Tips for Reducing Taxes
on
Investment Sales
December 2004
As year-end approaches, it's time to review
and rebalance your investment portfolio. Here are some tips for keeping
your taxes to a minimum.
* Remember that sales within your
retirement accounts are free of tax. If you need to trade just to
rebalance your portfolio, consider doing it in your IRA or 401(k) plan.
* Weed out poor performers and use the
losses to offset taxable gains on other sales, plus up to $3,000 of
other income. Keep track of excess losses that can be carried forward
to future tax years.
* If you sell some but not all of a mutual
fund or stock, sell the highest cost shares first to minimize your
taxable gain or maximize your loss. You must specify the particular
shares you are selling at the time of the
sale.
* Consider donating appreciated stock to
charity in lieu of cash; you can generally deduct the appreciated value
and avoid paying any tax on your gain.
For assistance with your year-end tax
cutting efforts, give us a call.
We can
help you keep your taxes as low as the law allows.
Return to 2004 Tax Tips
