Perspectives Blog

Trust accounts and the net investment income tax

Abram Claude, Vice President, Columbia Management Learning Center | November 14, 2014

The 3.8% net investment income tax applies to certain trusts and estates. Given the lower income thresholds for reaching higher tax brackets in a trust, it is possible that income or capital gains retained by the trust will be taxed at higher rates than if the income or gains were distributed to beneficiaries. The Columbia Management Learning Center is dedicating a series of blog articles to this important and timely “Navigating the New Tax Reg…

Retirement plan design for the new tax regime

Abram Claude, Vice President, Columbia Management Learning Center | November 12, 2014

Small business owners can potentially mitigate the effect of the new 3.8% net investment income tax (NIIT) by establishing or updating a retirement plan for their business. Strategic use of tax-advantaged retirement plans may prevent one from breaking through the MAGI income threshold for the NIIT strategy. The Columbia Management Learning Center is dedicating a series of blog articles to this important and timely “Navigating the New Tax Regime…

The three tax thresholds of the new tax regime

Abram Claude, Vice President, Columbia Management Learning Center | November 3, 2014

New tax rates and provisions became effective in 2013. These taxes will impact many high income individuals, as well as certain estates and trusts. The Columbia Management Learning Center is dedicating a series of blog articles to this important and timely “Navigating the New Tax Regime” topic. In 2013, there were new tax rates and provisions that became effective as a result of the American Taxpayer Relief Act of 2012 and taxes associated wit…

The role of asset location

Abram Claude, Vice President, Columbia Management Learning Center | November 18, 2014

Financial advisors and investors should have a good understanding of what is different about taxation in 2013 and beyond – and how it affects after-tax returns. An asset location strategy should consider the benefits of placing less tax-favored investments under tax-deferred or tax-free registrations in order to increase after-tax returns. The Columbia Management Learning Center is dedicating a series of blog articles to this important and time…

The new tax regime and stock compensation

Abram Claude, Vice President, Columbia Management Learning Center | November 21, 2014

For many employees in corporate America, a portion of compensation comes from one or more forms of stock plans or stock option plans. Compensation income from stock incentives contributes to adjusted gross income, but not net investment income for purposes of calculating the new 3.8% tax on net investment income. The Columbia Management Learning Center is dedicating a series of blog articles to this important and timely “Navigating the New Tax…

Maximizing workplace retirement plans to reduce or eliminate the net investment income tax

Abram Claude, Vice President, Columbia Management Learning Center | November 6, 2014

The net investment income tax (NIIT) is a new, permanent tax that began in 2013. Investors’ workplace retirement plans, such as 401(k) plans, may offer several opportunities to reduce exposure to the tax. The Columbia Management Learning Center is dedicating a series of blog articles to this important and timely “Navigating the New Tax Regime” topic. Many higher-income investors with taxable investments encountered a new tax that began 2013: t…

What is the Net Investment Income Tax, and how is it calculated?

Abram Claude, Vice President, Columbia Management Learning Center | November 4, 2014

The Net Investment Income Tax is a permanent tax that became effective in 2013. Investors who break a certain modified adjusted gross income threshold may face a 3.8% surtax. This tax is in addition to any ordinary income or long-term capital gains tax obligations. The Columbia Management Learning Center is dedicating a series of blog articles to this important and timely “Navigating the New Tax Regime” topic. The net investment income tax is…