THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Wednesday, November 24, 2004 - Vol. 6 No. 226
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In This Issue:
* COMMENT: Year End Tax Tips.
* OFFSHORE: Ireland Best. Rich Swiss. Dominica Damage.
* WEALTH: China Clout & Estate Taxes.
* PRIVACY & RIGHTS: Is It Dead?
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Then, he sued the unit owners for $5 million for negligence. The lawsuit could have wiped them out. Instead, it served as their wake-up call.....to follow the advice in this report.
LINK: http://www.agora-inc.com/reports/300SCAWD/W3CAEAAC/
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Today's guest comment is by author Vernon JACOBS CPA, CLU, Sovereign Society Tax Advisor & a member of our Council of Experts.
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COMMENT: Year End Tax Tips.
Dear A-Letter Reader:
It's very difficult to generalize about year end tax planning. What helps one taxpayer can backfire on others. What is useful depends on the specifics of each family, the source and type of income, whether they own a home or rental realty or whether they have unrealized capital gains or losses, to mention but a few.
An exhaustive discussion of things that can be done late in the year to reduce taxes would be almost as extensive as a checklist of tax avoidance methods. You should check the LINKS below for suggestions, including my special report on year end tax saving strategies. It's my opinion (after 35 years of helping people to save taxes) that tax planning is best done year round. But for procrastinators, it's better to act late in the year rather than doing nothing. Each dollar of US tax you can defer to next year likely will result in an equal deferral of estimated taxes and state income taxes for the next year.
With those caveats, the basic choices at the end of the year are to; 1) defer income, 2) accelerate deductions and credits, 3) make tax exempt gifts.
Most US taxpayers aren't able to control when they receive income. The self employed on a cash method of accounting have maximum flexibility in terms of delaying income. Investors with unrealized gains can take the gains this year or gamble on what the future price will be.
Investors with unrealized losses should consider selling loss securities this year in order to generate an offset against any realized gains, or to generate a deduction of up to $3,000 against other income.
In some cases, investors may be able to defer income from the sale of property with an installment sale. If real estate is involved, a tax deferred exchange may be worthwhile. Taxpayers who own a taxable corporation may be able to get the best mix of tax rates by adjusting their salary or bonus at the end of the year.
For high net worth taxpayers, any gifts made before the end of the year can utilize the annual exemption of $11,000 per recipient. For married couples that means exempt gifts of up to $22,000 per recipient. Keep in mind that each year-end tax avoidance alternative is dependent on the business, investment and family situation of the taxpayer.
In addition, some year end planning tactics can trigger the alternative minimum tax and therefore result in more tax rather than less.
Serious planning therefore requires professional help from someone who knows tax law and has an intimate understanding of your family's financial and tax situation.
Vernon K. Jacobs, CPA, CLU
E-mail: jacobs@offshorepress.com
Web site: http://www.offshorepress.com/
PS: For my special report, 'Year End Tax Angles for 2004' click on the following LINK: http://www.offshorepress.com/yearendtax04.htm
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COMMENT LINKS:
* Vern Jacobs Year End Tax Planning.
LINK: http://vernonjacobs.com/year-end.htm
* Smartmoney.com Year End Tax Planning Guide. LINK:
http://www.smartmoney.com/tax/advice/index.cfm?story=yearend
* Adkisson Analysis Year End Planning Solutions.
LINK: http://www.assetprotectiontheory.com/right-ad-1.htm
* Financial Planner's Article Library.
LINK: http://www.financialpublishers.com/year_end_tax_planning.html
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FROM THE EDITOR'S DESK
OFFSHORE:
IRELAND IS THE BEST DUBLIN: The Economist magazine has picked IRELAND as the best country in the world in which to live, with SWITZERLAND second. Based on quality of life, the rating takes unto account such factors as income, growth, political stability, health, job security and climate, plus 'freedom, family and community life.'
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=18026
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SWITZERLAND'S RICHEST BERN: The richest Swiss upped their combined fortune by SFr17 billion ($14.6 b) to SFr369 billion (US$318 b) last year. The richest man is a Swede, Ingvar Kamprad, founder of the Ikea furniture chain. Richest woman is Charlene de Carvalho-Heineken, heiress of Heineken breweries. 1 in 25 Swiss residents is worth at least SFr1 million. LINK:
http://www.swissinfo.org/sen/swissinfo.html?siteSect=161&sid=5356647
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DOMINICA EARTHQUAKE DAMAGE ROUSEAU: Sunday morning's earthquake caused major structural damage and will take millions to repair. The nation is one of only two that offer "instant" economic citizenship for foreign investors.
LINKS: http://www.caribbeannetnews.com/2004/11/23/repairs.htm
http://www.henley-partner.com/dominica0.htm
http://www.odci.gov/cia/publications/factbook/geos/do.html
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WEALTH:
CHINA COMES OF AGE BEIJING: It's a mark of the growing economic power of China,(and the decline of the US), that the only major Communist government in the world has to lecture Washington on its profligate spending. LINK:
http://news.ft.com/cms/s/f16a4694-3cb1-11d9-bb7b-00000e2511c8.html
* But in other ways, China may mimic US mistakes; rumor is they may impose a 40% inheritance tax; that ought to spur the exodus to offshore.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=18022
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LINK: http://www.agora-inc.com/reports/190SGOPS/W190EB07/
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PRIVACY & RIGHTS:
THE DEATH OF PRIVACY
From across the Net several stories in recent hours indicate just how much in jeopardy is your and my privacy, no matter who you are and where you live.
* US congressmen get the right to look at everyone's tax returns.
* In the UK, the Labour government is pressing ahead with mandatory national ID card for every person, something unseen since the days of World War II and the Nazi blitz. "Your papers, please!'
* In both the UK and the US, government plans to attach RFIDs (radio frequency transmitters) to large denomination dollar and pound bills,the better to track who has how much money and where it's located.
* And it happens that government secretly is using color laser printers to track documents, unknown to the document holders.
* And from that to the planned biometric passports, and the time is coming when our every move will be silently communicated to the police.
Then, won't we all feel so much safer?
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* Panel Chief Denies Knowing About Inspecting Tax Returns.
LINKS: http://www.nytimes.com/2004/11/23/politics/23explain.html
http://www.tax-news.com/asp/story/story.asp?storyname=18019
* Labour calls for UK biometric ID card.
LINK: http://www.thestandard.com/internetnews/000650.php
* Banknote 'bugs' in your pocket. LINK:
http://www.thisislondon.co.uk/news/business/articles/timid84900?source=
* Government uses color laser printer to track documents. LINK:
http://news.yahoo.com/news?tmpl=story&cid=1093&u=/pcworld/118664&printer=1
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* Learn how to slash your taxes...build an iron wall of protection around your assets...create a lasting legacy of wealth. Find out more in our print publication, The Sovereign Individual. Click here:
LINK: http://www.agora-inc.com/reports/SVS/WSVSEBFF/
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER.
* Bob Bauman, Editor * Daniel Aponte, Jr. Editorial Asst.
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* The A-Letter provides accurate information on the subject matter covered and advertisements displayed, so far as we can ascertain. We cannot certify the absolute accuracy of referenced articles nor do we necessarily endorse products advertised herein. The Sovereign Society advocates full compliance with all applicable tax and financial reporting laws. All LINKS are operative at time of publication.
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