Tax Strategies Scan: Munis on the Rise

Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.

Muni-bond appetite on the rise as clients seek tax-free safety: More clients are looking to add municipal bonds in their portfolios as they prefer safer investments in the wake of the Fed's decision not to raise interest rates, according to MarketWatch. In addition to its "defensive nature," this asset class also offers tax exemption on investors' interest payments. This bullish environment should spell well for the absolute value performance for munis, according to a report from Bank of America. -- MarketWatch

Buying an MLP fund? Look at its tax history: Funds invested in master limited partnerships that have suffered losses this year may have an upside, benefiting from a tax write-off, according to a report from Global X Research. A fund with more than 25 percent of its assets invested in MLPs is structured as a C corporation, and accrues corporate level taxes on the appreciation of its holdings. -- Barron's

6 advantages of real estate investing for savvy clients: Are your clients taking advantage of all the tax benefits of owning real estate? Do they even recognize all the advantages? Brandon Turner, writing in Entrepreneur, says that rental owners aren't subject to self-employment taxes, one of several unseen benefits from investing in real estate. -- Entrepreneur

Take an extra year to pay taxes thanks to this generous accounting rule: A client may report their income to the IRS either on a cash basis or an accrual basis – a choice that determines if the client can defer paying some taxes for a whole year, according to Forbes. The cash method, in principle, is not always the best method to choose, although most small-business owners go for this type of reporting. The accrual method of accounting is a little more complicated, but in the right circumstance can produce significantly better tax results. -- Forbes