YEAR-END GIFTING: STRATEGIES AND TAX BENEFITS

As the holiday season and the end of 2021 rapidly approaches, many Americans are contemplating their annual gifting strategies. Whether you are considering giving a gift this year as a tax shelter, to reduce your taxable estate, or just out of the kindness of your heart, it is important you understand the various regulations governing gifting and how they will impact your finances. Charitable Gifting Charitable gifting can have great impacts both for those in need and the donor. Donations to charitable organizations are tax-deductible for the donor. It may…

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Volatility is good! Volatility is bad! And other lessons that 2018 has taught us.

An apt description for 2018 might be “Be careful what you wish for.” It was a year that began with great promise and optimism but ended with disappointment along with a healthy dose of anxiety. In January, the change in the tax law was expected to generate higher economic growth than had been experienced over the prior several years. In fact, GDP growth did accelerate, wages, especially for lower income households, began to rise meaningfully, unemployment is now at a 50-year low, the Federal Reserve continued its normalization of monetary…

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Up in Smoke

There are sectors of speculation in every market that defy reasonable valuations. In the late 1990s, many Internet stocks with flimsy business models were bid up to stratospheric levels. One dozen years ago, speculation in the housing market reached historic proportions as the banks provided easy credit to risky borrowers. Housing prices in many markets are still way below the highs reached during the bubble. Last year, Bitcoin and other crypto currencies exploded higher only to deflate by 50% this year to date. The latest craze is the cannabis market.…

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Opportunity Funds: Great Tax Savings, but Caveat Emptor

The Tax Reform and Reconciliation Act that passed last year contains provisions that allow for significant tax benefits for targeted investments in certain economically distressed communities. The legislation incentivizes development in these areas by allowing deferral and/ or reduction of capital gains taxes regardless of the source of the gains. The goal of this program is to spur development and the law is a descendant of enterprise zones championed by the late Jack Kemp. An investor may invest the value of capital gains realized in a particular year into an…

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Auditors and Our Research Process

Our research process starts with a screen to narrow down our investable universe to a more manageable number of names. As the screen is reviewed, more names are removed from consideration due to unattractive qualitative factors, such as extreme cyclicality of revenues or earnings. A few names are targeted at a time for a deep qualitative dive, which includes a checklist of characteristics we want the company to demonstrate, such as sustainable margins and shareholder friendly management. One of the items we check is the auditor. The auditor’s role is…

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