Are tax-efficient strategies mainly for the wealthy?
No. Many strategies are simple and carry little risk. However, they require more creative thinking than investors usually do. Q: How so? A: You could invest in a money-market fund today and earn nearly 2% interest. Or you could buy a U.S. Treasury note maturing Nov. 15 with an 11.63% coupon because it was issued years ago, when interest rates were higher. The note recently traded at $1,081.25, above its $1,000 face value that you get at maturity, so it yielded 1.85%. When the note matures, you’ll earn $97.94 in interest and have $81.25 in capital losses. You can use those capital losses to offset state taxes due on gains in most states except New York. With both investments, you earn the same amount of interest, but you get an added tax benefit with the Treasury note. Q: A lot of investors are sitting on stock losses. What should they do tax-wise? A: Let’s say you want to continue to own a stock because you think it will rebound. In the meantime, you can still harvest the loss to offse
