Trump's Ultra-Wealthy Picks Face a Huge Tax Hit to Join His Cabinet — But Can Avoid It Thanks to This Little Known Provision

Tax attorney Bob Rizzi was quoted in a Fortune article explaining the certificate of divestiture (CD) as a tax mitigation tool for wealthy executives entering government service. This mechanism aims to encourage talented individuals to accept offers for executive positions by allowing them to defer capital gains taxes on forced asset sales, providing an opportunity to diversify their investment portfolios without immediate tax implications. However, Mr. Rizzi warned, there are inherent risks involved, as a new investment like a mutual fund might underperform compared to the original asset, illustrating the potential tradeoff of utilizing the CD provision.

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