Tax alpha
Tax strategies for high earners.
What an investment returns after tax depends on decisions that have nothing to do with the market: when a gain is recognized, which entity holds the asset, and what deduction is created in the same year. Our white paper examines those decisions and what it takes for each to hold up under review.
The idea
The same asset, two different outcomes.
Two owners can hold identical investments and keep very different amounts. One recognized the gain in a year with room to absorb it; the other did not. One held the asset in the right entity; the other inherited a structure nobody revisited. The difference is not luck, and unlike market return, it can be designed in advance.
That design window is usually open for months, not years. Once a sale closes or a year ends, most of the choices are gone. The work is sequence: model the consequence first, decide second, and implement before the window closes.
Inside the paper
Four decisions that change what you keep.
Every planning strategy works through one of four decisions. The paper explains each one, rates the authority behind it on a four point scale from Settled Law to IRS Challenged, and shows through three anonymized engagements how the decisions work together in a single year.
Timing
When income is recognized
The same dollar taxed in a different year can be taxed at a different rate. An owner selling a business can take payment over several years instead of all at once. A retiree can convert savings to a Roth account in the low income years before other income begins.
Character
What kind of income it is
Wages, business profit and long term gains are taxed at very different rates. How a sale is structured, and how its price is divided among the assets being sold, can decide whether the proceeds are taxed as ordinary income or as capital gain.
Location
Where it is held
The entity or account that holds an asset changes how its income is taxed. A business owner in their fifties can move far more into a deductible cash balance plan than a 401(k) allows. An investor can hold the least tax efficient assets inside retirement accounts.
Matching
The deduction created alongside it
A high earner can create a deduction in the same year as the income it offsets. A W-2 earner with a direct working interest in an oil and gas well can deduct drilling costs against wages. A property owner can use a cost segregation study to bring depreciation forward.
Our standard
A strategy that only works on paper is not a strategy.
We use provisions for the purpose they were written and document the support before it is needed. Structures built to look like planning, rather than to be it, are the ones that end in penalties.
Every strategy we recommend is vetted before it reaches you. We research it against the Internal Revenue Code, Treasury regulations and Tax Court decisions, and apply the law as it stands today. We document the authority behind it in writing, including any authority that cuts against it. If a strategy cannot be substantiated, we do not recommend it.
Preparing your return is part of what we do. It is where the plan is confirmed, not where the work begins.
For educational purposes only. Not tax, legal, or investment advice for any specific situation. Alternative investments discussed in the paper are illiquid, involve substantial risk, and may be suitable only for accredited investors.