The step‑up in basis at death is the closest thing we have to a get‑out‑of‑jail‑free card.

So the game is to build massive deferrals you never end up paying.

Your lines of defense against recapture:

• Tax‑favored income covers lifestyle

Real estate, securitized affordable‑housing loans, certain munis, etc. can provide tax‑efficient or tax‑free income to cover most of your spending.

• Losses harvested in the withdrawal year

If you need $1M, and you can harvest $1M+ of losses that year, you can take that withdrawal and still be roughly tax‑neutral.

• Banked loss carryforwards

Prior‑year harvested losses can be “spent” in high‑income / high‑withdrawal years.

• Borrow instead of sell

Box spread loans secured by the portfolio let you access liquidity without realizing gains.

• Charitable bunching

Charitably inclined families can donate highly appreciated securities to a DAF in years they need a big deduction.

• Section 351 exchanges

In the right fact pattern, 351 exchanges can serve as an escape hatch for low‑basis securities, letting you diversify quickly without immediate tax.

• Roth IRA as a backstop

Large Roth balances can always be tapped in a pinch in a tax‑neutral way (after 59½ and meeting the rules).

When these pieces are coordinated correctly, you can often defer taxes indefinitely and in many cases, eliminate them entirely via step‑up in basis.

What’s surprising is how often there’s no plan for this.

Before implementing any “tax‑aware” strategy, the real question to ask is:

How are we avoiding recapture?

If you have $10M+ and no one on your team can answer that clearly, that’s the real risk.