Someone with $20m of inherited farmland reached out

It’s appreciated quite a bit since they inherited it so we want to be mindful of taxes as we approach diversifying their balance sheet

Broadly, I see four primary levers we can use to rebalance and optimize:

1. RELOC — Use the available line against the farmland strategically to fund diversification into tax-advantaged investments
2. Selective farmland sales — Paired with capital losses from a long/short SMA to help manage the tax impact
3. 1031 → DST → 721 structure — Transition a portion of the farmland into a diversified real estate portfolio across data centers, multifamily, industrial, etc. all while deferring taxes
4. Ongoing cash flow deployment — Cash flow is shielded from depreciation and we can allocate it into asset classes and strategies that are currently underrepresented

For the existing Roth IRA I would look to diversify across private equity, infrastructure, and credit.

For public equities, I generally prefer holding those in taxable accounts where we can take advantage of tax-loss harvesting over time.

I also think it makes sense to prioritize adding tax-aware hedge fund exposure that can realize ordinary deductions, which can help offset earned income and upcoming RSU vesting.

This will be a multi-year process to fully optimize.

It’s also one of the more intellectually stimulating problem sets I've seen where we can bring our full breadth of capabilities.

If you want a model portfolio, go somewhere else.