6 Tax Strategies for Incentive Stock Options and AMT
Darrow Wealth Management
by Kristin McKenna
4d ago
6 tax strategies for incentive stock options and AMT Triggering the alternative minimum tax isn’t the end of the world, but you don’t want to do it by accident. Here are six tax planning strategies to consider when exercising and selling ISOs in 2024: Exercise early in the year Exercise late in the year Exercise unvested ISOs Tax planning around AMT exemptions, phase outs, and tax deductions Ways to accelerate AMT credits Exercise ISOs when regular income is already high 1. Exercise ISOs early in the year to manage or avoid AMT To get long-term capital gains tax treatment, you need to hold I ..read more
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Using a Securities-Backed Line of Credit to Buy a Home
Darrow Wealth Management
by Kristin McKenna
2w ago
A securities-backed line of credit is like a home equity line of credit in many ways, though with this type of loan, the collateral is your investment account, not a home. A securities-backed line of credit (SBLOC) allows investors to get cash by borrowing against their investable assets versus liquidating their portfolio. Although it may not be a good long-term strategy for most investors, it can be a compelling short-term solution while awaiting liquidity from selling your current house. Should you use a securities-backed line of credit to buy a home? In the right situation, a line of credit ..read more
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5 Ways to Manage a Concentrated Stock Position
Darrow Wealth Management
by Kristin McKenna
1M ago
Investors can wind up with a concentrated stock position in different ways. But it’s most often from an inheritance, founder, or employee with company stock. Or a long-term investor bought shares years ago, the stock did well, and the investor simply never took profits. But because stocks don’t only go up, it’s important to have proper risk mitigation and diversification strategies once a concentrated stock holding is identified. Here are five ways to manage a concentrated stock position. Why diversify? Individual stocks vs the index Historically, on average, the S&P 500 has been positive ..read more
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2 Key Benefits of Living Trusts
Darrow Wealth Management
by Kristin McKenna
2M ago
With so many misconceptions around trusts, it’s easy to understand the confusion about the benefits of a revocable living trust. A living trust (also called a revocable trust or revocable living trust) can be beneficial to a much broader group of Americans than most people expect. During life, a living trust is essentially an extension of yourself (and a spouse if you decide on a joint trust). There are no tax benefits during life nor are there any adverse tax implications. However, at death, a living trust can provide two key benefits compared to owning assets not held in trust. What happens ..read more
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Make a Mark with These Financial Gift Ideas
Darrow Wealth Management
by Kristin McKenna
3M ago
It’s hard to come up with good gift ideas, especially over the holidays if you have a lot of people to shop for. Unfortunately, giving money is often viewed less favorably compared to tangible gifts. It’s time to change that. These days, many children, adults, and grandparents don’t really need more stuff. And with a little creativity, it’s possible to give a financial gift that will make a lasting impression for the recipient. If you’re looking for gift ideas for a child, adult, parent, or relative for a holiday, birthday, or special occasion, consider one of these financial or investment gif ..read more
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Is Retirement a Good Time for Roth Conversions?
Darrow Wealth Management
by Kristin McKenna
4M ago
If you think retirement planning moves stop at retirement, think again. For high earners, converting an IRA to a Roth IRA while you’re still working could be the worst time of all. Although it won’t make sense in every situation, retirement can be a unique opportunity for Roth conversions for some investors. Particularly for individuals who are holding a lot of cash or have proceeds from a windfall such as the sale of a business, a multi-year Roth conversion strategy is worth considering. Considering Roth conversions in retirement When you convert pre-tax money from an IRA to an after-tax Roth ..read more
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2024 IRS Contribution Limits For IRAs, 401(k)s, and More
Darrow Wealth Management
by Kristin McKenna
5M ago
The IRS has released the 2024 contribution limits for retirement plans and other cost-of-living adjustments. Contribution Limits for 401(k)s, IRAs and More in 2024   Income Limits for Tax-Deductible IRA Contributions   Roth IRA Contribution Eligibility   The post 2024 IRS Contribution Limits For IRAs, 401(k)s, and More appeared first on Darrow Wealth Management ..read more
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Deciding What To Do When You Inherit A House
Darrow Wealth Management
by Kristin McKenna
5M ago
Of all the types of assets, real estate is usually the most emotional. It is, after all, difficult to make memories in a mutual fund (which is a feature of diversified investments, not a bug). So when you inherit a house from a parent, it’s important to recognize the emotional attachment will likely influence your decision-making. Before deciding what to do with an inherited home, consider all the angles and potential outcomes — particularly if you inherited the house with other family members. Options for an inherited home Whether you’ve inherited a home by will or as a beneficiary of a trust ..read more
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Starting a Home Renovation? Don’t Ignore These Key Insurance Risks
Darrow Wealth Management
by Kristin McKenna
6M ago
More homeowners have been renovating their homes instead of buying due to housing prices. While continuing to build equity in your home can be advantageous financially, navigating a construction project isn’t easy. And when something goes wrong, many homeowners are surprised to learn of gaps in their insurance coverage or their contractor’s. Before starting a home renovation project, take steps to help ensure you’re covered against these potential risks. Addressing insurance risks before starting a home remodeling project Updating your homeowners insurance before starting work One key risk to ..read more
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Should You Exercise Stock Options During a Pre-IPO Window?
Darrow Wealth Management
by Kristin McKenna
7M ago
Is exercising stock options right before a company goes public a good idea? Employees with pre-IPO incentive or non-qualified stock options often wonder if they should exercise before the company goes public (perhaps during a final open window) or wait until after the IPO. Assuming you have the cash on hand to fund it (more on that later), it can be a difficult question to answer as we’ll only know in hindsight (after seeing how the stock performs) whether exercising before the IPO was a good idea or not. So the choice ultimately has to be an educated guess in consideration with other key fact ..read more
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