Word: taxingly
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Dates: during 1990-1999
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...that swap funds aren't for everyone. They require that the stock be held in taxable accounts and are designed with stock-laden executives in mind, not the masses in tax-deferred retirement plans. They also require a minimum investment of $500,000 and a net worth of $1 million. It's a select crowd, for sure, and that bugs me. Diversification is a huge issue for all investors. If tax-free diversification for the rich is allowed to stand--and, frankly, even if it isn't--the time has come to ease restrictions on company-contributed shares...
Through something called swap funds, also known as exchange funds, Wall Street has divined a way for some overly concentrated investors to trade one stock that has risen for a basket of stocks of equal value--avoiding any immediate capital-gains tax. A crush of financial firms, including Banker's Trust, Salomon Smith Barney, J.P. Morgan and Donaldson Lufkin Jenrette, are launching swap funds right now. They aren't entirely new. But Congress took a whack at limiting them two years ago, and they're resurfacing with a new look...
...interest "in kind." That means partners are given equal amounts of all the stocks in the fund. It's a nifty way to launder, say, 50,000 shares of General Motors into about 500 shares each of 100 different companies without having to sell and pay an immediate tax on the capital gain...
...toward diversified mutual funds, or individual stocks in at least six industries--and avoid the one in which you work. If you are concentrated in a single stock in a taxable account--and are not wealthy enough to join a swap fund--you'll have to pay capital-gains tax as you diversify. In most cases, that's a price worth paying...
...G.O.P. has no ideological box big enough to hold the people Bush has gathered; conservatives of every stripe are pitching in. Lindsey, for example, may be a tax-cutting supply sider, but he spent his time at the Federal Reserve fighting inner-city red lining by major banks. Al Hubbard, a onetime deputy chief of staff to Dan Quayle, pushed for massive deregulation of business during the 1990 recession and now squires kindred spirits to Austin. Fred Steeper, the Republican pollster with the best fingertip feel for independents, is likely to be back for his third George W. campaign, even...