Tuesday, October 27, 2015

To Our KOS Friends...News You Can Use

How clients can avoid taxes on a home sale legally: Knowing the step-up basis can help clients curb the tax impact when selling their homes, according to Huffington Post. Capital gains of up to $250,000 for individuals or $500,000 for couples will be exempted from tax, provided the property involved has been the seller's primary home for two of the five years before closing the deal. The step-up in home basis should be considered when selling the property, especially if the home value has appreciated or depreciated considerably over time, and hiring a professional can help how the step-up basis can be applied to reduce the tax liability. -- Huffington Post
Partner Insights
State tax perks and 529 plans: While 529 plans are exempt from federal taxes, clients who consider investing in college-savings plans are advised to consider the state-specific tax benefits of these plans before deciding whether to stay in-state or pick an out-of-state 529 plan, according to Morningstar. State-specific tax benefits will spell the difference among 529 plan options that share similar investment merits but have differing fees, or plans with the same fees but less-competitive investment choices. Clients have the best incentives to stay if their 529 plan's tax benefit is equivalent to at least 5 pecent of their investment in the first year. – Morningstar

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