Results for "Tax Planning"

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How are REIT dividends taxed?

October 19, 2014

My recent column talked about companies lowering their overall tax burden by spinning off or be¬coming REITs that pay no corporate level of tax. Readers have asked if these real estate investment trusts pay qualifying dividends or are REIT...

Inversions the latest tax-cutting strategy

September 21, 2014

It's not often that a tax story gets front page treatment but the movement to erode the U.S. corporate tax base has taken center stage. We've read about inversions, where an American company and a foreign firm combine and the non-U.S. company...

Derivative basket options questioned

August 17, 2014

The Senate Permanent Subcommittee on Investigations has turned its attention to a derivative strategy that, from a tax standpoint, was rendered unusable in an earlier IRS memo. I attended the July 2 hearing and was not very surprised by the...

A new era for longevity insurance

July 20, 2014

Longevity insurance refers to a forward-starting life annuity. As an example, an investor at age 60 plunks down a wad of cash with an insurance company that promises a monthly income for life; but this monthly income only starts when the investor...

Out-of-state trusts may lose appeal

May 18, 2014

Over the past few years, we have been asked on numerous occasions about the tax benefits of holding your investments in a trust situated in a state that has no income tax, such as Nevada or Delaware. This might sound very much like the activity...

Foreign dividends can be a minefield

April 27, 2014

As dividends cross borders, complications arise. In my February column, I mentioned how shareholders of foreign corporations are the investors most negatively affected by a tax trap when buying puts. I will elaborate on the math on that and...

Taking a closer look at tax reform

March 9, 2014

House Ways and Means Committee Chairman Dave Camp, R-Mich., has proposed sweeping changes to the Internal Revenue Code. And while many of the ideas — such as a top tax rate of 35% and changes to the way derivatives are taxed — have been...

When buying puts to protect profits

February 23, 2014

Some clients are asking about buying puts to protect the profits that they have earned. Of course, there are possible tax surprises when using puts to hedge, and none of them are pleasant. When one buys puts on a stock as an outright speculation,...

Taxpayers act with enough incentive

January 26, 2014

The verdict is in. The government can get people to voluntarily pay taxes earlier than they have to. It seems that if the incentives are high enough, taxpayers will act. The year 2010 was the first in which those who made more than $100,000...

Keep your eyes on the calendar

December 15, 2013

Roth conversion rules allow an investor to re-characterize, or undo, a conversion. This makes sense when the value of the Roth declines substantially, making the tax bite disproportionate to the Roth's value. The government gives Roth converters...

Maximize loss harvesting year-round

November 10, 2013

We advocate harvesting losses (once they are big enough) all year to get the most from this tax-efficient strategy, but most investors harvest losses only at the end of the year. I guess the reasons are either that they want to take losses only...

Giant dividends: Bonanza or tax trap?

October 20, 2013

Vodafone Group PLC (VOD) has said that it intends to sell its 45% interest in Verizon Wireless to Verizon Communications Inc. (VZ), its joint venture partner in the wireless company, for $130 billion. Verizon will pay Vodafone mainly in cash...

Holding periods are a moving target

September 22, 2013

There are many instances in which the government demands a minimum holding period for an investment to obtain a long-term capital gains tax rate in order, I assume, to prove that the investment wasn't a speculation or merely a tax savings transaction....

Not all MLP funds created equal

August 25, 2013

There are exchange-traded funds, and open- and closed-end mutual funds that invest in master limited partnerships. All are regulated investment companies, but most flunk the tax test for funds and wind up being regular tax-paying corporations....

Optimizing the use of GRATs

July 21, 2013

The interest rates that are prevalent when financial advisers establish a GRAT for a client have a great effect on how much money can be transferred tax-free to the client's children. The grantor retained annuity trust is a very popular vehicle...

The best way to play Kinder Morgan

June 16, 2013

Recently there have been lots of articles written about the “kinder” (German for children) of Kinder Morgan. There is Kinder Morgan Energy Partners LP (KMP), Kinder Morgan Management LLC (KMR) and Kinder Morgan Inc. (KMI). Kinder Morgan...

Comparing the advantages of SMAs

May 19, 2013

A multitude of papers extol the tax virtues of investing through separately managed accounts. Most have compared them with mutual funds and have concluded that SMAs can produce better after-tax returns than funds for those able to take advantage...

Looking inside the president's budget

April 21, 2013

President Barack Obama's proposed budget for fiscal 2014 contains a host of revenue raisers relevant to taxpaying investors. The budget is a conglomeration of 1) proposals discussed in recent tax reform hearings held by House Ways and Means...

Another side of the carried-interest debate

March 24, 2013

Most of the debate over carried interest centers on whether managers of hedge funds, leveraged-buyout funds, venture capital funds and other private investment partnerships are paying their fair share of taxes. But if Congress changes the carried-interest...

Tax reform of financial products?

February 24, 2013

The House Ways and Means Committee has released a draft proposal for sweeping reform of tax laws dealing with financial products. Most of the proposals might be too complex or unfair to become law. Financial derivatives no longer would generate...

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