What do Trump's tax returns reveal about his finances?

Insight into Trump's finances
Insight into Trump's finances 02:55

Donald Trump has campaigned as a savvy businessman, but tax returns leaked to the New York Times suggest his companies were hemorrhaging huge amounts of money.

Verifying Trump's 1995 tax docs 07:30

The Times published three pages from Trump’s 1995 state tax returns, and the accountant who prepared one of them told CBS News they appear authentic. The filings show staggering losses that Trump could have used to avoid paying federal income taxes for up to 18 years. The publication of Trump’s state tax filings is renewing pressure on the Republican presidential candidate to release more information.

In the filings, Trump claimed about $6,000 in wages and more than $7 million in interest income, but CBS News correspondent Jan Crawford reports he also deducted almost $16 million from real estate losses and another $909 million in net operating losses from his other businesses.

“Well, we call it the billion dollar dream, and it is the billion dollar dream, but it’s a dream of beauty and fantasy,” Trump said about his Trump Taj Mahal casino on April 5, 1990. 

Trump’s Atlantic City casinos, as well as his airline, were struggling to make a profit at the time.

Tax experts tell CBS News Trump did nothing wrong by claiming those losses in order to avoid paying taxes on his income that year and in subsequent years.

“Nobody in the tax business would describe that as a loophole. It’s one of the things that make the system fair; when you lose money, you never pay taxes,” said Howard Abrams, a professor at the University of San Diego Law School. 

But the experts say the size of Trump’s losses -- nearly a billion dollars -- makes this case very unusual.  

“There’s a real question… as to whether those losses are economic -- through spectacular failures of Mr. Trump’s business, tax avoidance, perhaps lawful, or maybe something much worse,” said Steven Rosenthal, senior fellow at the Tax Policy Center. 

It’s possible some of the money Trump losts wasn’t even his.

“If he borrowed from a bank, it’s their money that disappeared… It’s almost inconceivable that he’s actually out of pocket $900 million dollars,” Abrams said. “In essence, he’s deducting their losses.” 

The leaked filings don’t reveal exactly how Trump earned his income, whether any of it came from foreign sources, or how much he gave to charity.

“There are plenty of things we can figure out if we can only see more of his taxes, but all we see for now is one narrow glimpse,” Rosenthal said. 

At this point, it’s unclear how many years Trump claimed those losses on his income taxes. 

Trump’s accountant tells CBS News the $900 million figure actually had too many digits for his tax preparation software; he had to enter part of the number manually, using a typewriter.