What a contrast over the past
153 years: Wow ...
[click image for larger view]
[click image for larger view]
President-elect Donald Trump
is stacking his administration with members of the rich business elite, many of
whom will likely be required to sell off some of their assets to avoid
conflicts of interest.
But
a provision in the tax code could give Trump's Cabinet nominees a hefty
financial break on anything they are forced to divest.
Any
person who is compelled by federal law to get rid of problematic holdings can
take advantage of the rule, which is outlined under section 1043 of the Internal Revenue Code (from Cornell Law).
It
allows those people to defer paying capital gains tax on any sale as long as
they reinvest their money in certain types of investments permitted by the
government, like U.S. Treasuries or highly diversified mutual funds.
That
could be a huge perk for people like Commerce secretary nominee Wilbur
Ross, a billionaire investor, and Treasury secretary pick Steven Mnuchin, a
former Goldman Sachs partner who until last week sat on the board of a
multi-billion-dollar financial holding company. While the full extent of their
holdings isn't yet known, they could be required to divest anything tied to the
industries they will be working closely with or regulating.
The
law doesn't necessarily mean government executives who use it avoid paying
taxes forever (according to Kenneth
Gross, a partner at the law firm Skadden, Arps, Slate, Meagher & Flom who
has provided legal assistance to several presidential campaigns).
If
a Cabinet appointment sells the government-approved investment after leaving
office, for example, he or she would pay the gain and he continued: “You pay
the capital gains rate that's applicable at the time that you sell. You're not
avoiding tax, you're just saying: I don't
have to pay it now.”
So,
this part of the tax law essentially is an incentive for nominees who leave
lucrative private sector jobs for public service – a free way to diversify
their holdings. Even if an executive wants to pull their money out of the
government-approved fund after leaving office, the initial tax deferral can
carry a financial benefit, since the longer the taxes are put off, the larger
the balance that remains invested and the faster the money can compound.
Trump
always said he would get the “best – the very best – the really very best” for the
jobs and now we are about to see how he not only preserves, protects, and defends
his oath of office, but preserves, protects, and defends his ultra-rich pals in
office.
“Make
America Great Again” – yeah, right. More like how about establish a new dynasty
in town – that does have a certain ring to it, um?
Plus, these stories are related to all this in various ways:
As always thanks for stopping by … we are in for very tough and unusual times for sure. Hang on tight…!!!
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