3 tax planning strategies we’re doing for a couple with over $3m of income
The situation:
- ~$3M expected income this year
- ~$500K capital gains from selling appreciated employer equity
- One spouse has Real Estate Professional Status (REPS)
The strategies:
-
Tax‑aware hedge fund exposure
- Diversifies the portfolio
- Realizes ordinary deductions that offset W‑2 / earned income
-
Tax‑aware long/short equity SMA
- Targets stock market return + long/short alpha
- Systematically harvests capital losses to offset the $500K gain from selling employer stock
-
Tax‑aware real estate (including manufactured home communities)
- Realizing ~1.8x depreciation in year one
- Thanks to the grouping election, that depreciation can be taken against the non‑REPS spouse’s income
If you have high‑earning years ahead, tax planning is the #1 way to enhance your net worth.
Not by making risky investments for home-run returns, but by keeping more of what you’re already making.