AQR’s September 28 research note argues that tax-aware long-short portfolios gain much of their tax advantage by deferring gains, especially short-term gains, while realizing losses at a pace closer to a tax-agnostic active strategy. Its optimizer tries to retain appreciated positions unless the alpha signal provides enough reason to sell. A related March study explains another channel: alpha grows NAV, reducing leverage relative to target; restoring target leverage creates new positions without embedded gains. These are modeled strategy findings, not guaranteed investor outcomes. The interesting intersection is between the alpha model, tax-lot choices and portfolio growth. New note · Gain-deferral study · Pre-tax alpha paper.