Steven A. Branson, Esq. - Financial Strategies

Congress changed the AMT exemption slightly. For individuals, the exemption increases to $44,350 in 2007 from $42,500 in 2006, and for married couples, the exemption climbs to $66,250 from $62,550. This change will mean that some 25 million filers will
avoid the AMT on their 2007 income, up from 4 million who paid it on 2006 income.

Enacted in 1969 to prevent very wealthy investors from using deductions and tax shelters to avoid paying income tax, the AMT has hit a growing number of middle-class tax payers because the 1969 law was not indexed to inflation. Paying the AMT means you lose deductions like high medical expenses and state and local taxes and credits for dependents.

Barry will be graduating then studying for the bar exam in January and February.

We wish him well on the exam and on his career search, as he has served us very well over the four years with us.

Now there are services allowing you to send e-mail messages after your death. For some who have more on-line relationships than in person, this is a way to notify their correspondence of their passing.

More importantly for estate planning, these from the grave services offer a personal way to provide instructions and advice to the fiduciaries in your will and trust. Where a will or trust give technical/legal structure, such an e-mail replaces a memorandum that you could sent, stating your wishes from schooling to baby sitters to foods to college preferences and so on. If you want to explore this more as an “add on” to your estate plan, let us know.

Beware of the “kiddie” tax age limit for 2007, up from 14 to 18. Also, in 2008, some children about to sell investments for college will be taxed at their parents rate so planning in 2008 can save taxes.

While tax returns in the 10% or 15% brackets get a break on long-term capital gains, paying 0% in 2008 (the rate was 5% before), children will not receive much benefit because of the rules described above.

We have seen environmentally oriented mutual funds pop up since the oil scare of the 1970s. However, investor interest was not sustained and some funds dried up. More recently, the conviction that alternative forms of energy will be necessary to meet global demand in coming decades has lead to responses by regulatory, corporate, consulting and other groups. Investors see that thinking green will be more than a passing fad.

“Going Green” and Risks of “Investing Green”

The term has different meanings to different people and, unfortunately, to different managers and mutual funds. You need to be careful (1) that the fund invests in a way that you consider “green” and (2) that, in so doing, it has the potential to do well over time (i.e., its environmental goals do not frustrate its investment goals). The funds may be large cap, for global impact, or smaller cap, for more localized impact. The managers may not have experience with the new technologies. Furthermore, regulations are changing, which could have an impact on the companies in which the funds invest. Furthermore, large or small cap, the fund may not be well diversified because there are few companies that meet their investment criteria. So, you need to be careful in your selection.

As we said below, you may be better off to recycle, purchase conscientiously, invest well, and contribute to causes that will have a global impact rather than hoping for “making green from going green”.