When you exchange your stocks for a share of the exchange fund, no taxes are triggered and your cost basis transfers to your shares in the fund.

As a result, there's no “sale” and no taxable event to report after you enroll. The exchange fund does generate a Schedule K-1 tax form for minor tax events. You’ll receive the K-1 each year you remain in the fund.

See more about how we manage the fund to limit taxable events.