Bob FraserCFO & Macro Strategist | Data-Driven Investing Expert | Speaker & Author

The Tax Bill Nobody Warned You About

Name: The Tax Bill Nobody Warned You About
Uploaded: 2026-05-01T13:01:27+00:00
Duration: 45 s
Channel: Bob Fraser
Description: In this segment, the speaker highlights a recent, under‑discussed change to the U.S. tax code: recapture taxes, which were previously taxed at the lower…

1 May 2026 · 1 min

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In this segment, the speaker highlights a recent, under‑discussed change to the U.S. tax code: recapture taxes, which were previously taxed at the lower long‑term capital gains (LTCG) rates, are now taxed as ordinary income. This shift eliminates the tax advantage of taking early losses solely for the time‑value‑of‑money benefit, fundamentally altering the financial math for investors, especially in sponsor syndications. The speaker notes that many investors focus on the immediate “adrenaline high” of realizing losses in year 1, but fail to consider the tax consequences when the underlying asset is eventually sold under the new ordinary‑income treatment.

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And this is actually really interesting because this is a recent change in the tax code that I've not heard honestly anybody talk about, but it is massive in that historically the recapture taxes used to be at long-term capital gains rates, tax rates, which were much lower. They have changed that to be ordinary income rates. So now there is no benefit to take the losses except for time value of money, meaning you can take the losses now, you can defer the tax that you will have to pay for a few years, but materially changes the math behind recapture. And a lot of investors don't understand it because it's not usually talked much about at the sponsor syndication level. Hey, we're selling this deal. We have all these losses year 1. That's the immediate adrenaline high that you get as an investor of getting these losses. But there's no discussion about what happens when this asset sells.