Charitable giving

The Tax Benefits of Charitable Giving

As we come to the close of 2013, financial advisors focus our conversations with clients on assessing where they are and what there is to wrap up before year’s end. If we conclude that they’ll owe taxes, we look for ways to reduce what they’ll have to pay, which often leads to a discussion of the tax benefits of charitable giving. For example, if some of a person’s income is the result of required minimum distributions (RMDs) from an IRA because they are over 70 ½, we discuss donating some or all of the distribution (up to $100,000) directly to a charity before the end of the year. This is called a qualified charitable distribution; if they don’t need the income and hate taking the distribution, this can be a favorable strategy because it removes up to $100,000 of income from the tax return and helps a charity.

Why You Should Evaluate Portfolio Returns Over A Complete Market Cycle

How to determine the proper time horizon to evaluate portfolio performance is always a subject for an interesting conversation. In a recent client survey on investment issues, we asked our clients “What time horizon do you feel is the best time frame to evaluate portfolio returns?” The results varied: 16% said “Monthly,” 43% said “Quarterly,” 37% said “Annually,” and 4% said “Over a complete market cycle.” (As an investment professional, I would have selected the last option.)

Planning for the Fiscal Cliff

The 2012 election is over, and Americans find themselves in an unsure financial environment. The country is heading toward a “fiscal cliff” — a series of significant tax increases and automatic spending cuts that will be triggered at the end of the year. Congress and the President are negotiating a compromise solution to prevent that,…