Edward Jones Investments

It may seem early to be thinking about spring, but if you’d like to reduce next April’s tax bill, you have until Dec. 31, 2008, to complete many tax-saving transactions. The following considerations may be appropriate for you:

Donate equities. You may donate shares of stock held longer than 12 months to an eligible charity. The entire market value qualifies as a tax deduction, regardless of your gain. However, adjusted gross income limits may apply, which may carry the deduction or part of it into a future tax year.

Offset capital gains with losses. Selling an investment for less than what you paid (adjusted for splits, etc.) creates a capital loss that you can use to offset capital gains from other investments. You can subtract up to $3,000 in losses from income and carry the excess into future years.

Sell your most advantageous positions. An equity holding that you have added to over time may have more than one cost basis (how much you paid for the shares). When deciding which shares to sell, consider how cost basis will affect the amount of gain or loss and the transaction’s potential tax rate.

Before making any tax-related decisions, always consider your overall financial situation, not just the taxes. Contact your tax professional, who can work with your financial advisor to help you achieve your long-term financial goals.

Edward Jones does not provide tax or legal advice. You should consult with your tax or legal advisor regarding your particular situation.

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