We can explore tax strategies while investing to maximize opportunities. Below are some examples of those strategies, bearing in mind that each strategy will be different depending on your unique situation.
TAX PLANNING WITH INVESTMENTS
ROTH IRA
Discounted
Roth IRA Conversions
Certain investments can create valuation discounts during the same tax year as a Roth conversion, potentially reducing the ordinary income generated from the conversion.
KEY BENEFITS
o Reduce the taxable value of converted assets
o Accelerate tax-free growth within the Roth IRA and estate planning benefits
Key Takeaways
Tax-efficient investment strategies can complement traditional portfolios by helping investors:
o Reduce current taxable income
o Defer or eliminate all types of client income-associated taxes
o Increase after-tax portfolio returns
o Enhance long-term wealth creation
*Assumes 37% Federal Income Tax and 3.99% State Income Tax.
Investment in Bonus Depreciation assumes the deduction is leveraged at 2x, and Investment in Oil and Gas assumes a 90% tax deduction in the first year. For Bonus Depreciation, whether the income being offset is passive or active depends on each individual investor’s unique circumstances.
*Investments discussed may be speculative, illiquid and involve significant risk, including the loss of principal
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Sparta Wealth Partners does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Sparta Wealth Partners website or incorporated herein, and takes no responsibility therefor. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Sparta Wealth Partners is neither a law firm nor a certified public accounting firm and no portion of this content should be construed as legal, investment or tax accounting advice.