Ask the Advisor – 1/2/2008

1/2/2008:

ask-the-advisor-hoboken411-logo-small.jpgHappy New Year!

Today, we have…

Portfolio Updates A Wash Or Not A Wash:
Beware when selling depreciated securities
Wash sale rules key dates

Rebalacing Act:
Might You Have Too Many Eggs In One Basket or Vice-Versa
Shifting to Income, Growth, Both, Neither

Retirement Updates:
Tip Sheets Vital For All Pre-Retirees
Tip Sheets Vital For All Retirees

Read all about it after the jump!

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Portfolio Updates: A Wash Or Not A Wash

Beware When Selling Depreciated Securities

If your capital losses exceed your capital gains this year, you may deduct the net loss from your ordinary income, up to $3,000. Capital losses greater than $3,000 may be carried over to future tax years. Should you decide to sell depreciated securities, beware of the wash sale rule.

A wash sale occurs when you sell or trade stock or securities at a loss, and within 30 days before or after the sale you:

  1. Buy substantially identical stock or securities.
  2. Acquire substantially identical stock or securities in a fully taxable event.
  3. Acquire contract or option to buy substantially identical stock or securities.

Rebalacing Act:

Might You Have Too Many Eggs In One Basket or Vice-Versa

Shifting to Income, Growth, Both, Neither

Speak to your accounting and financial team. If you own employer’s stock in your 401(K), analyze holdings to determine if you have too many eggs in one basket and whether you should diversify out of select holdings.

Since you may need to consider selling securities if you want to harvest losses before year-end, now is a good time to assess your overall asset allocation and plan for 2008.
Since long-term capital gains and qualifying dividends can be realized at the relatively favorable rate of 15%, investors seeking income with growth opportunity may want to consider shifting a larger percentage of their taxable portfolios to high-quality equities that have a history of increasing their dividend payments.

Retirement Updates: Tip Sheets Vital For All Pre-Retirees

Tip Sheets Vital For All Retirees

  1. Be aware of the percentage of assets you hold in your employer’s stock.
  2. Contribute to your retirement account.
  3. Don’t forget your IRA.
  4. Roth conversions for higher income IRA holders coming soon.
  5. Consolidate orphaned 401(K) accounts into one IRA.
  6. Take advantage of new rules for non-spouse beneficiaries.
  7. Be clear on your required minimum distributions (RMDs).
  8. Complete a tax-free IRA to charity transfer.

Have fun. Let your money work for you.

For more discussion and to schedule a consultation with The 411 Advisor:
E-Mail: AskThe411Advisor@GMail.Com
Phone: (212) 643-5890 or (800) 223-4565

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