Over the past decade, Jared Kushner’s family company has spent billions of dollars buying real estate. His personal stock investments have soared. His net worth has quintupled to almost US$324-million.
And yet, for several years running, Mr. Kushner — U.S. President Donald Trump’s son-in-law and a senior White House adviser — appears to have paid almost no federal income taxes, according to confidential financial documents reviewed by The New York Times.
His low tax bills are the result of a common tax-minimizing manoeuvre that, year after year, generated millions of dollars in losses for Mr. Kushner, according to the documents. But the losses were only on paper — Mr. Kushner and his company did not appear to actually lose any money. The losses were driven by depreciation, a tax benefit that lets real estate investors deduct a portion of the cost of their buildings from their taxable income every year.
In 2015, for example, Mr. Kushner took home US$1.7-million in salary and investment gains. But those earnings were swamped by US$8.3-million of losses, largely because of “significant depreciation” Mr. Kushner and his company took on their real estate, according to the documents.
In theory, the depreciation provision is supposed to shield real estate developers from having their investments whittled away by wear and tear on their buildings. In practice, though, the allowance often represents a lucrative giveaway to developers like Mr. Trump and Mr. Kushner. The law assumes that buildings’ values decline every year when, in reality, they often gain value.
The documents were created with Mr. Kushner’s co-operation as part of a review of his finances by an institution that was considering lending him money. The documents, mostly created last year, were shared with the New York Times by a person who has had financial dealings with Mr. Kushner and his family.
Thirteen tax accountants and lawyers, including J. Richard Harvey Jr., a tax official in the Reagan, George W. Bush and Obama administrations, reviewed the documents for the Times. Mr. Harvey said Mr. Kushner appeared to have paid little or no federal income taxes during at least five of the past eight years. The other experts agreed and said Mr. Kushner probably didn’t pay much in the three other years, either.
Nothing in the documents suggests Mr. Kushner or his company broke the law.
Peter Mirijanian, a spokesman for Mr. Kushner’s lawyer, Abbe Lowell, said he would not respond to assumptions derived from documents that provide an incomplete picture and were “obtained in violation of the law and standard business confidentiality agreements. However, always following the advice of numerous attorneys and accountants, Mr. Kushner properly filed and paid all taxes due under the law and regulations.”
The summaries of Mr. Kushner’s tax returns reviewed by the Times don’t explicitly state how much he paid. Instead, the documents include disclosures by his accountants that estimate how much tax he owed for the year just ended — called “income taxes payable” — and how much he paid during the year in anticipation of taxes he would owe, called “prepaid taxes.” For most of the years covered, both were listed as zero.