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President Joe Biden s expected proposals around increasing capital gains taxes for the wealthy could lead to big changes in tax planning strategies for those investors. If these proposals become reality, a stronger focus on charitable strategies could be the answer.
When coupled with likely proposals around the elimination of the basis step-up at death, the usual approach of deferring gains to reach long-term status or until death will no longer offer any benefits.
To illustrate the potential landscape after the proposed tax changes, let s assume the following set of facts. Terry regularly reports income of greater than $1 million per year. Terry is 65 years old and owns Apple (AAPL) stock worth $5 million at a cost basis of $200,000. Terry is charitably inclined and tends to donate approximately $100,000 per year. Terry wants to diversify but doesn t want to pay a huge amount of tax.
Get Morningstar s essential reading for financial professionals in Advisor Digest.
The pandemic forced us all to form new habits in every aspect of our lives, including how we spend our money. Instead of grabbing lunch with friends or planning our next vacation, many of us stayed home and experimented with sourdough bread recipes. Environmental restrictions, while keeping us safe, also inadvertently prevented many of us from excess spending.
As many locations begin easing restrictions, many predict a boom in consumer spending. For those who are enjoying their healthy savings accounts, there s a downside to partaking in that boom.
To help your clients stick to their saving goals, guiding them through a reflection process may be key to prolonging the good habits they ve adopted.
Get Morningstar s essential reading for financial professionals in Advisor Digest.
The pandemic forced us all to form new habits in every aspect of our lives, including how we spend our money. Instead of grabbing lunch with friends or planning our next vacation, many of us stayed home and experimented with sourdough bread recipes. Environmental restrictions, while keeping us safe, also inadvertently prevented many of us from excess spending.
As many locations begin easing restrictions, many predict a boom in consumer spending. For those who are enjoying their healthy savings accounts, there s a downside to partaking in that boom.
To help your clients stick to their saving goals, guiding them through a reflection process may be key to prolonging the good habits they ve adopted.
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