1Funds that rely on a Qualified Investor require a net worth of $1 million, exclusive of primary residence.
2 IRS, What’s New – Estate and Gift Tax, https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax
3 While gifting securities does not incur federal income tax at the time of the transfer, the recipient would still be subject to any relevant capital gains taxes (generally based on the donor’s original purchase price) when the shares are sold in the future. This may reduce the capital gains tax ultimately owed if the recipient is subject to a lower federal income tax rate than the donor. Consequently, it’s important to make sure both the donor and recipient understands the potential federal income tax consequences associated with the transfer and the potential future sale of the shares by the recipient.
4 Some or all of each annuity payment will be subject to federal income tax.
5 Income and capital gains realized in the trust are not subject to federal income taxes at the trust level, but the federal income tax liability will pass to the income beneficiaries when income is distributed from the trust.
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Exchange funds are private placement vehicles that enable holders of concentrated single-stock positions to exchange those stocks for a diversified portfolio. Investors may benefit from greater diversification by exchanging a concentrated stock position for fund shares without triggering a taxable event. These funds are available only to qualified investors and may only be offered by Financial Advisors who are qualified to sell alternative investments. • Before investing, investors should consider the following: • Dividends are pooled • Investors may forfeit their stock voting rights • Investment may be illiquid for several years • Investments may be leveraged or contain derivatives • Significant early redemption fees may apply • Changes to the U.S. tax code, which could be retroactive (potentially disallowing the favorable tax treatment of exchange funds) • Investment risk and potential loss of principal
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