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A. R. Kakhsaz Company
an accountancy corporation
Member
American Institute of
Certified Public Accountants
International associates:
Tavana & Co.
Chartered Accountants
Toronto, Canada
Tel.416-229-2221
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An income-tax break
that could
benefit many investors is to arrive next
January. And it's time to start planning
for it. Beginning in 2008, the federal tax
rate on long-term capital gains from
sales of stocks, mutual funds and other
securities is to drop to zero-yes, zero-
for people in the two lowest ordinary
income brackets. For higher-income
taxpayers, the top long-term
capital-gains rate is to remain at 15%.
But many people with higher income
also may be able to take advantage of
the zero tax rate if they can reduce their
taxable income through deductions,
such as mortgage interest and
charitable deductions, or by putting
away money in such accounts as 401(k)
plans. You may consider gifting some of
your highly appreciated securities to
your low tax-rate children or grand
parents who may then be able to turn
around and sell the securities tax free
next year. But use caution: Such gifts
may cause problems for students
applying for college financial aid, or to
seniors seeking Medicaid eligibility,
including for nursing-home care. Also
they could make a senior's Social
Security benefits subject to tax, or
increase the tax on those benefits.
Also, because of the recently expanded
reach of the so-called kiddie tax,
investment income above $1700 for a
child under 18, typically is charged at the
parents' higher tax rates. It's always
smart to check with your CPA before
making a large transfer of securities.
Finally, beware that investors should
never sell securities solely because of
tax considerations.
Excerpt from a court proceeding:
Q: All your responses must be
oral, OK? What school did you go to?
A: Oral.
China's exports of automobiles
doubled in 2006 from the pervious year
to a record 340,000 units.
Something lost in translation:
A sign in a Paris hotel elevator reads:
"Please leave your values at the front
desk."
For more of the Generalist, please visit our website at
ARKCPACOM.
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theGeneralist,
a one-page monthly publication of the accounting firm of A. R.
Kakhsaz Company, is in its 13th year of providing information,
presented fairly and accurately, from sources we can depend upon and
trust.
Virgin Atlantic
will purchase up to 24
of Boeing's 787 Dreamliners, as it seeks
to remain competitive on Atlantic routes
and address emissions concerns
Boeing's
earnings for the first
quarter '07 soared by 27% as the
aerospace giant delivered 106
commercial jets. That's the most
in five years.
How do you compare?
The current
U.S. average credit card is 677.
Buying a second or
vacation house?
U.S. house prices climbed 6.2% a year
over the past 30 years, versus 4.3% for
inflation. Beating inflation by 1.9% a
year is nothing to write home about.
Worse yet is to consider that after the
current decade's blistering appreciation
in house prices, even slimmer returns
may lie ahead. Also beware that
homeownership is quite expensive. In
fact it's comparable to owning a mutual
fund that not only charges about 3% in
annual expenses but also demands
some 6% back-end sales charge.
The best way to
remember your
wife's birthday is to forget it once!
The U.S. economy
now has
completed four quarters of annualized
growth below 3%, which has never
happened in past 60 years without
being followed by a recession.
U.S. home prices
rose an average of
58% in the five years ended December
31, 2005. In some cities, prices more
than doubled in that period. Some
believe housing prices will continue to
drift downward throughout 2007 and
much of 2008.
We see more in numbers
- than just numbers...
Ali R. Kakhsaz, CPA, MAcc
www.arkpca.com
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