Tax-Efficient Strategy for High-Income Investor

As a seasoned private wealth manager, you are advising a client, Dr. Lewis, a 50-year-old physician with substantial annual income and investment assets totaling $10 million. Dr. Lewis is concerned about the tax implications of his investments as he approaches retirement. He has investments in several asset classes, including equities, fixed income, real estate, and a family-owned business, which provides him with both salary and dividends. With a marginal tax rate of 37%, he is considering shifting his portfolio to generate more tax-efficient income. Dr. Lewis wants to avoid capital gains taxes while maximizing tax-adjusted returns. In this context, what strategy would best achieve Dr. Lewis’s goal of limiting his tax liability while maintaining growth and income from his investments?