The “Look-Through” Rule: A Closer Look at ETF Diversification in 351 Exchanges
Section 351 of the Internal Revenue Code offers a powerful tax-deferral tool for investors seeking to diversify their portfolios without triggering immediate capital gains. This provision allows individuals to contribute appreciated assets to a corporation, often an Exchange-Traded Fund (ETF), in exchange for shares, deferring taxes on those gains. However, this tax-free exchange is contingent […]
A Tax Loophole for the Elite: How the Wealthy Can Avoid Capital Gains Indefinitely
The US tax code, with its myriad rules and regulations, can seem like a labyrinth designed to confound the average taxpayer and full of tax loopholes. However, hidden within its complex structure lies a powerful tool that allows the rich and connected to avoid capital gains taxes indefinitely: the Section 351 conversion. Section 351 of […]
Everything You Need To Know About A 351 Tax Free Conversion
What is a 351 ETF Conversion? A 351 ETF conversion allows investors to transfer assets into an ETF in exchange for shares without triggering a taxable event. This tax-related mechanism is specifically under U.S. tax law Section 351 of the Internal Revenue Code. Investors can contribute a portfolio of investments and, in return, receive a […]