2011 Q4 Year-End Tax Planning for Investors

2011 Q4 Year-End Tax Planning for Investors

Stocks performed reasonably well for much of 2011 but fell precipitously after the downgrading of the United States’ credit rating. As of this writing, the investment outlook for 2011 is quite uncertain. Despite that fact, there are things you can do with your portfolio by year-end to reduce the tax you’ll owe for 2011. Start by reviewing Schedule D of the federal income tax return you filed for 2010. See if you are carrying over any net capital losses from previous years. The next step is to tally your trading activity for 2011 so far. You can determine if you are in a net capital gain or loss position for the year to date. Example 1: Jane Collins is carrying

2010 Q4 | Year-End Tax Planning for Investors

2010 Q4 | Year-End Tax Planning for Investors

For the past two years, investors have experienced extraordinarily tumultuous times. From late 2008 through early 2009, stock markets in the United States and around the world have fallen sharply. The S&P 500 Index, a leading benchmark for the U.S. stock market, lost about half of its value, for example. As the winter of 2009 came to a close, stocks rebounded. For the remainder of last year and into early 2010, stocks enjoyed one of the strongest recoveries since the 1930s. Investors who held on recouped some of their losses, and those who rimed the market successfully had sharp gains. During the second quarter of 10, however, stocks dived again. Debt woes in Europe and sluggish employment growth in the