‘Tis the Tax Season
John Milne – 04/01/2021
April 15 – A date most Americans have grown to love as much as their annual dentist appointment or long weekends with their in-laws. And while Tax Day for individuals to file and pay was recently extended to May 17 by the IRS, now is still a busy season for advisors as they scramble to get all the necessary data together to help clients’ wrap up their tax returns. As Benjamin Franklin once said, “in this world, nothing can be said to be certain, except death and taxes,” and advisors and their clients know that all too well. But, advisors using the Black Diamond® Wealth Platform have a variety of tools and data available that make the job easy.
From within the platform, insight into the gains clients realized over the year is quickly accessible. Cost basis data, both open lots and realized gain information, is synchronized from some of the largest custodians. This consolidated data experience prevents advisors from having to track this level of detail manually or hop from system to system to get the information they need. Additionally, statement integrations with some of the major custodians mean documents like 1099s are imported into Black Diamond where advisors can easily share them with clients within the secure Client Experience document vault. This gives clients a single location for all their tax documents, custodial statements, and performance reports.
Tracking and fulfilling required minimum distributions can also be a major time commitment for advisors. With Black Diamond’s RMD dashboard, advisors can clearly identify which clients are off track to meet their annual distribution amount, along with their current shortfall. Additionally, later this year a workflow within the Black Diamond Rebalancer is launching that will allow advisors to seamlessly raise cash for these client accounts directly from the RMD dashboard.
Advisors and their clients care as much about saving on taxes as they do about generating returns. This is why tax management is a critical component of Rebalancer. Specifically, advisors can monitor for tax-loss harvesting opportunities throughout the year. Using proactive monitoring, an analysis runs each day to identify positions that meet a pre-defined set of criteria, and this information is presented back to the advisor. Additionally, the proceeds can be left in cash or the funds can be reinvested in a defined security equivalent. Baked in settings, such as setting capital gains limits and avoiding wash sales, help advisors generate the most advantageous tax impact for clients. Meaning advisors can effectively put their clients’ portfolios on cruise control.
By leveraging Black Diamond’s tools and data, Tax Day becomes just a day like any other. To learn more about joining the Black Diamond community, request a personalized demo today.