[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  Neil Sethi [@neilksethi](/creator/twitter/neilksethi) on x 12.4K followers Created: 2025-07-22 14:45:00 UTC This was interesting. Under a provision of the tax code intended to encourage entrepreneurship by letting Americans create new companies with existing assets an investor can take their portfolio and form an ETF. Once the ETF is launched, they can use flows in and out to rebalance away from oversized positions without incurring a taxable gain. “You say, ‘Gee, Nvidia’s gotten a little bit too rich for my blood, I’d like to get rid of it,’” says Elwood. “The problem you would have is the only way to do it in a separately managed account would be to sell it, recognize some taxable gain.” Instead, you "transfer [your] XX positions into the ETF is not taxable, and then the substitution of taking Nvidia out and putting Apple in are both non-taxable as well,” Elwood says. That’s thanks to the great tax advantage of an ETF, where assets are swapped in and out by a type of market maker, rather than being bought and sold for cash by the fund itself. Since these “in-kind” transactions are not taxable events, appreciated securities can be swapped away without triggering a tax bill.  XXXXX engagements  **Related Topics** [capital gains](/topic/capital-gains) [fund manager](/topic/fund-manager) [investment](/topic/investment) [entrepreneurship](/topic/entrepreneurship) [tax bracket](/topic/tax-bracket) [Post Link](https://x.com/neilksethi/status/1947669211527974928)
[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]
Neil Sethi @neilksethi on x 12.4K followers
Created: 2025-07-22 14:45:00 UTC
This was interesting. Under a provision of the tax code intended to encourage entrepreneurship by letting Americans create new companies with existing assets an investor can take their portfolio and form an ETF. Once the ETF is launched, they can use flows in and out to rebalance away from oversized positions without incurring a taxable gain.
“You say, ‘Gee, Nvidia’s gotten a little bit too rich for my blood, I’d like to get rid of it,’” says Elwood. “The problem you would have is the only way to do it in a separately managed account would be to sell it, recognize some taxable gain.” Instead, you "transfer [your] XX positions into the ETF is not taxable, and then the substitution of taking Nvidia out and putting Apple in are both non-taxable as well,” Elwood says.
That’s thanks to the great tax advantage of an ETF, where assets are swapped in and out by a type of market maker, rather than being bought and sold for cash by the fund itself. Since these “in-kind” transactions are not taxable events, appreciated securities can be swapped away without triggering a tax bill.
XXXXX engagements
Related Topics capital gains fund manager investment entrepreneurship tax bracket