Transformed stock gifts into diverse portfolio
We worked with a young taxpayer who had been receiving stock gifts over the years from parents and grandparents. Taking advantage of the zero percent tax rate, we knew exactly how much in capital gains to take without incurring any tax. This enabled our client to establish a more diversified portfolio for essentially no cost.
Created trust to fund charitable contributions, protect estate
After inheriting a significant amount of money, our client turned to us to help set up a charitable trust. Through the trust, we helped our client make annual charitable donations while removing a significant amount of money from her taxable estate. The trust was funded with low-basis stock, and each year our client sells a portion of these shares to obtain the cash needed for donations. Any capital gains are offset by the trust’s charitable deduction.
Fueled Roth conversion with proactive tax planning
We turned two years of significant business losses into many years of tax savings. Our client was able to convert $400,000 in a traditional IRA to a Roth without paying any tax. The family has already seen substantial tax-free growth in the new account.
Turned passive losses into tax gain
Our client sold a rental property for a very small gain. We helped him uncover the suspended passive losses that became deductible upon disposition. Further, we advised this client to convert $100,000 of a traditional IRA to a Roth. Thanks to the deductible rental losses, no tax was due on the conversion.
Found the tax upside in a down year
We worked with a client to turn a bad year for his business into a benefit for his personal tax returns. This included advice on carrying net operating losses back or forward to offset other income, converting an IRA to a Roth IRA for future tax-free withdrawals, and recognizing additional capital gains. Our goal was to make the best use of the loss while taking into account the client’s cash flow and future goals.
Helped retiring executive exercise stock options.
Our client, an executive about to retire, needed advice developing a strategy to exercise ISO and NQ options. We helped our client understand the benefits and drawbacks of taking stock options after retirement. We weighed factors like changing tax laws, cash flow concerns and the current tax environment.
Guided clients through tax implications of divorce
We helped our clients and their divorce attorneys through the division of assets, including significant stock options, to minimize the tax impact. We created an option exercise strategy and analyzed the tax basis and AMT basis on which shares of stock would provide the most benefit to each party.
Handled estate planning for terminally ill spouse
Our team worked closely with our client’s attorney and investment advisors to create an estate plan for a terminally ill spouse. This included determining the tax implications of trusts set up for children, investment decisions and equalization of the estate.
Used Roth IRA conversion to reduce taxes
In 2010, 2011 and 2012, we advised our clients to use Roth IRA conversions to use the current-year losses and resulting lower tax brackets. In addition, the Roth conversions helped our clients avoid creating Net Operating Loss situations.
Evaluated long-term care options
We worked closely with a client to assemble a long-term care plan for a family member. We analyzed the costs of various arrangements (including long-term care facility, assisted living, and independent living with around-the-clock staff). We evaluated the care implications and financial sustainability of each choice, helping our client make an informed decision.
Helped client buy second home out of state
One of our clients wanted to buy a second home. We worked across state lines to find a mortgage company to finance the purchase, and served as the liaison between our client, the realtor and the bank. We even signed the papers in our office.
Used QPRTs to reduce estate taxes
We worked with a family to set up a Qualified Personal Residence Trust (QPRT) for their primary residence and a second home, transferring the property to their children without any estate tax. This removed a combined $1.5 million and any future appreciation from their estate. They remained in the house beyond the term of the trust, paying rent to the children and further reducing the overall value of the estate.
Built and protected wealth with Family Limited Partnership
We created a Family Limited Partnership (FLP) for a client to manage and protect their assets while reducing the value of their estate. Our client funded the FLP with nearly $4 million in securities. One of the partners is an Intentionally Defective Grantor Trust, so the assets were removed from the client’s estate. After seven years, the fair market value of the assets is nearly $7 million.