The latest episode of Let's Talk ETFs sees iShares' Danny Prince rejoin the podcast to try and help investors save money on their tax bill. One of his key messages is that while ETFs are famously tax efficient relative to their cousins in the mutual fund space, how you use exchange traded funds to tax manage is just as important as the underlying tax efficiency inherent in many of these investing vehicles.
Topics covered

3:00 - Why do investors overlook the tax efficiency aspect of ETFs?

Understanding how investments are taxed: 

7:00 - Capital Gains

9:30 - Qualified vs. non-qualified dividends

11:30 - Tax-deferred vs. non-tax-deferred accounts

14:00 - What do we mean when we say ETFs are “tax efficient”? And why is this the case?

18:15 - Why are mutual funds much more likely to pay out capital gains than ETFs?

21:30 - 2018 was a record year for mutual fund capital gains payouts; ETFs remained significantly more tax efficient over the same period 

Beyond equities: Tax rules for other asset classes and fund structures:

27:00 - What does it mean when a bond fund is listed as being “tax-free”? Muni bond ETFs

28:30 - ETFs that hold physical commodities are generally taxed as collectibles (IAU) (GLD) (SLV) 

30:30 - Taxing futures-based ETFs: The 60/40 rule

32:00 - Limited partnership funds and the tax man: Schedule k-1 forms

Tax management strategies:

34:30 - Tax loss harvesting

36:00 - The Wash Sale rule (IVV) (SPY)

38:00 - Knowing which assets belong in tax-deferred vs. non-tax-deferred accounts

40:15 - In summation: Investors need to be more conscious of how taxes can affect their bottom line


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