Millionaire US Commerce Secretary Wilbur Ross is selling stock after ethics concerns … and a big tax bill could follow
Wilbur Ross says he is selling all his vast stock holdings after news reports raised questions about the timing of some of his stock transactions
US Commerce Secretary Wilbur Ross’s decision to sell his remaining equity holdings could save him from future run-ins with the government’s top ethics watchdog. But it could also set him up with a sizeable tax bill.
Ross said last week he would get rid of his stocks after the Office of Government Ethics admonished him for failing to meet the deadline to sell some assets that posed potential conflicts of interest.
The New York businessman’s pledge means he’ll divest stakes in nine private-equity funds he still owns, which includes underlying stock holdings.
Since Ross’s actions are voluntary, those sales won’t be eligible for a capital-gains tax break that executive branch appointees can apply for if they’re required to sell assets to avoid a potential conflict, said Rebecca Glover, a spokeswoman for the Commerce Department.
Instead, Ross could have an immediate tax liability, though the exact amount is hard to calculate. It’ll be based on how much those investments have appreciated on top of the initial purchase price he paid, known as basis.
“There will likely be major tax consequences,” said Edward McCaffery, a tax law professor at the University of Southern California.