A Section 351 exchange lets you transfer appreciated stock into a newly formed corporation or diversified ETF in exchange for the ETF’s shares, without triggering immediate capital gains. The IRS requires a control group of five or fewer participants and diversification tests: no more than 25% of assets in a single issuer and no more than 50% in five or fewer issuers. This is a newer tool for concentrated stock diversification, offering an alternative to exchange funds or direct sales. Because the rules are technical, a wealth advisor and tax professional can help ensure the exchange is structured properly and aligned with your diversification and tax objectives.
We exist so you don’t have to worry about money. For more than 40 years, we’ve taken the sophisticated, time-tested approach that many ultra-high net worth individuals use to help manage their financial lives and made it accessible to more families.
