Category: Taxes
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Can Smoking Be Good for Your Lifetime Budget?
Many anti-smoking advocates make the blanket claim that smoking is bad for your finances.[1] But are those claims justified? This blog entry is purely an exercise in analysis. Please do not read it as advocacy. My purpose here is merely to make clear the lifetime financial implications of a pack-a-day…
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Inflation Protection? Or Trap?
With inflation remaining “stubbornly high”[1] we today take a look at the usefulness, or lack thereof, of TIPS. Please don’t buy TIPS without reading this. TIPS stands for Treasury Inflation-Protected Bonds. The US Treasury describes TIPS thus (we added the “bold” fond for emphasis): Treasury Inflation-Protected Securities (TIPS) are marketable…
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Why Doesn’t Your Client Act? 4 Factors to Guide Financial Decision-Making
Advisors can spend hours explaining a great solution to their clients, only to have those clients not act on the solution. There’s no magic bullet. But sometimes clients appreciate it when their advisor helps them identify what’s making the decision hard. What makes a decision difficult? Decision analysts have found…
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Are Your Clients Choosing to Pay $2.5 Million in Unnecessary Taxes?
Every week, we meet with advisors who have a client who is choosing to pay two and a half million in taxes that could be permanently and legally avoided. Before you say that none of your clients would ever make such a choice, you might want to see why we…
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Year-End Giving: Have We Been Doing it Wrong?
The industry’s approach to charitable planning is broken. Today we’ll focus on one way in which it’s broken. We hope understanding the problem, and the solution, will help you help your clients, and perhaps also help you gain valuable assets under management. Myth – Taxes Drive Year-End GivingOne myth that hovers…
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The Basis Step-Up at Death: Don’t Take the Bait!
If you had to pay tax, would you rather pay 40%, or 23.8%? It’s not a trick question. And yet, depending on how the question presents itself, some people are lured into choosing a 40% estate tax instead of a 23.8% capital gains tax. In this post, we’re going to explain how some…
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Can Your Client Actually Make Money By Giving It Away?
Charitable giving, especially through Section 642 trusts, can surprisingly result in substantial tax savings. A high-income client can, instead of selling an asset, contribute it to a Sec. 642 trust and generate a significant tax deduction. Coupled with the current rules for calculating deductions on new 642 trusts which allows…
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This Second-Best Tax Planning Opportunity Expires 12/31/23
Too often clients who sell major assets, including businesses, real estate, large stock positions, artwork, and airplanes, fail to do their tax planning in advance. For example, a few months ago we mentioned a case in which the client had realized a $50 million gain. Then, after the fact, he…
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“QSBS” Stock – More Than $10 Million Tax-Free?
Congress enacted section 1202 in 1993 with the stated purpose of creating an additional incentive for certain types of small business investment. The law allows investors in Qualified Small Business Stock (sometimes called QSBS) to avoid tax on up to $10 million in gains. If you have clients with Qualified…
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Diversify or Die (with 57.8% Probability)
In February of this year, I was speaking with an advisor in Utah. We were discussing the use of a Stock Diversification Trust (click here to request an Advisor Guide) for a client who had 80% of her net worth in a single stock. She was reluctant to sell because she…