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Understanding Tax Budgets

What Does the Tax Budget Control?

The budget controls how much gain the Transition Tool is allowed to realize during transition-driven trades.

What the Budget Applies To

The budget applies only to:

  • Transition Sleeve activity

  • Managed Portfolio sleeve transitions

What the Budget Does NOT Control

The budget does not govern:

  • Trading inside model sleeves

  • External account activity

  • Gains realized outside the transition process

⚠️Important Budget Behaviors⚠️

Budget Carryforward

Budget Exhaustion

Year-End Handling

Unused transition budget carries forward automatically.

Once the budget is exhausted:

  • No additional gain positions will liquidate

  • Unless offsetting losses exist

Budgets do not automatically reset at year-end.

Advisors must manually update budgets if desired.

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