The material obtained by The Times does not identify the business or businesses that generated those losses. But the losses were a kind that can be claimed only when partners give up their interest in a business. And in 2009, Mr. Trump parted ways with a giant money loser: his long-failing Atlantic City casinos.
After Mr. Trump’s bondholders rebuffed his offer to buy them out, and with a third round of bankruptcy only a week away, Mr. Trump announced in February 2009 that he was quitting the board of directors.
“If I’m not going to run it, I don’t want to be involved in it,” he told The Associated Press. “I’m one of the largest developers in the world. I have a lot of cash and plenty of places I can go.”
The same day, he notified the Securities and Exchange Commission that he had “determined that his partnership interests are worthless and lack potential to regain value” and was “hereby abandoning” his stake.
The language was crucial. Mr. Trump was using the precise wording of I.R.S. rules governing the most beneficial, and perhaps aggressive, method for business owners to avoid taxes when separating from a business.
A partner who walks away from a business with nothing — what tax laws refer to as abandonment — can suddenly declare all the losses on the business that could not be used in prior years. But there are a few catches, including this: Abandonment is essentially an all-or-nothing proposition. If the I.R.S. learns that the owner received anything of value, the allowable losses are reduced to just $3,000 a year.
And Mr. Trump does appear to have received something. When the casino bankruptcy concluded, he got 5 percent of the stock in the new company. The materials reviewed by The Times do not make clear whether Mr. Trump’s refund application reflected his public declaration of abandonment. If it did, that 5 percent could place his entire refund in question.