Fordham Law Professor Jeffrey Colon is quoted in a Bloomberg article about a fast-growing exchange-traded fund, BOXX, that has come up with a new way to avoid taxes.
The fund, known by its ticker BOXX, surpassed $1 billion in assets this month. It is one of a number of efforts to use the ETF loophole in creative new ways, said Jeffrey Colon, a tax professor at Fordham University’s School of Law in New York. He called BOXX “the poster child for tax arbitrage.”
Colon, the Fordham professor, said lawyers, bankers and fund managers are all kickingaround ideas for using ETFs’ in-kind redemption mechanism to solve new tax problems.One idea he’s heard: converting a hedge fund into an ETF to harvest winning bets anddelay the tax bill. Another possibility is using ETFs in corporate takeovers to fend offsellingshareholders’ taxes.
“Creative tax people are going to look for ways to apply it to different areas,” Colon said.
Read “T-Bills Without Tax Bills? This Fund Says It Cracked the Code” in Bloomberg.