Listener Questions: From Fiduciaries to Capital Gains Taxes, Ep #131

<p>How is a fiduciary different? What can you expect to pay a CFP? How does capital gains tax work? Did contribution limits increase? In the first episode of 2023, I’m going to revisit some important listener questions from the last few months. They’re important things to remember as we enter tax planning season. Check it out! </p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li>[0:40] Listener Question #1: How is a fiduciary different?</li> <li>[2:29] Listener Question #2: What can you expect to pay a CFP?</li> <li>[5:01] Listener Question #3: Why won’t I work with Wells Fargo?</li> <li>[8:52] Listener Question #4: How does capital gains tax work?</li> <li>[13:38] Listener Question #5: Why do you need to find specialists?</li> <li>[17:50] Listener Question #6: Did contribution limits increase? </li> </ul> <h2>How is a fiduciary different?</h2> <p>A fiduciary is an advisor that is both legally and ethically bound to do things in <em>your</em> best interest. If an advisor isn’t a fiduciary, they operate under what’s called the “Suitability Standard.” What they recommend has to be suitable for you <em>at that point in time</em>. </p> <p>Imagine you have high cholesterol and a Dr. recommends Lipitor (a brand-name drug), which costs you $300 a month. A fiduciary would recommend using a generic brand that would only cost you $9 a month. As a fiduciary, I think the generic drug is in your best interest. Lipitor IS suitable but costs you abundantly more per month. </p> <p>So what can you expect to pay a CFP? Listen to hear what the average cost is per hour (and how to determine what is a good value). </p> <h2>How does capital gains tax work? </h2> <p>One of the advantages of owning a residential rental property is that you can depreciate your property over 27 ½ years. What does that mean? It reduces the amount of rental income that’s taxable. When you sell the rental property, there is depreciation recapture which will impact your taxes.</p> <p>I spoke with a couple who wanted to sell th