We can only wonder why it has almost become a forgotten issue. But here is the rub. The President didn’t really lose his money. It was never all his own money. Most of the money came from investors and lenders. Now if you, our dear reader, or me, have a mortgage foreclosure, that forgiven debt becomes a tax liability. It is as if you earned the amount of money that represents your unpaid mortgage balance. So your terrible misfortune will be compounded by a devastating tax bill. But if you took out a business loan or issued bonds through the right kind of business structure, such as a Limited Liability Company, and defaulted, no problem. You are not tasked to pay the taxes on the debt you will never pay.
But it goes further. You can be assumed to have personally lost those funds, if your business entity was what is called a “pass through entity”. Even though those funds that were lost were never really yours. Thus it was possible to deduct the losses of money that other people provided and lost. Yes it was a brilliant tax strategy, and perhaps we are simplifying it a bit. Mr. Trump’s accountant took credit for this strategy, but the president was smart enough to adopt a suggested tax strategy, so cunning and original, but potentially harmful to the United States, that it has since been discredited and blocked. . So credit is due. Mr. Trump was smart enough to massively benefit from numerous people’s hardships (creditors, investors, employees, vendors), which he, due to poor judgement and timing, largely caused.
Is it really any wonder that Trump refuses to release his tax returns, which will reveal all this (not to mention charitable contributions, or the lack thereof, while identifying where conflicts of interest yet reside).