This is likely to become one of the largest tax dodges in the US, saving his family around $8 billion, according to the report.

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The US government’s estate tax revenue has barely changed since 2000, despite the wealth of the richest Americans having roughly quadrupled. If it had kept pace, it would have raised around $120 billion last year.

The missing revenue from the estate tax would be enough to both double the Justice Department’s budget as well as triple the federal funding for cancer and Alzheimer’s research.

However, Huang is not alone in doing this. Others include Blackstone Group’s Stephen A. Schwarzman, Meta’s Mark Zuckerberg and top executives at Google, Coinbase, Eli Lilly, Mastercard and Advanced Micro Devices, the report read.

The report attributes the easing of estate tax rules to the years of budget cuts plaguing the US Internal Revenue Service (IRS), estimating it would get worse with the Republicans coming to power.

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The rule as of today is that a married couple can pass on around $27 million tax free, but anything more is to be taxed at 40%.

How did Jensen Huang avoid paying so much taxes?

With Nvidia’s shares having soared over 800% since 2022, Huang and his wife Lori set up a financial vehicle known as an irrevocable trust and moved 584,000 Nvidia shares worth $7 million (at that time) into it.

This was an intentionally defective grantor trust which in the US, is nicknamed “I Dig It.” It circumvents estate tax, gift tax, and even capital gains tax.

Thus, the tax bill for those $7 million of shares now worth over $3 billion would be no more than a few hundred thousand dollars, rather than well over $1 billion without this setup, according to the report.

The Huangs also set up several vehicles in 2016 known as grantor retained annuity trusts, or GRATs in a move similar to the ex-wife of Walmart’s co-founder, Audrey Walton who transferred about $200 million worth of shares to two GRATs.

The trusts had to eventually repay Walton the value of those shares with some modest interest, but if the value of the shares went up over had to be repaid the trusts could keep whatever was left over tax free.

The Huangs put just over three million Nvidia shares worth about $100 million (At that time) into their four GRATs. They’re now worth over $15 billion, with the family poised to avoid about $6 billion in estate taxes, the report read.

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Yet another technique was to use their Jen Hsun & Lori Huang Foundation by donating shares of Nvidia that were worth about $330 million at the time. These are tax-deductible.

Since foundations have to annually donate to charities at least 5% of their total assets, the Huangs gave 84% of the money to a donor-advised fund which they own that are not required to actually give any money to charitable organizations and can pass on the fund’s control to heirs without estate taxes, saving the family another $800 million, according to the report.