this article does a good job of explaining what was happening around that time. big debt, airline failures, plus the usual high depreciation costs in real estate led to the huge loss.

 

http://www.wsj.com/articles/donald-trump...1475415294

 

"After borrowing more than $3 billion to build his business empire during the 1980s, much of it personally guaranteed, Mr. Trump faced a severe financial crunch starting in 1990. That was because casinos and an airline he owned at the time didn’t meet operating projections just as some of his debt was coming due. Meanwhile, a downturn in the New York City real-estate market and other factors made it hard for him to sell some assets, according to reports by New Jersey casino regulators at the time. 

 

During this period, he worked out several restructurings with creditors that bought him time, putting him on a monthly allowance for a period. He leaned on his Atlantic City casinos in New Jersey, dragging them through bankruptcy court and then borrowing against them to pay off loans elsewhere. He took out around $160 million from the casinos during this time to pay down other debt, a Wall Street Journal analysis showed.

 

<p style="font-size:16px;font-family:'Chronicle SSm', serif;color:rgb(51,51,51);">He finalized a deal with creditors in 1995 to wipe out the last of his personal debt.

<p style="font-size:16px;font-family:'Chronicle SSm', serif;color:rgb(51,51,51);">The tax treatment of losses, bound to become a subject of national debate, is a typically uncontroversial feature of the income-tax system. The government doesn’t pay net refunds when business owners lose money, but it lets taxpayers use those losses to smooth their tax payments as they make money. That reflects the fact that “the natural business cycle of a taxpayer may exceed 12 months,” according to a congressional report."

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