Dear Trust Officer: I bought shares in a mutual fund last summer and now I’m getting a distribution of capital gains from the fund. Why? I don’t want that. Do I have to pay taxes on it? — Buyer and Holder DEAR BUYER AND HOLDER: Federal law requires mutual funds to distribute nearly all of […]
Read MoreMonth: December 2018
Perils of the Amateur Trustee
Glenn Forgey created a revocable living trust to manage his assets, naming his oldest child, Lyle, as trustee. The trust owned bank stock and agricultural property. At Glenn’s death in 1993, the trust was to be divided into equal shares, one for Lyle, one for his brother Wayne, and one for his sister Bessie. The […]
Read MoreYear-End Planning
This year’s stock market correction and increased volatility has monopolized the headlines and commentary leaving other important issues unaddressed. One of those topics is tax planning. The new standard deduction which is part of the 2018 tax law will increase the number of individuals and couples who will use the standard deduction. This change, by […]
Read MoreMulti-year Tax Planning
According to estimates, there will be 29 million more taxpayers using the standard deduction for the 2018 tax year than did in 2017. Usually, one who is relying on the standard deduction, can get away with fairly minimal tax planning—maximize contributions to qualified retirement plans, offset capital gains with capital losses, and so on. However, […]
Read MoreSideways, Lower and Higher
Why do we constantly hear about investment time-horizons? Because, as the old saying goes, time in the market is a consistently effective approach to investing while timing the market is not a dependable strategy. It is impossible to know what the market is going to do. We can’t even agree on what the market has […]
Read MoreNo “Clawbacks”
Next year the amount exempt from the federal estate and gift tax will be $11.4 million per taxpayer. For a married couple, assuming that they both die next year, the exemption is doubled, to $22.8 million. This exemption is scheduled to fall roughly in half in 2026, unless Congress acts before then to make it […]
Read MoreHeadwinds Down to a Breeze
The stock market correction stalled last week. One of two headwinds was eliminated when Fed Chairman, Jerome Powell, confirmed the members of the Federal Open Market Committee are not the ill-informed, mindless and stubborn group many self-serving market participants and commentators had declared them to be in recent weeks. The market gained 4.85%, as measured […]
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