The Most Overlooked Tax Strategy Wealthy Investors Use

They have heard of charitable trusts. They know about Opportunity Zones. They understand tax loss harvesting.

We help clients do all of that. It works.
But it still does not solve the biggest tax problem high earners face.

Ordinary income.

For most professionals, this is the white whale of tax strategy. Your salary, your bonus and your short term gains all get hit at the highest possible rates. If you live in California or New York, you can lose more than half of every new dollar you earn.

If you want to keep more of that capital, you are in the right place.

I’m Brad Johnson, Managing Partner at Evergreen Capital.
We work with families who have five million dollars or more in investable assets.
Our focus is simple. Help them compound after tax wealth.
And over the past few years, our team has helped clients defer tens of millions of dollars in taxes using strategies like this.

This is not a real estate loophole. It is not a sketchy tax trick.
It is a structured investment designed to generate real, usable losses that can offset W2 income, bonuses and interest income.

It is called a tax aware hedge fund. And it produces ordinary income losses year after year.

Here is what we are covering:

I will also walk through the math on how this strategy can create six figure tax deductions each year.

For most high earners, the tax they feel most is ordinary income.
You can plan around selling a business.
You can defer gains in real estate.
You can gift appreciated stock.

But your ordinary income is probably the bulk of your annual earnings.

Your salary.
Your bonus.
Your interest income.
Your short term gains.

Most people have almost no way to offset this.
Sure, you can buy short term rentals for depreciation, but that means running a hotel operation on top of your career. Almost no one wants that.

Think about how much faster your net worth could grow if you could invest an extra six figures every year. That is the opportunity here.

Tax aware hedge funds give investors a way to reduce ordinary income directly, without changing their overall investment strategy and without taking on operational headaches.

At a high level, this is a long and short strategy. It holds some positions long and others short. But the goal is not to chase a few big winners. It is to engineer tax efficiency across a very diversified portfolio.

Think of it like investing in a broad index wrapped in a long and short structure.

This design creates many opportunities to realize losses. Here is the key:

By pairing long and short positions, the fund can create realized losses on paper even if the overall performance tracks market returns.

Those losses pass through to you. And because of the fund’s tax designation, a large share of those losses shows up as ordinary income losses.

You maintain exposure to the equity markets. Your long term compounding continues. And you gain access to losses that meaningfully reduce your tax bill every year.

This is tax loss generation by design, not by poor performance.

Here is why high earners are investing in this strategy.

Tax aware hedge funds commonly generate around 30 percent ordinary income losses.
So a one million dollar investment could produce a three hundred thousand dollar ordinary income loss in year one.

Ordinary income losses are far more valuable than capital gains losses because they offset earnings taxed at your highest rate. For many clients in California and New York, that combined rate is forty five to fifty percent.

So a three hundred thousand dollar loss can create roughly one hundred fifty thousand dollars in real savings.

When you pair this with strategies that defer or offset capital gains, you can stack tax benefits and capture the full after-tax advantage.

That is real tax alpha. Double digit levels in many cases. Over time that creates a structural advantage few other portfolios can match. And you are not taking excess risk to get it.

This is why we view this as a compounding strategy disguised as a tax strategy. The goal is not to reach for performance. The goal is to keep more of what you already earn.

These funds uses a rules based system to convert normal market volatility into short term tax assets.

The wealthiest investors understand a simple truth.
How you structure your portfolio matters just as much as what you invest in.

This is the next evolution of that idea. A smarter way to grow and preserve capital in a high tax environment.

Unfortunately, this is not a mass market investment.
It is designed for qualified purchasers with at least five million dollars in investable assets who want more tax efficiency than traditional strategies can provide.

It works especially well for:

None of this is tax, legal or investment advice, and the numbers here are simplified illustrations. The real work is sitting down with your CPA, attorney and advisor, mapping which of these moves actually fit your facts this year, and then executing a small number of big, coordinated plays before December 31.