Displaying items by tag: taxes

Friday, 18 March 2022 19:28

Morgan Stanley Launches Tax Model Portfolios

Model portfolios have been a surprisingly quick growing tool for the financial industry in the last year, and Morgan sStanley’s Wealth Management is capitalizing by adding a series of new model portfolios. These strategies will have hefty minimums of $750k to $1.5 million and are targeting tax and direct indexing strategies from the recently acquired Parametric. This was a key reason Morgan Stanley acquired Parametric last year to rapidly develop and deploy direct indexing strategies. Overall the portfolios have acquired $150 million in assets since their inception in January.


Finsum: Financial companies took a page out of tech companies playbook by just acquiring the companies that might align with them and allow the to quickly scale when it came to direct indexing.

Published in Wealth Management
Thursday, 24 February 2022 23:44

Advisors Boost Tax Efficiency

In the age of ETFs, many advisors may have a harder time justifying their fees to their clients however a new study shows that the fees alone can be justified by an advisor's ability to manage the tax burden of their clients. The primary method by which an advisor can add alpha to the portfolio is by appropriating funds for their most tax-efficient purposes, such as putting taxable bonds in a tax-deferred account and allocating growth stocks to a tax-free account like a Roth. Advisors also can edge out by advising about how to optimally tax-loss harvest when it comes to their portfolio’s crypto holdings. The main way to capitalize is through taking advantage of crypto’s status as property in the wash rule.


Finsum: Everyone is dying to hold crypto right now, but most haven’t made it big; tax-loss harvesting with the Wash rule exception is an edge as long congress doesn’t adjust the rules.

Published in Wealth Management

Capital gains taxes vary based on a lot of factors. Those dwelling in California for example may pay up to capital gains like regular income for their state taxes, which can be brutal. However, variation in income and holding duration play a large part in the total expected payments for cap gains. Finally, medicare surtaxes for those couples with over a quarter of a million in income will face additional capital gains taxes. Investors should take early precautions at the beginning of 2022 to consider how to mitigate their tax bill for the upcoming year with tax-loss harvesting. Realizing certain losses in the middle of turmoil can minimize your final tax burden.


Finsum: There are great advantages in tax-loss harvesting that you can take advantage of in crypto still, and now might be a perfect time.

Published in Wealth Management
Wednesday, 02 February 2022 19:07

Cut the Bonds, Your Tax Bill Will Thank You

Macro factors are flummoxing the bond market and a combination of rising inflation and higher interest rate forecasts are crushing bottom lines. However, now is a great time to consider the future tax bill. Rarely can investors see the future, but the Fed is being about as explicit as possible about hiking rates multiple times this year. This means as yields creep up, bond prices will fall in various segments of the bond market. This is an opportune time to consider cutting ties with bonds and realizing the losses you have because it will be over a month before investors will want to jump back in and they can harvest the losses for the end of the year. FINSUM: Most investors have been looking to active funds and shorter duration to minimize inflation risk, but tax-loss harvesting is a nice way to take advantage of rising yields.

Published in Bonds: Total Market
Tuesday, 28 December 2021 22:10

Last-Minute Tips for Cutting Your Tax Loss

The deadline is approaching for many investors to capitalize on tax strategies to minimize their bills moving forward. The most important thing investors can do is capitalize before the end of the year and claim losses they have. Special deductions are given to those with losers outpacing winners, up to $3000. However, investors should be wary of wash rules that may penalize them for repurchases within a 30-day period. The other most important strategy is to actually pay off excess medical expenses. Special provisions will mitigate your tax losses if they reach a certain portion of your income. Deferring income could also be a way out but it could be a risky strategy because next year could be even better than 2021.


FINSUM: Now is the time to capitalize on bond market blues and sell off those useless-yieldless tickets to save on the tax bill.

Published in Wealth Management
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