The rule that let Mr. Trump shelter almost $1 billion in income from taxation dates to 1918. It was enacted to prevent businesses from being penalized by the administrative convenience of calendar-year taxation: If a company loses $100,000 one year, and makes $100,000 the following year, the law allows the company to pay nothing in taxes, as it has only broken even.

There is nothing unusual about business losses appearing on a personal tax return. Most American businesses are organized as “pass-throughs,” rather than corporations, meaning their profits are passed through to their owners, and taxed as personal income. Losses are passed through, too.

“It’s good policy,” said Alan Cole, an economist at the conservative Tax Foundation. “This is just the astounding edge case that has everyone’s eyes bulging as they look at that number.”

But the rule also reflects an inequity in how income earned through labor is taxed compared with income earned through capital. Mere wage earners cannot avail themselves of the provision Mr. Trump and other business owners use to avoid taxes.

“As individuals, we generally don’t get this,” said David Herzig, a tax law professor at Valparaiso University School of Law in Indiana. “If you experience a loss in one year, you don’t get to carry it forward or carry it back.”

Ms. Batchelder said that it would be a boon to working families if they could carry over their deductions or spread out their taxable incomes over many years the way businesses do with their operating losses. “Virtually every taxpayer would be better off if they were able to pay tax on their average income rather than their income in a given year,” said Ms. Batchelder, who was deputy director of the White House National Economic Council under President Obama.

It remains unclear exactly how Mr. Trump lost such a huge sum. But the rough outline of his business decline is well established. By the early 1990s, Mr. Trump had amassed hundreds of millions of dollars in personal financial liability and had lost money on casinos, his Plaza Hotel property in Manhattan and his airline, though precisely how he reflected those losses on his taxes is not known.