1%ers: What are you doing with your $$ before Dec 31?

[Anonymous]

Anonymous wrote:We are giving all to charity.

Aren't we all?

[Anonymous]

This thread makes the idea of soaking the rich in taxes that much more appealing.

Keep it up, ladies!

[Anonymous]

My clients are taking advantage of remaining time before larger estate tax exemption is reduced.

[Anonymous]

Anonymous wrote:My clients are taking advantage of remaining time before larger estate tax exemption is reduced.

What does this mean, besides maybe dying in 2012?

[Anonymous]

Not that I'm in the 1%, but I'm going to assume the OP meant, to which charities are you giving?

Red Cross disaster relief, Capital Area Food Bank, DC Central Kitchen, Bright Beginnings, House of Ruth, Hypertrophic Cardiomyopathy Association.

[Anonymous]

OK, so then I actually went back and read the first post. Guess that's not what's on folks' minds.

[Anonymous]

OK, so then I read the whole thread. I agree with the 1%er who said it was in pretty poor taste.

[Anonymous]

Anonymous wrote:Not that I'm in the 1%, but I'm going to assume the OP meant, to which charities are you giving?

Red Cross disaster relief, Capital Area Food Bank, DC Central Kitchen, Bright Beginnings, House of Ruth, Hypertrophic Cardiomyopathy Association.

Let's just pretend that's what it was. For us it would be a couple of yours, but also--

Bread for the City
Bethesda Cares
Doctors without Borders
Heifer Int'l
FINCA

I also sent a little money to the Rolling Jubilee but I have no idea if that counts as a charity.

[Anonymous]

Anonymous wrote:OK, so then I read the whole thread. I agree with the 1%er who said it was in pretty poor taste.

Poor taste? It's a straight up financial discussion among 1%ers. Or so the title suggests.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We're paying down our mortgage. That deduction will be on the chopping block for higher income household's soon.

You must really live in an alternative universe of Fox paranoia. Get rid of the mortgage deduction? Possibly, remotely possible for second homes. But for your primary residence -- never in a million years. Never.

I would never watch Fox News. Just watch them phase out the deduction for higher incomes just like other deductions. It's more palatable to Repubs to take away deductions than "raise taxes."

[Anonymous]

The title of this thread is unfortunate, because there are tax strategies that can benefit anyone, not just you 1%ers. If you search online, there are dozens and dozens of articles suggesting strategies. https://www.google.com/search?hl=en&gl=us&tbm=nws&q=tax+strategy+2012&oq=tax+strategy+2012&gs_l=news-cc.3..43j43i400.16170.24511.0.24979.17.5.0.12.0.0.136.357.4j1.5.0...0.0...1ac.1.W9iosCcATdk#hl=en&safe=off&tbo=d&gl=us&tbm=nws&sclient=psy-ab&q=tax+strategy+2012+year+end+estate+capital+&oq=tax+strategy+2012+year+end+estate+capital+&gs_l=serp.3...8401.8401.5.9066.1.0.1.0.0.0.0.0..0.0...0.0...1c.1.SsMuaovmlHA&pbx=1&bav=on.2,or.r_gc.r_pw.r_cp.r_qf.&fp=92b6671ad676249a&bpcl=38093640&biw=1400&bih=937

Some of the most common for general application:

1. Get paid in 2012 instead of 2013. Since marginal tax rates likely will increase in 2013, you'll pay less tax in 2012, albeit sooner. See if your employer will pay any year end bonus in Dec 2012 rather than Jan 2013, get an advance on your paycheck, or maybe cash in vacation time.

2. Swap around any investments you have in taxable accounts, so you can "lock in" current long-term capital gains tax rates. Tax rates on long-term capital gains are expected to increase in 2013 and beyond, so sell those investments now and re-purchase other comparable (but not identical) investments. You will pay more taxes in the short term, but (maybe) will pay less than you'd pay later in the future. Bonus points if you can offset sales of gainers against losers, because you can avoid taxes entirely with this hedge move.

3. Make gifts now to minimize future estate taxes. Estate tax rates likely will increase in 2013. This might not make sense if you expect to live several more years, unless your estate is enormous. If your estate is that enormous, you surely can pay someone more informed than I am to give you advice.

4. Take advantage of itemized deductions now. Some of those itemized deductions are expected to be reduced in 2013, so get the maximum tax benefit now. For example, if you're planning to give $1000 to your favorite charity, give it in Dec 2012 rather than Jan 2013.

I'm no investment professional, and I'm just repeating what I've been reading lately, so don't follow this advice blindly. Do your own research. Good luck.

Sam2

[Anonymous]

Anonymous wrote:

Anonymous wrote:My clients are taking advantage of remaining time before larger estate tax exemption is reduced.

What does this mean, besides maybe dying in 2012?

Heh heh. I'm curious too.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I wouldn't be surprised if they are means-tested in the near future.

Translation, please.

Means tested - dependent on income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn't be surprised if they are means-tested in the near future.

Translation, please.

Means tested - dependent on income.

As in the mortgage deduction will likely be phased out as income levels increase? And so it will go the way most other deductions have gone.

[Anonymous]

Anonymous wrote:The title of this thread is unfortunate, because there are tax strategies that can benefit anyone, not just you 1%ers. If you search online, there are dozens and dozens of articles suggesting strategies. https://www.google.com/search?hl=en&gl=us&tbm=nws&q=tax+strategy+2012&oq=tax+strategy+2012&gs_l=news-cc.3..43j43i400.16170.24511.0.24979.17.5.0.12.0.0.136.357.4j1.5.0...0.0...1ac.1.W9iosCcATdk#hl=en&safe=off&tbo=d&gl=us&tbm=nws&sclient=psy-ab&q=tax+strategy+2012+year+end+estate+capital+&oq=tax+strategy+2012+year+end+estate+capital+&gs_l=serp.3...8401.8401.5.9066.1.0.1.0.0.0.0.0..0.0...0.0...1c.1.SsMuaovmlHA&pbx=1&bav=on.2,or.r_gc.r_pw.r_cp.r_qf.&fp=92b6671ad676249a&bpcl=38093640&biw=1400&bih=937

Some of the most common for general application:

1. Get paid in 2012 instead of 2013. Since marginal tax rates likely will increase in 2013, you'll pay less tax in 2012, albeit sooner. See if your employer will pay any year end bonus in Dec 2012 rather than Jan 2013, get an advance on your paycheck, or maybe cash in vacation time.

2. Swap around any investments you have in taxable accounts, so you can "lock in" current long-term capital gains tax rates. Tax rates on long-term capital gains are expected to increase in 2013 and beyond, so sell those investments now and re-purchase other comparable (but not identical) investments. You will pay more taxes in the short term, but (maybe) will pay less than you'd pay later in the future. Bonus points if you can offset sales of gainers against losers, because you can avoid taxes entirely with this hedge move.

3. Make gifts now to minimize future estate taxes. Estate tax rates likely will increase in 2013. This might not make sense if you expect to live several more years, unless your estate is enormous. If your estate is that enormous, you surely can pay someone more informed than I am to give you advice.

4. Take advantage of itemized deductions now. Some of those itemized deductions are expected to be reduced in 2013, so get the maximum tax benefit now. For example, if you're planning to give $1000 to your favorite charity, give it in Dec 2012 rather than Jan 2013.

I'm no investment professional, and I'm just repeating what I've been reading lately, so don't follow this advice blindly. Do your own research. Good luck.

Sam2

A fine contribution, as usual. Thanks Sam2.