The Republican tax plan has preserved a loophole that enables golf course owners to write off portions of their income on the promise of land conservation. While the tax deduction was designed for farmers, it could save millions of dollars for golf course owners, including President Donald Trump.
On Nov. 9, an analysis of the House Republican tax plan found that the proposal did not eliminate a loophole that allows for golf course owners to deduct land easement from their commercial properties. If the owner decides to restrict a portion of their golf course for conservation, known as a land easement, instead of selling the land for development, the owner can deduct the amount that the difference from their income taxes, Bloomberg reports.
Tax lawyer Steve Small, who helped write the regulations for conservation easements while working for the IRS from 1978 to 1982, said that the tax deductions were meant for farmers.
"For what I see and hear about golf easements, 98 percent of the time it's not what the tax code was intended to provide a benefit for," Small said.
Former President Barack Obama made several attempts to repeal the golf course loophole. In 2014, the Obama administration asserted in its budget proposal that allowing golf course owners to write off land easements would cost the government over $600 million in revenue over 10 years.
"The Obama administration wanted to cut the deduction because it viewed the policy's costs in total as far exceeding the conservation benefits," said tax lawyer Ruth Madrigal.
Madrigal explained that the loophole could be abused by real estate developers by building a golf course around their properties and claiming a land easement to write off their income.
The tax deduction has come under criticism from some Senate Republicans. On April 5, GOP Sen. Jeff Flake of Arizona blasted the golf course loophole in a congressional report titled "Tax Rackets."
The tax loophole could potentially be lucrative for Trump. In March 2016, an investigative journalism article by The Wall Street Journal found that Trump had wrote off $39 million from his 2005 federal income taxes through a land easement for his Trump National Golf Club in New Jersey alone, the Washington Examiner reports.
Trump currently owns 17 golf courses around the world, according to CNN Money.
On Nov. 7, Trump spoke with several Senate Democrats over the phone about the GOP tax plan while he was traveling in South Korea. The president reportedly asserted that the proposed changes to the tax code would hurt him financially.
Sources present during the meeting recalled that Trump told them that he would be a "big loser" if the tax plan was signed into law.
That evening, Trump singled out his New Jersey golf course while speaking before the South Korean National Assembly.
"Korea golfers are some of the best on Earth," Trump said. "And you know what I'm going to say -- the women's U.S. Open was held this year at Trump National Golf Club in Bedminster, New Jersey."