www.qns.com I LIC COURIER I NOVEMBER 2018 43
TAX TIPS
YOUR
INVESTMENT
PORTFOLIO
BY JOHN SAVIGNANO, CPA
Take a look at your investment portfolio. You have lots of
tax-saving opportunities in the coming months as the year’s
end approaches. But don’t let the tax impact alone dictate
your moves. Your decisions should make economic sense,
too.
Consider getting rid of poor performers. Capital losses
you incur can oset capital gains plus up to $3,000 of other
income. Any excess losses are carried forward and can help
oset future gains.
But beware of the sneaky wash-sale rule, which prohibits
taking a capital loss write-o if you purchase substantially
identical securities within 30 days before or aer a sale. Any
suspended loss is added to the tax basis of the replacement
securities or shares.
is rule can apply in surprising way: For example, selling
a mutual fund at a loss 30 days aer the date a dividend is
reinvested. Or having your IRA buy stock shortly aer you
sell the same stock at a loss out of your taxable investment
account.
If you have capital loss carryforwards, search your portfolio
for gains. Your net capital gains…up to the loss carryover
amount…will not be subject to tax.
Some words of caution on the 0% rate. Zero-percent-rate
gains and dividends hike adjusted gross income, which can
cause more of your Social Security benets to be taxed and
can squeeze some itemized write-os, such as charitable
contributions. Also, your state income tax bill may rise, as
many states tax gains as ordinary income.
Take steps to limit the sting of the 3.8% surtax on net
investment income…taxable, interest, dividends, gains,
passive rents, annuities, royalties and the like. Singles with
modied AGIs over $200,000…$250,000 for
couples…could owe the tax. It’s due on the lower of net
income from investments or the excess of modied AGI
over the thresholds. Buying municipal bonds can help keep
the surtax at bay. Tax-free interest is exempt from the 3.8%
bite and doesn’t aect the owner’s AGI. If selling property,
see if you can use an installment sale to spread out a large
gain.
John Savignano is a partner with Savignano Accountants &
Advisors located at 47-46 Vernon Blvd., Second Floor, in Long
Island City. If you have any questions or require additional
information, please call John at 718-707-0955.
/www.qns.com
