Residency Status Dictates Tax Treatment Of Gain
June 10, 2006Q: I am a United States resident alien and German national. I recently sold property in Germany and want to know if it is subject to tax in the United States. If so, which tax and how much? My parents gifted me the property but retained all rights to the property until it was sold. Niessbrauch was the form of ownership. A: To determine if the gain is taxable in …
Cashing in a 401(k) to Pay Off Student Loans
June 6, 2006Q: If I cash out a portion of my 401(k) to pay off student loans, will I be penalized the full 10% at tax time or is there a way to get around that penalty? I do understand that there will be an immediate 20% tax withheld when I cash out regardless. M.D. Allen, Texas A: Before we determine whether the 10% penalty will apply, you should know there is …
Protesting Pays: Fund Forgets Fee Increase
June 2, 2006Letter Defends Shareholder Interests To Board of Trustees DWS Equity 500 Index Fund – Institutional: As a registered investment adviser managing over $630 million, approximately $33 million of which is invested in DWS Equity 500 Index Fund – Institutional, we are dismayed to see that the Board has approved an increase of annual fees on the DWS Equity 500 Index Fund – Institutional (ticker: BTIIX) from 0.10% to 0.27%. We …
Be Wary Of ‘Life Settlement’ Transactions
June 1, 2006Q: My two partners and I built a successful business. The business held a large insurance policy on each partner’s life to buy out his interest in case of premature death. We recently sold the firm. Each partner took over the policy on his own life. I am in good health. I don’t need the coverage, and I don’t want to pay the premiums. I have been told that I …
Private Equity: Too Much Of A Good Thing?
June 1, 2006To quote Warren Buffett, are private equity investors “looking in the rearview mirror instead of through the windshield?” Has the popularity of this asset class created a case of too much money chasing too little opportunity? After the stock market’s downturn in the beginning of this decade, institutional and wealthy individual investors alike flocked to private equity. These investors were searching for an alternative to the public stock markets, seeking …
Traps And Opportunities In New Tax Law
June 1, 2006High-income taxpayers will find traps as well as opportunities in this year’s first round of tax legislation, recently signed by President Bush. There may be more to come. The Tax Increase Prevention and Reconciliation Act of 2005 (a curious name for legislation enacted in May 2006) extends the 15 percent maximum tax rate on capital gains and most dividends until 2010, two years beyond the prior expiration date. Beginning in …
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