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351 ETFs: Tax-Free “Diversification” Is Supposed to Hurt

alphaarchitect

2 hours ago

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Co-authored by Wes Gray, PhD (Alpha Architect) and Robert Elwood (Practus, LLP).

On July 21, 2026, at the Wall Street Tax Association (WSTA) tax-geek meeting, Treasury announced that it may put certain types of Section 351 transfers to ETFs on a list of transactions that may look “too good to be true.” Cue the media’s panic headlines.

Of course, the problem with media companies is that they have economic incentives to focus on clicks, but they don’t care about context. The point of this po...

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