Series 65: Tax Situation

Tax Situation

Whether a client is focused on creating current income or growing his investments for the future, failing to take income and capital gains taxes into account can mean inefficient investing and missed opportunities. Since virtually no investor is in a truly “tax neutral” situation where the taxes on his investments are irrelevant to him, an adviser needs to make an effort to understand and incorporate a client’s potential tax situation into his investment choices. Attempts should be made to coordinate with his tax professional to collaborate about the best choices for the client.

Here are a few key strategies:

• • Tax-advantaged investments—Investments such as municipal bonds and U.S. Treasury