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Your aunt would like to minimize tax on investment income.

Your aunt is in a high tax bracket and would like to minimize the tax burden of her investment portfolio. She is willing to buy and sell in order to maximize her after-tax return and she has asked for your advice. What would you suggest that she do?

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Without knowing the age or amount of wealth of your aunt, some of the following ideas may not be appropriate for her:

1. She can invest a portion of her portfolio in tax free bonds. It is relatively easy to compare the tax free rate to the after tax rate of other investments including the effects of state income tax. Assuming she lives in a state with tax, and if she buys municipals issued within her state, she can possibly avoid both federal and state ...

Solution Summary

The solution lists five strategies that could be employed by your aunt to minimize the total income tax on investments. All five are practical solutions to the problem without giving up her control of her assets. Following that discussion, there is a short paragraph suggesting a plan to discuss and identify whether any of the five strategies would fit her situation and temperment.

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