In this edition of Next Nest, the Carlsons’ son and his fiancée deal with working remotely during COVID-19 and leaving their NYC apartment to quarantine at the family’s beach house. Sate income taxation rules are complex, and the increase in the out-of-state-remote workforce has highlighted further complications. If the above scenario sounds familiar to you, then you are not alone.
The TCJA quietly added a provision to tax certain ‘carried interests’ at a higher tax rate. That addition—Internal Revenue Code Section 1061 (IRC 1061)—taxes certain carried interests at the ordinary income tax rate. Simply stated, carried interest is the right for the manager of a private investment fund to share in a fund’s profit.
There are many factors to consider when saving for future education costs—the time between now and when the funds are needed, risk tolerance of the investor, investment preference, and individual tax situation. It may be obvious, but we always recommend saving for education as early as possible in a child’s life, so that there’s a more sizable time horizon for the money to grow.
This could be an opportune time to consider transferring wealth to future generations—by transferring assets (at lower values) and taking advantage of historically low interest rates. As the world continues to face these unprecedented times, we at Fairman Group Family Office want you to know that we are available to help you with all your financial planning needs.
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