11/22/2024

High Net Worth Taxpayers Year-End Potential Tax Strategies

High-net-worth taxpayers have various year-end opportunities to minimize tax liabilities. Key strategies include using the estate and gift tax exemptions, taking advantage of trusts, and making strategic gifts during periods of market downturns. Here are some specific ideas:

Estate and Gift Tax Exemption: The exemption is $13.61 million for 2024, increasing for inflation in 2025. Consider using the increased exemption before it reduces to approximately $7 million after Dec. 31, 2025. While the election results may impact these features, nothing is set in stone yet.
Maximizing Exemptions: High-net-worth married taxpayers should max out their exemptions before the end of 2025.
Spousal Exemptions: Married couples not maxing out both exemptions should use one spouse’s exemption over $7 million. Unmarried taxpayers should seek personalized tax advice.
Annual Gift Exclusion: In 2024, the exclusion is $18,000 per person per year, or $36,000 for married couples. Use this exclusion before year-end. The exclusion for 2025 is $19,000 per person.
Early Gifting: Make 2025 gifts in January to shift appreciation outside of your estate.
Using Trusts: Consider trusts for significant gifts to benefit from asset protection, estate tax benefits, and protection in case of divorce.
Non-Cash Assets: Gift non-cash assets during market downturns for potential tax advantages.
Spousal Lifetime Access Trusts (SLATs): Use SLATs for lifetime gifts while retaining indirect access to the funds through a spouse.
High-Interest Rate Strategies: Utilize strategies like charitable remainder trusts and qualified personal residence trusts when interest rates are high.
Discounted Assets: Gift assets subject to discounts for lack of marketability and control. Business owners should consider stacking income tax exclusions for qualified small business stock.

IMPORTANT DISCLOSURE INFORMATION

Next Capital Management, LLC (“Company”) is an SEC registered investment adviser located in New York, New York.

The Company may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. The Company’s website is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of the Company’s website on the Internet should not be construed by any consumer and/or prospective client as the Company’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by the Company with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of the Company’s current written disclosure Brochure and Form CRS discussing the Company’s business operations, services, and fees is available on this website and/or from the Company upon written request. The Company does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to the Company’s website or incorporated herein, and takes no responsibility therefor. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by the Company), will be profitable or equal any historical performance level(s). Neither the Company’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if the Company is engaged, or continues to be engaged, to provide investment advisory services. The Company’s registration status does not imply a specific level of skill or training.

Certain portions of the Company’s website (i.e., newsletters, articles, commentaries, etc.) may contain a discussion of, and/or provide access to, the Company’s (and those of other investment and non-investment professionals) positions and/or recommendations as of a specific prior date. Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from the Company, or from any other investment professional. The Company is neither an attorney nor an accountant, and no portion of the website content should be interpreted as legal, accounting or tax advice.

Please Note: Limitations. Neither rankings nor recognitions by unaffiliated rating services, publications, media, or other organizations, nor the achievement of any professional designation, certification, degree, or license, membership in any professional organization, or any amount of prior experience or success, should be construed by a client or prospective client as a guarantee that the client will experience a certain level of results if the investment professional or the investment professional’s firm is engaged, or continues to be engaged, to provide investment advisory services.

To the extent that any client or prospective client utilizes any economic calculator or similar interactive device contained within or linked to the Company’s website, the client and/or prospective client acknowledges and understands that the information resulting from the use of any such calculator/device, is not, and should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from the Company, or from any other investment professional.

Each client and prospective client agrees as a condition precedent to his/her/its access to the Company’s website, to release and hold harmless the Company, its officers, directors, owners, employees and agents from any and all adverse consequences resulting from any of his/her/its actions and/or omissions which are independent of his/her/its receipt of personalized individual advice from the Company.