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Join Dave Nadig as he dives deep into the complex world of ETF tax strategies with expert Brent Sullivan from Tax Alpha Insider. In this illuminating conversation, they break down the often misunderstood concept of "return of capital" distributions in ETFs and how these can impact your investment strategy and tax planning.
## Key Topics Covered:
- What return of capital actually means and how it works in different market conditions
- The origin of return of capital in Master Limited Partnership (MLP) ETFs
- How modern buy-write and covered call strategies utilize return of capital
- Tax implications when your cost basis reaches zero
- Potential downsides and risks of aggressive return of capital strategies
- How ETF sponsors manufacture return of capital through tax-loss harvesting
- The difference between capital gains and ordinary income in distribution planning
- What investors should track and monitor when investing in these products
- How to find reliable information about an ETF's distribution characterization
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