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2020-10-28 — nytimes.com

Mr. Trump's federal tax returns, as well as loan documents filed in Cook County, Ill., provide clues to what happened: Mr. Trump was let off the hook for about $270 million. It was the type of generous financial break that few American companies or individuals could ever expect to receive, especially without filing for bankruptcy protection.

Before Mr. Trump defaulted, Fortress had expected to receive more than $300 million from his company: the $130 million in principal and roughly $185 million in anticipated interest and fees.

But Fortress and its partners -- including Mr. Mnuchin's Dune Capital, as well as Cerberus Capital Management, whose co-chief executive, Stephen A. Feinberg, would become a major Trump fund-raiser and go on to lead a White House advisory panel -- quickly realized they wouldn't ever collect that full amount.

Ultimately, Fortress settled for $48 million, which Mr. Trump wired to the firm in March 2012, according to people familiar with the deal.

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The I.R.S. requires taxpayers to treat forgiven debts as income when calculating what they owe in federal taxes. The New York attorney general, Letitia James, is investigating whether Mr. Trump followed the law.

The tax records reviewed by The Times show that while Mr. Trump accounted for $287 million of income from his canceled debts, he managed to avoid paying income taxes on nearly all of it.

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For the other $141 million, Mr. Trump took advantage of a law, passed after the 2008 financial crisis, that allowed income from canceled debts to be deferred for five years and then spread out over the next five. Each year from 2014 through 2018, Mr. Trump declared $28.2 million of canceled-debt income.

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