Tax-Smart Investing : Maximizing Your Client's Profits

by Andrew D. Westhem; Stewart J. Weissman

• ISBN13: 9780471332619
• ISBN10: 0471332615
• Format: Hardcover
• Copyright: 1999-06-01
• Publisher: Wiley

Summary

In /ITax-Smart Investing/N, you'll find an invaluable ally to help your guide your clients through the minefield of tax consequences of a wide range of investment vehicles. Investment professional Andrew Westhem and Stewart Weissman reveal the tax traps that can snare the unwary - and describe the sophisticated tactics they have developed to elude those traps. Drawing on over fifty years' combined experience advising high-income, high-net worth clients, Westhem and Weissman offer proven strategies for minimizing the tax burden of investment earnings. Written in a clear, straightforward style and packed with practical examples, /ITax-Smart Investing/N is an indispensable guide for investment advisors, financial planners, accountants, and attorneys.

Table of Contents

Acknowledgments	xiii
Introduction	xv
Roll Your Own
Directly Owned Stocks and Bonds	1	(18)
The Beauty of Buy-and-Hold	2	(1)
The Buffett Formula	3	(1)
A Perfect Ten	4	(1)
Marginal Notes	4	(1)
A Capital Idea	5	(1)
Lop Off the Losers	6	(1)
A Slice of Life	6	(1)
'Til Death...	7	(1)
Sweet Charity	8	(1)
Grand Finales	9	(2)
Swap Smart	11	(1)
The Preferred Approach	11	(2)
Switch-Hits	13	(1)
Paying a Premium	14	(1)
Taking Stock	14	(1)
Junk Is Not Garbage	15	(1)
Low Grade	16	(1)
Recap	17	(2)
Marvelous Munis
The Allure of Tax-Exempt Bonds	19	(10)
The Bigger, the Better	20	(1)
Controlling Factors	21	(1)
State Capital	22	(1)
Fund Finding	23	(1)
Moving Violations	23	(1)
Social Insecurity	24	(1)
A Painful Alternative	25	(2)
Borrowing Trouble	27	(1)
Safety Belt	27	(1)
Recap	27	(2)
Defer and Conquer
For Employees: Make the Most of 401(k)s and IRAs	29	(10)
Match Point	29	(1)
Know Where to Hold 'Em	30	(1)
In or Out?	30	(2)
A Few Good Funds	32	(1)
Overexposed	32	(1)
Lone Danger	33	(1)
Haste Makes Waste	34	(1)
Roll Right	34	(1)
Separating IRS from IRA	35	(1)
The Roth Revolution	36	(1)
Recap	37	(2)
Lapping Up the Lion's Share
For Employers: Choosing among Retirement Plans	39	(12)
Bulking Up Benefits	39	(1)
Uncharted Course	40	(1)
Tilting the Playing Field	41	(5)
No Complaints	46	(1)
Keep It Simple	46	(1)
Responsibility Knocks	47	(1)
Pile On the Paper	48	(1)
Showing the Way	49	(1)
Recap	50	(1)
Putting the Tax Collector on Hold
Fixed Annuities for Tax Deferral	51	(14)
Patience Is a Virtue	52	(1)
Exit Strategies	53	(1)
More Safety, Less Income	54	(1)
Withdrawal Gains	55	(3)
Better Than a Bank	58	(1)
High Tease	58	(3)
Sweet Surrender	61	(1)
Split Decisions	62	(1)
Recap	62	(3)
Hanging Up on the IRS
Permanent Life Insurance as a Tax Shelter	65	(8)
A Preference for Permanence	65	(1)
Income Tax Immunity	66	(1)
Ace in the Hole	67	(1)
Nothing for the IRS	68	(2)
Seeing, Not Believing	70	(1)
Recap	71	(2)
Gains without Pain
Dodging the Mutual Fund Trap	73	(12)
Dividends Are a Drop in the Bucket	74	(1)
Capital Comebacks	75	(1)
Phantom Income, Real Taxes	76	(1)
Gored by the Bull	76	(1)
Less Taxing Solutions	77	(2)
Hot Spots	79	(1)
Living on the Edge	79	(1)
A High-Octane Portfolio	80	(1)
80 Cents on the Dollar	81	(1)
The Case Is Closed	82	(1)
Recap	83	(2)
Mutual Funds Now, Taxes Later
Variable Annuities Can Enrich Your Retirement	85	(12)
Multiple Choice	86	(1)
Plus Factors	87	(1)
Minus Signs	88	(3)
Finding a Fit	91	(2)
Switch-Hits	93	(1)
Better Than the Bank	93	(2)
Loan Arrangers	95	(1)
Holding Patterns	95	(1)
Recap	96	(1)
Mutual Funds Now, Taxes Never
Variable Life Insurance Makes Taxes Disappear	97	(12)
That's Life	98	(1)
Death Benefit	99	(1)
Balancing Act	100	(2)
Needs-Based Policy	102	(1)
Winning the Endgame	103	(1)
Stocking Up	104	(1)
Shedding Light on Illustrations	105	(2)
Hard Times	107	(1)
Recap	107	(2)
Heads You Win, Tails You Don't Lose
Modified Endowment Contracts for You and Your Heirs	109	(12)
Life History	110	(1)
Slamming the Door	110	(1)
Win without Losing	111	(1)
Ahead at the Finish	112	(1)
Different Strokes	113	(2)
Tops for Trusts	115	(1)
Flex Plans	116	(1)
Mastering MECs	117	(1)
The Near-MEC Solution	117	(1)
Recap	118	(3)
Real Shelters
The Payoff in Property Ownership	121	(10)
Double-Edged Sword	122	(1)
Appreciating Depreciation	122	(1)
Phantom Losses	123	(1)
Free Cash	124	(1)
Happy Endings	125	(1)
Trading Places	126	(1)
Watching the Clock	127	(2)
Sunnier Climes	129	(1)
Go Now, Deduct Later	130	(1)
Recap	130	(1)
Blasts from the Past
Partnerships That Still Provide Shelter	131	(10)
Coming Out Ahead	132	(1)
Real Returns	132	(1)
Bumping the Ceiling	133	(2)
A River of Cash Flow	135	(1)
Foundation for the Future	136	(1)
Net Profits	136	(2)
Well-Equipped Partnerships	138	(1)
Recap	139	(2)
Inside or Out?
Dividing a Portfolio between Taxable and Tax-Deferred Accounts	141	(8)
Spreading the Wealth	142	(1)
Stretching the Shelter	143	(3)
Focusing on Funds	146	(1)
Recap	147	(2)
Truly Tax-Free
Avoiding Estate Tax As Well As Income Tax	149	(10)
Sky's the Limit	150	(1)
Turning Point	151	(1)
Option Plays	152	(1)
Spurning Safety	153	(1)
The Family Way	154	(2)
Sweet Charity	156	(1)
Keep the Cash Flowing	157	(1)
Recap	157	(2)
Trust Me on This
Sophisticated Asset Protection Strategies	159	(10)
Growing by Shrinking	160	(2)
Creating a Dynasty	162	(1)
Imperfect by Intent	163	(2)
Worst-Case Scenario	165	(1)
Warming Up to a Superfreeze	166	(1)
Recap	167	(2)
Appendix A Tax Schedules	169	(4)
Appendix B IRA Stretch-Out	173	(20)
Appendix C Excerpts from Sample Variable Annuity Contract	193	(30)
Appendix D Excerpts from Sample Modified Endowment Contract	223	(32)
Index	255