Our weekly roundup of tax-related investment strategies and news that your clients may be thinking about.
The tax advantages of donating stock: Taxpayers who intend to make charitable donations to lower their tax bill may consider donating stocks directly to charities, instead of selling these stocks and eventually donating the proceeds, according to The Wall Street Journal. When picking the stocks to donate to charities, clients may select shares that they owned for over a year and have increased in value since they were bought. "It allows you to get a fair-market-value charitable-donation deduction on your return, as well as not having to pick up the capital gain on the sale of the stock," says Brittney Saks of Big Four firm PricewaterhouseCoopers. -- The Wall Street Journal
Smart year-end moves to trim your 2014 tax bill: Monitoring mutual fund capital-gains distributions and avoiding the surtax can help taxpayers reduce their tax bill for 2014, according to Kiplinger. Taxpayers may also take advantage of the 0% capital-gains rate or consider giving away their appreciated securities to their loved ones who are in the 10% or 15% tax bracket. Another way is to get a tax break by donating some of their appreciated securities to charities. -- Kiplinger
A two-year plan to lower your taxes: Taxpayers may make their charitable donations before December 31 and prepay their state and local taxes for next year to qualify for tax deductions and subsequently reduce their taxes, according to The Wall Street Journal. When availing themselves of these tax deductions, taxpayers can take the standard deduction equivalent to $6,200 for single filers and $12,400 for joint filers, or itemize the deductions they are entitled to claim, such as mortgage interest, state and local income and property taxes, and charitable donations. -- The Wall Street Journal
Tax tips every angel investor should know: Angel investors could lessen their tax burden by understanding the nature of their investment and applying for the 1244 deduction to protect them from their losses, according to Forbes. Acquiring a Qualified Small Business Stock or the IRC Section 1202, which reduce taxes on successful exits should also be considered. They, however, should discern tax laws before investing to receive lower tax bills. -- Forbes
MLPs: 3 tax facts all dividend investors need to know: Master limited partnerships are known for their high and potentially fast-growing yield, but potential MLP investors need to be aware of their tax ramifications, according to The Motley Fool. MLPs can complicate tax preparation, their full tax benefits can only be enjoyed when one holds on to units for several years, and having them in retirement accounts can be complicated. -- The Motley Fool
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