Plain-English definitions.

Tax basics

How income, gains, and deductions are treated by the IRS.

0% LTCG bracket #

The income band in which long-term capital gains are taxed at 0% federal. For 2026, a married couple with taxable income (after deductions) under roughly $96,700 pays zero federal tax on realized long-term gains up to that ceiling. A powerful and underused planning tool for early retirees between age 59½ and Social Security.

When it matters: Retirees or gap-year households living off cash / Roth — realize gains, reset basis higher, pay zero.

See also: LTCG , Cost basis , Roth conversion

Cost basis #

What you originally paid for an asset, including commissions and reinvested dividends. When you sell, the IRS uses this number to calculate your gain: sale price minus cost basis equals capital gain (or loss). Higher basis = smaller taxable gain.

When it matters: Every taxable brokerage sale, every home sale, every inheritance.

See also: Step-up in basis , LTCG , Wash sale rule

Installment sale (§453) IRC Section 453 installment sale treatment #

A tax election that lets a seller who accepts payment over multiple years (typically via a seller-financed note) recognize capital gain proportionally as principal payments come in, rather than all in the sale year. Spreading the gain over 5-30 years can keep the seller in lower brackets, avoid NIIT thresholds, and generate ongoing interest income on the deferred principal. Depreciation recapture is NOT eligible — 25% recapture is fully recognized in year one regardless.

When it matters: Seller-financed real estate sales (rental property, farmland, business real estate); useful when the seller wants to retire and does not need full proceeds up front, and trusts the buyer.

See also: Depreciation recapture , LTCG , NIIT

Official reference: 26 USC §453 ↗

LTCG Long-Term Capital Gains #

Profit on an asset held more than 12 months before selling. Taxed at preferential federal rates (0%, 15%, or 20% depending on income) instead of your ordinary income bracket. Held 12 months or less, it becomes short-term (STCG) and is taxed as ordinary income.

When it matters: Selling any appreciated stock, mutual fund, or investment property.

See also: STCG , NIIT , Cost basis , 0% LTCG bracket

Official reference: IRS Topic 409 ↗

NIIT Net Investment Income Tax #

An additional 3.8% federal tax on investment income (interest, dividends, capital gains) that kicks in above modified AGI thresholds ($200k single, $250k married filing jointly in 2026). Sits on top of your LTCG rate, so a top-bracket investor's true federal capital gains rate is 23.8%, not 20%.

When it matters: Above the income threshold, essentially every dollar of investment income.

See also: LTCG

Passive Activity Loss (PAL) rules IRC Section 469 Passive Activity Loss rules #

Enacted 1986 to shut down widespread real-estate tax shelters. Says losses from 'passive activities' (which rental real estate is by default) can only offset passive income, not W2 wages or business income. For most rental investors this means real-estate losses are trapped until they have passive income to offset, or until they sell (at which point suspended losses release). A $25k active-participation exception phases out between $100k and $150k AGI. The two big loopholes around PAL for high earners are Real Estate Professional Status (REPS) and the Short-Term Rental loophole.

When it matters: Every W2 earner with rental property losses; determines whether cost-seg + bonus-depreciation savings can offset day-job income.

See also: Real Estate Professional Status (REPS) , Short-Term Rental (STR) loophole , Bonus depreciation , Cost segregation study

Official reference: 26 USC §469 ↗

State income tax #

Tax levied by individual US states on wages, business income, dividends, interest, and capital gains earned by residents (and on state-sourced income for non-residents). Ranges from 0% (Nevada, Florida, Texas, Washington, Wyoming, South Dakota, Alaska, Tennessee) to over 13% at the top bracket in California — 14.4% with the Mental Health Services Tax on income over $1M. Sits on top of federal tax: combined federal + state top rate for a California ultra-earner is 37% + 14.4% ≈ 51.4%.

When it matters: Every earner of wages, gains, or business income; a major driver of interstate migration for high earners.

See also: Tax domicile , LTCG , NIIT

STCG Short-Term Capital Gains #

Profit on an asset held 12 months or less before selling. Taxed at your ordinary income rate (up to 37% federal in 2026) rather than at LTCG rates. One reason 'held one year' is a magic number in investing tax planning.

See also: LTCG , Wash sale rule

Tax alpha #

The extra after-tax return generated by tax-aware portfolio management (mainly loss harvesting), typically reported as an annualized 0.5–2% depending on account size, volatility, and how much tax the harvested losses actually offset. It is a real return, but only for investors who have gains to offset — otherwise the losses just carry forward.

See also: Tax-loss harvesting , Direct indexing , 130/30 long-short strategy

Tax domicile #

The state a person legally considers their permanent home for tax purposes. States tax residents on all income (from wherever earned) and non-residents only on income sourced to that state. Establishing a new tax domicile requires more than a driver's license swap — physical presence (usually 183+ days/year), voter registration, property, banking, medical care, and social ties all migrate. High-tax states like California and New York run aggressive residency audits with 'closer connection' doctrines that can pull back years of tax if the change is not clean.

When it matters: Anyone considering a move from a high-tax state (CA, NY, NJ) to a no-tax state (NV, FL, TX, WY) primarily for tax reasons; especially W2 income > $1M/year and years with large capital-gains realizations.

See also: State income tax , CA Prop 13

Official reference: CA FTB Residency Status guide ↗

Tax-loss harvesting #

Deliberately selling losing positions to realize a capital loss you can use to offset capital gains — plus up to $3,000/year of ordinary income for individuals. Unused losses carry forward indefinitely. Requires avoiding the wash-sale rule, usually by immediately buying a similar but not 'substantially identical' security (e.g., sell SPY, buy IVV).

When it matters: Any taxable brokerage account with volatile holdings; automated by robo-advisors and direct-indexing platforms.

See also: Wash sale rule , LTCG , Direct indexing , Tax alpha

Wash sale rule #

IRS rule that disallows a capital loss deduction if you buy the same or 'substantially identical' security within 30 days before or after the loss sale. The disallowed loss is added to the basis of the replacement shares — you get the deduction eventually, just not now. Applies to individual accounts, IRAs (both), and effectively to spouse accounts too.

When it matters: Any tax-loss harvesting attempt; cryptocurrency currently exempt but that may change.

See also: Tax-loss harvesting , Cost basis

Official reference: IRS Pub 550 ↗

Estate & wealth transfer

How assets pass to heirs and what the tax code does at death.

Estate tax exemption #

The amount of estate value that passes to heirs free of federal estate tax. For 2026, $15M per individual, $30M for a married couple; amounts above are taxed at a flat 40%. Separate from step-up in basis — an estate can be free of income tax at death but still owe estate tax if it exceeds the exemption.

When it matters: Estates approaching or exceeding $15M individual / $30M joint; smaller estates only face state estate/inheritance tax, which varies.

See also: Step-up in basis , GRAT , IRC §1014

GRAT Grantor Retained Annuity Trust #

An estate-planning trust that lets a wealthy grantor transfer future appreciation to heirs while retaining a stream of annuity payments during the trust's term. If assets grow faster than the IRS's assumed rate (Section 7520 rate), the excess passes to heirs gift-tax-free. Widely used by the ultra-wealthy to bypass estate tax on high-growth positions.

When it matters: Concentrated founder positions or pre-IPO shares expected to appreciate rapidly; wealth well above the estate tax exemption.

See also: Estate tax exemption , Step-up in basis

IRC §1014 Internal Revenue Code Section 1014 #

The specific tax code provision that grants step-up in basis at death. One of the most-attacked provisions in every Democratic tax reform proposal of the last 15 years; if repealed, heirs would inherit at the original cost basis and lifetime gains would be income-taxed on eventual sale.

See also: Step-up in basis , Estate tax exemption

Official reference: 26 USC §1014 ↗

Step-up in basis #

The reset of an asset's cost basis to its fair market value on the date of the owner's death. Heirs inherit as if they bought the asset at the current market price — all appreciation the deceased accumulated during life escapes income tax entirely. Governed by IRC §1014. Does not apply to retirement accounts.

When it matters: Any long-held appreciated asset in a taxable account (stock, real estate, business); central to the Buy-Borrow-Die strategy.

See also: IRC §1014 , Cost basis , Estate tax exemption , SBLOC

Real estate

Terms specific to owning, selling, and inheriting property.

§1031 exchange IRC Section 1031 like-kind exchange #

Sale of investment real estate in which proceeds are reinvested into another investment property within strict IRS timeframes (identify within 45 days, close within 180). Capital gains and depreciation recapture are deferred, not eliminated. Combined with step-up in basis at death, gains can defer indefinitely and then vanish — the 'swap till you drop' strategy.

When it matters: Rental property investors selling and reinvesting; requires a qualified intermediary to hold funds during the exchange.

See also: Step-up in basis , Depreciation recapture , IRC §1014

Official reference: 26 USC §1031 ↗

§121 exclusion Primary residence capital gains exclusion #

Federal tax exclusion of up to $250,000 (single) or $500,000 (married filing jointly) of capital gain on the sale of a primary residence, if the owner lived there at least 2 of the past 5 years. One of the largest tax breaks available to non-wealthy households — often left on the table when families sell 'accidentally' by moving out too early.

When it matters: Selling a primary residence; does not apply to rental or investment property.

See also: Depreciation recapture , Step-up in basis

Bonus depreciation IRC §168(k) bonus depreciation #

First-year deduction of a percentage of the cost of qualifying property (typically 5, 7, and 15-year property under cost segregation). Post-TCJA 2017 schedule: 100% (2017-2022), 80% (2023), 60% (2024), 40% (2025), 20% (2026), 0% (2027 unless Congress extends). Combined with a cost segregation study, can turn a real estate purchase into a massive first-year tax deduction. Multiple bills have been filed to restore 100% bonus retroactively but none have passed as of Sept 2026.

When it matters: Any rental or commercial property placed in service through 2026; the deduction is significantly smaller each year as the phase-out proceeds.

See also: Cost segregation study , Depreciation recapture , Passive Activity Loss (PAL) rules

Official reference: 26 USC §168(k) ↗

BRRRR strategy Buy, Rehab, Rent, Refinance, Repeat #

A cash-flow + financing strategy (not a specific tax code provision) where an investor buys undervalued property, rehabs to force appreciation, rents to stabilize cash flow, refinances based on the new higher appraised value to extract equity tax-free (loan proceeds aren't income), and repeats with the extracted capital. Combined with cost segregation and bonus depreciation on each property, the running tax bill can stay minimal or negative even as the portfolio scales to $10M+. Downside: highly leveraged — the strategy that built quiet fortunes 2010-2020 crushed many investors 2022-2023 when rates jumped and cash-out refis stopped being available at the leverage BRRRR needs.

When it matters: Real estate investors in stable/appreciating markets with access to bank financing; disproportionately hurt in downturns.

See also: Cash-out refinance , Cost segregation study , Bonus depreciation

CA Prop 13 California Proposition 13 (passed 1978, Howard Jarvis) #

California ballot initiative that caps property tax at 1% of assessed value AND caps assessed-value growth at 2%/year regardless of market appreciation. Full reassessment to market value happens only on sale or major improvement. A house bought for $500k in 1985 now worth $15M pays tax on an assessed value of about $1.1M (roughly $12k/year), while a new buyer of the same house pays about $180k/year. One of the most consequential and politically untouchable tax laws in California history.

When it matters: Every California homeowner — dramatic wealth-preservation benefit for long-term holders, dramatic entry tax for new buyers.

See also: CA Prop 19 , CA Prop 60 / Prop 90 , Step-up in basis

Official reference: CA Constitution Article XIII A (enacting text) ↗

CA Prop 19 California Proposition 19 (effective February 2021) #

California ballot measure with two big provisions. (1) Dramatically tightened parent-to-child property tax inheritance: inherited property is reassessed at market value UNLESS the heir uses it as primary residence within a year AND market value does not exceed the old assessment by more than $1M. (2) Dramatically expanded senior portability: homeowners age 55+ can now transfer their assessed value to any new home anywhere in California, up to 3 times in a lifetime, within 2 years of selling, and even to a more-expensive home with a partial upward adjustment (new assessed value = old assessed value + purchase-price delta).

When it matters: Any California family passing a home to heirs (regressive side); any Californian 55+ downsizing or relocating within CA (progressive side).

See also: CA Prop 13 , CA Prop 60 / Prop 90 , Step-up in basis

Official reference: CA Board of Equalization — Prop 19 portal ↗

CA Prop 60 / Prop 90 California Propositions 60 (1986) and 90 (1988) #

The original senior property-tax portability rules. Prop 60 allowed homeowners age 55+ to transfer their old assessed value to a new home of equal or lesser value within the same county, once per lifetime. Prop 90 extended this to cross-county transfers, but only if the receiving county opted in — only about ten counties did. Both were superseded by Prop 19 (2021), which allowed transfers anywhere in California, up to 3 times, and to more-expensive homes with partial adjustment.

When it matters: Historical context — Prop 19 replaced both. Any transfers completed under Prop 60/90 remain grandfathered.

See also: CA Prop 19 , CA Prop 13

Official reference: Cal. Rev. & Tax. Code §69.5 (statute) ↗

Cost segregation study #

An engineering-based analysis (typically $5k–$20k performed by specialist firms) that reclassifies portions of a real estate purchase from the default 27.5-year (residential) or 39-year (commercial) depreciation life into shorter 5-year (fixtures, cabinets, appliances), 7-year (certain equipment), and 15-year (land improvements, sidewalks, landscaping, parking lots) buckets. A typical study reclassifies 20-40% of the building's cost basis. Combined with bonus depreciation, front-loads huge deductions into year 1. Can be applied retroactively via Section 481(a) catch-up on the current return without amending prior returns.

When it matters: Any newly-purchased or newly-placed-in-service rental or commercial property $500k+; the study pays for itself many times over via first-year tax savings.

See also: Bonus depreciation , Depreciation recapture , Real Estate Professional Status (REPS) , Short-Term Rental (STR) loophole

Official reference: IRS Cost Segregation Audit Techniques Guide ↗

Delaware Statutory Trust (DST) #

A legal structure that lets multiple investors own fractional beneficial interests in institutional-grade real estate (Class A apartments, medical office, industrial, self-storage) while qualifying as 'like-kind property' for §1031 exchange purposes. Solves the '45-day identification clock' pressure since DSTs are ready to accept exchange proceeds immediately. Investor gets institutional property + monthly distributions + zero management responsibility. Downsides: 5-10% up-front fees, no control (no vote on when to sell), illiquid, sponsor quality varies enormously.

When it matters: Retiring active landlords who want to keep §1031 tax deferral without continued property management.

See also: §1031 exchange , Reverse §1031 exchange

Depreciation recapture #

When you sell a rental or investment property, all the depreciation you deducted over the years is 'recaptured' and taxed at up to 25% federal — higher than the LTCG rate on the appreciation itself. Combined with capital gains tax, this makes selling a fully depreciated property brutally expensive. Step-up in basis at death eliminates this liability entirely.

When it matters: Any sale of rental property held long enough to have accumulated meaningful depreciation.

See also: Step-up in basis , §1031 exchange , §121 exclusion

Improvement §1031 (build-to-suit) #

A §1031 exchange variant that lets the taxpayer use exchange proceeds to construct or improve the replacement property, and count the completed improvements toward the exchange value. Solves the "the replacement land alone costs less than the relinquished property" problem — the leftover proceeds go into construction rather than being taxable boot. Improvements must be substantially completed within the 180-day window. The QI/EAT holds title during the construction phase.

When it matters: Development, ground-up construction on exchange land, major rehab of existing structures.

See also: §1031 exchange , Reverse §1031 exchange

Real Estate Professional Status (REPS) IRC §469(c)(7) Real Estate Professional Status #

A tax classification that reclassifies rental real estate from passive to non-passive, unlocking rental losses to offset ordinary income (W2, business, etc.). Two tests, BOTH must be met annually: (1) more than 50% of total personal services are in real property trades or businesses, AND (2) at least 750 hours in real property trades or businesses. Full-time W2 earners almost never qualify (the 50% test alone kills it — 1,500 hours of W2 work can rarely be matched with a majority in real estate). Married-filing-jointly couples can qualify if EITHER spouse meets both tests. Documentation of contemporaneous hours is critical — IRS audits REPS claims aggressively.

When it matters: Married couples where one spouse (often the non-working one) can dedicate 750+ hours to the family's real estate operations; unlocks W2 tax offset from real estate losses.

See also: Passive Activity Loss (PAL) rules , Short-Term Rental (STR) loophole , Cost segregation study , Bonus depreciation

Official reference: 26 USC §469(c)(7) ↗

Reverse §1031 exchange #

A §1031 exchange in reverse order — buy the replacement property FIRST, then sell the relinquished property within 180 days. Useful when the ideal replacement property is on the market NOW and can't wait for you to sell your current one. Uses an Exchange Accommodation Titleholder (EAT), a special-purpose entity created by the qualified intermediary, to hold title on one of the properties until both legs close (because the taxpayer can't own both simultaneously and still get §1031 treatment). Extra fee: $5,000–$15,000 on top of standard QI cost. IRS safe harbor: Rev. Proc. 2000-37.

When it matters: Competitive real estate markets where you need to lock in the replacement property before the relinquished one is ready to list.

See also: §1031 exchange

Official reference: IRS Rev. Proc. 2000-37 ↗

Short-Term Rental (STR) loophole #

A rental property is NOT classified as a 'rental activity' under §469 if the average customer use period is 7 days or less (or 30 days or less with substantial personal services). Instead it's treated as a business, meaning the PAL rules don't apply and losses can offset ordinary income without qualifying for REPS. Material participation (100+ hours if no one else works more, or 500+ hours regardless) is required. This is why Airbnb / VRBO investing became tax-planning gold post-2018 for high-earning W2 workers who couldn't qualify for REPS but wanted real estate tax shelter.

When it matters: Tech / medical / law W2 earners with real estate ambitions but no time or spouse-time to qualify for REPS; the STR path is much more accessible.

See also: Passive Activity Loss (PAL) rules , Real Estate Professional Status (REPS) , Cost segregation study , Bonus depreciation

Lending against assets

How to borrow using stocks, homes, or businesses as collateral.

Cash-out refinance #

Replacing an existing mortgage with a new, larger mortgage and pocketing the difference as cash. Unlike a HELOC, it locks in a fixed rate (or a new adjustable one) for the entire balance. Because the cash is loan proceeds, no tax event is triggered. Mortgage interest is deductible on 'acquisition indebtedness' up to $750k of principal for post-2017 loans.

When it matters: Homeowners wanting to extract equity at a fixed rate rather than a variable HELOC line.

See also: HELOC , DSCR loan

DSCR loan Debt Service Coverage Ratio loan #

A rental property mortgage that qualifies based on the property's rental income covering the loan payment (typically DSCR ≥ 1.20), not on the borrower's personal income. Popular with real-estate investors who have large paper income but complicated tax returns. Rates are usually 1–2% higher than owner-occupied conventional mortgages.

When it matters: Buying or refinancing rental property when personal income doesn't cleanly qualify for conventional loans.

See also: HELOC , Cash-out refinance

HELOC Home Equity Line of Credit #

A revolving line of credit secured by the equity in your primary residence. Draws are made as needed, interest-only payments during the draw period (typically 10 years), then principal + interest during repayment (typically 20 years). Rate is usually prime plus a spread (roughly 8–10% in 2026). Post-2017 tax law limits interest deductibility to funds used for home improvements.

When it matters: Retirees funding cash needs from home equity without selling; the real-estate parallel to an SBLOC.

See also: SBLOC , Cash-out refinance , Reverse mortgage (HECM) , LTV

LTV Loan-to-Value ratio #

The size of a loan divided by the value of its collateral, expressed as a percentage. SBLOCs typically cap at 50–70% LTV; mortgages at 80–95% depending on program. A drop in collateral value can push LTV over the covenant and trigger a margin call (SBLOC) or PMI / refinance issues (mortgage).

See also: SBLOC , Margin call , HELOC

Margin call #

A lender's demand for additional collateral (or partial loan repayment) when loan-to-value breaches the covenant — typically because the pledged asset dropped in price. If the borrower cannot meet the call within a short window (24–48 hours), the lender sells enough collateral to restore the ratio. For a Buy-Borrow-Die strategy, a forced margin sale is exactly the taxable event the strategy exists to avoid.

When it matters: Any borrowing secured by volatile collateral — SBLOCs especially, but also mortgages in extreme housing downturns.

See also: SBLOC , LTV

Reverse mortgage (HECM) Home Equity Conversion Mortgage #

A federally insured mortgage for homeowners age 62+ that pays them (as a lump sum, line of credit, or monthly annuity) against home equity, with no monthly payment required. Interest accrues to the loan balance and is repaid when the home is sold, the borrower dies, or the borrower permanently leaves the home. Heirs typically repay the balance from sale proceeds or refinance in their own name.

When it matters: Retirees over 62 with substantial home equity and limited liquid retirement funds.

See also: HELOC , Cash-out refinance

SBLOC Securities-Based Line of Credit #

A revolving line of credit secured by pledged securities in your taxable brokerage account. The lender advances cash against 40–70% of the collateral value; you pay interest but no principal amortization is required as long as you stay within the loan-to-value covenant. Rates typically SOFR plus a spread. Available at Schwab, Fidelity, Morgan Stanley, JPMorgan, and most major brokerages.

When it matters: The 'borrow' step in Buy-Borrow-Die; also for short-term cash needs without triggering a taxable sale.

See also: HELOC , SOFR , LTV , Margin call , Step-up in basis

SOFR Secured Overnight Financing Rate #

The US benchmark short-term interest rate that replaced LIBOR in 2023. Published daily by the New York Fed based on actual overnight repo transactions collateralized by Treasuries. Most SBLOC, HELOC, and adjustable-rate mortgage products in 2026 are priced as 'SOFR + spread' where the spread reflects the lender's cost plus risk premium.

When it matters: Every variable-rate borrowing arrangement in the US after 2023.

Official reference: NY Fed SOFR ↗

Retirement accounts

IRA, 401(k), Roth, RMDs, and how they interact with taxes.

QCD Qualified Charitable Distribution #

A direct transfer of up to $105,000/year (2026 limit, indexed) from a traditional IRA to a qualified charity, available to IRA owners age 70½ or older. The transferred amount counts toward the year's Required Minimum Distribution but is excluded from taxable income entirely — better than taking the RMD and donating separately, because it lowers AGI (which affects Medicare premiums, Social Security taxability, and NIIT).

When it matters: IRA owners age 70½+ who are charitably inclined — especially valuable for retirees who take the standard deduction and can't itemize donations.

See also: RMD , Roth conversion

Official reference: IRS Pub 590-B ↗

RMD Required Minimum Distribution #

Minimum amount the IRS forces you to withdraw annually from traditional IRAs and 401(k)s starting at age 73 (as of 2026, moving to 75 in 2033 per SECURE 2.0). The distribution is taxed as ordinary income. Missing an RMD triggers a 25% penalty on the shortfall (reduced from 50% under SECURE 2.0).

When it matters: Every traditional retirement account owner from age 73 onward; can be satisfied via QCDs for charitably-inclined retirees.

See also: QCD , Roth conversion , Withdrawal ordering

Roth conversion #

Moving funds from a traditional IRA (or 401k) to a Roth IRA and paying the ordinary income tax on the converted amount now, in exchange for tax-free growth and tax-free withdrawals later. Usually strategic in gap years (early retirement, before Social Security or RMDs start) when income is temporarily low and marginal rates are cheap.

When it matters: Retirees between ages 59½ and 73 (RMD start age) with unused low-bracket tax space; also anyone expecting to be in a higher bracket in retirement than today.

See also: RMD , QCD , Withdrawal ordering , 0% LTCG bracket

Withdrawal ordering #

The sequence in which a retiree draws from taxable brokerage, traditional IRA/401(k), and Roth accounts to minimize lifetime tax and preserve step-up in basis for heirs. Conventional wisdom (taxable first, tax-deferred second, Roth last) is often wrong — filling low tax brackets with intentional traditional withdrawals or Roth conversions before RMDs kick in can beat the default sequence by 5–15% of retirement wealth over 30 years.

When it matters: Every retiree with a mix of account types; benefits from real math with a fiduciary or CPA rather than rules of thumb.

See also: RMD , Roth conversion , QCD , 0% LTCG bracket

Investing techniques

Portfolio construction and tax-aware strategies.

130/30 long-short strategy #

A tax-aware equity strategy that owns 130% of the target market long and 30% short (net exposure = 100%). The short positions manufacture additional losses to harvest while keeping full market exposure. Generates 2–4% of annual tax alpha for taxable investors — roughly double what long-only direct indexing produces. Offered by Aperio, Parametric, AQR, and increasingly by wealth managers as a tax-optimization overlay for HNW accounts.

When it matters: Taxable accounts of $1M+ where the higher fee (0.60–1.00%) is more than paid for by the incremental tax alpha.

See also: Tax-loss harvesting , Direct indexing , Tax alpha

Direct indexing #

Owning the individual stocks that make up an index (e.g., all 500 names in the S&P 500) in your own brokerage account rather than through an index fund. Enables tax-loss harvesting at the individual-security level — even in years the index is up, roughly a third of its constituents are down and can be harvested. Historically minimum-viable at $500k+ portfolios; now offered by Fidelity, Schwab, Vanguard, Frec, Aperio, and Parametric at $100k–$500k minimums with fees of 0.15–0.40%.

When it matters: Taxable brokerage accounts of $250k+ where the tax alpha (0.5–2%) exceeds the extra fee.

See also: Tax-loss harvesting , Tax alpha , 130/30 long-short strategy

Opportunity Zones (QOF) IRC §1400Z-1 and §1400Z-2 Qualified Opportunity Funds #

A tax incentive created by the 2017 TCJA that offers three benefits for investors who reinvest capital gains from any source into designated distressed census tracts via a Qualified Opportunity Fund (QOF) within 180 days: (1) DEFER the original gain through 2026, (2) REDUCE it by 10-15% via basis step-up at 5 or 7 years (largely expired for new investments), (3) ELIMINATE all capital gains on the QOF investment itself if held 10+ years. The 10-year elimination is the remaining big prize; most reduction benefits are past their windows. QOF sponsor quality varies enormously — due diligence on the underlying project cash flow matters more than the tax benefit.

When it matters: Investors with large capital gain realizations from any source (stock sale, business sale, other real estate) willing to lock capital into a 10+ year real estate development.

See also: LTCG , NIIT , §1031 exchange

Official reference: IRS Opportunity Zones FAQ ↗

Markets & filings

Regulatory disclosures and market-structure terms.

13F filing #

Quarterly SEC disclosure required of institutional investment managers with $100M+ in US equities under management. Filed within 45 days of quarter-end and shows the manager's long US equity positions as of that date. Widely watched for hedge-fund and Warren Buffett-style clues, but the 45-day delay and long-only limitation mean 13F holdings can be stale or one-sided by the time they're public.

When it matters: Anyone following what smart money is doing; Berkshire's Q2 2026 13F is a recent example of a regime-signal 13F.

Official reference: SEC Form 13F ↗