One of the hardest things to do as an investor is to think logically, without emotion. The human mind will process facts but it is difficult to make decisions when there are conflicting opinions. This can give rise to confusion or even anxiety. In order to deal with this situation, another part of the mind intervenes—the emotional side.
Anyone who has a trust probably knows that the federal tax rates that apply to trust income and capital gains are much higher and kick-in sooner than on income from earnings or other sources, e.g., ordinary income. As a result, taxes can take a significant bite out of trust assets. And your trust pays Massachusetts state income tax, too, but there is a way to avoid it.
Nothing changed for investors with regard to the new tax law. But other tax law changes have renewed focus on making the most of your investment decisions. This is especially important after such a strong year for US and foreign stocks in 2017. Many investors now have significant unrealized gains and few, if any, losses to offset those gains.
For the last couple of decades, homeowners have benefited from a tax-deduction for the mortgage interest they pay on their residence. Some would say that as a result homeowners have been using their homes as an ATM machine by making withdrawals at low rates whenever they need money. This incentive has helped propel home ownership and, the housing and real markets for many years.