All tax professionals need to know the tax-economics of investing for themselves and their clients. This need is accentuated by the rapid rise of the Internet as a broad-based and effective investment tool.
The tax professional is in a special position to detect a client's need for financial planning. Preparing returns discloses assets, savings, business entities, and family members. Knowledge of the client's assets, activities and the tax characteristics of available entities permit investment matching for maximum after-tax return.
The basic tax characteristics of the primary tax entities are explored and analyzed. Their ability to defer, reduce, and eliminate tax is examined. Client goals, purposes and risk tolerances are determined and quantified using the Sharp ratio. Investments and assets are then evaluated using a variety of tools found on the Internet. Finally, investments and entities are matched to produce the best after-tax return for the client.
Delivery Method: Online Interactive Self Study
Prerequisites: General understanding of federal income taxation.
Advanced Preparation: None
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Author: Danny Santucci
Field of Study: Taxes
Passing Score: 70%
Publication Date: 04/04/2017
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Investments and Tax Reduction Strategies
Chapter 1: Introduction
1. Identify Internet advantages including depth and volume of available financial information and specify steps in the mapping process to prepare for financial independence.
2. Recognize investment planning goals and purposes, select retirement planning direction, and identify resource allocation including necessary generational changes.
3. Determine the development and implementation of a financial plan for retirement by:
a. Identifying how to manage income to generate and protect cash noting savings elements;
b. Specifying physical and financial assets including stocks and bond types;
c. Selecting mutual funds based upon an investor's personal objectives and risk tolerance; and
d. Recognizing major types of life insurance including their use as financial planning tools.
4. Identify active and two passive investment acquisition strategies.
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