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Tax Loss Harvesting

Nobody likes losses. However, in taxable accounts, you may be able to take advantage of them through tax loss harvesting. When you sell a security that has a loss, you can use that loss to offset the gain from selling another security. Through this tax loss harvesting action, you can reduce or eliminate the tax that you would have owed on the gain. If you don't have gains to offset, you can use up to $3,000 of the loss to offset ordinary income. The amount you don't use, can be rolled forward to use in a future year.

When harvesting a tax loss, you may sell a security that you still want to hold long term. The security can be bought back 30 days after it has been sold. You may not want to be uninvested during that period in case the market moves higher. One solution is to buy another security that is similar to the one being sold that would likewise participate in any bounce.  Another solution if cash were available is to double up on the security by purchasing shares and after 30 days sell the original shares with the bigger loss. Losses can be harvested in any type of investment and at any time of the year—not just year-end.

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Charitable Gifts From an IRA

With tax reform, it has become more advantageous for some people to make charitable gifts from their IRA. To do so, the person must be over age 70 1/2. Gifts of up to $100,000 per year can be made directly to the charitable organization from the IRA and excluded from ordinary income. Therefore, someone who does not itemize their deductions can take the standard deduction and make their gift without it being included in their income.

Eligible clients may want to make both large and small gifts from their IRAs. To simplify the process, clients can have a checkbook linked to their IRA. They could write checks from this checkbook on the spot to whoever they wanted to make a donation whether it be their weekly tithe to their church, a once a year donation to a community foundation, or a gift to fulfil a pledge. For larger or ongoing gifts, clients should contact their advisor so we can make sure that cash is available in the account. If you would like to have the checkwriting option on your IRA, please contact your advisor to see if it is appropriate for you.

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IRA Charitable Gifts

With the latest tax reform, it has become more advantageous for some people to make charitable gifts from their IRA. To do so, the person must be over age 70 1/2. Gifts of up to $100,000 per year can be made directly to the charitable organization from the IRA and excluded from ordinary income. Therefore, someone who does not itemize their deductions can take the standard deduction and make their gift without it being included in their income.

Some eigible clients may want to make both large and small gifts from their IRAs. To simplify the process, clients can have a checkbook linked to their IRA. They could write checks from this checkbook to any qualified organization whether it be annual gifts to their church, a once a year donation to a community foundation, or a gift to fulfill a pledge. For larger or ongoing gifts, clients should contact their advisor so we can make sure that cash is available in the account. If you would like to have the checkwriting option on your IRA, please contact your advisor to see if it is appropriate for you.

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Client Portal

It's here! Cambridge Advisors has been developing a client portal through our portfolio accounting and reporting software provider and we are ready to roll out the first phase. In this phase, clients will be able to view their balances and security holdings in total and by account. In addition, quarterly reports will be available online. If you would like to stop receiving paper copies of your report from Cambridge Advisors, let us know because they will now be available online. Other documents or reports can also be downloaded by clients securely which can provide better protection to our clients. If you would like access to the client portal, please contact your advisor so we can set up a login and password for you.