To Our Valued Clients and Friends:

Since President Trump signed the Tax Cuts and Jobs Act into law last December, we have been working in high-gear to understand the changes to the tax code in order to maximize the law’s benefits and minimizing potential negative impacts for you.

Below are some points you may want to consider before December 31, 2018:

• If you own real estate for rental purposes, it may be possible for you to deduct 20% of your net rental income. There are significant limitations, so please check with us.

• Would it be beneficial for you to either accelerate or defer income and/or deductions between 2018 and 2019?

• Review the new limitations on itemized deductions – would you be better off taking the standard deduction, increased for 2018 under the new law?

• If you make a gift to charity of investments which have appreciated, you can avoid the tax liability on the capital gain, and deduct the full fair market value of the asset as an itemized charitable deduction (with some limitations – check with us).

• Is it possible for you to recognize capital losses on the sale of investments to offset current-year taxable capital gains?

• If 2018 is a low-tax year for you, you might consider converting either all or part of your Traditional IRA to a Roth IRA. This could be a wise strategy to obtain long-term tax-free appreciation on assets held in the Roth IRA.

• If you are over the age of 70 ½, make sure you initiate any Required Minimum Distributions (RMDs) from your retirement accounts before December 31, 2018. If itemizing deductions is not to your benefit in 2018, consider gifting a portion of your RMD(s) directly to charity, which will enable you to itemize and deduct the fair market value of the gift. This is limited to $100,000 per year, per person.

• Make your annual gifts – the annual tax exclusion has increased to $15,000 per gift, per person.

• Review investments held on behalf of your children – their unearned income may be subject to income tax at the higher trust and estate income tax rates.

• If you have capital gains in 2018, consider deferring or reducing these via either a 1031 Exchange or investment in a Qualified Opportunity Fund.

• Maximize contributions to your retirement account(s).

If you have questions on the above, please feel free to contact me directly.

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Until next Wednesday – be remarkable.

Cause a ruckus!

Eric