Tax Reform Talks Having Limited Impact on Majority of Investors’ Portfolio Decisions


Last month’s Asset Allocation Survey special question asked AAII members how discussions about tax reform were impacting their portfolio decisions. More than 86% of respondents said tax reform was so far having limited or no impact on their decisions. Many respondents said they are waiting to see if tax reform legislation gets passed and, if it is passed, what changes to the tax code are made. About 5% of respondents said they are delaying making changes or are otherwise hesitant to make changes until they know how the bill will impact them.

Here is a sampling of the responses:

  • “None, as I expect a lot of haggling and it may fall apart.”
  • “Congress has much to do before I start making decisions regarding tax liability strategies.”
  • “I have delayed some investment decisions pending the outcome of the tax revisions in the works.”
  • “I’m waiting until the final passage of the bill before making any decision on potential portfolio adjustments.”
  • “Not at all. I’ll react or have an opinion when Congress actually does something.”

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2 Replies to “Tax Reform Talks Having Limited Impact on Majority of Investors’ Portfolio Decisions”

  1. The provision in the Senate Bill–to require FIFO–will have a material negative impact on the individual investor’s portfolio decisions and tax planning. The House Bill doesn’t contain this provision so one can only hope it prevails in conference. There is no point even planning portfolio decisions until this issue is resolved. Call your representatives!

  2. Senate version of tax reform will impact individual investors when they are forced to use the FIFO rule when selling and managing positions. The playing field is increasingly turning in favor of the institutions and shutting out the individual investor. Institutions will be exempt from this rule.


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