Fri08222014

News

Electrical shutdown scheduled today, tomorrow

PG&E is installing new electrical service to the 400 Main St. development project today, which will require the temporary interruption of electric services to several businesses located on First, Main and State streets in downtown Los Altos. PG&a...

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Schools

Community support pays dividends

Community support pays dividends


As a recent cover story in The New York Times Magazine revealed, getting low-income students into college is not enough to close the achievement/income gap. The percentage of low-income students entering college who actually earn a degree lags far ...

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Community

War veteran to visit D.C. memorial on Honor Flight

War veteran to visit D.C. memorial on Honor Flight


Ellie Van Houtte/Town Crier
Los Altos resident and World War II vet Earl Pampeyan is preparing for an Honor Flight trip to Washington, D.C., next month.

Los Altos resident Earl Pampeyan is scheduled to fly to Washington, D.C., next month to vis...

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Sports

Making a splash

Making a splash


Courtesy of Clarke Weatherspoon
Stanford Water Polo Club’s under-14 boys team earned the bronze medal at the Junior Olympics. Front row, from left: Corey Tanis, Larsen Weigle, Nathan Puentes, Walker Seymour, Alan Viollier and Jayden Kunwar. B...

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Comment

Whom can you trust?: Haugh About That?

Waving my pink poodle skirt with all the fervor of a matador preparing to tease a raging bull, I blinked my 20-year-old eyes and gave a come-hither look to indicate, “I’m ready!” Little did I know that the blind trust I had in this ...

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Special Sections

Getting right by eating right: PAMF doctor's book addresses South Asian health risks

Getting right by eating right: PAMF doctor's book addresses South Asian health risks


Ellie Van Houtte/Town Crier
Dr. Ronesh Sinha, a physician at Palo Alto Medical Foundation, promotes healthful living among the South Asian population. His new book, “The South Asian Health Solution,” includes nutritious recipes.

When you think o...

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Business

From Google to First Street: Massage therapist sets up studio in downtown Los Altos

From Google to First Street: Massage therapist sets up studio in downtown Los Altos


Ellie Van Houtte/Town Crier
Upuia Ahkiong is slated to open Kua Body Studios next month at 106 First St. Ahkiong is sharing space with Evolve Classical Pilates.

A massage therapist with ties to Google Inc. is slated to open a new – and shared...

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Books

"Jack London" chronicles author's adventurous life


Much has been written about American author Jack London, primarily known for his early-20th-century Western adventure novels, including the classics “White Fang” and “The Call of the Wild.”

In Earle Labor’s biography of the literary icon, “Jac...

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People

TIMOTHY WARREN WATSON (TIM)

TIMOTHY WARREN WATSON (TIM)

Born June 2, 1935, died peacefully on August 11, at home in Mountain View, surrounded by his family. He died of complications of Parkinson’s Disease after a courageous 15-year battle.

Tim was the beloved husband of 55 years to his college sweethea...

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Travel

Bergama bound: A visit to newest World Heritage site

Bergama bound: A visit to newest World Heritage site


Photo Eren GÖknar/ Special to the Town Crier
The amphitheater in Turkey’s ancient city of Pergamon, now known as Bergama, overlooks the Bakirçay River valley, left. The city’s ruins also include the Temple of Trajan.

It was 90 F during t...

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Stepping Out

TheatreWorks offers 'Spoonful' of drama beginning this week

TheatreWorks offers 'Spoonful' of drama beginning this week


Kevin Berne/Special to the Town Crier
Three strangers – “Chutes & Ladders” (Anthony J. Haney, left), Odessa (Zilah Mendoza, center) and “Orangutan” (Anna Ishida, right) – come together in an online support group in TheatreWorks’ regional premie...

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Spiritual Life

Spiritual Briefs

Meditation group meets at Foothills Congregational

A Weekly Meditation Practice group meets 7-8:15 a.m. Tuesdays at Foothills Congregational Church, 461 Orange Ave., Los Altos.

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Magazine

Festival features fun for everyone

Festival features fun for everyone


TOWN CRIER FILE PHOTO
The Los Altos Arts & Wine Festival boasts more than 375 craft and arts booths.

This weekend’s 35th annual Los Altos Arts & Wine Festival promises to be jam-packed with fun activities for just about everyone. The eve...

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Tax gain harvesting a good strategy to avoid fiscal cliff

 

You may be familiar with the term “tax loss harvesting.” Toward the end of each year, many investors routinely sell assets such as stocks or mutual funds with embedded losses to offset the current taxes they will have to pay on gains from other assets.

This strategy generally works well during periods of steady or declining tax rates. However, if you really wanted to keep those stocks or funds and sold them solely for the purpose of taking tax losses, you would need to buy them back immediately after selling them.

The IRS doesn’t appreciate investors executing this maneuver for the sole purpose of deferring taxes. So they require you to wait 31 days or more before repurchasing the asset (or a substantially identical asset), otherwise they will add the loss to your cost basis and treat the sale as if it never happened. This is the wash sale rule and complying with it can make this strategy a bit tricky to execute.

This year we are facing the so-called fiscal cliff. Among other things, the 15 percent long-term capital gains tax rate has the potential to increase to 20 percent if Congress fails to restore some or all of the tax cuts set to expire Dec. 31. In addition, married taxpayers with incomes more than $250,000 will see their capital-gains tax rate go up an additional 3.8 percent to fund the Affordable Care Act (this one is a sure thing). Under these circumstances, tax loss harvesting probably doesn’t make sense. But you can do the reverse (tax gain harvesting), and it’s completely acceptable to the IRS.

The strategy involves selling assets with embedded long-term gains before the end of 2012, then immediately buying them back. The gains accumulated since the assets were originally purchased will be taxed this year at the current 15 percent rate, and any future gains will be taxed at the higher 2013 rates. Not only is this strategy simple to execute, it does not run afoul of the wash sale rule, because that applies only to losses, not gains. (The IRS is perfectly happy when you make your tax payments sooner rather than later.)

It’s important to remember that this strategy applies only to investments held in taxable accounts, not in retirement accounts like IRAs or 401(k)s. Because the money you put into the latter accounts was never taxed (except under certain circumstances), the IRS doesn’t care how much you paid for your investments. You will be taxed at the ordinary tax rates when retirement account money is withdrawn.

If you are a high-income taxpayer, tax gain harvesting in 2012 could save you at least 3.8 percent in taxes on your investments, unless tax rates go down within the next five years or so (a pretty unlikely prospect). For everyone else, you need to balance your expectations of higher tax rates – what are the odds that our lawmakers will reach a deal before the end of the year? – with your own cash-flow needs for this year and next. Don’t wait too long before having this conversation with your tax accountant or financial planner.

Los Altos resident Artie Green is a Certified Financial Planner with Cognizant Wealth Advisors. For more information, call 209-4062.

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