Retirement Planning and Financial Expert, Brian Fricke, Explains How Surviving Spouses Can Avoid Tax Mistakes

Posted by mattcollins on Oct 4th, 2010

Brian Fricke, financial and retirement planning expert, writes about some common tax mistakes made by surviving spouses, and offers ways to avoid them.

Orlando, Fla. – October 4, 2010 – Brian Fricke, CFP founder of Financial Management Concepts and “Worry Free Retirement” author/expert, recently published an article on his website titled “Surviving Spouses – Don’t Make This Mistake And Overpay Your Taxes” where he explains how the death of a spouse can cost the surviving spouse big money in the form of overpaying on their taxes.

“You probably know that if you inherit an asset and then turn around and sell it, you’re only taxed on the increased value from the date that you inherited the asset. For instance, if you inherit a stock worth $100 from a friend or family member and they only paid $10 for it, you can turn around and sell the stocks at $100 and pay zero tax on the $90 profit!” wrote Brian Fricke.

The article goes on to show how mistakes are sometimes made using this $100 stock as an example:

“Say you and your spouse buy stock in a joint account for $10. Now it’s worth $100. Your spouse passes away and you want to sell the stock. What are your profits for tax purposes?   If you’re like a lot of people, you instinctively remember what you paid for the stock –$10.  And when you report that profit you report it as $90. Which is wrong!” remarked Brian.

“You would actually be over-reporting your taxable income.  Why?  Because you haven’t adjusted your tax basis (cost) as a surviving spouse.  When you stop and think about it, you actually inherited a portion of that stock. You owned 50% of the stock, but your spouse owned 50% of the stock,” continued Brian.  “What this boils down to is the fact that you get a stepped-up basis on your spouse’s interest in the asset.  For that same $100 stock, you should adjust your cost to $55. Meaning you would only pay tax on a $45 profit.”

The entire article can be found at http://www.brianfricke.com/articles/surviving-spouses-dont-make-this-mistake-and-overpay-your-taxes.php

Orlando Business Journal has named Brian’s company, Financial Management Concepts, one of the top financial planning companies in Central Florida. Financial Advisor magazine – an industry trade journal- has recognized him as one of the leading financial planning firms in America.  Brian Fricke is a Certified Financial Planner. Financial Management Concepts is a Fee Only Financial Planning firm. They currently manage over $98 million of investment assets for a select community of clients.

Brian also holds a weekly teleconference call, “Coffee Talk,” which is a live call held every Tuesday morning from 9-9:30am, to discuss current economic and lifestyle issues that affect retirees and anyone wanting to retire within the next 5 years.  Brian has also recently launched a live in-person meeting, built around the teleconferences, called “Coffee Talk Live.” These teleconferences and live events are not limited to clients and will be available to the public, free of charge.  Details for each week’s call can be found at http://www.BrianFricke.com/news_room

For more information about Brian Fricke and Financial Management Concepts, please visit http://www.BrianFricke.com.  You can also call toll free 1-800-294-4917 or send an email request to info@fmcretire.com

About Brian L. Fricke, CFP®:

Brian Fricke is the Author of “Worry Free Retirement, Do What You Want, When you Want, Where You Want”.

For the last 6 years in a row Brian and his company – Financial Management Concepts – have been named one of America’s Top Wealth Managers.

Orlando Business Journal has named his firm one of the top financial planning companies in Central Florida. Financial Advisor magazine – an industry trade journal- has recognized him as one of the leading financial planning firms in America.

If you’ve been in Central Florida over 10 years, you may have heard him on the radio. He used to host his own show on WDBO radio. He’s also served on the City of Winter Springs Board of Trustees Pension Fund.

Brian is a Certified Financial Planner. His firm – Financial Management Concepts – is a Fee Only Financial Planning firm. They currently manage over $98 million of investment assets for a select community of clients.

Brian and his team have worked with retirees and pre-retirees from companies like AT&T, Sprint, Harris, Lockheed Martin and Siemens/Westinghouse.

For more information, please visit http://www.BrianFricke.com