A Remarkable Week

Last week was remarkable, and so will be this year. First, a nice brief story about the passing of a President:

Angela Merkel recalled that “Bush had treated her ‘like a somebody when I was not.’ Meeting with the obscure junior minister in the Oval Office in 1991, the president treated the young woman with great personal and professional respect. And so there she was this week, because history is human and how you treat people matters.” Read the full article.

The very recent history has not been kind to our equity portfolios. I hope you view this as an opportunity, as I am certain your wealth manager will tell you. I believe there is wisdom in this perspective from one money manager, Bill Smead:

“A great company whose stock price falls 40% is likely going to provide much more in returns the next 10 years than if it hadn’t declined in price,” writes Smead Capital Markets’ Bill Smead. “In every other facet of commerce, lower prices are considered a good thing…What a stock price does in the short run doesn’t matter in 10 years. How well the underlying company does and how attractively you bought [it] determines the long-run returns.” 1

We are “tax harvesting.” If you have not spoken to your wealth manager, you may want to pick up the phone. This could be the lemonade that the market’s lemons are made for!

When will I receive my 1099?

Is this a question you ask yourself each time tax season rolls around? Each year we receive questions regarding the timing of 1099 initial mailings and 1099 revisions.

Some clients may not receive their initial 1099 forms until late March.

This can be frustrating if you do not understand the complexities. We would like to remind you of a few things regarding tax reporting.

  • The investment custodians/clearing firms we at A&I utilize for your accounts (i.e. TCA by E*Trade, National Financial Services, Pershing, etc.) will follow a phased mailing schedule for 1099s. They all receive a 30-day extension from the IRS to accommodate the phased mailing schedule. This is done to help reduce the publishing of revised forms.
  • Revisions are extremely likely and can continue well into March or even April. Just because a client receives a 1099 does not mean it is a final 1099. We strongly encourage you to speak to your tax advisor(s) regarding the timing of their tax return filing and if it makes sense to hold off on filing or file an amended return if it becomes necessary.
  • Revisions are not due to delays or errors by our broker dealer or by the clearing firms. These organizations do not do any tax reporting for client holdings/investments. The custodians do not calculate or determine what the taxable income is on client investments. The custodians gather the tax information on your investments from various resources and report it to you on a consolidated 1099.
  • Revisions are generally due to:
  • The issuing company or trustee has not completed their own tax return till after the 1099 mailings are sent
  • The issuing company or trustee has to reclassify income, or
  • They have made a mistake in their reporting and a correction must be made.
  • Holdings that commonly have reclassification or additional information from the issues include:
  • Mutual funds
  • Unit Investment Trusts (UITs)
  • Certain equities
  • Complex non-equity securities

If you have any questions regarding tax reporting, remember to call your wealth manager and/or your tax advisors.

  1. U.S Markets Are Closed but the Selloff Continues
A Happy Ending to 2018
Tax Harvesting 2018

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