2023 Year End Tax Planning Tips



As the close of 2023 quickly approaches, investor’s should start thinking ahead, reviewing and taking advantage of tax saving strategies. Here are three important tips that will help investor’s manage tax consequences, while helping to better manage their investment portfolio(s).



1) Harvest Tax-Losses…
Review your investments, looking for those that are trading at values less than what you paid for them.  Now is a great time to review these positions, and considering selling these losers to offset capital gains from your winners. Also, if you’ve used the portfolio strategy to ‘double up’ on positions with unrealized losses, and you’ve met the IRS 31 day holding requirement for these ‘double up’ positions, be sure to record the losses as possible for the current tax year. Tip: check with a tax advisor or published IRS forms to learn more on the tax rules for offsetting gains with losses.

2) Consider Charitable Gift-Giving…
It’s that time of year again when generous people think of ways to help those less fortunate than themselves. For investors, this is often accomplished by gifting appreciated stock to a qualifying charity. The benefits are many. First and foremost, the benefits from acts of kindness are priceless to both the recipient and donor alike. Additionally, the Internal Revenue Code allows most gifts to be deducted at their current market value rather than at their cost. So, by gifting appreciated securities, the capital gain that would have otherwise been realized is avoided and yet the entire value of the security is gifted for tax purposes. Clearly a win-win situation!

3) Identify Rebalancing Needs…
Investors need to take the time necessary to review and identify any rebalancing changes necessary to reach long-term goals. Investors should focus on rebalancing portfolios consistent with their risk adjusted goals, while managing the tax consequences of their activity. For example, is the current allocation in line with your targeted goals for portfolio asset mix (cash v. bonds v. stocks)? If not, now represents an opportune time to make adjustments, while considering tax planning goals.

Investment Account Manager, a windows based desktop software program for portfolio management, includes many tools that enable investors to identify tax saving maneuvers.

A free 60 day demo version (no credit card required) is available on our website: Investment Account Manager