Financial Focus: Is there a time bomb in Donald Trump’s tax returns

Is there a time bomb in Donald Trump’s tax returns

Since the first day the Donald announced that he was running for President, he said he would release his financial information.

When Mr. Trump says he’ll release his financial information, he does not mean his tax returns. He really means his financial statements.

WHAT’S THE DIFFERENCE?

Quite a bit!

In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership, a corporation or other business organization, such as an LLC or an LLP.Assetsliabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A balance sheet is often described as a “snapshot of a company’s financial condition.” Of the three basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business’ calendar year.

A standard company balance sheet has three parts: assets, liabilities, and ownership equity. The main categories of assets are usually listed first, and typically in order of liquidity. Assets are followed by the liabilities. The difference between the assets and the liabilities is known as equity or the net assets or the net worth or capital of the company and according to the accounting equation, net worth must equal assets minus liabilities.

Another way to look at the balance sheet equation is that total assets equals liabilities plus owner’s equity. Looking at the equation in this way shows how assets were financed: either by borrowing money (liability) or by using the owner’s money (owner’s or shareholders’ equity). Balance sheets are usually presented with assets in one section and liabilities and net worth in the other section with the two sections “balancing”.

Trump’s financial statement will tell us many things about Donald’s businesses but will not tell you what Donald Trump paid in personal income taxes.

Former Republican presidential nominee Mitt Romney recently suggested that there could be a time bomb in Mr. Trump’s tax returns.

“We have good reason to believe that there’s a bombshell in Donald Trump’s taxes,” Romney told Fox News.

“Either he’s not anywhere near as wealthy as he says he is, or he hasn’t been paying taxes we would expect him to pay,” Romney added.

Perhaps Romney fears a repeat of what befell him four years ago when he was the Republican standard bearer against President Barack Obama.

When it was disclosed on his income tax for 2010 that Mr Romney only paid 14% in Federal Income Taxes, many Republican operatives said, that was the moment when President Obama won re-election

After all, as Warren Buffet once said, “who wants to see a [billionaire] pay less in taxes than his $40,000 a year office assistant?”

Recently on CNN, Trump rejected Romney’s accusation out of hand, saying “there is no bombshell at all other than I pay a lot of tax and the government wastes the money.”

Donald Trump’s financial statements say he’s worth $8 billion. Based on current tax rates (before deductions), Trump’s gross Federal and State tax bite should be close to 60%. Only Donald’s tax return can tell us how much he actually PAID in taxes.

If he could, Trump would  prefer to write a big tax check to the Treasury tomorrow to make this issue go away.

But ironically, Mitt will keep up the pressure. And once the returns are made public, The Donald’s big presidential hopes will evaporate.

Anthony Rivieccio is the founder & the CEO of The Financial Advisors Group, celebrating their 20th year as a fee only financial planning firm specializing in solving one’s financial problems. Anthony, a recognized financial expert since 1986, has been featured by many national and local media including: Klipingers Personal Finance, The New York Post, News12 The Bronx, Bloomberg News Radio, Bronxnet Channel 67 TV, The Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Bronx News and The Bronx Chronicle.

For financial assistance or a FREE COPY of a 2015 Income Tax Guide, Anthony can be reached at (347) 575 5045 .

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