351 Exchange Overview
We are sharing an overview of Section 351 exchanges, which may be a consideration for certain investors seeking to reallocate equity portfolios in a tax-efficient manner. These strategies are subject to specific eligibility requirements and may not be appropriate in all circumstances. We encourage you to consult with your attorney/tax advisor to determine whether this is appropriate for you.
- Tax-efficient reallocation tool: Section 351 exchanges allow appreciated equity holdings to be contributed into an ETF structure without triggering immediate capital gains, while maintaining the original tax basis.
- Applicable use cases: This approach may be relevant for investors with concentrated positions or portfolios where tax considerations have limited the ability to rebalance or diversify.
- Defined parameters: Participation is subject to eligibility, asset type restrictions, and diversification requirements (including 25%/50% thresholds), which must be met for the exchange to qualify.
- Current considerations: Section 351 exchanges are increasingly being used in the context of broad equity exposure, including global mandates, as investors evaluate ways to adjust portfolio positioning without immediate tax recognition.
Read 351 Exchange Overview here.
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Any views expressed above represent the opinions of Mill Creek Capital Advisers ("MCCA") and are not intended as a forecast or guarantee of future results. This information is for educational purposes only. It is not intended to provide, and should not be relied upon for, particular investment advice. This publication has been prepared by MCCA. The publication is provided for information purposes only. The information contained in this publication has been obtained from sources that
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