The first two pages of the recently released 2015 to 2020 tax returns of Donald Trump, provide some insight into how he invests. It appears that Mr. Trump has relatively very little of his wealth invested in publicly traded stocks. His income from qualified dividends has been between $14,000 and $20,000 for 2017 to 2020. Based on the average dividend rate for stocks, this would indicate a stock portfolio of around $1 million to $2 million. In 2015 and 2016 he had significantly higher qualified dividend income ($718,317 in 2015 and $292,068 in 2016), which might suggest that he had at least $50 million or more in stocks at the start of 2015 but sold most of these in 2015 and 2016. Alternatively, he may have received dividends from privately held stocks in 2015 and 2016, but not in the later years.
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His relatively meager dividend income can be contrasted with his interest income, which varied between $6.7 million and $11.3 million during those years. Without knowing more about the source of the interest income it is difficult to guess the amount of principal. It could be in the $100 million to $1 billion range.
Capital gains peaked at $36 million in 2015; most other years were between $7 million and $11 million. In 2015 the gains may be related to the sale of his stock portfolio, but it also might relate to the sale of a real estate investment.
Mr. Trump’s real estate investments showed combined annual losses of $7 million to $17 million. This is presumably due to depreciation and interest expense. Many real estate entrepreneurs have real estate losses on their tax returns but have positive cash flow from their real estate since depreciation is a noncash expense that is permitted as a deduction under the tax law.
The 2015 tax return shows what would appear to be a $77 million dollar loss carryforward from prior years, presumably from real estate activities. This loss has been used to offset income and has been fully utilized.