The candidates Donald Trump has earmarked for top cabinet positions could defer paying tens of millions of dollars worth of personal taxes on investment gains thanks to federal rules that permit them to sell shares and other assets before taking their post without amassing huge taxes, analysis by the Wall Street Journalhas found.
The tax deferrals—designed to avoid potential conflicts of interest between politics and business—could even amount to hundreds of millions of dollars, according to one analyst WSJ interviewed.
WSJ reports that the estimate was derived from analysis of corporate filings and other disclosures pertaining to public companies recently tied to an appointee. But the paper’s analysis did not include other assets the President-elect’s nominees may have to divest—such as investment vehicles reportedly used by appointees like Treasury pick Steven Mnuchin and Commerce Secretary-to be Wilbur Ross—for which publicly available information is in short supply. And Fortune’s analysis of Rex Tillerson’s stock holdings suggests the Exxon executive may not qualify for the tax loophole on the bulk of his $245 million worth of Exxon shares.
For more on tax policy, watch Fortune’s video:
Robert Willens, a Columbia Business School tax professor, predicts that the nominees’ total tax savings will probably amount to hundreds of millions of dollars.
“It’s a great thing for the nominees, they get to diversify their portfolios on a tax-free basis,” Willens told the WSJ.
The federal rule has granted tax deferrals to various members of past administrations—notably 74th Secretary of the Treasury Henry Paulson, who owned around $700 million’s worth of Goldman Sachs (GSJ) shares—but Trump’s executive-stacked cabinet is especially well-placed to benefit.
Both Trump and Mike Pence, as President-elect and Vice President-elect, are exempt from the conflict-of-interest rules and so will not be required to divest their holdings.