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Get Ready to Cover all Bases if Senate Cost Basis Proposal Passes

VIEW PLANNING UPDATE (PDF)

SUMMARY

At the time of this writing, the House and the Senate are preparing to go to a joint committee to iron out the differences in their respective tax proposals. While there are many similarities in the respective proposals, several differences remain. One particular provision that is included in the Senate version but not the House could have a wide-ranging impact for more active investors and suggests a need for proactive monitoring before year-end.

KEY TAKEAWAYS

  • Uncertainty remains regarding the specifics of the final tax bill at this time. Some differences in the tax proposals are minimal whereas others are significant.
  • The provision set forth in the Senate version would require that stocks sold, exchanged, or disposed of by individual investors be determined in a first-in-first-out basis.
  • For those investors that have multiple positions of the same stock, they would no longer be able to determine which positions to dispose of to best suit their tax objectives.
  • Review your current situation with your advisor to determine what, if any, action to take in 2017.