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Here is our Strategic Insight discussing the implications of tax reform. This piece addresses the impact of the tax reform bill on among other things deferred tax assets, S-Corporations and the municipal market.

Recommended Action Items:

  1. Consider taking losses in the bond portfolio prior to year-end and other strategies to accelerate losses and expenses this tax year.
  1. Analyze how your tax-equivalent (TE) yields are impacted by the change in Tax Code.  On some shorter municipal bonds, it may make sense to extend into longer tax-exempt municipal bonds or to swap them for a taxable investment in some circumstances.
  1. Re-evaluate deferred tax accounts and potential year-end adjustments related to potential tax-reform. For many banks, this could result in a significant adjustment to income and capital this year.

The implications of tax reform are complex and, in most cases, depend on many different factors that are specific to each institution. If you have questions we will try to help answer them. Should you wish to see an analysis of selling securities this tax year to accelerate losses please let us know.  If you would like to see an analysis send your portfolio please forward it via email with a note you would like to see year end tax loss analysis.

William M J Taylor
Director Portfolio Management Group
Vining Sparks
Office 800-786-1282
Cell 901-832-7898
651 Oak Leaf Office Lane
Memphis, TN 38117
[email protected]