4 Tax-Smart Ways to Diversify Your Portfolio

Footnotes 1Qualified investors must have a net worth of at least $1 million. This excludes primary residence. 2 IRS, What's new - Estate and gift tax, URL 3. While gifts of securities do not attract federal income taxes at the time they are made, the recipient will still be subject to capital gains taxes when the shares are sold later. These taxes are generally based on the original purchase price. If the recipient is subjected to a lower federal income rate, this may reduce the capital gains taxes ultimately owed.
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It is therefore important that both the recipient and the donor understand the federal income tax implications of the transfer as well as the possibility of future sales by the recipient. Federal income tax will apply to some or all annuity payments. 5 Capital gains and income earned in trust are exempt from federal income taxes. However, federal income tax liability will be passed to income beneficiaries upon distribution of income from the trust. Disclosures: This material does not solicit any offer to purchase or sell any financial instrument, or participate in any trading strategy.
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This information has been prepared solely for informational purposes. It is not intended to provide investment advice that can be tailored for each individual. It was prepared without taking into account the financial goals and personal circumstances of those who received it.
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Morgan Stanley Smith Barney LLC (‘Morgan Stanley’) encourages investors and others to independently assess investments and strategies. An investor's personal circumstances and goals will determine the suitability of any investment or strategy. Private placement vehicles called exchange funds allow holders of concentrated single stock positions to trade those stocks in order to create a diversified portfolio.
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An investor may be able to benefit from greater diversification through exchanging a concentrated stock holding for fund shares, without the need to trigger a tax event. These funds can only be available to qualified investors. Financial Advisors may not be qualified to offer alternative investments. * Investors should be aware of the following before investing: * Dividends can be pooled * Stock voting rights may be forfeited * Investments could be leveraged or include derivatives * There may be significant early redemption fees * Changes to U.S.
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Tax code that could be retroactive (potentially preventing favorable tax treatment of exchange fund funds) * Investment risk, potential loss of principal. Morgan Stanley Smith Barney LLC, its affiliates, Morgan Stanley Financial Advisors, and Private Wealth Advisors (collectively, Morgan Stanley'), provide 'investment advice. These terms are defined by the Employee Retirement Income Security Act of 1973, as amended ('ERISA) and/or the Internal Revenue Code of 1987 ('Code'), as applicable. Morgan Stanley is not considered a 'fiduciary under ERISA or the Code if it provides investment education, accepts orders on an unrequested basis, or does not provide investment advice'. Please visit URL for more information about Morgan Stanley's role in retirement accounts.
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Tax laws can be complex and are subject to change. Morgan Stanley does NOT provide legal or tax advice. Individuals are advised to consult their tax and law advisors before setting up a Retirement account.
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Direct Indexing can have a negative impact on account performance. Direct indexing may not produce the desired tax results. Morgan Stanley offers investment program services via a variety investment programs. These are opened under written client agreements
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Every program has investment managers, fund and other features that aren't available in others. Conversely, you may find some investment managers or funds in more than one program. Morgan Stanley's investment advisory program may have a minimum asset requirement. This will depend on the client's financial situation and investment goals. For more information, please refer to the appropriate program disclosure document at URL. You can also contact your Financial Advisor for further details. Morgan Stanley Smith Barney LLC does not endorse, sponsor, endorse, or make any endorsements of third parties.
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Morgan Stanley is not responsible or liable for any information on third-party websites or their use or inability use. We cannot guarantee their accuracy and completeness. Diversification and Asset Allocation do not guarantee a profit, or protect against losses in declining financial markets.
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The federal income tax exemption generally applies to income from municipal bonds. Income may be subject to local and state taxes, as well as the federal alternative minimum tax. Capital gains, if applicable, may be subject to tax
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