Timing is more important than many realize. Investor rule of thumb: Time in the market is more important than timing the market. Here’s evidence for that statement. Start with the following set of hypothetical returns: Hypothetical returns Year Return 1 -28% 2 -4% 3 -2% 4 8% 5 3% 6 10% 7 12% 8 8% […]
Read MoreAuthor: Nicole Easton
IRS Forgives Rollover Mistake
A man’s family noticed that he was mentally declining in 2016. It may have been the onset of dementia. In 2017, this man withdrew funds from his IRA, apparently intending to roll the money into a new IRA. However, due to his medical condition, the man never completed the rollover. This man’s grandson son was […]
Read MoreAsk a Trust Officer: Mutual Fund Distributions
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 MorePerils 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 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 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 MoreAsk a Trust Officer: Charitable IRA Giving
Dear Trust Officer: I’ve heard of something called a “charitable IRA rollover.” What is that? — Generous, but Prudent DEAR GENEROUS, BUT PRUDENT: If you are older than 70½, you are permitted to arrange for a tax-free transfer of up to $100,000 per year from your IRA to the charity of your choice. This is […]
Read MoreInternational Issues
Treasury note yields pushed lower as investors raised allocations to what were deemed to be safer assets. The 10-year note yield ended the week 18 basis points lower at 3.06% and the 2-year note finished 12 basis points lower at a yield of 2.80%. Stocks were lower last week with the S&P 500 settling down […]
Read MoreAn Inheritance Protection Plan
Estate planners and trust officers often hear the question: “How can I keep my money out of the hands of my child’s spouse?” There can be many motivations for this attitude—perhaps the son-in-law or daughter-in-law lacks financial maturity, or has a substance abuse problem, or the parent thinks that the marriage itself might not last. […]
Read MoreLike-kind Exchanges Changed
Internal Revenue Code Section 1031 provides that an exchange of things that are alike will not be taxable except to the extent that cash changes hands. The most important application of this provision has been in the area of exchanges of real estate, but it also has been applied in other contexts as well, such […]
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