Saturday, December 30, 2017

What Will Baby 2018 Bring Us?

The great American illustrator J.C. Leyendecker originated the contemporary concept of
representing the new year as a baby, starting with his New Year’s cherub that welcomed in 1907 on a December, 1906 issue of The Saturday Evening Post.

Leyendecker went on the create new year baby illustrations for a generation of Post readers, often putting the tot in a setting that suggested a trend of the times.

Baby 1910 had only vestigial wings but, thanks to the Wright brothers biplane, he could actually fly!

Baby 1934 had reason to worry about the stock market. Still,  if he bought and held, he could have retired as one of the richest members of the Silent Generation.

We end this year with stocks at new highs, so baby 2018 is entitled to toot his horn, just as baby 1937 did. Will he be showered with Bitcoin instead of confetti? 

Friday, December 22, 2017

Who is Fiction's Best Known Executor?

[TV keeps rerunning "It's a Wonderful Life," so we'll repeat this 2006 post.]

Come now! 'Tis the season when the answer should be at the tip of your tongue:

"[Jacob Marley's] sole executor, his sole administrator, his sole assign, his sole residuary legatee, his sole friend and sole mourner" was . . . Ebeneezer Scrooge.

Flinty old coot, Ebeneezer Scrooge. Happily, the Christmas spirit(s) set him right.

"It was always said of him," Dickens tells us, "that he knew how to keep Christmas well, if any man alive possessed the knowledge.

"May that be truly said of us, and all of us!"

Wednesday, December 20, 2017

The Tax Act's Marketer in Chief

President Trump advised Congressional Republicans to make their tax legislation palatable by communicating simply, the Washington Post reports. Talk tax cut, not tax reform. A big, beautiful tax cut. Biggest ever (well, not quite, but still pretty big).

To his great credit, the President questioned the Walmart-pricing approach to setting tax rates. What's with this 39.6%, 38.5% nonsense?

Reportedly, the President feels the most marketable tax rates are multiples of five. Congressional Republicans didn't achieve that simplicity, but at least the new rates are free of percentage points.

Monday, December 18, 2017

HNWIs Will Have Seven Years to Die Prudently

The rush to pass the tax bill sows confusion. David Leonhardt in the NY Times, for instance, assumes the doubling of the federal estate tax exemption, like the lowered income tax rate for corporations, is intended to be permanent.

Not so, according to this Times report and other sources. Along with the personal income tax changes, the higher estate exemption will expire after 2025.

Grey-haired High Net Worth Individuals may wish to plan their demise accordingly.

Saturday, December 16, 2017

Wealthy Donor's Bitcoin Dilemma

You've already used up your $5-million plus estate and gift tax exemption. Now you want to pass  along another asset, worth $2 million, to your heirs.

Should you make the transfer immediately and pay federal gift tax? Or wait until next year, when you'll pay no tax because the new tax legislation will double the exemption?

A no-brainer? Not necessarily, suggests Paul Sullivan in his Wealth Matters column. If that $2 million is in Bitcoin, who knows its value in 2018? $20 million? $50 million? You might be smarter to pay tax on $2 million this year.

Or, you might wait for the Bitcoin bubble to burst. No $50 million, no $2 million, no tax problem.

Thursday, December 14, 2017

Nothing Beats an Aston Martin for Christmas

Is your wealthiest client still looking for "something special" to give her husband this Christmas? How about an Aston Martin?

No, not the car. Too common. Think boat.

The Aston Martin AM37 will cost your client about $1.64 million ($2.1 million for the souped-up version). Beauty seldom comes cheap.

Your client's husband already owns a superyacht? Then she might consider the latest superyacht accessory – the Aston Martin Neptune, a three person submarine. Order now for delivery in a year or so. Price: about $4 million.

Wealth isn't always a burden. Cannily deployed, it's fun.

Sunday, December 10, 2017

Tax Plans Stranger Than Fiction

 Generally, well-compensated employees should pay income tax at higher rates than business owners and investors. 

However, certain high-income business owners should pay tax at a marginal rate of 85.2%.

Haste and input from billionaires have produced weird taxation possibilities.

Friday, December 08, 2017

Don't Like the Parrot? How About Bitcoin?

Eager investors are getting rich quick with Bitcoin. But  Bitcoin reminds an Economist blogger of  a certain parrot. A real live currency it ain't.
It seems that every day, Bitcoin seems to hit a new high. But the reported price can move up and down by $1,000 or so within a few hours. This might have made it a great investment for those who got in at the right price and are nimble enough to get out in time. But it doesn't make it a useful means of exchange. When the price is rising fast, those who use bitcoin will be reluctant to part with it; when the price falls, those who sell goods will be reluctant to accept it.