All financial planning strategies involve purchasing assets and holding them for a period of time before either selling them or gifting them to another individual or entity. Planners need to understand what tax liability they are creating for their clients when they sell different assets so that they are able to create a holistic plan for their client. It is important to consider what the client’s after-tax rate of return will be if they follow their investment strategy as well. Otherwise, there could be a shortfall in funds if a planner did not account for tax liability as an expense and the client may not meet their financial goals. This column seeks to inform financial planners of different strategies to utilize when developing investment strategies for their clients.
Stephanie Wendling, CPA, MSTFP, is a lecturer at Widener University where she teaches tax and financial planning courses at the graduate and undergraduate levels. Tax is the primary focus of her research. Stephanie received both her bachelor’s degree in business administration with a concentration in accounting and her master’s degree in taxation and financial planning from Widener University in Chester, Pennsylvania.