Assuming congress fails to enact legislation that would further extend the 2001-2002 tax reductions, the 15% long-term capital gains rate will expire 12/31/2012.  Of course, recent history suggests that no tax legislation will be forthcoming until late in the year at best.  Let’s focus on what the scheduled increase in capital gains rates could mean to you…

Taxpayers with ordinary tax rate of:

Current capital gains rate

Scheduled rates beginning in 2013

25% or Higher (taxable income over $70,700 MFJ/$35,350 Single)


20% (18% for 5+ yr holding period if bought after 12/31/00)

10% or 15% (taxable income up to$70,700 MFJ/$35,350 Single)


10% (8% for 5+ yr holding period if bought after 12/31/00).


In addition to these rate increases, there is also a 3.8% Medicare surtax when a combination of unearned income and earned income exceed $250k MFJ and $200k Single.  Combine this with the return of the reduction in itemized deductions and personal exemptions, and “wealthy” tax payers could see capital gains tax rise from 15 to 25%, a 66.66% increase!

In a raising tax rate environment, the optimal strategy is to accelerate income this year (meaning you should stop harvesting losses and instead harvest gains).  If you are well under the $70,700 MFJ/ $35,350 Single taxable income limit, capital gains harvesting is a virtually risk-free opportunity.

For those above the 0% threshold, there is some risk; if current rates are extended you will have paid taxes earlier than necessary, but would provide a step up in tax basis.  We find the potential upside appealing and are likely to recommend using this strategy.

For those who already have capital losses carrying forward, it likely would be preferable to skip harvesting gains and allow the losses to continue to carry forward until 2013 when they can be applied at higher rates.

In short, 2012 may be the best year to realize capital gain.  If you feel this strategy may work best for you, please contact us to review your case in detail before year end.

Barbara started working with us 3 years ago. She initially came to Lighthouse Financial Advisors, Inc. to have her tax returns prepared professionally. It was the first year in which she started to earn a significant income. During that year she had relocated to change jobs; the new job was the result of using a business agent. Her taxes had been prepared over the last few years by either a friend or one of the nationally known tax preparations firms. We found quite a few errors on her prior years’ returns and were able to amend and claim an additional refund for overlooked business expenses of approximately $1,500 for two years. During our first meeting, we stressed the importance of record keeping and the fact that overlooked deductions could be costing her over $1,000 per year. We emphasized that we work with clients all year round providing them with comprehensive financial planning solutions. We worked with Barbara during that tax season and showed her that if she had worked with us over the last year, her refund would have been higher. After filing her tax return, we lost touch with Barbara. We did not hear from her until the tax season of the following year. Barbara had experienced many life transitions during this time frame. She had lived and worked three different jobs in three different cities. If she had taken full advantage of our services during these life and financial transitions instead of trying to take care of everything on her own, she would have been more organized and consequently would have saved more tax dollars.

After coming to this realization, Barbara decided to use of all our services. We filed her tax returns and moved forward reviewing the other financial areas of her life. We consolidated all of her retirement plans in one place, reviewed all of her insurance and emphasized the importance of disability insurance for a young single professional. After we had “crossed our T’s and dotted our I’s” we started laying out a financial game plan for the future. One of Barbara’s goals was to buy a house, so we helped her understand the size house she should look for, along with all the cost and tax advantages associated with home ownership. Barbara was relocated to a new city. She began looking for a house that met the parameters we had discussed during our meetings. She thought she had found the right place, but after discussing the cost with us, we determined that it was not a good investment for her. She continued searching and soon found a house that met the parameters we had discussed. The first house was not in Barbara’s price range and would have left her financially strapped. The second house turned out to be a better house and a sound investment.

Barbara feels that without LFA as a partner she would have made many wrong decisions, instead she working to lay the foundation necessary to achieve financial freedom. More importantly, she also realized the value of having a partner that could guide her to make decisions keeping only her best interests in mind. Finding the right house is just one example of how we have helped Barbara. By establishing a trusting relationship with Lighthouse Financial Advisors, Inc., Barbara is assured that she is financially sound and has someone to guide her through more life transitions in the future.


2011 Fall Financial Focus

2011 Summer Financial Focus

2011 Spring Financial Focus

2010-11 Winter Financial Focus

Don & Michele have been clients of Bob Walsh’s for over 15 years.  The couple met in 1995 while both living in Hoboken, NJ and working in NYC,  and married in 1999.

Don has worked for Bloomberg, LP since he graduated UVM in 1993.  He began his career as a sales representative for the company’s core terminal sales, and has had a variety of different sales and product development roles over the years.  He is currently the Global Business Manager for Equity Trading & Sales.

Michele, formerly a sales & marketing professional for a mix of business-to-business publications, is now at home in Madison, NJ with their two boys, Ryan (8 years) and Donovan (6 years).

In their free time, the family enjoys being in Vermont and Long Beach Island.  The boys are seemingly being raised with the Carey tradition of taking up as many hobbies and sports as humanly possible – skiing, surfing, fishing, sailing, running, hiking, biking, etc., etc.!   Michele just tries to keep up!

Don and Michele are extremely grateful for their many blessings, and have made a commitment to giving back.   Michele contributes her time primarily to fundraising efforts at the boys’ school, and Don is on the committee for Wings Over Wall Street.   They have always financially supported a variety of different charities.  Don has most recently combined his passion for competition with a his desire to give back, while participating in the Wall Street Decathlon (a charity event raising money for Sloane Kettering’s Pediatric Cancer Research).   With donations from family and friends (Lighthouse Financial included), Don raised over $11,000.

The turn of the century marked the beginning of my relationship with Robert Walsh and Lighthouse Financial Advisors. For over 12 years Robert has not only been my financial advisor, but also provided guidance with his life planning and coaching skills. Robert has helped me through multiple job changes, layoffs, divorce and relocation to a number of new cities. Through my life changes, Robert has empowered me with the knowledge and direction to manage my finances wisely.

The first half of my life was spent in India, where I was born and raised. My decision to attend college in the USA transported me across the globe.  I went to Kent State University. In 1996 I received my Masters in Computer Science. Following graduation I accepted a job in New York City and witnessed the horror of 9/11. With a new appreciation for my life, I decided that I wanted to give back. I began volunteering with victims of domestic violence. Soon after, I started a successful (woman-owned) business offering technology consulting services to non-profits and corporations alike. I currently split my time between Ohio and Washington DC, living happily with my significant other and working with the American Red Cross.

In addition to my efforts in the US, it is important to me to give back to the children of India as well. I still have family there and visit often. The past few years I have been working with an orphanage in Kolkata for children with special needs. Just recently I have started working with a small school on the west coast of India as well.

Lighthouse has been involved in every major decision of my life: financial, professional and personal. LFA is a great team and everyone is always very responsive, helpful and pleasant to work with. The support has been wonderful and is something that I have come to rely on very heavily.

Scott and Jill Glenn have been clients at Lighthouse Financial Advisors since 2005. They enjoy living on the Jersey Shore with their 12 year old son.

Glenn & Glenn Productions, located in Central, NJ, is a full service meeting and event production company that focuses on exceptional creative, strong customer focus and a passionate attention to the production process. They have been operating for 10 years, serving the pharmaceutical, medical device, chemical and technology sectors. Their productions are designed for audiences as small as 150 to as large as 3,000+. Most of their work comes from repeat business and client referrals.  They have put live cheetahs on stage, flown hang-gliders from the ceiling, worked with former U.S. Presidents, astronauts, famous singers and dancers – and are proud to produce award-winning corporate “shows.” They love what they do and it shows!!  To learn more about Glenn & Glenn Productions and their services please visit