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Business Briefs

Happy New Year!

Out with the old and in with the new! The fiscal year 2004 is coming to a close, and 2005 is ready to go. New Year’s resolutions are made and usually broken within the first month. Yes, I could do with a few pounds less around my middle, and I could exercise more. I also know that this is and has been the case for longer than the last month, and will take longer than I want.So is the case with tax planning, investments and your family’s financial future. If you are reading this prior to Dec. 31, 2004, look at your last brokerage or investment company statement. Should you be talking with your financial planner, broker or tax preparer about taking the paper losses and turning them into actual losses for tax purposes? When was the last time you looked at your investment allocations? Now would be a great time to rebalance your portfolios.Is charitable giving a thought before the end of the year? One popular estate planning technique is planned giving. Making a donation to a qualified organization could provide some very attractive benefits.You could receive an immediate income tax deduction. With a properly structured gift, you could realign your investment portfolio without paying capital gains tax on appreciated property. Another strategy may allow you to pass your estate on to your children while avoiding both probate and estate taxes.You’re free to give your property to whomever you choose. To retain the tax advantages associated with planned giving, however, your gift must be made to a qualified organization.The vast majority of donations are made to charitable organizations. To qualify, a charitable organization must have been organized in the United States, be operated on a strictly non-profit basis and not be politically active.In addition to common charitable organizations, you may give to veterans’ posts, certain fraternal orders, volunteer fire departments, and civil defense organizations.You can contribute almost anything to a qualified organization. The deduction limits are more restrictive for gifts other than cash, but you are free to give almost any property of value. There are also limitations based on your adjusted gross income (AGI) or the type of organizations that you gift to.Making a planned gift can provide some significant benefits.

  • A charitable contribution may qualify you to receive a significant current income tax deduction.
  • Your deduction for an outright gift could equal the value of your gift up to certain generous limits. You can carry forward any gift amount that exceeds these limits for up to five years.
The only thing you can’t do is take back your gift.As always, talk with a tax professional before implementing this strategy.If you are reading this after Jan. 1, 2005, this is a great time to plan ahead for the coming year. I have written in past articles that the majority of people put more thought into their vacation plans than their financial future and their financial well-being. Pick up the phone, make the call and get a review of all of your accounts to include your estate plan. This process does not have to have the anxiety equivalent of sitting in the dentist chair, especially if you are working with a competent planner.Have a safe, happy and healthy New Year!Donnell Services, LLC719-886-3377Registered RepresentativeSecurities America, Inc.Member NASD, SIPCwww.alexdonnell1.sarep.comDonnell Services, LLC and Securities America, Inc. are independent companies.

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