Resource Search

Many private enterprises are just beginning to understand the changes necessitated by these rules and their implications. This is important, as preparation of annual financial statements that are subject to the rules involves a review and analysis of accumulated tax positions. Private enterprises can benefit from the accumulated experience of public companies as they prepare for the issuance of these statements.

Research demonstrates that even large pools of recognized losses may be depleted in a rather short period of time if the investor loses focus on tax management. The longer the investor can expand this window of time by continuing to actively manage their tax situation, the greater the potential opportunity for total wealth creation in the long term.

Planning can help reduce a client's tax liability and mitigate the unpleasantness of surprises when tax returns are filed. This is a valuable service advisors can offer clients, and because proper tax planning requires a discussion of a client's entire financial picture, it also can serve as a catalyst to broaden the scope of relationships with clients.

Given the relatively low current tax rates, changing executive and legislative control and the increasing need for government revenue, there is a distinct possibility of a capital gains tax rate increase. Knowing this, individuals may be wise to suspend the common practice always to defer taxation.

Wealthy global families are becoming increasingly aware of their need for a well thought out citizenship and residency strategy to protect their wealth and to safeguard their freedom of movement. This paper from Northwood Family Office makes the case for Canada as a safe and surprisingly tax-efficient alternative to many of the more well known citizenships the wealthy can consider acquiring.

Contrary to what some investors think, embedded capital losses in stock mutual funds may not be tax advantageous, according to Hammond Associates. If capital gains rates remain at current levels, those capital loss carry-forwards add value for shareholders, albeit modest. If capital gains tax rates increase after 2010, loss carry-forwards may impose additional costs on shareholders who invest before 2011.

Many taxable investors are literally losing money by purchasing government bonds trading at a premium to their par value. A short article by Northwood Family Office notes that to understand the true rate of return, individuals must consider the impact of taxes on their bond investments.

Creating an estate plan can be a complex process, but it ensures security for surviving family members, serves as a core element of long-term wealth strategy and contributes to the family's long-term stability. Neuberger Berman covers the essentials of creating an estate plan, including basic planning documents, legal issues and lifetime wealth transfers.