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-- in the new economy is with us to talk.
Jack is huge tax -- heated today norm -- -- being with us out of Phoenix and that it's warm and there's no snow threat out there.
That's great being here knows now thanks for having me on the show -- -- -- -- -- try to focus on tax is in your investments in I think.
A lot of people have a fair amount issues when they sit down come April 15 this year.
Not a lot of people native and I had -- done a lot of trading.
But they could've had a bunch of different issues let's start with some who sold the stock at a loss.
We could still right up against any gains we've -- if they weren't seeing a lot of that a lot of people having those issues coming up.
Yeah I think we sort our clients there's a fair amount of harvesting losses last year in the anticipation.
That that was a good opportunity to do it and certainly he can use all the -- you do have the opportunity carry forward.
You'll probably see some of that still going on in 2010.
And let's also talk about thank you we had a lot of companies going down last year with a tough here I at a worthless stock.
It's still needs to be reported on my schedule.
Sure I think you have to demonstrate that it is worthless and that may be some of the challenges -- -- -- your tax advisor.
Some of the things that might indicate it's worth -- -- -- stop trading.
I certainly -- common stock and went bankrupt you probably wiped out all of your equity.
But you do have to provide some basis for proving the stock is worthless.
-- a lot of folks have mutual funds they have and their 401K plans and they never look at him I mean of the the fact of the matter is they just put in there and and -- -- -- -- -- the units are looking at and is this a mistake from a tax perspective not to.
To have an idea what's going on year over year.
Yeah specifically what I would suggest is about four things for people look at it -- have an asset allocation policy.
And you come up what it diversified portfolio.
One of the questions as most people before one -- an individual account and -- allocate between your tax deferred account your individual account.
For example some asset classes may work better in your -- your 401K.
So -- have exposure to let's say global bonds or reits real estate investment trust.
Under the current tax -- they don't get particularly favorable tax treatment so you may want to allocate those are your tax deferred accounts.
Use other assets -- your individual account like Munis are tax efficient Venus mutual funds your individual account.
When people go to rebalance and to your point.
A lot of people don't we balance season and rebalancing means selling off what -- made money on the reality Katie to those assets that are currently under performs.
If people don't do that what they do is increase their risk there are studies that indicate if you -- balance you reduce the risk your portfolio.
By forty or 50%.
So the idea of gluing your hiring 41 K with your individual account which you -- now look at is what you want to rebalance.
And I would say the greatest tragedy I so was in 97 and 98.
Where people had Internet stocks and they once -- as they wanna pay the taxes means so we balancing is critical.
And the best place to probably start rebalancing.
Is natural in your 41 K and Ira we don't pay taxes.
Let's talk about gold we had a lot of people buying and selling gold last year.
Then have to report those trades.
Their tax returns now presuming they did it through an ETF or mutual fund.
It's not that big a deal they were reported as a regular trade.
But I think what the actual commodity.
Well if -- -- the actual commodity they're gonna have report they aboard an actual future there's certain tax treatments for buying futures.
And they're not all treated as longer short so that gets more complicated -- what the actual commodity.
It's much easier when you what the ETF and the fun.
I don't have a lot of clients actually who have used -- we tend to use tips as an asset class to hedge against inflation.
Because of the volatility of -- Right so that gold futures will fall under animal we say this nobody listen under the 6040 tax rule people need to understand that if you -- critical future McNamee it jerky anymore move on.
Mean I was a -- I was attacks occurred one time.
We we got so is there anything -- human need to know coming into April 15.
They only got -- talk about going forward could these.
Beneficial lower capital gains rates are gonna go -- probably -- prelude have to wanna do something before the end of the year but first coming up to April 15.
2009 at this point there's not a lot of a lot you.
We do as far as your investment trades go cracked.
It's pretty much done that's correct you're pretty much over with that -- there are opportunities in 2000 time.
With the ability to look at the Roth conversion which will affect a lot of people.
Re looking at.
You know where the as you said whether you should take some capital gains this year -- at a higher bracket.
And there's some little no changes in the annuity rules to let people pay for long term care tax free.
So those are three things that you can plan on in 2010.
Yeah I think that was my question really you know like ten and you might taxes.
Not nearly as -- he's racing incomes -- taxes I tried doing this because -- attentive.
But I do my taxes I can't look back at last year that I don't last year another really change from election ought to do in the same way this year.
Are those changes you put out there really the big things that people that look out would this year as opposed to last year they've been doing their taxes for several years what's new.
The big thing that I think is the headline for a lot of people is the ability to convert to a Roth IRA.
And now you're no longer limited by your adjusted gross income and we're converting to a Roth -- means -- you pay the taxes out front you literally taken Ira.
In some cases of 41 K.
But you take your Ira and you make the conversion to a -- that you pay the income taxes.
The benefit of that is all the future growth and that Ira is now tax free.
So if you really believe taxes are gonna go -- and you want to look at this and it's not an easy analysis.
Because typically you're gonna have to use not a -- money to pay the income taxes.
But if you're young.
And young maybe your 20s30s or forties and you believe taxes are gonna go up you may want to pay those taxes now.
And the ability to take that money out of never pay taxes.
And on top of that you're not required to take money out at seven in half.
Right president typical -- today at seven and a half you're forced to pay taxes that's really in the -- situation.
You're not going to be able you don't have to pay the taxes so if you're young enough you got the time.
A lot of tax advisors are focusing on this they have -- -- do the analysis.
But it's not an easy decision for most people.
Now but -- -- I guess is that you do -- -- -- -- you have you can pay the tax bill over two years I'm not mistaken by 2011 match goes away so there is that and a lot of people are.
At work making less money so your overall tax rate might be a little bit lower.
There's a lot to -- norm your -- out that thank you very much for being with us today.
Thanks a lot -- a pleasure being here.
Thank you don't know I'm in -- from wolf management.
In the new economy that's what he notes tax.
Cheat sheet for the day hope you had that.
That's a thing if any trades he made by the end of -- 2009 -- pretty -- -- them it's going forward are we gonna lose the beneficial capital gains rate that's and you really -- start planning and even if you're not rich you are gonna start being taxed more it's inevitable with fourteen trillion dollars in debt.
So attacks and everybody.
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