The U.S. Treasury Department has announced new measures targeting certain investment strategies used by exchange-traded funds (ETFs) that are designed to avoid taxes. The move aims to close loopholes that allow some investors to defer or eliminate tax obligations.
The Treasury is moving to block specific versions of an ETF maneuver known as “351 conversion transactions.” These transactions have been used to shift assets into ETFs in a way that circumvents certain tax rules. While blocking some of these strategies, the department also flagged others for potential future scrutiny.
This action reflects the Treasury’s ongoing efforts to ensure that corporations and high-income individuals pay their fair share of taxes. Tax avoidance strategies, particularly those that exploit complexities in the tax code through financial engineering, have been a focus for the administration.