Planning and Minimizing Taxes

Conceptually, we all understand that if you pay less in taxes, you will have more of your wealth left to use for the purposes you intend. While nearly everyone would agree that this is true in principle, few people have the necessary mechanisms in place to achieve this in practice. The reasons for this are wide and varied, but can be summarized by the fact that it takes time, energy and expertise to make the most of your investments. Our strategies emphasize several levels of tax minimization:

Level 1: Evidence-Based Strategy

An overwhelming amount of independent, academic research concludes that conventional investment management fails to deliver superior after-tax returns. Incorporating this knowledge means abandoning high turnover and tax-inefficient investment strategies, while focusing, instead, on a scientific portfolio structure designed to be tax-efficient.

Level 2: Tax-Efficient Investments

Investments with lower turnover have greater tax efficiency. On average, Cole Asset Management’s recommended investments are more tax-efficient than most approaches. Further, when capital gains distributions do occur, a larger proportion are long-term (vs. short-term) in nature. This is important because short-term capital gains are taxed as ordinary income rather than preferential long-term capital gains rates.

Level 3: Tax Loss Harvesting

Cole Asset Management actively looks to sell securities with losses when they occur, not just at the end of the year. These “booked” losses can be used to offset realized capital gain and distribution in your portfolio, as well as to offset realized gains for non-portfolio related capital gains, such as real estate.

Level 4: Asset Location

There are three primary types of investments accounts: after-tax, tax-deferred and tax-free. Each of these is preferred for different types of portfolio investments. Cole Asset Management will customize an asset location strategy for each client.

Level 5: Tax Return Reviews

Whether your tax return is being prepared by a tax professional or you are doing it yourself, your Cole Asset Management team will review your return and help you take advantage of tax savings opportunities.

Level 6: Roth Conversion Analysis

Cole Asset Management will examine and customize recommendations to see if this highly effective and flexible planning tool makes sense for you.

Level 7: Tax Return Preparation

Effective tax and investment integration is essential. We have tax professional associates to prepare your returns.