Yes, Trump paid taxes in 2005, they just don't look much like a billionaire's taxes

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Jonathan Ernst/Reuters

Thanks to MSNBC's Rachel Maddow and investigative reporter David Cay Johnston of DCReport.org, America got to see two more pages of President Trump's tax return.

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And while the pages don't tell us much about where his money comes from, what we do know from looking at them is that - in 2005 at least - Trump wasn't making money like the billionaire people thought he was.

Back in 2005, Forbes put Trump's net worth at $2.6 billion and Trump was trying to convince people he was worth a lot more.
That same year a journalist - Tim O'Brien - reported that Trump's wealth was probably less than $250 million. The claim got O'Brien sued by Trump but the suit was dismissed, and O'Brien - then a reporter for the New York Times and now a boss at Bloomberg News - has spent the past year or so beating Trump up over his claims.

The tax return doesn't entirely settle the matter, because, unfortunately, we only got to see 2 pages of the document.

Trump's return shows he earned about $110 million off his investments - which includes a one-time, $32 million gain that came from selling off assets, while the rest comes from income earned off of rental real-estate and ownership of businesses and in the form of interest.

The second chunk - about $78 million - basically suggests what he's earnings from all his assets. It's a return of just 3% on $2.6 billion in assets, which isn't great, but it's not all Trump earned that year. Trump discloses another $42 million of "business income" but it's not clear what this is and some could've been coming off of his role as star and part-owner of The Apprentice.

Now, its true that anyone can have a lousy year as an investor. But remember again that we're talking about 2005. The pre-financial crisis real-estate bubble was still inflating, stocks were rising and interest rates were high. You could get 4% just from 10-year Treasury bonds back then, meaning you'd be netting $40 million just by parking $1 billion in the safest investment out there.

Then there's the matter of the $103 million loss. When it came to paying taxes, all that income we described above, got whittled down by this huge loss, leaving him with a
adjusted gross income (AGI) of just $48.5 million. Where it comes from isn't clear, but some tax experts speculated to CBS News that it is lingering from the huge write-down Trump took in a 1995 tax filing that was released by the New York Times during the campaign.

About $32.1 million of that is the one-time sale of assets taxed at a lower rate, which leaves another $16 million to be taxed at a regular rate. So that means, with all the losses folded in, Trump's claiming he earned $16 million in 2005.

The reason his tax bill is much higher is the Alternative Minimum Tax. This is a tax on people or entities that take a lot of deductions. In fact, the way the law was written in the 1960s sounds like it had a businessman like Donald Trump in mind:

Individuals or corporations which received the bulk of their income from such sources as capital gains or were in a position to benefit from net lease arrangements, from accelerated depreciation on real estate, from percentage depletion, or from other tax-preferred activities tended to pay relatively low rates of tax.

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This is the government's way of saying - we know you lost money doing business, but you still have to pay on whatever it is you made. Without the AMT, Trump was gonna pay taxes of only about $5 million.

That's not billionaire money.

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