Jared Kushner Avoided Paying Income Tax For Years, Reports Show — But It Was Totally Legal
Less than two weeks after The New York Times broke the news that Donald Trump had been involved in questionable tax schemes, the paper reported that his son-in-law Jared Kushner had engaged in legal tax avoidance. According to the Times, Kushner seems to have paid almost no federal income taxes for several years, despite having a personal net worth of roughly $324 million.
Bustle has reached out to the White House for comment. Kushner, who is also Trump's senior adviser, managed to avoid taxes by exploiting a tax loophole, ThinkProgress explained. Every year, Kushner and his family company reported on-paper losses on the real estate they were purchasing. But Kushner's company wasn't really losing money; instead, it relied on a tax benefit called depreciation, which enables real estate investors to subtract part of the cost of their buildings from their taxable income.
Current tax law assumes that buildings will undergo standard wear and tear that will lead to a depreciation in their values, and the aforementioned tax benefit exists to protect investors in light of that. But as the Times pointed out, buildings actually tend to gain value, meaning that Kushner has been making significant profits by deducting nonexistent losses from his taxes.
In 2015, Kushner made $1.7 million in salary and investment gains. However, he reported a loss of $8.3 million caused by the "significant depreciation" of his company's real estate, thereby enabling him to subtract that amount from the taxes he would have owed. In the end, he actually ended up getting a $4,000 tax refund.
After reviewing "confidential financial documents" pertaining to Kushner's business dealings and finances between 2009 and 2016, the Times reported that the documents did not indicate that Kushner or his company had done something illegal. A spokesman for Kushner's lawyer also told the Times that Kushner had "paid all taxes due" — which is technically true under the law, given that he reported depreciation on his buildings.
The spokesman, Peter Mirijanian, went on to claim that the Times had obtained the documents "in violation of the law and standard business confidentiality agreements," though as TIME pointed out, Mirijanian did not offer any proof of this. Bustle has reached out to Mirijanian for comment.
The news that Kushner had engaged in tax avoidance surfaced right as Trump himself is under scrutiny for alleged tax fraud. Earlier this month, a Times investigation alleged that Trump not only reported millions of dollars in losses — as Kushner did — but also that he and his siblings avoided estate and gift taxes by undervaluing their parents' gifts and holdings.
According to ThinkProgress, the tax bill Republicans passed last year made it even easier for companies like Kushner's and Trump's to benefit from theoretical depreciation by increasing the deductions real estate investors could claim on their taxes. That tax bill also increased corporate profits, while the wage gains Trump promised for workers have not come to pass.
The news of Kushner's tax avoidance isn't the first time Kushner's company has come under controversy in recent months. In August, the company was fined $210,000 for lying about the number of rent-regulated tenants in its buildings, Bloomberg reported. Kushner also faced increased scrutiny earlier this year when The Washington Post reported that he and his wife had made $82 million from their external businesses and investments while working as senior White House advisers.