Your Money: One more gift to open: Your portfolio

Posted: December 24, 2013

Give yourself the gift of losses.

There are only six trading days left in 2013, so it's time to review your portfolio to see if there are any tax losses you can harvest. In other words, sell your portfolio's losers, use the losses to offset realized taxable gains, and lower your 2013 tax bill. Remember, you need to act by Dec. 31.

Tax-loss harvesting, or selling investments such as stocks, bonds, and mutual funds that have lost value, can reduce your taxes on capital gains realized from selling winning investments.

And this year, harvesting losses could be an even more attractive strategy for high-income investors, according to a Fidelity note to clients. That is because of three tax increases that took effect in 2013:

The highest tax rate on long-term capital gains increased to 20 percent from 15 percent.

A new 3.8 percent Medicare surtax for high-income taxpayers pushed the highest effective long-term capital gains tax to 23.8 percent.

The top tax bracket is now 39.6 percent for ordinary income, dividends, and short-term capital gains. The previous top rate was 35 percent. With the Medicare surtax, the effective rate can now be as high as 43.4 percent.

2014 forecast

The CFA Society of Philadelphia will host its 10th annual Forecast Dinner at the Loews Hotel in Center City on Jan. 9, with speakers on the financial markets and the economy. Bob Pisani, CNBC network stocks editor, will moderate the event, which will include panelists Anthony Crescenzi of Pacific Investment Management Co., Robert Doll of Nuveen Asset Management, and Momtchil Pojarliev of Fisher, Francis, Trees & Watts.

For more information, contact Pete Conners ( pconners@cfaphil.org).

Target or fraud

If you shopped this holiday season and had your credit card stolen or you think your personal information could be compromised, request a free consumer credit report by visiting AnnualCreditReport.com or call this number: 877-322-8228.

Consumers receive one free Equifax, Experian, and TransUnion credit report every 12 months by request. Review yours for any unauthorized or potentially fraudulent activity. If fraudulent activity is spotted, contact the credit bureaus to place a fraud alert on your credit report. Or visit the Federal Trade Commission website to learn more about fraud and identify theft:

www.ftc.gov/bcp/edu/microsites/idtheft.


erinarvedlund@yahoo.com

646-797-0759

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