Taxes quietly chip away at even a well-built portfolio. Robert Fenn Giles III, CFP®, CAIA, Managing Partner at Wealth Advisors of Tampa Bay, and Ryan Chard, CFP®, CRPC®, a Wealth Advisor with the firm, sit down to explain how custom indexing may give high-income investors more control over when and how they recognize gains.

They start with the basics: how ordinary income, capital gains, and qualified dividends are taxed differently, and why that difference tends to matter more as income rises. From there, they look at why mutual funds and ETFs can create a tax liability even in a year you didn't sell a position, and how custom indexing is designed to address that through individual stock ownership and active management.

The real value shows up in the applications: working to transition a concentrated stock position over time rather than all at once, planning ahead of a liquidity event like a business sale or stock option exercise, positioning a portfolio with step-up in basis in mind for those who inherit it, and using appreciated securities to potentially increase the impact of a charitable gift. Giles and Chard wrap with a Q&A on what counts as "high income" and how often a custom-indexed portfolio is rebalanced.