Results for "Tax Planning"

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Use tax time to focus on retirement

April 2, 2015

As Tax Day looms, your clients' thoughts are probably focused on putting the finishing touches on their 2014 tax return — or at least preparing that extension and kicking the can down the road for a few months. However, don't let tax season...

Why President Obama's estate tax proposal is a big deal

February 6, 2015

President Barack Obama whipped up the class warfare argument with his estate tax proposal in the State of the Union address. Let's explore the estate tax and the step-up in basis, and their influence on taxable investors. When a person dies,...

New cost-basis rules for options

January 11, 2015

It's the beginning of the year and you and your clients are starting to receive an avalanche of forms and reports from brokerage firms and custodians. You'll see some new information this season as 2014 was the first year that brokers had to...

Some year-end tax strategies to consider

December 14, 2014

When is the best time for clients to fund their retirement plans? One has until April 15, 2015 to contribute to their retirement plan for 2014, but is that optimal? A report from the Vanguard Group Inc. sheds new light on the issue. Vanguard...

Working around the wash-sale rule

November 16, 2014

Loss harvesting is popular in December, but it should be done year-round, especially since there are ways to take a loss that don't disturb alpha. There are perfect end runs around the wash-sale rule, most of which use options strategies. If...

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...

Managing tax brackets a potent tool

June 15, 2014

Now that we again have so many tax brackets, it's time for a refresher on what these brackets are and how to make the most of them. If a married couple had taxable income of $150,000, they would be in the 28% tax bracket. However, only $1,150...

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....

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...

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