For those expecting significant capital gains from investment transactions or the sale of business or real estate or who are philanthropically minded, Goldberg recommends considering utilizing a charitable remainder trust “with several possible flexible arrangements, that can partially mitigate the capital gains tax ... and potentially reduce the impact of the estate tax incurred later,” he said.
“Priorities for many of our high-net-worth clients include philanthropy and annual gifting,” said Alyson Nickse, wealth manager and partner at Boston-based Crestwood Advisors. “Using a donor advised fund or making gifts to charity of appreciated stock are popular strategies. Similarly, client may choose to gift low-cost basis securities rather than cash to family members to move the tax liability to a lower tax bracket. Front loading 529 contributions continues to gain popularity for high earners.
“As we see the market swing,” Nickse said, “clients interested in accelerating their taxes to carve out a bucket of funds that are tax free for the future are moving forward with Roth conversions, often with their eyes on the next generation.”
“One thing that holds true for most times is that Roth conversions are almost always an excellent idea,” Etter said. “If one already has a mega-Roth then conversions wouldn’t be advised at this time as they may end up having to remove the money soon.”