The video features a discussion between Brittany Lewis, a Forbes breaking news reporter, and Kyle Kahn Mullens, a Forbes money and politics reporter, focusing on the financial implications surrounding Donald Trump's involvement with Truth Social. Kyle emphasizes that although Trump publicly declares he is not selling his stock, there is a financially advantageous path laid out that could benefit him if he decides to do so. Trump possesses a significant amount of stock in Truth Social, where it's noted that its market valuation is high despite recent losses.

The conversation explores the potential financial advantage Trump could gain through a certificate of divestiture (CD), allowing him to unload shares without paying immediate capital gains taxes. The process involves selling off his stocks due to a conflict of interest and reinvesting in non-conflicted holdings, ultimately saving him a substantial amount in taxes while avoiding potential ethical dilemmas. Kyle provides examples from the past to clarify the process where figures like Hank Paulson benefited by selling off stocks tax-free.

Main takeaways from the video:

Please remember to turn on the CC button to view the subtitles.

Key Vocabularies and Common Phrases:

1. volatility [vɑːləˈtɪlɪti] - (noun) - The quality of being changeable and unpredictable, often referring to financial markets. - Synonyms: (instability, unpredictability, fluctuation)

You and I have talked about the volatility of Truth Social within the past months.

2. majority owner [məˈdʒɔːrəti ˈoʊnər] - (noun) - A person or entity that owns more than half of a company's shares. - Synonyms: (chief proprietor, principal shareholder, main owner)

It's over half of the outstanding stock that's available there is the majority owner.

3. divest [daɪˈvest] - (verb) - To sell or dispose of an asset or investment. - Synonyms: (disinvest, sell off, relinquish)

No, he did not. Despite pretty extensive pressure from ethics officials and from the media, Trump did not divest from his business empire.

4. ethics [ˈɛθɪks] - (noun) - Moral principles that govern a person's behavior or conducting an activity. - Synonyms: (morality, principles, values)

Despite pretty extensive pressure from ethics officials and from the media.

5. conflict of interest [ˈkɒnflɪkt əv ˈɪntrəst] - (noun phrase) - A situation where a person's personal interest could potentially influence their professional actions or decisions. - Synonyms: (professional conflict, personal interest, vested interest)

So when a wealthy person, or actually really when anyone comes into the executive branch and they own something that could present a conflict of interest for them, they can get what's called a certificate of divestiture

6. certificate of divestiture [sərˈtɪfɪkət əv daɪˈvestɪtʃər] - (noun) - A government-issued document that allows officials to sell assets to avoid conflicts of interest without immediate tax consequences. - Synonyms: (divestment certificate, tax-exempt certificate, conflict resolution allowance)

They can get what's called a certificate of divestiture.

7. capital gains tax [ˈkæpɪtəl geɪnz tæks] - (noun) - A tax on the growth in value of investments incurred when the asset is sold. - Synonyms: (investment tax, asset profit tax, stock tax)

Avoid a massive capital gains tax bill saving him hundreds of millions of dollars.

8. scrutiny [ˈskruːtɪni] - (noun) - Critical observation or examination. - Synonyms: (examination, inspection, analysis)

Which of course led to years of lawsuits and scrutiny over who exactly was staying at his hotels.

9. curry favor [ˈkɜ:ri ˈfeɪvər] - (verb phrase) - To try to gain favor or approval by flattering or trying to please someone unduly. - Synonyms: (ingratiate, fawn, flatter)

That could be a foreign government, that could be domestic special interest groups. It could be anyone who again is just looking to curry favor with them.

10. boons [buːnz] - (noun) - Things that are helpful or beneficial. - Synonyms: (benefits, advantages, blessings)

And so overall, you know that $700 million could be a, could be a real boon.

How Trump Can Sell His Truth Social Stock Without Paying A Dime In Taxes

Hi, everybody. I'm Brittany Lewis, a breaking news reporter here at Forbes. Joining me now is my Forbes colleague, money in Politics reporter Kyle Kahn Mullens. Kyle, thanks so much for joining me. Great to be here, Brittany. Thanks for having me. You and I have talked about Truth Social now for months. And here's your most recent reporting. You report this how Trump can sell his Truth Social stock without paying a dime in taxes. So the first question I have when I read that headline is, is Trump selling his Truth Social stock? So he says he's not. I want to make that super clear right here at the outset. Trump says he is not selling his True Social stock. He makes that clear in all caps on Truth Social. You know, as recently as like a week or so ago, he said that. So outward appearances, he is not intending to sell. But with that said, we sketch out a path here that it could be very beneficial for him if he does end up trying to sell.

You lay out a very clear path, which I will quote you on in a little bit. But how much does Donald Trump have in Truth Social stock? Trump has, and I'm just going to check my number here, he has 114,750,000 shares of DJT, which is the ticker for Trump Media and Technology Group, which owns True Social. That is an extensive amount of that stock. It's over half of the outstanding stock that's available there is the majority owner, and it is a majority of his net worth at this point. And he vows he's not selling. He says it in all caps. But you and I have talked about the volatility of Truth Social within the past months. So is the company right now doing well? Well, it depends on how you look at it. If you base that on its stock price, it's doing very well. The company is trading in over a thousand times its sales. For context of typical tech companies, probably going to sell, sell for probably going to have a stock price between 5 and 20 times its sales. So it's really through the roof there when it comes to its share price.

On the other hand, the company lost $19 million last quarter. It's lost over $100 million this year. And it doesn't appear to have a pretty strong path to profitability. So from that perspective, no, the company's not doing super well. Well, you lay out a path for Donald Trump's profitability, but he says he's not selling, like we keep saying, but remind us that he divest from his businesses in no, he did not. Despite pretty extensive pressure from ethics officials and from the media. Trump did not divest from his business empire, which of course led to years of lawsuits and scrutiny over who exactly was staying at his hotels, who was paying him money by going to his golf courses, who was buying memberships at his clubs.

There were all these different opportunities to essentially funnel money into the pocket of the former president and at that point, the sitting president and now the future president, something that we've all been doing the past two weeks, has been looking at Donald Trump's first term for any indication of how he's going to lead in his second term. So is there any indication that he's going to divest from his businesses this time around? He has made pretty clear, at least when he's been asked about it, which seems like he hasn't been asked about it quite as much as he was back in 2016. He's made pretty clear he's not interested in doing that. And I don't see any reason to think that he intends to change his tune, unless of course, it's beneficial for him. And if it's beneficial for him, which is again, the path that we sketch out here with Trusocial, maybe he will. We'll see.

Well, let's talk about that beneficial path. I'll quote you and then break it down for us. You write this quote. There is a clear path for him to unload his shares that would allow him to quiet ethics concerns, diversify his net worth away from one volatile stock and avoid a massive capital gains tax bill saving him hundreds of millions of dollars. That sounds like a best-case scenario for Trump. So how exactly does he do all that? It's actually somewhat straightforward. So when a wealthy person, or actually really when anyone comes into the executive branch and they own something that could present a conflict of interest for them, they can get what's called a certificate of divestiture.

Basically what that means is you get a form that says, the government made me sell this thing because it would create a conflict with my executive branch position. And you give that form to the IRS and you tell them I sold all my stock, I put it, or whatever the asset is, and I put that money into a non conflicted holding that could be a diversified mutual fund, it could be an index fund, it could be treasury bonds, any of these, there's lots of different options for you to put your money into that are not going to create conflicts of interest. And then you don't have to pay capital gains taxes on that sale. So the best example here is, I think It's Hank Paulson was the, he was nominated to be Secretary of the treasury for under George W. Bush. He was the CEO of Goldman Sachs and he owned something like $600 million of Goldman Sachs stock at the time he came in. And he got to sell all of that stock. He paid no capital gains tax on it for the time being. You do have to pay it eventually, but not at the time that you sell it. He got to put it all into a diversified portfolio of investments.

And then of course two years later in 2008, stock market crashed and Goldman Sachs was hit pretty hard in that. So I bet Hank was looking back thinking okay, this, this worked out pretty well for me. So essentially what you're reporting is that a CD can be a win-win for all involved. Correct. So for the government, the win is that the person is not conflicted anymore. They don't have. There's not this potential question over whether or not they're acting because they think it's a good idea versus because it's going to personally financially benefit them. That's really important. You don't want the guy who, I'm just making something up, but you don't have want the guy who is regulating crypto to also own a bunch of crypto because that might lead to questions about whether or not he's doing so out of his own financial benefit or whether he's doing it because he thinks it's good policy but for the nominee.

And the other thing that it benefits the government is it enables them to access a wider pool of potential candidates to bring into government. So again, Hank Paulson, if he hadn't been able to get this bonus, maybe he wouldn't have been as interested because he's got a good job as the CEO of Goldman Sachs. Maybe he wouldn't have been as interested in going in to become Treasury Secretary because it would have been, you would have been hit with a massive tax bill immediately upon coming into office. And then flip the, you know, flip it around for the nominee. They get this little perk. They don't have to pay the capital gains tax immediately. Instead they can defer that capital gains tax to when they sell the non conflicted assets which could be years, decades down the road, maybe they've grown a bunch more and that, that could work out a lot better. So let's say Donald Trump did sell, he wouldn't have to pay taxes on this.

So how much would he be saving right now we calculate that based on when we published the article, which was over the weekend he would save about $700 million in capital gains taxes. That's an enormous amount of money that he could turn right around and plow it into an S&P 500 index fund or a diversified other diversified mutual fund, anything like that, or just treasury bonds and make a good return on that. And those investments would be probably significantly more stable than Truth Social, which swings up and down with Trump's political prospects on any given. And so overall, you know that $700 million could be a, could be a real boon. Now that is not to say he doesn't have to pay the taxes eventually. Eventually he does have to pay the taxes when he sells the non conflicted assets, but that could be again years down the road. And one of the experts I talked to pointed out if you pass away before you sell the non conflicted assets, then you get the stepped up basis at death and you don't have to pay capital gains taxes on that gain at all.

I want to read another line from your reporting because I think it's really important you write this. The consequences of Trump holding onto his stock could be serious and stretch beyond just his own finances. Talk to us about these other repercussions. Couple of conflicts of interest questions here that are really raised when a public official holds assets that could create again these conflicts of interest. The first is that Trump is going to be appointing the regulators that are going to be overlooking through social media. He's going to be appointing the head of the fcc, for example, that regulates communications in this country. And then you also have the question of whether people who want to curry favor with Trump, why don't they buy a million dollars worth of ads on Truth Social, that could be a foreign government, that could be domestic special interest groups.

It could be anyone who again is just looking to curry favor with them. They could buy ads on True Social, they could invest in the company. And I will also note that some of the ethics experts I talked to pointed out all of these concerns apply to his newfound crypto business, which is still kind of vaguely defined. Applies there too. You know, he's going to be appointing presumably a new head of the SEC that is going to be regulating crypto. And that head of the SEC is going to be making decisions that in turn impact the president's cryptocurrency business. Same thing if there are investors who want to invest in that cryptocurrency business drive that company's value up, that is, that is money going into the pocket of the president. And that is a way to potentially again curry favors. You have all of these potential conflicts of interest that the ethics experts I talked to were very, very concerned about, both the true social and with crypto.

And let's not forget his hotel empire. Has Donald Trump ever responded to claims that his businesses could pose a conflict of interest? And at least recently, because we know the conflict of interest qu question has been swirling around him since he jumped into the political sphere over a decade ago. So the last example I found, he talked a little bit about this in Fox News town hall back in January. So almost a year ago now, he was asked whether he would divest from his businesses. And he didn't really seem particularly interested in that. And he said that, you know, if a Chinese businessman or a Chinese official were to come to one of my hotels, it's not that much money for me. So it's not really a conflict of interest. That is how he looks at it. He is wealthy enough that the conflicts of interest don't actually matter. And so that's the approach that he might be able to take as president again. Well, Kyle, per usual, I appreciate the conversation. I'm sure there are going to be plenty more between now and when Trump goes into office, as well as the next four years. So I can hope you can join me through them all. Kyle Con Mullins, thanks so much. Thanks for chatting, Brittany. Always great to be here.

POLITICS, FINANCE, TRUMP, CONFLICT OF INTEREST, ECONOMICS, BUSINESS, FORBES