By far, the oddest thing about Donald Trump’s 1995 tax returns, a portion of which was published by The New York Times on Saturday, is not the massive $916 million loss—some 9,385 times as large as what was taken by the average filer who claimed a similar loss—but this: 1995 was actually a very good year for Trump, perhaps one of the best of his career.

Trump’s Atlantic City casino empire went public in a near-$300 million offering in June 1995. The stock soared, rising from $14 to $21 by the end of 1995, creating a paper gain for Trump of more than $69 million. On top of that, Trump’s casino empire performed well. Revenue was up 13% in 1995. And its losses, excluding a one-time expense, had shrunk to just $2.3 million, less than a tenth of the $35 million Trump’s Atlantic City properties had produced in red ink just three years prior.

And yet, 1995 is also the year Trump told tax authorities that he lost nearly $1 billion.

It doesn’t seem to add up. Just one example of where Trump’s tax returns seem to conflict with reality: the Republican presidential candidate told the IRS and New York state tax officials that he collected a mere $6,108 in “wages, salaries, tips, etc.” in 1995. Yet, according to financial reports filed with the Securities and Exchange Commission, that same year Trump received $583,333 in compensation from the then-named Trump Hotels & Casino Resorts, the company Trump had taken public in the middle of that year. The figure comes from a proxy statement that the company filed in early 1996. The payment is clearly listed as salary for 1995, and it appears to have been paid directly from the company to Trump, and not through one of the corporate entities he controls.

Compensation table in Trump Hotels & Casino Resorts 1996 proxy statement.


The Trump campaign did not return a request for comment from Fortune as to why the salary figure Trump told the IRS that year is significantly smaller than the amount Trump Hotels said in its financial filing that Trump was paid.

It’s possible that while Trump earned that compensation for 1995, he was not actually paid it by the company until 1996 or later. Some executives defer their compensation in order to delay paying taxes. The table in the proxy statement says that the compensation list is what was “paid to or accrued” by the named executive that year. And that if there is a difference, the income would be reported in the year that the compensation was accrued. But salaries, unlike, say, bonuses, are typically not paid in lump sums.

What’s more, that’s not all Trump was paid directly from his casinos that year. Trump also was reimbursed by Trump Hotels for $733,000 in expenses in 1995. And, unlike the salary, the company filings specify that Trump’s expenses were paid monthly.

Those payments, unlike direct salary, don’t have to be reported on your personal tax forms as wages, as long as they qualified as legitimate business expenses, and remained under the IRS’s per diem cap rules. But given the size of Trump’s expense reimbursement, it seems likely that at least some of the nearly three quarters of a million dollars that Trump was reimbursed by his company for expenses should have been included in wages.

And that’s not it. Along with the direct salary Trump collected from his casino company, Trump had a number of “service agreements” that required the casinos to pay Trump-controlled businesses annual fees for licensing, marketing, and management. For example, in 1995, according to Trump Hotels’ proxy statement, the company paid Trump Plaza Management, a separate company fully owned by the real estate developer, just over $1.3 million for consulting services. The financial statements say those fees were paid in “equal monthly installments.”

In addition, Trump Hotels paid another entity “beneficially owned” by Trump $950,000 to rent the land on the Atlantic City boardwalk where the Trump Plaza was located. Trump remained the owner of the land for a time after selling the casino to his publicly traded company. The company also paid $57,500 to rent office space in the Trump Tower in New York City that year. That rent was paid monthly.

In all, Trump, through his corporate entities, collected just over $4.8 million in 1995 from his casino operations. That seems understated on his tax returns as well. Trump’s New York tax return, as well as the one he sent the IRS, did list $3.4 million in business income in 1995, which is after expenses. But Trump’s casinos were just a portion of his overall Trump Organization, which also included the Trump Tower, a Trump building on Wall Street, a licensing deal for a building at Columbus Circle in New York, Mar-a-Lago, and other properties and licensing deals.

Not done yet. In 1995, Trump Hotels bought what was then Trump Regency, a hotel that Trump had previously owned himself but lost a few years earlier to the mortgage holder Chemical Bank. As part of the deal, Chemical agreed to cancel $35.9 million in debt that Trump still owned on the property.

Debt relief is supposed to be reported as taxable income, though as my colleague Shawn Tully wrote last month, there are ways to get around it. But by 1995, with a new public company, Trump should have been solidly solvent, and therefore responsible for taxes on any debt forgiveness. Yet, Trump doesn’t appear to have paid taxes on that debt relief either.

Shortly after The New York Times published Trump’s tax returns this weekend, John Hempton, a hedge fund manager in Australia—who was early in pointing out the problems at Valeant, and who has been raising concerns about Alibaba recently—wrote on this blog that even after the Times analysis, something still didn’t smell right about Trump’s tax returns.

The losses, Hempton argued, had to be paper losses, likely on debt relief, because even Trump likely didn’t have nearly $1 billion in hard, cold cash to lose. And a debt write-down would have forced Trump to pay income taxes, which he clearly didn’t do. So Hempton’s conclusion was that either the Times had the story wrong, and Trump wasn’t able to avoid taxes, or Trump used some other tax avoidance scheme that was still hiding in his tax returns.

Trump hasn’t denied the Times’ conclusion that he could have avoided taxes for nearly two decades, just saying he was smart to pay as little as possible. So that likely means the Times story is correct. But it also means we haven’t gotten to the bottom of Trump’s tax tale yet, either.