The Washington Post)

She said Trump’s tax proposals benefit him and his companies the most — and that he would continue to look out for himself and big businesses if elected president.

“Trump represents the same rigged system he claims he will change,” Clinton charged. “Trump’s plan would cut his own taxes even more. He’d open the loopholes even wider.”

Clinton’s campaign released a new television ad Monday using footage from the first presidential debate at Hofstra University last week, in which Trump responded to accusations that he avoided paying taxes by saying it made him “smart.” Pro-Clinton allies also ran with the same message, highlighting the tax revelations and Trump’s boasting that the tax strategy showed his smarts.

“You work hard, you pay your taxes, but why didn’t Donald Trump pay his?” the narrator says. “If he thinks that makes him smart, what does he think of you?”

Later in the day, Clinton’s campaign also reacted to Trump’s comments about mental health, writing on her Twitter feed: “Veterans who experience PTS are stronger than we’ll ever understand. We owe them nothing short of world-class care.”

Trump said at the veterans event — hosted by Retired American Warriors, a political action group — that mental health and suicide prevention are the issues that veterans want to discuss with him most often and that, as president, he would provide more funding for mental health initiatives and work to reduce wait times for veterans seeking medical help.

But his comment about strength comes as military leaders are attempting to fight the stigma attached to post-traumatic stress disorder (PTSD) and other mental-health issues, especially as the suicide rate among veterans has increased sharply since 2001.

Trump’s campaign defended his comments on Monday afternoon and accused reporters of taking his words out of context.

“The media continues to operate as the propaganda arm of Hillary Clinton as they took Mr. Trump’s words out of context in order to deceive voters and veterans — an appalling act that shows they are willing to go to any length to carry water for their candidate of choice,” Lt. Gen. Michael Flynn, one of Trump’s top advisers, said in a statement. “Mr. Trump was highlighting the challenges veterans face when returning home after serving their country.”

Marine Staff Sgt. Chad Robichaux, whose question Trump was responding to in his remarks, also issued a statement, saying that it was “sickening that anyone would twist Mr. Trump’s comments.” Robichaux, who suffered from PTSD, added: “I took his comments to be thoughtful and understanding of the struggles many veterans have.”

Trump was warmly received by the friendly audience as he gave prepared remarks that included his plans for bolstering cybersecurity — an issue that came up during last week’s debate and was one of his weakest answers of the night — and continued attacks on Clinton and her use of a private email server while serving as secretary of state. After his speech, Trump took several questions from the audience, something he rarely does on the campaign trail.

Sullivan reported from Herndon, Va., and Pueblo, Colo. Phillip reported from Toledo. John Wagner contributed to this report.