Situation
Tax strategies for a concentrated position
If you have a large position you want to reduce, the order of operations on tax strategy matters as much as which strategies you use. Eliminate, then reduce, then defer — and check QSBS eligibility before you do anything that disqualifies it. These are the levers that actually move the bill.
The Reading List
Articles, in order.
Work through them sequentially, or jump to the one most relevant to your situation.
- 01Reference— EQUITY ADVANTAGE
Tax Strategy for Highly Appreciated Stock: (1) Eliminate vs. (2) Reduce vs. (3) Defer —- And Why Confusing Them Is Expensive
Eliminate vs. reduce vs. defer for appreciated stock — the three-bucket tax-strategy taxonomy, and why confusing them is expensive.
10 MIN10 MIN - 02Reference— TAX STRATEGIES
Qualified Small Business Stock (QSBS) Exclusion
What QSBS is, the eligibility criteria (C-corp, sub-$50M assets, 5-year hold, eligible industries), federal and state treatment, and how stacking/packing/rollovers extend it.
5 MIN5 MIN - 03How-to— TAX STRATEGIES
QSBS "Stacking" (Via Gifts and Trusts)
Gifting QSBS shares or contributing them to separate-taxpayer trusts multiplies the per-taxpayer QSBS exclusion — useful when anticipated gains exceed $15M.
4 MIN4 MIN - 04How-to— TAX STRATEGIES
Exchange Funds (Diversification; Not Taxation)
Exchange funds let you swap a concentrated position for a diversified LP interest tax-free — at the cost of a typical 7-year lock-up, high minimums, and ongoing fees.
4 MIN4 MIN - 05How-to— TAX STRATEGIES
Donor Advised Funds (3x Tax Benefits)
How DAFs deliver three tax benefits — deductible contribution, no capital gains on donated stock, and tax-free internal growth — plus how to stack giving across years.
3 MIN3 MIN - 06Reference— TAX STRATEGIES
Charitable Trusts (CRUT/CRAT/CLAT)
How CRUTs, CRATs, and CLATs work — appreciated-stock contributions, deduction timing, distribution mechanics, and when each charitable trust fits.
6 MIN6 MIN - 07How-to— TAX STRATEGIES
351 Exchange (Upon ETF Creation)
Contribute a semi-diversified portfolio to a newly launched ETF tax-free under IRC 351 — defer capital gains and broaden diversification with original cost basis preserved.
2 MIN2 MIN - 08How-to— TAX STRATEGIES
Hold Stock Until Death (Step-up in Basis)
Step-up in basis at death erases unrealized capital gains for heirs — for highly appreciated assets you don't need to sell in life, holding can save heirs significant tax.
4 MIN4 MIN
Talk to a 30/40 Advisor
Want this applied to your situation?
A 30-minute consult tells you whether the frameworks in this reading list cleanly apply to your equity package — and if so, what the first three moves are. No pitch.
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