Mark Cuban weighs in

Another perspective on Trump's $900 million loss, from Mark Cuban:

"Cuban said voters shouldn’t rush to the conclusion that Trump’s loss is simply the result of failed casinos.

“'If Donald is taking tax shortcuts, maybe he bought an insurance company instead of doing something in real estate,' Cuban speculated, 'and he took a huge tax write-off to offset income.'

“'We’ve all heard about tax scams and tax shelters, right? What we don’t know is whether or not this is a tax shelter,' he added. 'This could be something where he got involved in currencies or insurance tax shelters, there a thousand and one tax shelters that were very aggressive and were being offered at the time.'

"Cuban recalled that in the '90s, 'there were accounting companies, accounting agencies, and tax shelter companies coming to me, offering me ways to offset my income so I didn’t have to pay taxes.'

“'We don’t know. And that’s the inherent problem,' he continued. 'There’s no transparency, and he is so ashamed of what he’s done, he’s not willing to speak up and explain to us what happened.'”

Cuban is right that these sorts of things were around in the 1990s, and were generally on offer to people such as himself and Trump. He also is right that the NYT reveal doesn't in any way rule out this being the cause.  And he's right that a shelter of those kinds certainly could have been used to create a $900 million loss.  For that matter, they could have been used to create a $900 billion loss. One of their core features was to use circular cash flows to create fake losses.  E.g., suppose I purport to pay you $X, and you purport to pay me $X, and I claim that my payment to you is currently deductible, while yours to me is not currently includable.  Then, since it's just a sham swap of offsetting notional amounts, we can make X as big as we like.

The reason I'd continue to assume that this is less likely than the real estate scenario is that the IRS did eventually get around to being fairly assertive in countering these scams, so it might not have worked. Plus, they were generally used to offset positive taxable income, not to set up huge NOLs that would be used in the future, probably for reasons centered on the hope that one wouldn't be audited (which becomes a bit tricky when one is claiming a $900 million loss).

Still, it's a possibility worth keeping in mind.