A Big Tax Loophole For Trump’s Millionaire Cabinet
By Morris Pearl for Other Words. When Trump’s nominees are sworn in, they’ll need to unload any assets that pose a conflict of interest with their new positions. But due to an obscure tax provision that applies only to executive branch nominees, this “burden” may actually end up allowing them to avoid paying millions in taxes.
In the late 1980s, Congress passed a law allowing nominees to indefinitely defer paying taxes on all capital gains. They still have to sell off their conflicting assets, but as long as they reinvest the money from those sales in low-risk assets like mutual funds or government bonds, they don’t have to immediately pay taxes on their profits.
This means that many will get away without paying a cent. They can diversify their assets, reduce the level of risk in their portfolio, and live off the dividends of their newly acquired bonds or mutual funds for the rest of their lives.