The Meb Faber Show

The Tax Alpha Arms Race (W/ Wes Gray & Brent Sullivan) | #622

In this episode, hosts MedFaber, Wes Gray, and tax analyst Brent Sullivan dissect the growing "tax alpha" landscape, focusing on how investors can manage and mitigate tax drag, especially with concentrated stock positions. They explore a menu of strategies—from exchange funds and option overlays to Section 351/721 structures and charitable vehicles—highlighting the regulatory tightening around tax‑free diversification. Brent explains the evolution of Section 351, the IRS’s diversification rules (the 25% and 50% tests), and the trade‑offs between liquidity, timing, and estate planning. Wes adds perspective on how active management, ETFs, and transaction costs intersect with post‑tax returns, underscoring the importance of proactive tax planning.