Strategies to Reduce Capital Gains Tax on Large Portfolios

For investors with portfolios exceeding $2 million, enhancing after-tax efficiency is crucial for maximizing wealth. This document outlines strategies to reduce capital gains tax, focusing on tax efficiency, structure, and coordination. Key methods include addressing tax drag, managing concentration risk, and optimizing asset location across various accounts. By improving after-tax efficiency by just 1%, investors can significantly increase their wealth over time. A case study demonstrates how a client with a $3 million portfolio reduced tax liability and improved risk-adjusted positioning through diversification and charitable structuring. The document also emphasizes the importance of coordinated advice from financial advisors, CPAs, and estate counsel, while avoiding common mistakes like reactive rebalancing and uncoordinated advice.