Limited Partnership Obsession

[JohnH]

Well yeah, but without that K-1 he wouldn't have any exposure to the "alternative asset class desigend to have a low correlation of return with traditional assets".

Tell him that - I'm sure he will feel much better knowing he's not stuck with just that boring, old fasioned stuff like stocks, bonds, and real estate investements. Everybody needs to live a little.

[JSLATER]

One of my favorites

My client's financial planner sold him on "Permanent Portfolio." ( No offense to the good financial planners on this board, but my client's needs to be fired. He gives the profession a bad name, at least since my client hired him a few years ago.)

"Purchasing Power and Growth.
Designed as a core portfolio holding, the Permanent Portfolio seeks to preserve and increase the purchasing power value of each
shareholder’s account over the long term, regardless of current or future market conditions, through strategic investments in a
broad array of different asset classes."

The dollar amount was quite large to the client, but maybe not in the scheme of things. Anyway, purchased in early October and sold in early November at a loss. Along with an ETF with a "straddle." Client is still trying to figure out what a straddle is.

[RitaB]

God bless the USA

I am not a fan of Variable Annuities but I sold quite a few fixed annuities (no stock market risk) many yrs ago when rates were much higher and the guaranteed rate was and still is for my polcyholders, 4%. Not to shabby of a tax deferred rate in today's interest enviorment.

Just like those good old savings bonds they used to call dogs. Ruff. Ruff.

[DaveO]

I’ve had a retired school teacher for a client for about 10 years. Various pupils of hers over the years have gone into insurance. Accordingly they came back and sold her an annuity or two. She has quite a collection of them worth from $2k to $20 each. Sadly one of her pupils became a broker and she placed a small amount of money in a taxable discretionary account with him. All was fine for a few years as the account was populated by a mutual fund or two. Last year she came in well after we had filed her return with a Powershares K-1. Although the difference it made to the return was slight I amended it so she wouldn’t have to worry. I suggested that maybe this wasn’t an appropriate investment for her and she should have a chat with her “advisor”. Low and behold she comes in this year so proud she had taken my advice and sold the Powershares only to have it replaced by a few shares of SLV and GLD with tiny little Schedule D transactions of a dollar or two a month. I feel so much better for her.

[marlenew]

The average taxpayer has no idea what is involved in these K1's. I told my client this morning to tell his brokers NOT to sell him any more limited partnerships. This also is a case where he has 8 PTP with investments of $5,000 - $10,000. I completed his return which has 9 brokerage accounts and they all buy and sell stock and I had to summarize this year with short-term covered and non-covered and long term and I e-file and send the documents. After all is done, he comes in today with a NEW k-1 that was purchased in 2011 and now I have to change the return, and reprint out a new copy for him and I am not very happy...just venting.

[Uncle Sam]

Partnership Obsession

marlenew - I thought I was the only preparer who had such problems -
How about a widower who is supporting a divorced daughter with college age or past college age children who has -

10 brokerage accounts - no 2 report information the same way - mainly two of them
have multiple security trades to report

25 PTP K-1s to report - tracking basis for each one

15 Royalty income sources

2 brokerage accounts for a deceased spouse's trust fbo him - 1041 return

about 15 directly owned corporate stocks each with separate 1099s

1099-R for IRA distribution

And when I get all through - *****es about the fee - claims he can get it for less
where he lives (I'm in NY, he's in Fla) (used to live up here - but after wife died bought
a condo in both daughters' names in NJ) and each year I tell him he can't take the NJ real estate taxes 'cause he doesn't own the place' - his daughters do - and I have nothing to
do with daughters' returns.

[Burke]

And thank the Lord the Boston Cap Ser PTP is finally done! Since 1989! Now I get to deal with the suspended losses next year. Most have already recovered their entire basis.

[Lion]

Our clients don't know their basis in stocks and mutual funds, don't know how to get it or what to ask their brokers. So, they certainly don't understand how their PTPs and annuities and puts/calls and commodities and...work. "Can't you look it up on your computer?" I get so mad when I see how much they pay in fees for their "managed accounts" while they still complain about MY fees. I think I'm going to start charging the exact same amount I see them pay their brokers.

[Burke]

I know. I get so frustrated when I see that the fees exceed the taxable income from their investments. I want to say, "Don't you get it?"

[Gary2]

It's time to repost this relaxing video, http://www.xtranormal.com/watch/7512...ple-tax-return , originally found for us by JohnH at http://www.thetaxbook.com/forums/showthread.php?t=16947 .

[MRPLOW]

I wouldn't Immediately discount all annuities as being bad.
A fixed income annuity can make sense is some situations.

And an immediate annuity can be a good decision to turn a lump sum of money into a guaranteed FIXED income stream for life, with no worries about out-living your money.

And a medically underwritten immediate annuity can make even more sense for someone in a bad medical condition, to live out the rest of there life with a large guaranteed FIXED income stream.


Sadly, most of the annuities that I see are variable annuities, that have large fees and a low rate of return.

Here is an interesting piece of information on annuities...
Generally the larger the commission % to the broker, the larger and longer surrender period there is.
So, brokers have a financial incentive to steer clients into the annuities that have a long and high surrender charge.

[Burke]

I wouldn't Immediately discount all annuities as being bad.
A fixed income annuity can make sense is some situations.
And an immediate annuity can be a good decision to turn a lump sum of money into a guaranteed FIXED income stream for life, with no worries about out-living your money.
And a medically underwritten immediate annuity can make even more sense for someone in a bad medical condition, to live out the rest of there life with a large guaranteed FIXED income stream.Sadly, most of the annuities that I see are variable annuities, that have large fees and a low rate of return.Here is an interesting piece of information on annuities...
Generally the larger the commission % to the broker, the larger and longer surrender period there is.So, brokers have a financial incentive to steer clients into the annuities that have a long and high surrender charge.

I agree. I don't oppose annuities per se. Have a couple myself. Just when they are marketed to the wrong clients, and when they replace existing ones.