An extra day's reflection helps me to see more clearly what are the three main takeaways from the NYT's Trump tax story. Nothing new here, just a matter of suggesting the right emphasis.
1) Business - Not many people could lose $900 million like Trump did. But we've already seen his management skills at work in the presidential campaign. Feckless, erratic, and undisciplined are not the qualities one would want in either a business person or a president, and the fruits here are plain for all to see.
2) Tax - Here I think the big story is that, while it's likely that someone lost $900 million, it probably wasn't Trump. The question of what happened to debts that he presumably escaped in bankruptcy looms over the loss claim here. Now it's possible that debt cancellation later on, while not creating taxable income because the discharge occurred in bankruptcy or when he was insolvent, reduced the NOLs. This is consistent with the known facts, which solely relate to 1995, but we can pretty much rule it out because then the Trump campaign could have pointed out that he didn't spend all the years since using NOLs for someone else's losses against his own income.
So it's plausible that he avoided reduction of the NOLs, by either a more straightforward method or a more esoteric one. The straightforward method would involve electing, under Internal Revenue Code section 108(b)(5), to reduce the basis of depreciable property before taking a hit to his NOLs. But the problem with this is that it would in effect reduce the NOLs, albeit slowly, via the loss of depreciation deductions over time. Even for real property, which gets depreciated slowly, this could add up after a while. So the more advanced method, involving dubious tax planning, would be to try to park the debt somewhere where it wasn't formally forgiven but in actual economic effect was, thereby getting to continue deducting other people's losses.
Let's try to put this more saliently. It's all very well (to tax experts if not the general public) to pay no tax for years because one's loss years plus one's gain years didn't actually add up to a net gain. But it's not so innocuous if, in effect, he was deducting other people's losses against his income.
3) Policymaking - If that's what he did, does that, as the Trump campaign would have it. show that he's a "genius" and knows the Code better than anyone, hence can fix it?
Anyone who actually thinks that Trump knows anything about the federal income tax, please raise your hand. This is not a man who can read more than two sentences in a row, or who appears to know much of anything about anything substantive. The last time I checked, the best tax experts get paid a lot of money because they actually can read, think, and analyze things. Whatever his skill set, it doesn't appear to include any of that. But also, as many have pointed out, his latest tax plan, possibly the most detailed policy proposal that he has issued in any area (although he is trying to have it both ways on whether all business would get a 15% rate), does nothing whatsoever to eliminate any of the games that he (presumably through his advisors) played. Instead, all it does is throw further giant tax cuts at people like himself.