A major way that losses are generated in real estate ventures is through depreciation, which is supposed to reflect the way that assets lose value over time. But a well-maintained building typically gains value.

The rationale for eliminating the alternative minimum tax is that such a backup system should not be necessary if the tax code is fundamentally fair and eliminates all the loopholes that made it possible for high-income taxpayers to escape taxation in the first place.

From what little is known of Mr. Trump's tax returns, he used losses to offset virtually all of his taxable income for years by generating something called net operating loss carry-overs.

James B. Stewart Quotes