ExchangiFi
Managing concentrated stock positions is one of the biggest challenges facing wealth advisors today. How do you help clients diversify without triggering a massive tax event? I recently sat down with Chris Latham to discuss exactly that. In this interview, we break down the mechanics of a Section 351 exchange and why it is becoming … Read more
For investors sitting on highly appreciated assets, a Section 351 exchange is a powerful—but often overlooked—tool. It enables investors to contribute assets in-kind to a newly formed Exchange-Traded Fund (ETF), deferring capital gains taxes while gaining the flexibility and tax efficiency of the ETF structure. Here are the five most common reasons investors use this … Read more
In today’s market, where many long-term investors hold highly appreciated stock portfolios, the prospect of selling to diversify is often met with the potential of a massive capital gains tax bill. A solution has emerged in the form of the Section 351 ETF Exchange, an innovative application of the U.S. tax code that enables investors … Read more
Imagine holding a stock for years, watching it appreciate 300%, only to see that position disappear from your brokerage account because a private equity firm decided to take the company private. You get a cash premium for the shares, but when a public company is acquired for cash, or a mix of cash and stock, … Read more
The next major wave in ETFs won’t come from AI funds or thematic plays. It’s already here—and it’s hiding in the tax code. Section 351 exchanges—a process using a specific tax rule—are transforming how ETFs launch and scale, and we’re just getting started. The Problem Worth Trillions Investors hold trillions (yes, trillions!) in appreciated stocks. … Read more
The Challenge When new ETFs launch through Section 351 exchanges, they inherit a mix of securities from separately managed accounts that may not match their investment goals. These “seed assets” need to be gradually replaced with securities that fit the fund’s strategy. Timeline: 1-12 Months Most ETFs take between 1 to 12 months to fully … Read more
How 351 tax-deferred exchanges help investors diversify without the capital gains hit The Challenge Every Concentrated Stock Investor Faces Picture this: You’ve held onto company stock for years, watching it appreciate significantly. Now you want to diversify your portfolio, but there’s a problem—selling would trigger a massive capital gains tax bill. What if there was … Read more