Central bankers used the term Transitory Inflation to explain a series of rapid price increases following the Covid-19 Pandemic. Inflation readings nearly doubled from 2.6% in March 2021 to 5% just two months later. Price increases eventually peaked at 9.1% in June 2022 before gradually decelerating.
The phrase implied that price increases were merely temporary and circumstantial.
Central bankers argued that supply chain disruptions, pent-up consumer demand from pandemic lockdowns, and available cash from stimulus actions were driving price increases. This theory posited that prices would quickly stabilize once producers and consumers readjusted.
Inflation ultimately proved stickier than the Federal Reserve anticipated. Economists point to government policy, job market disruptions, and corporate profit-taking as key culprits.
US Aircraft Finance, LLC (USAF or the “Company”), a nationally recognized leader in light aircraft lending, has been acquired by AMF Holdings, LLC (AMF). The Company, having generated over $400 million in loan value since inception, provides loan origination, servicing and insurance-related services to customers on a nationwide basis.
It seems logical to conclude our business retirement plan series with guaranteed pension plans. These plans are unique because benefits are guaranteed and there are no annual contribution limits. Both features accommodate significant tax-deferred retirement savings for the right companies.
There are many different types of retirement plans. Each serves a specific set of goals and circumstances. This month’s article focuses on pension plans – a rare but worthy option for select businesses.
Certain pension plans promise a guaranteed income stream in retirement. These plans are funded entirely by the employer. Annual contributions are mandatory and driven by return assumptions, life expectancies, and turnover expectations. Contribution formulas typically favor longtime owners approaching retirement. The reasoning for this is fairly simple: aging owners have longer tenures and shorter retirement deadlines.
Previous articles tracked the evolution of retirement plans. Readers learned that there are now leaner, less expensive, and more flexible alternatives to guaranteed pension plans. Still, guaranteed pension plans can be attractive due to their unique contribution rules. Pension plans accommodate substantial annual contributions, allowing aging owners to reduce their tax bills and jumpstart retirement savings goals.
Tax-loss harvesting is a year-end tax management strategy for investors. The practice involves selling losing investments, booking the losses, and purchasing replacement securities. Investors achieve a desirable portfolio mix and capture capital losses to reduce current or future taxes. Here’s a basic overview of how tax-loss harvesting works:
Identify Losses: Investors identify positions that have declined in value since the purchase date.
Sell Losing Investments: Investors sell the underperforming investments to book the losses.
Offset Gains: The resulting capital losses are then used to offset capital gains from other investments in the current tax year. If losses exceed these gains, investors can offset up to $3,000 of other income. Any remaining losses can be carried forward to future years.
Maintain Portfolio Exposure: Investors may replace the losing investments with similar, but not identical, investments to maintain the desired portfolio allocation. This step is crucial to avoid violating the IRS’s “wash-sale” rule.
Tax rules are complex. Investors individuals should always consult a tax professional or financial advisor before proceeding.
