These two strategies may have helped Trump pay just $750 in federal taxes - CNBC

The billionaire president paid just $750 in federal income taxes in 2016, the year he won the presidency, and $750 in 2017, the Times found, in examining the president's tax documents.

This strategy allows business owners who are facing losses in a given year use the red ink to help offset income – and lower taxes -- in future years.

"Let's say you had $50 of losses in July and $100 of income in January of the following year," said Erica York, an economist with the Center for Federal Tax Policy at the Tax Foundation.

"You wouldn't be taxed in the first year due to those losses, but you'd be taxed on the $100 the next year," she said.  "The NOL allows the business to carry forward the $50 loss," she said.

Taxpayers were once limited to a 20-year carry forward period, and they could apply the loss up to two years preceding the year in which their business had lost money.

Business owners can now carry the loss forward indefinitely, but they are limited to 80% of taxable income.

However, the CARES Act, passed earlier this year, gave business owners a reprieve: Taxpayers can carry back losses from 2018, 2019 and 2020 for five years.

The coronavirus relief act also suspends the 80% rule on  taxable income limit on loss carry forwards for three years.

When it comes to losses from real estate, how much income you can offset depends on your level of involvement with the business.

You have to actively participate in real estate to maximize those losses.

"There is a whole set of laws designed to prevent people from using losses to offset other sources of income unless you make your living in the real estate world," said Tony Nitti, CPA and partner in RubinBrown's tax services group in Denver?