The Fiduciary Rule is a controversial United States federal rule that came into being during the Obama administration. Intended as a way to mitigate conflicts of interest arising between financial advisors and their clients, the rule was due to take force on April 10, 2017. However, it has been delayed by newly elected President Trump until at least June 9, 2017.
Tax loss harvesting is the act of selling securities to offset paying taxes on capital gains for a set year. The loss selling method gets done as a way to reduce tax liabilities in a high-income year. The extra money can then go into investing, and the long term compounding effects of the additional assets can be significant.
How Can CPAs Mitigate Their Client's Risk? Ask “How Does This Tie In With the Rest of Your Finances?"
Investment professionals and entities alike should always ask “How Does This Tie In With the Rest of Your Finances?”. It is an important enough question that even from service providers such as attorneys and CPAs, often does not get asked enough to their clients.
Towards the end of the year, CPA firms are generally looking for opportunities to maximize the tax deductions available to their business owner clientele. For a business owner client whose operation has the right characteristics, there is a substantial opportunity for tax deduction (up to $1.2 Million annually) that has gone unutilized until relatively recently (around 2002). This opportunity is provided by IRS tax code under IRC 831(b), and is known as the domestic captive insurance company.