In 1993 Congress restored those breaks. At the same time, it carved out another advantage for the real estate industry. For most businesses, canceled or forgiven debts had to be recognized as income. Real estate investors for the most part got a pass, though they had to relinquish some future deductions. Mr. Trump has benefited from those rules, such as when his lenders canceled about $270 million of debt on his Chicago skyscraper, his tax records show.
Then Mr. Trump ran for president. On the campaign trail, he acknowledged that he had been a big winner from the tax code’s favoritism toward the real estate industry. He said his expertise on the subject would help him close loopholes and make the tax code fairer.
“The unfairness of the tax laws is unbelievable,” Mr. Trump said in 2016. “It’s something I’ve been talking about for a long time, despite, frankly, being a big beneficiary of the laws. But I’m working for you now. I’m not working for Trump.”
But Republicans’ 2017 tax overhaul, which remains Mr. Trump’s signature legislative achievement, expanded and enhanced several lucrative tax breaks for real estate developers. For example, while the law barred people and companies from avoiding capital-gains taxes by selling one property and buying another, one industry was exempted: real estate.
The law was a boon to people, like Mr. Trump, who owned golf courses. It permitted real estate investors to immediately write off the full cost of various expenses, including improvements to golf courses.
In recent years Mr. Trump has also taken advantage of a tax credit that covered 20 percent of developers’ costs of rehabilitating historical structures, which is meant to encourage the preservation of old buildings.
Mr. Trump has said that he spent $200 million transforming the Old Post Office Building in Washington, a designated landmark, into a luxury hotel. That could translate into a tax credit of as much as $40 million, which Mr. Trump could use to offset his taxes for up to 20 years. (The caveat is that such tax credits reduce a developer’s ability to take other tax deductions in the future.)