Newsom tax returns show $1.7 million adjusted income, business and real estate writedowns and huge tax payments

Gov. Gavin Newsom and his wife, Jennifer Siebel Newsom, reported making $1.7 million in 2019, his first year in the governor’s office, earning income from his restaurants and wine businesses, from turning their Marin County home into a rental and from an advance for a children’s book the governor is writing.

Their adjusted gross income of $1,692,167 was higher than what the Newsoms have reported on average over the past decade and an increase of about half a million dollars, or more than 40%, over 2018, when Newsom was elected governor.

The Newsoms paid $518,402 in federal taxes and $194,192 in California taxes, or 42.1% of their adjusted gross income, according to tax returns provided by the Newsom campaign.

The campaign gave reporters an hour Monday to review the couple’s 2019 returns, which were filed in October after they received an extension. The documents, which totaled several hundred pages, were not published publicly.

Unlike his predecessor, fellow Democratic Gov. Jerry Brown, Newsom has released his tax returns annually since taking office. He also signed a law in 2019 that would have required presidential and gubernatorial candidates to share their last five years of returns to be eligible for primary elections in the state, though the requirement for presidential hopefuls was ultimately thrown out in court.

The Newsoms’ tax returns revealed that, after moving to a $3.7 million, six-bedroom house in the Sacramento suburb of Fair Oaks, the couple did not sell their home in the exclusive Marin County community of Kentfield, which they placed on the market for nearly $6 million in February 2019.

Instead, they turned it into a rental property, apparently starting in June, earning $140,000 from tenants in 2019, or $20,000 a month in rent. Nevertheless, the Newsoms wrote off the venture as a $247,721 loss, listing among other expenses $68,915 in mortgage payments and $277,271 worth of depreciation on the building, furniture and fixtures, equipment and landscape improvements.

Gross income from all sources totaled more than $2.2 million in 2019, with about $1.5 million coming from the wine and entertainment empire that Newsom placed in a blind trust before taking office.

With the financial backing of oil heir and family friend Gordon Getty, Newsom opened a wine store in San Francisco in 1992, and grew it into a multimillion-dollar line of wineries, restaurants, hotels and retail stores under the PlumpJack label. Because of the blind trust, the business earnings were not labeled, though one company generated $876,529 for the Newsoms.

The couple took home $379,720 in compensation in 2019, including Newsom’s $175,827 salary as governor.

Siebel Newsom, a documentary filmmaker and advocate for gender equity, received $151,875 from the Representation Project, the nonprofit she founded to shift how women and girls are portrayed in the media, and $50,850 from her Girls Club Entertainment production company, as well as another $1,168 in royalties from her films and past acting roles.

The governor also received a $125,000 advance for the children’s book he is planning to write about dyslexia, the learning disability that he has struggled with. It was announced in August 2019 and has not been published yet. Minus $78,333 for a ghostwriter and $7,000 in commissions and fees, Newsom pocketed $39,667 from the advance.

The Newsoms deducted more than $382,000 in qualified business income and personal expenses, including $15,840 for their mortgage, and claimed $193,040 in credits, including $24,921 for a child tax credit. They have four young children, and paid $288,148 in wages and employment taxes in 2019 for household help. The campaign did not specify how many staff they employed.

Like many wealthy taxpayers in states with high tax rates, the couple hit the new $10,000 federal cap on state and local tax deductions, part of the Trump tax overhaul that Newsom and several other governors asked President Biden last month to overturn.

The Newsoms donated $100,871 to charity in 2019, nearly 6% of their adjusted gross income. That was about four times more than their contributions the prior year. The campaign did not provide a breakdown of the gifts.

They continue to hold onto silver and platinum bars, reporting $1,209 for storage costs, though no income. In past years, the couple made hundreds of thousands of dollars trading metal, for which Newsom was mocked during one gubernatorial debate in 2018.

https://www.sfchronicle.com/politics/article/Newsom-tax-returns-show-1-7-million-adjusted-16184020.php