Latest / The High Net Worth Podcast with Fexingo: Wealth Management, Tax Strategy, and Affluent Finance
How Exchange Funds Defer Taxes on Concentrated Stock
Episode 135 of The High Net Worth Podcast explores exchange funds—a sophisticated Section 721 strategy that allows ultra-wealthy families to diversify concentrated low-basis stock without triggering immediate capital gains. Lucas walks through the mechanics: how a tech founder with $200 million in company shares can exchange them for a pooled portfolio of blue-chip stocks, deferring taxes until the fund shares are sold years later. We cover the seven-year holding requirement, typical fund structures, and the risks—including limited liquidity, high fees, and the possibility that your own stock…
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