Thursday, October 08, 2020

Trump's $70,000 haircut deduction

Regarding Trump's $70,000 haircut deductions, many commentators have noted that it isn't inherently fraud to claim something is a deductible business expense, rather than a nondeductible personal one, even if the claim proves incorrect, if there were genuine (or at least arguable) business elements to it.

While that is correct as a general principle, it's not clear how much this would help Trump upon a fuller investigation. This New York Times article, following up on the initial big story, points out not only that the law here, including decided cases, is REALLY clear on haircuts' nondeductibility, but also that there is reason to suspect Trump may have deducted something for which he was reimbursed. That would potentially put us in clear fraud territory if the reimbursement was not included in income.

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