Although 2011 federal tax law remained relatively stable, investors are looking ahead to 2012 with trepidation as an “overhang of uncertainty” about what congress will do to reduce national debt and improve the economy clouds the future when it comes to tax reporting[1]. Clint Stretch, managing principal of tax policy at Deloitte Tax LLP, says that many of his company’s clients are “unhappy…because they want to know what the rules are.” Regulations on how investments are reported are likely to change, including one change that “investors can plan for,” says Stretch, that affects both mutual funds and most Exchange Traded Funds (EFTs). In 2012, investors must decide before they sell what reporting method – average cost or first shares acquired – that they want to use to report to the IRS information on the cost basis of investments. “Cost basis” refers to the “original value of an asset for tax purposes…adjusted for stock splits, dividends and return of capital distributions”[2]. It is used to determine capital gains on investments.
Analysts are questioning the wisdom of many classic investing strategies in the shadow of looming changes and reforms. Pre-construction investing, already on shaky ground, is likely to become even harder to predict in the coming year[3], while many investors with offshore accounts protecting their monies are having to determine whether or not their investments would be better moved home as the IRS “ramps up efforts to flush out taxpayers hiding money abroad” or whether they should move even more money offshore into new – and fully legal – offshore investments[4]. With all the uncertainty, the markets stand to stagnate while investors weight their options. Do you think now is a good time to change courses, or are you leaving your money and your investment planning strategies the way they are?
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[1] http://www.bloomberg.com/news/2011-12-07/year-end-tax-planning-contends-with-2012-uncertainty.html
[2] http://www.investopedia.com/terms/c/costbasis.asp#axzz1gKBNVmfx
[3] http://www.theglobeandmail.com/globe-investor/personal-finance/is-that-new-condo-a-good-investment/article2266452/
[4] http://online.wsj.com/article/SB10001424052970204319004577086441475822300.html
More of the same with this Administration. Uncertainty. That is why employers are not hiring, and the economy is not growing. (Government numbers are fudged) This Administration has not presented a black and white budget for the past 3 years. They will not do so in 2012 either. Too put in simple terms, the current Administration and the Democratic majority in Congress is just bad for business and economic recovery. I don’t know any other way to say it. Facts are facts regardless of how they are spun by the media and Obamaites.
If more people were in the self-employed category, they wouldn’t have worry what the new taxes will be. The section to read is 1.1402 “Definitions”. In that section it states that” any buying and selling of a capital asset is “exempt” from gross income.”
So read it as it is, ask questions, but beware of whom you ask the question, because you might be jeopardizing the person’s job. But find the truth. The law is what is says to be applied accordingly, in this case “Ignorance is not Bliss.”
“…That is why employers are not hiring…” No, it’s not. Employers aren’t hiring because they don’t have to. Very simple. If I can get the same job completed with half the staff, why would I hire? I wouldn’t is the answer. That’s $150k in my pocket. 5 employees X $20k each, tax savings, payroll tax savings, health care costs all I will save. Now multiply my scenario by what? 100,000 employers in America? This is the way it is and will continue to be. Not a new congress, not a new president, nobody is going to change it. Employers have realized the past three years that they can still run a business with half the staff. If an employee is stupid enough to quit (or they get fired), there’s even more of a savings for the owners or shareholders because when they hire to replace that employee: they don’t pay a working wage. – again, because they don’t have to.