Financial planning

At the end of a year of sideways markets, many tax advisors are focusing on the ramifications of the two recently passed tax acts. There is, however, a roster of other year-end strategies that are worth looking into.

For tax years beginning in 2004 and 2005, the American Jobs Creation Act of 2004, recently passed by Congress, allows taxpayers to elect to take state and local general sales and use taxes as an itemized deduction on their federal income tax returns for those years. However, a taxpayer who makes this election will not be able to take an itemized deduction for state and local income taxes for the same year.

WACHOVIA TO BUY TANAGER FINANCIAL: In an effort to strengthen its wealth management practice, Charlotte, N.C.-based Wachovia Corp., the nation's fifth-largest bank, agreed to acquire wealth advisory firm Tanager Financial Services Inc.

TRUST COS. CONSOLIDATE: A quartet of independent trust companies - First Trust Corp., Lincoln Trust Co., Resources Trust Co. and Retirement Accounts Inc. - have rolled up under a single brand, Fiserv Investment Support Services. The convergence represents the first of a three-phase consolidation effort designed to create an umbrella organization.

The defined-contribution world has never been more competitive. Retirement plan providers are fighting aggressively to keep existing clients, as pricing has come down dramatically, services have improved and, importantly, provider disclosures are significantly better.

When bonus first-year depreciation deductions end at the close of 2004, so will the extra first-year dollar limit for autos, light trucks and vans subject to the luxury auto rules.

529 ASSETS REACH $43 BILLION: Assets in 529 college savings plans totaled an estimated $43 billion at the end of the second quarter, up 7.4 percent over assets in the first quarter, according to a report from the College Savings Foundation. The quarterly asset total marks a 66.9 percent increase from the second quarter of 2003's total of $25.8 billion, according to data developed by research and consulting firm Financial Research Corp.

Federal Reserve Chairman Alan Greenspan sounded the death knell, again, for the Baby Boom generation's hopes for some external help during their retirement.

For most taxpayers, bonus first-year depreciation ends Dec. 31, 2004.

The College for Financial Planning has unveiled a new planning designation that it says is aimed at advisors working with high-net-worth clients, bringing the number of planning designations that it offers to six.

PORTFOLIOS FEELING FED CHANGES: A recent CFA Institute study found that interest rate changes enacted by the Federal Reserve could affect clients’ investment portfolios.

The Internal Revenue Service has issued final regulations on the exclusion allowed for gain on the sale of a principal residence. The final regs modify the rules contained in temporary regulations with respect to partial home-sale exclusions. They also provide special rules for military and foreign-service personnel.

by Lance Wallach

NEWKIRK INTRODUCES NEW RETIREMENT PAYOUT ESTIMATORS: Financial services application services provider Newkirk has rolled out two new retirement payout estimators for retirement plan providers.

by Bob Rywick

by Lance Wallach

Genworth Completes Hochman & Baker Integration: Genworth Financial, a global insurance and financial services concern, said that it has completed the integration of Hochman & Baker Securities into Terra Securities Corp., its broker/dealer unit.

Washington — The House approved separate bills in late July that would extend a tax break for small businesses and would expand eligibility for the Form 1040 EZ tax form.

by Bob Rywick

by Jay N. Nisberg and Tony Wood