Archive - November 2008

1
A Couple of Year-End Roth IRA Strategies
2
Further Note on Roth IRA Recharacterization/Conversion
3
2008 Year-end Income Tax Planning
4
A Trillion Here, A Trillion There….
5
How Do Hedge Funds Fail so Spectacularly?

A Couple of Year-End Roth IRA Strategies

With stock market indices down 30% or more from their January 1st levels, most investors are battered, bruised, and hoping for happier times. In the midst of a generally depressed stock market, there are still a couple of clever ways to make the most of a bad situation using a Roth IRA.

Roth Conversion
If your Traditional IRA account balance has been walloped by the vagaries of this year’s market and you intend to keep it invested in stocks or stock mutual funds, now is a good time to consider doing a conversion (or partial conversion) of the funds into …

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Further Note on Roth IRA Recharacterization/Conversion

In my earlier post on Roth IRA conversions, I noted that if you converted an IRA into a Roth earlier this year it may make sense to recharacterize the funds if the value of your account has slumped and you still owe taxes on the earlier, larger conversion amount. I also stated that you can’t go back this year and do another conversion. However, I realized that there is a way to sort of do a conversion/recharacterization/reconversion.

If you do a partial conversion of an IRA and later recharacterize it, you can do another partial conversion of different funds …

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2008 Year-end Income Tax Planning

As 2008 draws to a close, take some time to consider what you can do before year-end to reduce your income tax bill.

In late November, a financial planner’s fancy lightly turns to thoughts of…minimizing taxes.  Actually, I’m thinking about Thanksgiving too, but while there’s still time to act, it’s wise to spend a little time thinking creatively about managing your tax liabilities.

This year, end-of-the-year strategies are trickier, as no one can say for sure whether income taxes will increase significantly in 2009 under a new presidential administration.  In the midst of recession, it’s becoming less likely that taxes

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A Trillion Here, A Trillion There….

A Trillion Here, A Trillion There...Bloomberg.com has toted up all the Federal commitments made to date to stabilize the markets and the figure, if correct, is staggering: $7.76 trillion.

The late Sen. Everett Dirksen would be livid if he were around, even though Dirksen probably didn’t make the remark most often attributed to him.  But we’re definitely talking real money:  $7.76 trillion is about half of the US annual Gross Domestic Product.

The full amount hasn’t actually been spent; rather, this is the total of all the guarantees, asset buybacks, and equity purchases made by various government agencies over the past year.  The Federal …

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How Do Hedge Funds Fail so Spectacularly?

Yesterday, the House Oversight and Government Reform Committee hauled in a gaggle of hedge fund managers to grill them about, among other things, why they should receive such favorable tax treatment. If I were a congressman, the question I’d have liked to have asked this crowd is, “Why is it so often the case that when hedge funds fail, they don’t merely fail, they implode, like dying stars?” This failure mode seems especially inappropriate for an investment class that’s often touted as a way to make money in both good times and bad.

I can’t possibly discuss all the …

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