Did Trumpy Joe underpay his taxes?

My journey down the Joe Kent financial rabbit hole has led me to poke around in his tax returns for the last three years. They don't shed much light on what the guy actually does for a living, which to the voters of his Congressional district should probably be the biggest concern, but they do contain one interesting tidbit. So here it is. (All of the following is according to the tax returns his campaign has released, here.)

In April of 2021, Kent sold a home he owned in Crownsville, Maryland. He used to live there before he moved to Oregon. For tax purposes, his profit on the sale was around $55,000. Because it was his principal residence at one time, he excluded the gain from his income.

Now, you're allowed to do that, but there is an exception. If you rented the place out and took depreciation deductions at any point, that much of your gain is taxable. (For you tax geeks out there, the relevant Treasury Regulation is section 1.121-1(d).) According to the tax documents Kent has released, he took between $22,968 and $26,211 of depreciaton on the home over the years, including $11,119 that he deducted against rental income in 2020.

Therefore, unless I'm missing something (which has been known to happen), that $20-something-thousand should have been reported as income on his federal tax return for 2021, and as far as I can see, it wasn't. And I would think it should have been shown on his Maryland tax return as well, although I am far from an expert on that state's tax system.

On another front, Kent also took advantage of an Oregon tax loophole, one that ought to be closed. He took a deduction on his 2020 Oregon tax return for $5,378 of Virginia state income tax paid, but he filed for, and presumably got, a refund of all of that Virginia tax in 2021. Now, you would think that would mean that he must report that amount as income on his 2021 Oregon return, which he filed just to get his "kicker" refund. But the form instructions in Oregon require you to report the refund only if it is income on your federal return, which it wasn't for Kent because he took the federal standard deduction in 2020.

Anyway, somebody ought to ask him about the depreciation "recapture" on the house. I think something may be amiss there.


  1. Reminds me of the question. “ when did you stop beating your wife”

  2. If you review his tax returns, it also appears that Joe Kent didn't report $40,000 he received as a book advance from HarperCollins in Dec., 2019. (See his financial disclosure filed with the House of Representatives in April, 2022.)

    1. There is a $50,000 royalty on the 2020 return.

    2. The $50,000 dollars in royalties reported on Kent's 2020 income tax return is another example of his errant bookkeeping because his mandatory candidate disclosure to the House of Representatives says he took a $40,000 advance from HarperCollins in December, 2019. Second, is a book advance really a royalty? Sure, a book advance is an advance on royalties but, if the book hasn't been published and there are no sales, is it still possible to have a royalty on something that doesn't exist yet and hasn't been sold? The internet net tells me (sorry, Prof. Jack!) that a book advance is self-employment income for the prospective author. So what's the difference between a royalty payment and self-employment income? Not much probably, except maybe the would-be author wouldn't pay Social Security and Medicare taxes through self-employment taxes on royalties. Did Joe Kent mislabel his book advance income as royalties to get around some of his tax obligation in 2020?

    3. If it were self-employment income, it would be 20% deductible under Section 199A, which might very well be better for Joe than the position he reported. The line between a royalty and self-employment income is an interesting one, but we'd need more facts than we have to know for sure which way was correct. The dollar amount and timing discrepancies regarding the book money are more troubling. And the house issue is more concerning still.


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