Report: Trump used dubious tax avoidance scheme in 1990s

The newspaper said the maneuver also may explain how Trump posted a one-year loss of more than $900 million a few years later, enabling him to avoid paying federal income taxes for perhaps 18 years.

Canceled debt generally is treated as taxable income, meaning Trump would have owed the Internal Revenue Service significant money on debt that his creditors forgave.

The Times said it obtained documents from a quarter-century ago showing Trump essentially traded the debt relief for nearly worthless "partnership equity" to avoid any tax liability.