Discussion:Tax planning in this economy
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| + | {{ForumReplyPost|UserID=Lmcdon9822|Date=23 November 2008|Text=Smokey - I was talking to a guy who was down 60-70% in his non-qualified accounts, mostly individual stocks. He does have other qualified accounts for retirement and it looks like his income will be almost the same in retirement. He was 61 years old and planned on retiring in 2-3 years. I was going to suggest to him to sell all his positions in the non-qualified account, he can get the tax write off for the upcoming years. In 31 days, buy 40% of previous holdings if he wants to get back in the market and 60% in fixed securities. If folks in this situation hold on to their securities some would be shock to see that they will also pay taxes on the dividends on stocks that went down 60-70%. Some just don't understand!}} | ||
Revision as of 14:44, 23 November 2008
Discussion Forum Index --> Tax Questions --> Tax planning in this economy
| 21 November 2008 | |
| Given the current state of the economy, and based on your opinion of where the economy is headed, any thoughts on tax planning for this year?
Here's my point. I prepare a lot of farm returns. Farmers are very big into deferred sales contracts and prepayment of expenses. I think the economy is going to get worse before it gets better. If I advise a client to defer some grain sales or prepay some expenses to get their taxable income down, then the grain elevator where they deferred the sale, or feed store where they prepaid the expense, goes under, what's my exposure? Been mulling this around since my farm tax planning fires up hard next week. | |
| 22 November 2008 | |
| I usually tell clients that deferring income and accelerating expenses is advantageous, but ask them how they think their business will do next year. I also mention that I give tax advice but they should consider the economic and legal consequences of deferring income, accelerating expenses, 1031 exchanges, installment sales, etc. And I do this in writing the first few years I have a client, and all the time for some of them. | |
| 22 November 2008 | |
| I've been talking to clients about "harvesting capital losses" a lot lately.
It really makes me nervous however, with the volatility of the market, which can go up or down 5-10% in one day. I'm advising clients that they really need to think this issue through, especially if they plan on waiting 30 days and buying back the same security. I'm liking simultaneous exchanges for similar stocks or mutual funds better than waiting 30 days, or even 1 day before repurchase. | |
| 22 November 2008 | |
| Don't worry too much Luke, they say that the Chinaman is coming over in about three years to buy all our agricultural land up at top dollar, so it's a good chance that your clients will join the champange and caviar crowd up in NY, or out to LA if they can just get through these lean times.
I caught two stock brokers, a loan broker, and a fiancial planner this week trying to poach deer off my property. They was hungry, so I didn't have them arrested. Don't bother me none. I have always sold apples on the street corner this time of year to tide me over to tax season. When I went downtown the other day to peddle my apples, so many people asked me how to get into the business that I decided to start franchising, and now I sit back and let my apples sell themselves. I can't say enough about the benefits of free trade. P.S. I thought I had caught a tax preparer trying to poach on me too, but he wouldn't give his profile, so I figured he was a do it yourselfer. | |
Lmcdon9822 (talk|edits) said: | 23 November 2008 |
| Smokey - I was talking to a guy who was down 60-70% in his non-qualified accounts, mostly individual stocks. He does have other qualified accounts for retirement and it looks like his income will be almost the same in retirement. He was 61 years old and planned on retiring in 2-3 years. I was going to suggest to him to sell all his positions in the non-qualified account, he can get the tax write off for the upcoming years. In 31 days, buy 40% of previous holdings if he wants to get back in the market and 60% in fixed securities. If folks in this situation hold on to their securities some would be shock to see that they will also pay taxes on the dividends on stocks that went down 60-70%. Some just don't understand! | |
