Hillary Clinton used the same exact method as Donald Trump to pay less tax, according to her own tax returns released by her presidential campaign.
Donald Trump reportedly avoided paying federal income taxes by reporting massive losses on his 1995 tax return, which the New York Times somehow obtained before Trump himself released it.
The Wall Street Journal describes the loophole that Trump used:
The tax treatment of losses, bound to become a subject of national debate, is a typically noncontroversial feature of the income-tax system. The government doesn’t pay net refunds when business owners lose money, but it lets taxpayers use those losses to smooth their tax payments as they make money. That reflects the fact that “the natural business cycle of a taxpayer may exceed 12 months,” according to a congressional report.
Typically, for federal returns, such net operating losses can be carried backward for two years to offset past income and then kept on a taxpayer’s books for 20 years, though Mr. Trump’s losses could only qualify for a 15-year carryforward under the law at the time.