LOS ANGELES--(BUSINESS WIRE)--Dec. 15, 2004--While April 15 maystill seem a long way off, actions investors take between now andyear-end can have a big impact on their tax bills. City National Bank,the second largest independent bank headquartered in California,offers the following last minute tax-planning tips for a moreprosperous 2005:
- "Harvest" your losses in stocks and mutual funds. If you've realized some profits in 2004 but still have other positions sitting at a loss, you may want to sell and get those losses on the books. "Resulting capital losses will offset against capital gains earned earlier in the year," said Mary Thomas, an estate and financial planning advisor at City National. "If you still have excess capital losses, you can deduct up to $3,000 against ordinary income every year until they are all used up."
- Defer mutual fund purchases until 2005. Stock mutual funds with capital gains frequently make taxable capital gains distributions at the end of the year. If you buy these funds before year-end, you will be taxed on profits earned before you owned the fund.
- Make gifts of stocks where you have long-term gains. Current law allows you to give up to $11,000 ($22,000 for you and your spouse) worth of appreciated stock to a child or grandchild with no tax consequences. "Giving appreciated stock to your children or grandchildren will reduce your taxable estate," advised Thomas. "Assuming the child or grandchild is in a lower tax bracket, he or she will pay less in capital gains taxes when the stock is sold."
- Donate appreciated assets to charity instead of cash. If you donate a stock in which you have long-term gains to a qualified charity, you can receive a fair market value deduction but pay no taxes on the capital gain.
- Bunch deductible expenses into 2004. It is almost always better to pay taxes later rather than sooner. You can reduce your 2004 taxes by paying your deductible expenses such as mortgage interest, state income taxes and property taxes before year-end. This is especially advisable if your tax rate might not be higher next year.
"Of course, every individual's tax situation is unique," saidThomas. "Estate and investment decisions should not be made on taxconsiderations alone. Be sure to discuss your specific tax profilewith your accountant or advisor before making any moves."
About City National
City National Corporation (NYSE:CYN) is a financial servicescompany with $14 billion in total assets. Its wholly owned subsidiary,City National Bank, is the second largest independent bankheadquartered in California. As California's Premier Private andBusiness Bank(R), City National provides banking, investment and trustservices through 52 offices, including 12 full-service regionalcenters, in Southern California, the San Francisco Bay Area and NewYork City.
City National is ranked among America's top companies in Forbesmagazine's "Super 500" list. It also is one of the nation's top wealthmanagers, according to Barron's magazine. The company and itsaffiliates manage more than $15 billion of client trust and investmentassets. Assets under management or administration amount to more than$33 billion.
For more information about City National, visit the company'sWebsite at cnb.com.
CONTACT: City National Bank
Linda Mueller, 213-833-4719
SOURCE: City National Bank