Last Minute Tax Tips
Craig Hackler, Financial Advisor, Raymond James Financial Services
Here’s a potpourri of rules and
ideas that are important for yearend
planning.
Securities Sales To
realize a gain or loss
in 2007, the trade
date must occur on
or before December
31, 2007. Settlement
date is irrelevant for
publicly traded securities.
The limit on the
deduction of capital
losses in excess of
capital gains is
$3,000. Any net capital
losses in excess of
$3,000 are carried
over into 2007. Both
short- and long-term
losses are counted on
a dollar-for-dollar
basis. A few years
ago, long-term losses
were worth only $.50 on the $1. No
longer.
The holding period to achieve a longterm
capital gain or loss is now more than
twelve months. Count the period from
trade date to trade date. Whether a gain is
short- or long-term does make a difference.
The date a long-term gain is realized
also makes a difference. In general, net
short-term gains are subject to a 35% maximum
rate, while net long-term gains are
taxed at a maximum of 15%. However,
some gains may be subject to a 25 or 28%
rate, such as gains on the sale of art or collectibles
and gains on certain depreciated
real property.
Retirement Plans If you are a calendar
year taxpayer, the deadline for establishing
a qualified retirement plan for deductions
against 2007 income is December 31, 2007.
The contribution need not be made until
the tax filing deadline of the taxpayer’s
return. Note however, that a SEP plan can
still be established for 2006 deductions up
until the return due date in 2007.
In order for a distribution to qualif y as
a lump sum distribution, 100% of the balance
to the credit of the employee must be
distributed in one taxable year. If you
have retired this year, make sure that you
received (or will receive by year-end)
everything you have coming under your
former employer’s qualified retirement
plan.
Charitable Contributions Many people
make their annual charitable contributions
during the holidays. If you’re going to
make a cash contribution, mail the check
by December 31, 2007 to qualify for a 2007
deduction. Giving a personal note or I.O.U. to the charity won’t qualif y for a
deduction but donating with a credit card
does.
Making gifts of securities is a very
effective way to make charitable contributions.
Charities are happy to receive odd
lots. Donations of long-term capital gain
property are deductible based on fair market
value. It doesn’t make sense to donate
short-term capital gain property; your
deduction will be limited to your basis.
Also, it doesn’t make sense to donate securities
with losses; sell the stock and donate
the cash. To claim a 2007 deduction, the
security must actually be
transferred to the charity
before December 31, 2007.
Check in with your
financial planner near the
end of the year to see what
deadlines and opportunities
apply to your particular
financial situation.
Social Security
Numbers and Driver’s
License Numbers on
Pleadings. In order to make
it easier for title companies
and others to determine the
identity of judgment
debtors on abstracts of
judgment, SB 699 requires
that each party’s initial
pleading in a civil action
filed in a district court,
county court or statutory
county court include the last
three digits of the party's drivers license
number and the last three digits of the
party's social security number.
Proceedings in statutory probate courts are
exempted from this requirement.
Unfortunately, probate and guardianship
cases in non-statutory probate court counties
will be subject to the requirement. The
requirement applies to civil actions filed
on or after September 1, 2007.
Craig Hackler holds the Series 7 and Series
63 Securities licenses, as well as the Group I
Insurance license (life, health, annuities).
Through Raymond James Financial Services,
he offers complete financial planning and
investment products tailored to the individual
needs of his clients. He will gladly
answer your questions. Call him at
512.894.0574 or 800.650.9517
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