Investment Tax Planning

Investment Tax Considerations at Hampton Wealth Management

Ideally, we would like to hold securities for at least a year to give them time to perform and to take advantage of lower tax rates. However, if the situation warrants it, we could recommend selling sooner if the markets move against us, or if company-specific news justifies it. Regardless of when we sell, we will try to keep everything tax neutral along the way or by the end of the year. We are sensitive to the fact that fees and taxes can eat into our returns.

As an aside, cost basis is kept track of by our integration partners, however the custodians may need cost basis of securities bought at other firms or were even deposited from certificate form. Because real-time reporting is more accurate, we will not be listing cost basis on our reports in the interest of keeping things succinct and to-the-point. You can view your cost basis directly online.

To keep things simple, we will NOT be reinvesting dividends in order accumulate cash in your money market fund for future purchases or withdrawals.

The custodians will be sending all the necessary tax forms to you, as is standard operating practice everywhere.

Ideally, we would like to use actively managed funds in your tax-deferred accounts and exchange-traded funds in your taxable accounts for tax minimization purposes.

Because each individual’s tax situation is different, we can discuss the particulars of your situation once you become a client. We would be glad to speak to your accountant or tax preparer if you would like us to. If you don’t already have one, we can refer one to you.