I always wondered about what happens to your holdings when you accept a government job.  I figured you had to sell them… but I did not know about the tax free loophole.

Henry Paulson sold his 3.23 million shares in Goldman, worth about $500 million at the time, when he took the Treasury job, according to regulatory filings. He was exempted from paying capital gains tax on the sale of those stakes under a rule meant to avoid penalizing wealthy people who take government jobs and are forced to sell assets. continue reading...