Trapped By Taxes? How 351 Exchanges Let You Diversify Without Selling Your Stock (EP.225)

Oct 8, 2025

Investors worried about tax implications from selling appreciated stocks can find relief through Section 351 exchanges. This strategy allows the exchange of concentrated stock for ETF shares without immediate tax consequences. Peter Lazaroff discusses eligibility criteria, the non-recognition nature of the exchange, and practical benefits compared to traditional strategies. He highlights why these exchanges are gaining popularity due to advancements in technology and offers insights into key questions to discuss with financial advisors. It's a smart and efficient way to diversify.

Ask episode

AI Snips

Chapters

Books

Transcript

Episode notes

ANECDOTE

Why He Focused On 351 Exchanges

Peter says 351 exchanges are the topic he's discussed most this year with clients, advisors, and on conference stages.
He highlights this approach as especially useful for people holding company stock, inherited shares, or long-held winners.

INSIGHT

How A 351 Exchange Works

A 351 exchange lets you contribute appreciated securities into a newly created ETF and receive ETF shares in return.
The transaction is a non-recognition event so your cost basis and holding period carry over to the ETF shares.

INSIGHT

Eligible Assets And Liquidity

351 exchanges apply mainly to publicly traded stocks and ETFs and typically exclude illiquid or private assets.
The fund structure preserves liquidity: you get daily tradable ETF shares and a 1099 like any other ETF.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Wondering if you’re making the right financial moves? Let’s build a strategy you can rely on. Schedule a call with Peter to get professional guidance.

-----

Many investors want to diversify out of a few appreciated stocks but can’t stomach the tax bill that comes with selling. In this episode, Peter Lazaroff explains how Section 351 exchanges give investors a smarter, tax-efficient way to move from concentrated stock positions into diversified ETFs–without triggering immediate capital gains.

Listen now and learn:

► What a 351 exchange is and how it works

► Who’s a good candidate–and who isn’t

► Questions to ask an advisor before pursuing one

Editing and post-production work for this episode was provided by The Podcast Consultant (⁠https://thepodcastconsultant.com ⁠)

Disclosure: This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Plancorp LLC employees providing such comments, and should not be regarded the views of Plancorp LLC. or its respective affiliates or as a description of advisory services provided by Plancorp LLC or performance returns of any Plancorp LLC client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Please see disclosures here.