This article is from State Street Global Advisor.
Here are a few highlights on Professor Frank’s patented Optitax and how it can help minimize taxes.
Highlights:
“Frank has developed a new software program that he uses at Lexington Wealth Management called OptiTax that will calculate the tax savings for a wide range of investment location decisions. OptiTax was used in the preceding example. “The industry and its professionals are often not judged on after-tax returns, but we should be,” says Frank. “OptiTax makes it easy to calculate the tax savings for clients, helping them to more readily embrace the benefits of taking a holistic view of their portfolio.” – Page 9
“The tax efficiency of their total portfolio has been dramatically improved. As a result of these moves, the total accumulation in year 20, after all taxes are paid, is over 8% greater: $4,156,000 versus $3,812,000, saving $344,000 in taxes! This is “free money” as the improvement is achieved with the identical investments/risk, by simply locating investments in an optimal way to take advantage of basic tax law. Also, note that these savings are all from income tax. If, for example, the taxable account passed to the next generation before positions were sold and the heirs received a step-up in basis, the tax savings would increase by $192,000, making the difference in the portfolio’s total accumulation close to 12%”. -Page 9