Discount Code For A4A Members For My -- A Great Resource With Tax Season Upon Us edit
Friday, March 07, 2014 14:48


With tax season in full swing and stocks showing huge returns in recent years, advisors are dealing more with tax issues related to stock options, restricted stock and other compensation methods that can be complicated tax-wise. Here’s a discount code for A4A member from, which is one of the best resources on the Web covering equity compensation and has an outstanding tax resource center.

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To receive a $25 discount on a one-year Premium Membership (offer good until April 1, 2014), enter the promotional code TAXBACK2014 in the registration/upgrade form, or click here to sign into your existing membership and then upgrade.’s Tax Center teaches the withholding, reporting, and filing rules for stock options, ESPPs, restricted stock, and SARs, which could come in especially handy during the next few weeks.


Medicare Surtax On Investment Income - Beware! edit
Tuesday, January 07, 2014 01:03

Tags: client communication | client education | high net worth | medicare surtax | new tax rules | Tax Changes | tax law | tax planning | Tax-efficient investing | Taxes

As of 2013, your clients might be impacted by the by the 3.8% Medicare Surtax. And, if they are, they might ask you, their advisor, for an explanation! It's important to know how the calculation works before you can determine if a client will be affected and whether there's anything you can do about it. 

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The surtax calculation is based on two components:
   - The taxpayer’s net investment income (‘NII’) and,
   - The taxpayer's modified adjusted gross income (‘MAGI’).  
The 3.8% applies to the lesser of NII or adjusted MAGI. 
NII is the total of all taxable investment income, including interest, dividends, capital gains from investments, rental income, passive income, annuities and royalties. It does not include retirement plan distributions. MAGI is the total of NII plus all other taxable income not included in NII, such as wages and business income. Adjusted MAGI is MAGI reduced by:
   - $250,000 for married couples filing jointly
   - $125,000 for married couples filing separately
   - $200,000 for singles and head-of-household status
Clearly, if MAGI is not greater than the threshold amounts above, no surtax will apply. Also, if NII is low, the surtax will not be material. For clients with gross income approaching or exceeding the thresholds, minimizing investment income will be important. To minimize investment income, consider:
Harvesting tax losses
Choosing high cost lots on sales
Locating income-producing investments in retirement accounts
Using municipal bonds in taxable accounts
The most critical aspect for advisors: Be aware and proactively communicate with your clients!
You Are About To Run Out Of Time To Warn Clients About The New 3.8% Surtax On Net Investment Income edit
Saturday, December 21, 2013 13:14

Tags: Tax Changes | tax law | Taxes | year end tax planning

The new 3.8% surtax on income, known as the net investment income tax (NIIT), is going sneak up on a lot of clients when it shows up for the first time ever on 2013 tax returns. You are about to run out of time to check in with clients to see if they can avert this new tax on net investment income and a bad tax surprise. That's not a lot of time, especially with the holiday this week, but it's enough time to make a phone call, ask a few questions, and possibly save a few clients a few thousand dollars.

Robert Keebler gave a webinar about the NIIT yesterday and it received a 4.7 star-rating, the kind of rave reviews from advisors that have become customary of Bob Keebler webinars. If you listen to that webinar replay, you'll probably have a very good idea of which of your clients might be "NIIT-picked" and you can give them a call and maybe save them some money.

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Only the most dedicated professionals would attend a session about the NIIT on a Friday at 4 ET less than a week before Christmas, but attendees were amply rewarded. Bob didn’t drill down into taxation the way he would when speaking to CPAs. He did something better. Keebler tailored his lesson to financial advisors.

Because the A4A audience is comprised of financial advisors and not tax-preparers, your entry point and role in advising clients on NIIT is different from a CPA’s, and Keebler’s remarks addressed what financial advisors need to know to advise clients on NIIT. Classic Keebler!

Keebler says the tax practice at accounting firms these days does not provide revenue year-round. So accounting firms are more interested in advising businesses and other services more lucrative than personal taxation. Your local CPA is typically less focused on tax practice, especially outside of the January 1 to April 15 filing season.
However, when this surtax was adopted by Congress, it was expected to raise tax revenue of $20.5 billion in 2013 and projected to generate about that amount annually for 10 years. Keebler expects it to affect about 5% of taxpayers, but a much larger number of advisor clients.
The Net Investment Income Tax is imposed by section 1411 of the Internal Revenue Code. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates and trusts that have income above statutory thresholds.
Financial advisors can play a meaningful role in educating clients about this tax because you know about the investment side of the client’s life. So please view this webinar and get on the phone with some of your clients who might subject to the NIIT. While it is kind of late in the year to be doing this, they'll appreciate the call and that you were trying to save them money on taxes.
Here are the reviews froma ttendees of Bob Keebler's session on the NIIT:
·       Excellent but a lot to digest and he went a little fast over some complex issues...
·       Excellent update and presentation.
·       Mr. Keebler does a beautiful job of explaining a complex topic.
·       Well worth the time to identify problem areas that could require additional research.
·       Bob's presentation was excellent as always. He takes the IRC and makes it simple to understand and explain to clients. Thanks
·       Very precise and helpful.
·       Very excellent
·       Superb discussion of combining tax planning with financial planning.
·       If a planner has a big case, is Bob available to provide inpuit - does he do hourly? Rate? What information would be needed? Does he have a questionnaire?
·       As Andy put it so well, it was another blockbuster presentation by Bob Keebler and the focus on the 3.8% surtax (without introducing a lot of other tangential topics) was effective because it allowed everyone to try and focus on just that one issue. This is conducive to mastering the single topic of the 3.8% surtax and the use of examples was illustrative. I would suggest that similar focus be made on future Keebler webinars on a single aspect of the new law as was done today. Thank you.
·       Very Timely. Thank you
·       Bob Keebler is always very helpful w/relevant content and an easy to follow presentation.
·       Wow. This is just what I needed to help wrap the year. My focus since December 7th has been on Atlas program 33, an oil and gas partnership that offers a 94% writeoff for 2013. Thanks very much for aiding my understanding of a problem area begging for a solution right now.
·       Bob, Excellent as always. The examples were beneificial and thanks so much for the clarification about what's included and not included. Big help!!!




Averting State Estate Taxes With Non-Grantor Trusts, Transferring Digital Assets At Death, And The Portability Election: An Update On Estate Planning For Financial Planners edit
Monday, December 02, 2013 16:35

I'm pleased to be invited to participate as an A4A blogger. I plan on updating you on estate planning and asset protection matters as they develop. I also look forward to sharing my thoughts on A4A webinars, including the session on December 13. See you there!


For this first post, let’s focus on three timely estate planning topics for financial planners.

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Using Incomplete Non-Grantor Trusts To Avert State Income Tax On Capital Gains

Recently, the IRS issued a private letter ruling (PLR 201310002) after several years of silence on the issue of incomplete non-grantor trusts.  By way of background, individuals who live in high tax states and who have significant appreciated assets have used a technique, commonly referred to as a DING trust (Delaware incomplete non-grantor trust).  By structuring the transfer as an incomplete gift to a trust governed by the laws of a state that does not impose a state income tax and using a distribution committee consisting of adverse parties (typically beneficiaries) they were able to avoid state income tax on the capital gains.  This is most useful where a client may be selling a business at a substantial gain.  The IRS issued a revenue ruling in 2007 which led to uncertainty as to some tax consequences of such a structure effectively chilling further transactions.  But now with this favorable private letter ruling (which, however, cannot be used as precedent by other taxpayers) there is renewed interest in this. Because the requirements for a transfer to be an incomplete gift require the settlor to retain not only a testamentary power of appointment but also, under this ruling, a lifetime power, the only three states that presently provide creditor protection (which is necessary to avoid grantor trust status) are Alaska, Nevada and Wyoming.


Transfer Of "Digital Assets" Upon Death

A subject gaining media attention is the transfer of "digital assets" upon death (or disability).  Law on this emerging issue is being developed at the state-level and the topic is under study by a drafting committee of uniform law commissioners. Uncertainty often results related to the different contractual policies social media companies like Facebook, Twitter, and LinkedIn require users to agree to accept.  Who can be given authority to access digital media, sell or exploit it has emerged as a major issue. For example, who is entitled to your iTunes downloads and domain names when you die?  See Arden Dales's recent WSJ article to for details on this.


Over-Reliance On Portability In Their Estate Planning

Finally, though not new news, many married couples may be placing too much reliance on portability of the estate-tax exclusion in their estate planning. Though there are many benefits of portability, there can be detriments. Each client's situation requires a careful review of the pros and cons.

I discussed these three topics in more detail at an A4A webinar. If you have questions please feel free to email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

The Insurance Industry Doesn’t Know Fee-Only Fiduciaries Exist; Observations And Attendee Reaction To Bob Keebler’s Webinar About Retirement Income Planning edit
Wednesday, November 27, 2013 17:24

Tags: asset allocation | fiduciaries | retirement income | tax efficient investing | tax planning

Retirement income planning has always focused on reaching a wealth accumulation goal by the time of a client’s retirement date, but managing assets after retirement to maximize income is ultimately what’s most important.

That was the subject of Bob Keebler’s recent webinar session. At a rapid clip, Keebler ticked off pitfalls, problems, and solutions -- why distribution planning is so important, the five-dimensional tax world practitioners must suddenly navigate, the effect of asset allocation on tax minimization and a wide range of other issues.
Because Keebler is so steeped in the CPA world, his approach and perspective is different from that of a CFP, CIMA, or CPWA professional. It's an unbiased approach to optimizing after-tax returns on retirement income.
A4A members can get CFP, CIMA, and CPWA continuing education credit and view the replay for free. The slides for Bob's monthly sessions are available for $25 a month (annual commitment). You can use the slides in meetings with clients, conducting your own webinars, as well as in in blogs or newsletters you send to clients. Buy it here.  

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While Bob covered a lot of ground, a major takeaway from the session is the growing need for annuity products targeted to fee-only RIAs and fiduciaries.
Many of the comments below mention a Jefferson National product and a couple of other commenters mentioned other products. I am struck by the dearth of choices.
The income distribution phase of financial life is spreading across thousands of Baby Boomer households daily. Advising this growing segment of potential clients is increasingly important to clients and practitioners.
Diversifying an income stream beyond a securities portfolio — into annuities — is prudent because it mitigates risk in generating retirement income. Fiduciaries will want to offer clients diversified income streams—that is, a stream of income derived from multiple sources. Annuitization of a 15% to 25% portion of a client’s assets in income-generating annuities is being recommended by leading academics, and Keebler is saying the same thing. 
For fee-only advisors, advising clients on annuities is a sticky issue because you have to do what’s in a client’s best interest always. You are obliged to recommend a client place assets in an annuity, even if it means you will no longer be able to charge a client for managing those assets.
RIAs working on a retainer basis are well-positioned to deal with this challenge to professional ethics and net income. Retainer-based RIAs, of course, get paid a fixed fee regardless of which products they recommend.
 “Jefferson National Monument Annuity is great,” according to one attendee. “Only $20 per month. If a prospect already has a variable annuity, it is much better if they transfer it to JeffNat—usually saving 1-4% per year depending on the cost of the VA they are currently in.”
What strikes me is the dearth of choices. As comments below from attendees show, there are only a small number of annuity products that fee-only advisors can utilize and count as AUM. Clients, ideally, would diversify across different annuities to reduce the risk of a default by an insurer.  
It seems like the insurance business doesn’t know fiduciaries exist.
Put another way, fiduciaries, who are supposed to be setting the standard for how financial advice professionals practice, are totally underserved with annuity products, especially since it is arguably imprudent for a fiduciary not to put some assets under management in annuities. It will be interesting to see how long it takes for the insurance companies, product manufacturers, and consultants to fill the void and provide fiduciaries with more choices.   
Here are the unedited comments from attendees. Proving once again that you people can never be satisfied, Bob received a 4.5-rating out of five.
  • Keebler is an amazing teacher!
  • You have some of the best content here...
  • Great job Bob. Excellent slide materials, as always. Thank you for the service you provide to advisors.
  • Very interesting
  • I wished Bob Keebler had time to do some case studies to show how tax planning can help clients increase their income in their retirement.
  • Always love Bob Keebler. Never enough time. What I'd love is if we could get more specific. Let's have a webinar that really digs deep on just NUA, just ROTH conversions, just Oil & Gas, just annuities -- etc.
  • Too much material for short amount of time.
  • Always greatly appreciated...
  • He really tried to cover a lot in a short time and did a pretty good job!
  • Seemed to be at various levels of expertise - sometimes glossed over the more complex stuff at the same pace as he went through the simpler stuff.
  • Really good. Wish it could have been longer to go thru some more case studies to really show the value of tax planning on withdrawal strategies.
  • Great info I have not seen organized anywhere else like this.
  • Very good
  • Great stuff
  • Great as always.
  • Overall it was excellent but there was too much "heavy" material presented in too short a period of time.
  • Very good
  • Bob Keebler is so brilliant!
  • Excellent. I thought the perspective for using annuities for tax planning was. useful info for an RIA
  • My question was not answered regarding paying caps gain vs loss of step up for person who does not need money from annuity but wants to leave the money for heirs
  • I wish he would complete his presentation rather than just refer to the remaining "mystery" slides.
  • Complex material to cover in 60 minutes. I think the subject needed to be narrowed down for the time slot.
  • Good presentation.
  • Andy and Bob, I think the comment about the fee-only annuities may pertain to variable annuities offered by Vanguard, Fidelity, etc. which are on our advisor platforms institutional
  • JeffNat has 400+ fund choices and includes many good low cost funds from DFA and Vanguard.
  • Andy, I think Jefferson National Monument Annuity is great. Only $20 per month. If a prospect already has a variable annuity, it is much better if they transfer it to JeffNat...usually saving 1-4% per year depending on the cost of the VA they are currently in.
  • Andy, Check out Lincoln Financial Distributors, they have a RIA specific annuity...
  • Jefferson National has a fee-only annuity that RIAs can charge fees.
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