Cortburg Speaks Retirement

Ways to Minimize Tax on an Investment Portfolio

January 11, 2023 Miguel Gonzalez, MBA, AIF®, CPFA®, CRC® Season 2023 Episode 118
Ways to Minimize Tax on an Investment Portfolio
Cortburg Speaks Retirement
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Cortburg Speaks Retirement
Ways to Minimize Tax on an Investment Portfolio
Jan 11, 2023 Season 2023 Episode 118
Miguel Gonzalez, MBA, AIF®, CPFA®, CRC®

In this audio podcast episode, Miguel Gonzalez shares several approaches and strategies to minimize taxes on your investment portfolio.

Welcome to Cortburg Speaks Retirement Podcast
with Miguel Gonzalez, MBA, AIF®, CPFA®, CRC®



Show Notes Transcript

In this audio podcast episode, Miguel Gonzalez shares several approaches and strategies to minimize taxes on your investment portfolio.

Welcome to Cortburg Speaks Retirement Podcast
with Miguel Gonzalez, MBA, AIF®, CPFA®, CRC®




Welcome to Cortburg Speaks Retirement

An audio podcast about investing in the stock market, financial planning, money management and retirement planning.  Each Wednesday, we help investors at all stages of life learn how to potentially grow and preserve their money from first job through retirement.

Now here is your host, Miguel Gonzalez.



Good morning and welcome to the CORTBURG SPEAKS RETIREMENT audio podcast.   

On this week’s audio podcast, I share different ways to minimize tax on your investment portfolio.  

Improving return by minimizing taxes

Although we are all obligated to pay our fair share of taxes, few of us would be pleased to pay taxes unnecessarily. Because taxes lower the actual return on your investments, you should be interested in legitimate ways to minimize taxes on your investment portfolio. Several approaches and strategies exist, including the following.

Year-end tax planning

The basic strategy for year-end tax planning is to time your income so that it will be taxed at a lower rate, and to time your deductible expenses so that they may be claimed in tax years when you are in a higher tax bracket. Year-end planning involves not only a review of your income and deduction situation but also the use of checklists and a marginal tax rate analysis to help you minimize taxes.

Generally speaking, taxes should be postponed whenever possible. However, there can be circumstances that warrant paying your taxes sooner rather than later--for instance, if you anticipate being in a higher tax bracket in the future, or if you know that new or higher taxes are to take effect in the near term.

The retirement years

It's important to manage income taxes on your investment in retirement. In addition to considering the capital gains consequences of investment decisions, you should manage and control your investment income so that your Social Security benefits either will not be taxed at all or will be taxed only minimally. In addition, you must ensure that required minimum distributions from pension plans do not push you into a higher tax bracket.

Estate taxes and your portfolio

If your assets are such that you're concerned about minimizing estate taxes on your portfolio, you should pursue strategies today to minimize taxation. Review your investment portfolio for estate freeze possibilities (which remove future appreciation of your assets from your estate) and consider gifting to loved ones.

Lowering your tax bite with mutual funds

You can also minimize taxes by investing in tax-efficient mutual funds that never pay dividends, that purchase securities immediately after they have made large dividend/interest payments, or that try to limit capital gain exposure. You also should try to delay purchase of mutual funds or stocks until after it distributes income, dividends, or capital gains.

Caution: Investing in mutual funds involves risk, including possible loss of principal.

The advantages of capital losses

Understanding how to use capital losses effectively can make a difference in your portfolio's after-tax return. If you expect to recognize a capital gain this year, you should review your investment portfolio for possible capital losses to offset gains. Likewise, if you have any capital loss carryforwards, you should review your portfolio for capital gain opportunities to make use of the capital losses.

Taking advantage of tax credit investment opportunities

Understanding how to use tax credit programs as part ofy our investment portfolio can provide significant advantages. The low-income housing credit and the qualified rehabilitation expenditures credit may provide you with income, tax credits, and tax deductions.

What to do with highly appreciated assets and unneeded income-producing assets

If the value of your investments has increased substantially, and you are concerned about capital gains, there are several strategies you may consider to minimize taxation of highly appreciated assets. If you have more income than you need and are searching for ways to minimize your taxes, you might consider gifting unneeded income-producing assets to relatives who are in lower tax brackets.

Buying on margin can provide you with a tax deduction

If you borrow money from a broker to finance your purchase of stock, you may be able to deduct the margin interest on your tax return.

Caution: Where a margin account holds dividend-paying stock, certain considerations apply. Qualifying dividends paid to individual shareholders from domestic corporations (and qualified foreign corporations) are taxed at long-term capital gains tax rates rather than as ordinary income. However, for purposes of the deduction for investment interest (which is limited to net investment income), investment income is not considered to include qualifying dividends subject to tax at capital gains tax rates. Individuals may elect to treat such dividends as investment income for purposes of deducting investment interest, but doing so makes the dividends ineligible for taxation at capital gains tax rates.

Caution: Similarly, long-term capital gains are generally not included in net investment income for purposes of determining deductible investment interest unless an election is made to pay tax on the capital gains at ordinary income tax rates.

Make sure to visit our website, Our site is filled with educational videos, eBooks, publications, and financial calculators designed to help you learn more about your finances.  As you search our site, send us a note regarding any questions you may have about any particular investment concepts or products. We will get back to you quickly with a thoughtful answer.

This is Miguel Gonzalez, Certified Retirement Counselor (CRC) and Managing Partner, with Cortburg Retirement Advisors signing off for this week’s educational podcast.  



Opinions expressed are subject to change without notice and are not intended as investment advice or a solicitation for the purchase or sale of any security. Please consult your financial professional before making any investment decision. 

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

CRC conferred by The International Foundation for Retirement Education.

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Private Advisor Group, LLC, a registered investment advisor.  

Private Advisor Group, LLC and Cortburg Retirement Advisors, Inc. are separate entities from LPL Financial.

Investing involves risk including possible loss of principal.

·         This article was prepared by Broadridge. 

·         LPL Tracking #1-05000960