Year-End Distributions Hold Dangers for Fund Investors / Buying right before the "date of record" can lead to an early tax bill

SIMON CONSTABLE for the Wall st. journal writes: Congratulations, you've made it through another year! Well, almost. For mutual-fund investors, there is at least one more thing that could trip you up: ignoring the so-called date of record for the capital-gains distributions that many funds pay near year-end. Failure to pay attention may mean you get taxed for profits you didn't actually participate in.

With stocks, you decide when to take your capital gain or loss when you sell. But funds must distribute substantially all of the net realized gains in their portfolios to investors each year, explains Brian Peer, co-portfolio manager at Novato, Calif.-based Hennessy Funds.

The recipients are the investors who own fund shares on a predetermined day, the record date. After that date, the fund price trades lower by the amount of the distribution.

You actually get the money on the payout date, which is typically later, and many investors opt to reinvest the dollars in additional shares of the same mutual fund.

No matter when you purchased it, if you own the fund on the record day, you will get that distribution—and it will be taxable unless you hold the shares in a tax-favored account such as a 401(k) or individual retirement account.

"It's certainly something you should be aware of in a taxable account," says Russ Kinnel, director of fund research at Morningstar Inc.

What if your fund stake has actually dropped in value since you bought it? The distribution reduces the value of the fund shares, says Mr. Kinnel. That means the tax you pay now will reduce the taxable gain (or increase the loss) when you eventually sell. But depending on how long you hold the fund it could be years before it irons out.

If you are worried about getting hit with a capital-gains payout, don't buy a fund right before the record date. Information about record dates and estimated distributions should be available on the fund website.

The Cloud ERP Market Heats Up - FinancialForce Makes Two Strategic Acquisitions

Ben Kepes for Forbes writes: The cloud Enterprise Resource Planning (ERP) market is a funny one – with SAP‘s on-again, off-again cloud product Business ByDesign currently being on the back burner, NetSuite has pretty much had the entire market for mid-sized companies wanting a cloud ERP to themselves. At the lower end of town there are a large number of cloud accounting products for SMBs, and Intacct provides an answer to companies that have outgrown small solutions but aren’t yet ready for a full-blown ERP. In the true mid-market ERP area we’d only really had NetSuite offering a compelling “pure cloud” solution.

That situation took an interesting twist a couple of weeks ago with the announcement by FinancialForce that it had acquired Supply Chain Management vendor Less Software and Human Capital Management vendor Vana Workforce. This isn’t the first time FinancialForce have made a strategic acquisition, a couple of years ago they took on the Professional Services Automation product created by the large cloud consulting firm Appirio. So we’ve now got a financial management company that has offerings within the fold that deliver HR functions, supply chain enablement and professional services support – that starts to get mighty interesting when seen in the context of NetSuite’s business.

All three of these acquisitions have been of companies that built products on the Salesforce.com CRM +1.28% platform – what that means in real terms is that all these products share a common data model, code base and customization model – one of the reasons that Salesforce is investing so heavily in creating its Salesforce1 platform is their knowledge that a group of products built on a single platform starts to become far more compelling to customers than a pseudo-suite created partly through acquiring disparate solutions.

Interestingly one of the key marketing messages that NetSuite itself articulates is that by using a single suite, customers avoid the necessity of creating a “hairball” of specific integrations – that nightmare scenario where multiple solutions need to be tied together that use different code bases and data structures. While it is true that modern integration vendors make this process easier than ever before – it’s still much hard than simply using multiple products built on the same platform. Which is where FinancialForce comes in.

When FinancialForce was created a few years ago, some questioned the prudence of building the product on a platform that was primarily focused on Customer Relationship Management. Indeed financial applications, with their reliance on Paccioli’s concept of double entry, place particular requirements on the database and core architecture upon which they sit. FinancialForce had its work cut out to reconcile the needs of a financial application with the ability of a CRM platform to deliver.

But it would appear from speaking to FinancialForce customers that this issue has been resolved and the company now delivers a robust financial engine. But what was a barrier in the past, the need to build on an existing platform, bears fruit today as the company can snap up other products built on Force.com and have them deeply integrated within their own product from the get go.

By making these strategic acquisitions, FinancialForce has given itself the ability to articulate a true ERP story, but at the same time it also has the ability to articulate its own platform play – by leveraging the Force.com platform on which FinancialForce is built, customers and Independent Software Vendors (ISVs) are able to create specific solutions that integrate natively with the core application but meet the specific needs of particular verticals.

Of course the space isn’t standing still – NetSuite has been trying to deliver a more compelling platform – one that will truly enable third parties to build native applications easily and avert customer integration pain. At the same time SAP will eventually deliver a viable story with ByDesign – while it’s been a long time coming, surely SAP will eventually get it right? Either way – and in the mean time – FinancialForce is starting to really reap the rewards of the design decisions it made back on day one – it’s built a great product, leveraged a strong platform and in doing so has created it’s own platform on which a vibrant ecosystem can develop.

Service members advised to prepare now for tax season

Terri Moon Cronk writes: With a month left before the start of tax season, service members should begin gathering documentation to file their 2013 taxes, the director of the Pentagon’s office of Family policy and children and youth said.

In a recent interview with American Forces Press Service and the Pentagon Channel, Barbara Thompson suggested visiting the Military OneSource website for tax filing resources, and to learn what will be necessary to file, such as W2 forms, Social Security numbers and receipts for deductions such as child care, education, medical expenses and donations, among other write-offs.

And tax preparers at Military OneSource will do short-form tax filing free of charge for service members and their Families, Thompson said.

Relocations and deployments have tax implications, Thompson noted. For example, deployed service members can receive an extension to file taxes after the normal April 15 filing date, she said.

“It’s very helpful to have someone who is experienced to help you through the cumbersome issue of taxes and tax returns.”

The tax preparers at Military OneSource are up to date on changes in tax laws, and can answer military-specific questions, Thompson said.

Installations also offer volunteer income tax assistance to service members and their Families, while certain banks and credit unions provide education and training on tax preparation, Thompson said. She advised that service members organize their taxes by starting a file beginning each Jan. 1 for the following year’s tax papers, such as receipts and other write-offs.

“You don’t want to wait until the last minute,” she said.

Service members and Families who prepare long-form taxes with deductions such as mortgages and rental properties might want to consider hiring a tax expert to file for them, Thompson said.

“It’s best to get advice to make sure you have everything covered.”

People who do their own taxes need to stay on top of current tax information, Thompson said.

“Sometimes tax laws change, so you have to be really smart about doing your own taxes,” she said.

States’ tax laws often vary, too, she said, and because of relocations, some service members have to file local taxes in more than one state.

“That’s where (tax consultants) can really be of great value to make sure you know what the requirements are for states,” Thompson said.

Filing federal and state tax returns usually results in either a tax refund or money owed back to the government. Expecting to receive a tax refund, but instead finding out that money is owed can be a shock, Thompson said. Looking at W2s to determine how much money in taxes is being withheld is a good indicator of whether or not one will owe money, she suggested.

Service members who receive a tax refund face important decisions on what to do with the money, Thompson said.

“Do you use it to buy down debt, or put it in a savings account?” she asked, advising people to not blow their tax refunds in a spending frenzy of unnecessary purchases. A tax refund also can be deposited into a retirement savings account, she said.

“It’s important to think about what you’re going to do with that money,” she advised, “and how you can best utilize it for your financial well-being.”

Meeting with a financial planner to learn the “lay of the land,” and what tax deductions might apply to a service member’s finances is a good idea, Thompson said. “It’s really important to be savvy about that.”

Read more here: http://www.thebayonet.com/2013/12/04/513580/service-members-advised-to-prepare.html#storylink=cpy

Read more here: http://www.thebayonet.com/2013/12/04/513580/service-members-advised-to-prepare.html#storylink=cpy

Year-end mutual fund tax planning

Kenneth B Peterson for the Monterey Herald writes: I nvestment pundits are warning investors about large mutual fund distributions this year, so if you own or plan to buy a mutual fund this month, be aware. According to Morningstar, American Funds will pay distributions of between 5 and 8 percent of the share price on three of its funds, and three Vanguard funds will pay out about 10 percent of their share price.

As regulated investment companies, mutual funds must distribute all of their income by the end of the year to avoid paying income tax. If your fund is not in a retirement account, you pay tax on your share of dividends and capital gains distributions. Equity mutual fund managers sell stocks to reposition their portfolios or to provide cash for liquidations.

When a fund manager sells a stock for more than the purchase price the fund realizes a capital gain and then distributes the gain along with any dividends to you before Dec. 31. You in turn report these gains and dividends on your tax return.

When the fund distributes dividends and capital gains, it actually pays them to you and on the day the dividend and capital gain distribution is declared the fund price will decrease by the amount of the distribution.

If you have elected a reinvestment option, then the fund will use the distribution to buy more shares, and the market value of your account will stay the same. If you take the distribution in cash, the market value will decrease by the amount of the distribution. But in either case — whether the distributions are reinvested or distributed — you must report them on your tax return.

What you need to know:

1. If your fund is worth less then what you paid for it and is forecasting significant capital gains and/or dividend distributions, consider selling it before the record date. Review the fund and the reasons you own it. Don't sell it just for tax reasons. If you do decide to sell it you will have a deductible capital loss and you can always buy it back again after the record date.

If you do buy it back, wait at least 31 days from the date of sale to avoid the "wash sale" rules. Or, you could buy a similar fund without waiting.

2. If you are thinking about buying a mutual fund before the end of the year, call the fund company and find out if they are forecasting taxable distributions. Include this information in your decision-making process. But don't let the threat of taxes alone stop you from making your purchase. You could be worse off if you miss out on a year-end rally in the fund's share price.

3. Never make your investment decisions based solely on the tax consequences. But do consider the tax consequences in your investment plan.

4. Remember that some dividends and all long-term capital gains qualify for a maximum 20 percent federal tax rate and may be subject to a 3.8 percent additional net investment income tax, depending on your income level. If you buy shares now and pay tax on a distribution that you reinvest in more shares, you will acquire a cost basis in those shares that won't be taxed later at a possible higher rate.

It Pays to Plan Ahead: 2013 Year-End Tax Planning

John E Day writes: As 2013 draws to a close, the last thing anyone wants to think about is taxes. But if you are looking for potential ways to minimize your tax bill, there’s no better time for planning than before year-end. And, with the higher rates put in place with the passage of the American Taxpayer Relief Act of 2012, being tax-efficient is more important than ever.

Consider how the following strategies might help you to lower your taxes.

Put Losses to Work

Since stock and bond performance tends to differ throughout the year, there is a chance that your target asset allocation has shifted, potentially exposing you to more risk than you originally intended. That is why now is a good time to review your portfolio for gains and losses and make adjustments as needed.

The IRS allows you to offset investment gains with losses, a practice sometimes referred to as tax-loss harvesting. Short-term gains (gains on assets held less than a year) are taxed at ordinary income tax rates, which now range from 10% to 39.6%, and can be offset with short-term losses. Long-term gains (gains on assets held longer than a year) are taxed at a top rate of 20% and can be reduced by long-term capital losses.

To the extent that losses exceed gains, you can deduct up to $3,000 in capital losses against ordinary income on that year’s tax return and carry forward any unused losses for future years.

Given these rules, there are several actions you may want to consider.

• Avoid short-term capital gains when possible, as these are taxed at higher ordinary rates. Unless you have short-term capital losses to offset them, try holding the assets for at least one year.

• Consider taking capital losses before capital gains, since unused losses may be carried forward for use in future years, while gains must be taken in the year they are realized.

• Consider sell or hold decisions carefully. Keep in mind that a few down periods don’t mean you should sell simply to realize a loss. Stocks, in particular, are long-term investments, subject to ups and downs. Likewise, a healthy, unrealized gain does not necessarily mean an investment is ripe for selling. Remember that past performance is no indication of future results; it is expectations for future performance that count. Moreover, taxes should only be one consideration in any decision to sell or hold an investment.

Power of Tax Deferral

Year-end is a good time to reevaluate employer-sponsored benefits, such as qualified retirement plans that offer tax deferral and typically allow participants to make contributions on a pre-tax basis, thereby lowering current taxable income. If you have not already done so, you may still have time to “max out” your 2013 contribution of $17,500 — with an additional $5,500 in “catch up” contributions if you are aged 50 or older.

Once you have contributed the maximum to your employer plan, consider doing the same with any IRA accounts you may have. Depending on your situation, you may be able to deduct all or a portion of this year’s contribution ($5,500 with an additional $1,000 in catch-up contributions) from your 2013 tax bill.

Another important year-end consideration for older IRA holders is whether or not they have taken their required minimum distribution (RMD). Starting at age 70-½, the IRS requires account holders to withdraw specified amounts from their traditional IRAs each year. If you have not taken the required distribution in a given year, the IRS will impose a 50% tax on the shortfall.

So, make sure you take any required distributions by Dec. 31.

Income Shifting Through Gift Gifting

Year-end is also a time to make gifts to children, grandchildren and charities. The annual gift tax exclusion is currently $14,000 per individual ($28,000 for spouses combined). This technique works particularly well for individuals or couples who want to give away significant assets in a relatively short timeframe.

For instance, assuming you and your spouse have one child who is married and two grandchildren, you could give away $112,000 this year — $14,000 from each of you to each family member — without affecting your lifetime gift tax or estate tax exemptions. Over time, these annual gifts could help to shift considerable assets out of your taxable estate.

Another time-sensitive gifting strategy involves making a charitable gift from an IRA. The tax law passed in January 2013 granted IRA holders who are at least 70-½ years old an extension (through Dec. 31, 2013) for making contributions of up to $100,000 directly from an IRA to a charity of choice without having to treat the withdrawal as taxable income. While the gift is not tax deductible, if done properly it does help fulfill your RMD for the year.

If you act fast, there is still time to reduce your tax bill before the books close on 2013. Contact your financial professional and tax adviser for assistance.

- See more at: http://www.bizmonthly.com/it-pays-to-plan-ahead-2013-year-end-tax-planning/#sthash.nl7RvH75.dpuf

Year-End Tax Tip: Sometimes It’s Good To Be A Loser / Tax Loss Harvesting

Jessie Szymanski writes for NASDAQ:  What is tax loss harvesting?

Tax loss harvesting is purposefully selling an investment at a loss.

How on earth could that help? Because the government taxes you on your total gains for the year , you can use losses in one part of your portfolio to offset gains in another, and reduce your total tax bill.

This technique can make a difference in your tax bill and on your long-term returns. The federal government currently taxes long term capital gains (from the sale of investments held more than 1 year) at a rate up to 23.8%, and short term capital gains at an individual's ordinary income tax rate. This year, the highest income tax bracket is a whopping 43.4%*.

According to the IRS , you can also carry your losses forward indefinitely. So make sure you've used up all of your losses from prior years ( 2008 is a good place to start!) to make sure you're not leaving some losses on the table.

Where should I look in my portfolio this year?

Check your monthly statements to see where you're at a loss or gain. US stocks have had a good run this year, but this list of the Six Worst S&P 500 Stocks of 2013 proves that not all stocks are winners.

How can I stay invested during the meantime?

If you're looking to sell individual stocks to offset gains, diversified ETFs and mutual funds can help you stay invested during what's known as the "wash sale" period.

The "wash sale" rule says that an investor can't claim a loss on the sale of an investment and then buy a "substantially identical" security for the period beginning 30 days before and ending 30 days after the sale. (Think of it as the government's insurance policy-they want to make sure that investors don't get a tax break and then instantly buy back their original investment.)

Because ETFs and mutual funds hold many stocks or bonds, (and so look very different from an individual stock), they can be great candidates for reinvesting your money during the 60-day period.

Bottom line: there's still hope to reduce your tax bill this year. In between trips to the mall and grocery store, take a quick look at your investments to see where you can save this year-I promise you won't regret it.

Don't Lose Your FSA Dollars

Mark Steber for the HuffPo writes: 2013 is almost gone. You, and many American taxpayers, may be in danger of leaving some of your hard-earned money on the table and otherwise losing some tax benefits you otherwise deserve and can get quite easily.

Do you still have unused money in your medical flex savings accounts (FSA)? You know, that employee-benefit-cafeteria-plan-account you put money in all year long, but have to use by the end of the calendar year or forfeit the balance back to the insurance company? While FSAs can be great for managing medical expenses and they offer real benefits come tax time they do come with some restrictions. Here are some tips on each plan and some ways to help use the funds you need to use before the end of the year.

About Flexible Spending Accounts or FSAs
An FSA is a non-taxed medical flexible savings account offered through your employer to put money aside to pay for medical related expenses. The plan allows you to contribute up to $2,500 of your annual salary into a special account before any taxes are withheld. It's basically taken out of your taxable wages on your year-end Form W-2 wage and tax statement. Any money you put into the account is not considered taxable wages and you can spend it on medical related expenses. This essentially gives you a "tax deduction" for medical expenses - where typically you would need to meet other IRS limits including itemizing your deductions on schedule A to deduct them. This special benefit provides you with an additional $191 to spend on medical or dental expenses from the tax savings on your Social Security and Medicare taxes alone above and beyond federal and state income taxes. . The additional tax savings depends on your tax bracket and federal and state tax rates but certainly is better than no tax savings at all. However, as with any tax benefit, they are strict rules governing the program.

FSA funds can not earn interest and must be used for qualified medical or dental expenses only. In the past, the FSA had a "use it or lose it requirement." Use it or lose simply means, if you don't spend it within the required time frame, typically by December 31 each year, you lose the money forever. Yep, you can lose a part of your pay if you don't use all the money in your plan before January 1.

Recent Good News
Because it is difficult to determine the amount of out-of-pocket medical expenses you will have each year, the IRS recently decided to allow taxpayers to carry over up to $500 each year into the following calendar year -- so you might be able to carry some of your 2013 funds into 2014. Not only does the new rule allow you to carry over up to $500 in contributions from 2013, you can still contribute the maximum $2,500 in 2014. This is a great help if your medical and dental expenses were lower than you anticipated this year. So, you have a few more months to use that remaining money.

What should you do now to make sure you don't lose your money? First, check with the person in your company who handles the FSA and see if they have adopted the new carry-over rules. Your plan must specifically adopt the new carryover rule. Next, check the balance in your FSA. Then gather all your medical and dental receipts that haven't been submitted for reimbursement and file your claims -- get your money! Finally if your company has not yet adopted the new rule and if you need to spend down your FSA before December 31, consider making your semi-annual dental appointment, check-up appointments, and even eye exams before January 1. In addition, you can replace your glasses or contact lenses and even purchase medical devices such as a walker, orthotics, diabetic testing items, or any other medical equipment necessary for you, your spouse, or your dependents.

No FSA? You May Still Be Able to Deduct Medical Expenses
If you itemize deductions, you can deduct qualified health care expenses. These include:
• Prescription drugs
• Insulin
• Dental care
• Doctor visits, hospital visits
• Lab work and radiology
• 24 cents per mile for miles driven to receive care and fill prescriptions

Note that health insurance premiums can not be paid with FSA funds, but can be included in your itemized deductions. Act now to get your FSA account used up before the first of the year and maybe get a little extra spending money for the holiday season!

People always ask me, "What tax deduction might I have overlooked ?" One of the easiest and best is to make use of your company provided flexible spending account provided your company has one. By putting some money into an FSA you can avoid federal income taxes, state income taxes, social security taxes and Medicare taxes -- all adding up to quite a tax benefit.

Everyone has medical expenses every year -- some taxpayers lesser and some larger and some known and expected and much unknown. With a little planning and some forethought each year you can save taxes by using a FSA -- and the tax benefits will add up fast. If you incur just $1,000 of medical expenses in a year -- for co-pay amounts, eye glasses, other out of pocket costs and if you are in a middle federal and state tax bracket, say 25 percent for federal and 5 percent for state, combined with the Social Security and Medicare savings -- that $1,000 that you would otherwise spend and not get a tax break for, by using an FSA could save you about $370 in taxes.

INTUIT TO ACQUIRE DOCSTOC / Intuit acquires Docstoc to broaden its offering to the smallest of small businesses

Intuit has entered into an agreement to purchase Docstoc, Inc., the premier online destination for content and resources to start and grow small businesses.

Docstoc, founded in 2007, has quickly become a go-to resource for new and emerging businesses and is a leading tech company in Southern California.  The company provides a broad array of user-generated and proprietary documents, articles and videos that help small businesses on topics including business plans, licensing, marketing, human resources, and financial management. In recent years, Docstoc has complemented its content offering with tools such as License123 (business licenses) and ExpertCircle (product recommendations).

As part of Intuit, Docstoc’s team of 50 employees will maintain operations in Santa Monica and will continue to be led by Docstoc’s CEO and co-founder, Jason Nazar.  Docstoc.com regularly attracts more than 16 million unique monthly visitors with over 40 million registered members worldwide.

The acquisition will help Intuit expand its offerings to solopreneurs, self-employed and independent contractors. In the U.S. alone, there are more than 22 million entrepreneurs looking for assistance to start and grow their businesses. Combining Intuit’s powerful brand, customer reach and small business savvy with Docstoc’s platform, broad content and popular tools will ultimately help more small businesses succeed.

“Our vision is to be the ultimate destination and resource site for small businesses.  We’re extremely excited to continue to pursue this shared vision with Intuit, a world leader of solutions for small businesses,” said Nazar. “Together we will have an unprecedented opportunity to help entrepreneurs make their businesses better.”

“As we strive to be the operating system behind small business success, we are looking for solutions and teams that best serve small businesses, and Docstoc stood out as a clear leader,” said Alex Chriss, a vice president and general manager within Intuit’s small business division. “Docstoc’s model of harnessing the contributions of the community, customer-centric mindset and fast-paced culture will flourish as part of Intuit.”

The transaction is expected to close during the second quarter of Intuit’s fiscal year 2014, which ends Jan. 31, and is subject to customary closing conditions. The purchase terms were undisclosed.

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Michael Carney for Pando.com writes: Intuit acquires Docstoc to broaden its offering to the smallest of small businesses

If you’re targeting small business customers, there’s hardly a better name to team up with thanIntuit. That was the attitude that Docstoc founder Jason Nazar held when first engaging in business development talks with the company behind Quickbooks, TurboTax, and one of the largest payroll platforms on the planet. But those talks quickly grew into something larger, as Nazar revealed today that Intuit has agreed to acquire his six-year-old startup and make it the foundation of its new division focusing on solo-preneurs, self-employed professionals, and independent contractors.

The companies did not reveal the terms of the acquisition, which is expected to close before the end of Intuit’s fiscal second quarter (ending January 31). Often this indicates a soft landing or an otherwise unimpressive outcome for the selling company, but with Docstoc that doesn’t appear to be the case. The company has been profitable for several years and has millions of dollars in the bank, Nazar says, not to mention 50 percent revenue growth over the past year.

“This is a very, very good deal for all our shareholders and employees,” Nazar says. “We weren’t looking for a buyer. It happened very organically. But we’re thrilled with the opportunity to continue building this in conjunction with a world class brand .”

Both Docstoc and Intuit have described themselves as the “operating system for small businesses,” indicating that there may be true synergies in the vision and culture of the two companies. Docstoc has been more focused on the long-tail of this market, namely earliest stage companies or those with just a handful of employees. It’s a market segment that Intuit has yet to reach.

“We’ve been asking ourselves, how do we start working with smallest of small businesses?” says Intuit VP and GM Alex Chriss. “We think there’s about 22 million of the 28 million small businesses in the US that have one or two employees. In many cases, they have a ton of questions and needs that they’re ill-equipped to answer on their own.”

Docstoc, which operates includes a portfolio of Web properties, Docstoc.com, License123.com, andnewly-acquired BestVendor.com, offers these small businesses more than 20 million documents and 20,000 pieces of premium original content aimed at answering all manner of business questions. On its own, the company had grown its audience to 40 million registered users and nearly 16 million monthly unique visitors, numbers that it should be able to extend and further leverage given Intuit’s brand and product portfolio. The company had recently restructured its offering into a single, all-you-can eat subscription product in October of this year.

Chriss explains Intuit’s decision to buy versus build in this case, saying, “They’ve been around for a long time and building out communities and network effects takes a long time. These network effects are very strategic to us and one of the things we love about Docstoc is that its model is not just premium content, but also includes a user-contribution model.”

Intuit will look retain the entirety of the 55 person Docstoc team as part of this acquisition, according to both Nazar and Chriss, and the company will continue to operate out of its Santa Monica offices. Intuit’s nearest office is its Woodland Hills payment services office 20 miles north. The companies have yet to decide on a going-forward branding strategy, but Nazar expects the Docstoc brand to live on.

Nazar revealed news of the acquisition to his staff less than an hour ago at 10am this morning, meaning it will be some time before we learn whether the move to a giant company and some measure of newfound liquidity gives anyone ideas of greener pastures. The challenge for those that stay, and for Intuit, will be to maintain the familial culture and fast-moving startup attitude that has gotten Docstoc to this point. Historically, 30-year-old public companies have been less than conducive to innovation and disruption.

Nazar has become one of the elder statesman of the LA tech scene. He founded the company in 2007 and is backed by a local crew of prominant angels and VCs including Rustic Canyon Ventures, Crosscut Ventures, Matt Coffin (LowerMyBills), Kamran Ppourzanjani (PriceGrabber), Brett Brewer (Intermix Media), and Mike Jones (MySpace). In the ensuing six years, Nazar has founded a successful monthly event series called Startups Uncensored and become an active advisor to a number of up-and-coming entrepreneurs.

Given this standing within the community, there are likely to be mixed feelings about the exit. The majority of people here will undoubtedly be happy for Nazar and his team, who have been working longer than most at building a venture-backed success story. And “putting wins on the board” is generally a good thing for an up and coming startup ecosystem. It’s certainly better than the alternative of flaming out.

But what LA really needs are tentpole companies – those that grow large enough to become acquirers themselves and which train and shed talent back into the local startup ecosystem. By that measure, Docstoc’s decision to sell to Intuit is somewhat disappointing. It’s unclear whether the company had juggernaut potential, and in recent years it appeared to be approaching stability more so than escape velocity.

“I think this should be viewed as another really meaningful win in the column for LA companies,” Nazar says. “We’re a real LA story. I think of us as part of the class of 2007, meaning we got started when things were just starting to ramp up again down here.”

There’s no doubt that it’s been a long, hard fought road to this point. Nazar founded Docstoc on the precipice of the 2008 financial meltdown and grew to a seemingly positive exit in an era where most startups withered on the vine due to lack of capital or the inability to attract technical talent away from the stability of traditional careers.

For those reasons, today’s news should be received positively. An acquisition doesn’t necessarily represent an end. Nazar is taking it as the opening whistle to a whole new game, one being played on the biggest stage imaginable.

Year-End Financial To-Do List / Follow these ten steps to improve your finances

Kimberly Lankford for Kiplinger writes: What should I do before the end of the year to help with my finances?  Here are ten ways to take advantage of tax breaks, financial strategies and opportunities to boost your savings by year-end.

1. Add more money to your 401(k). You can contribute up to $17,500 to your 401(k) for 2013 ($23,000 if you’re 50 or older or will be by the end of the year), and you have until December 31 to reach that limit. You can’t just add extra money into the account yourself; the pre-tax contributions must be made through payroll deduction. Ask your employer’s payroll department what steps you need to take to increase your contributions starting with your next December payday. Some employers also let you contribute a lump sum directly from a year-end bonus, before the money is paid and taxed. See How to Increase 401(k) Contributions for more information about giving your retirement plan a boost at the end of the year.

2. Consider a Roth conversion. You have until December 31 to convert money from a traditional IRA to a Roth for 2013. You’ll pay taxes on the conversion, but you’ll be able to withdraw the money tax-free from the Roth in retirement. Making a Roth conversion is a particularly good idea if your income was lower in 2013 than in previous years. Ted Sarenski, a CPA and financial planner in Syracuse, N.Y., recommends looking at your income each year and calculating how much you could convert without bumping any of the money into the next tax bracket. Spreading your conversions over several years, especially after you retire, can help you avoid having to take big required minimum distributions after age 70½, which could trigger taxes on your Social Security benefits. If you convert and later change your mind because your tax situation changes -- say, because you lose your job before the tax bill is due next year or your investments lose money -- you have until October 15, 2014, to undo the conversion (called “recharacterization). “You have almost a whole year to look at it and see if you made the right move or not,” says Sarenski. If you do recharacterize, you’ll get the money back that you paid in taxes, and you can reconvert later, ideally with a lower tax bill. For more information about recharacterization, see Do-Over for a Roth Conversion. For more information about Roth conversion strategies, see The Complexities of Roth Conversions and our Roth IRA Special Report.

3. Take your required minimum distributions. If you’re older than 70½, you generally need to take required minimum distributions from traditional IRAs, 401(k)s and other retirement-savings plans by December 31 (except for the year you turn 70½, when you’re given a extension until April 1 to make your first withdrawal; also, you don’t need to take RMDs from your current employer’s 401(k) while you’re still working). If you miss the deadline, the penalties can be big -- see IRS Cracks Down on Retirees Who Don’t Take RMDs. If you haven’t taken your RMD yet, contact your administrator soon so you have plenty of time to meet the December 31 deadline. See Calculating Your Required Minimum Distributions and our Required Minimum Distribution Special Report for more information. Also keep in mind that people older than age 70½ can contribute up to $100,000 from their IRAs to charity this year, which counts as their RMD but doesn’t boost their adjusted gross income. See Tax-Free Transfers From IRAs to Charity Still Allowed for details.

4. Make the most tax-effective charitable gifts. Giving money to charity before the end of the year is a great way to boost your deductions if you itemize. You can deduct all kinds of charitable contributions, including cash, stock and non-cash donations, such as the cost of ingredients you buy for a soup kitchen. Some giving strategies can stretch the tax benefits even further. For example, if you have highly appreciated stock you were planning on selling, consider giving the stock to the charity instead of cash. That way, you get a deduction for the full amount, but you avoid paying capital-gains taxes on the increase in value since you’ve owned it. See Charities: Give Stocks Instead for details. For a few ideas of ways you can give, see Expand Your Options for Charitable Giving, How to Set Up a Scholarship Fund and Donor-Advised Funds: Contribute Now, Donate Later.

5. Make energy-efficient home improvements. If you haven’t claimed a tax credit of up to $500 in energy-efficient home improvements since 2006, you have until December 31 to do so. The break applies to 10% of the purchase price (not installation costs) of certain insulation materials, energy-efficient windows (which have a $200 limit), external doors and skylights, and roofing materials. You can count both materials and labor costs for certain energy-efficient central air conditioners, electric heat pumps, biomass stoves and water heaters powered by an electric heat pump (up to $300 each, with a maximum credit of $500), or up to $150 for an eligible natural gas, propane or oil furnace or hot water boiler. For more information, see Time Is Running Out on Energy-Efficient Home Improvement Tax Credits.

6. Check the deadline for cleaning out your flexible spending account. Until recently, many people had to deplete their FSAs by December 31 or lose whatever money was left in it. That meant December was a time of frantic spending as people raced to spend money at, say, the eye doctor or dentist. Recently, however, the U.S. Treasury Department and IRS changed the FSA rules to allow employers to let people carry over $500 in their FSAs from one year to the next (see Big Change to Flexible Spending Accounts for details). Some employers already offered a grace period until March 15, thanks to an earlier change in the rules by the IRS. But a few employers still require you to use the money by December 31 or lose it. In that case, now is a good time to order contact lenses, visit the eye doctor or dentist, buy new glasses or prescription sunglasses, or pay for other eligible medical expenses. See 7 Smart Uses for Your Flex Account Money for some more ideas.

7. Open a solo 401(k) for self-employment income. A solo 401(k) is one of the best ways for self-employed people to save for retirement. You can contribute up to $17,500 ($23,000 if you are 50 or older) plus up to 20% of your net self-employment income, up to a maximum contribution of $51,000 for 2013. You have until April 15, 2014, to make contributions for 2013, but you have to open the account by December 31 if you don’t already have one. See How the Self-Employed Can Save for Retirement for details. Self-employed people should also time their equipment purchases and other expenses carefully over the next few weeks to make the most of the deductions for 2013. See Last-Minute Tax Breaks for the Self-Employed and Moonlighters for details.

8. Contribute to a 529 college-savings plan. This strategy is a win-win: The beneficiary of the account (for instance, your child, grandchild or the child of a friend) can use the money tax-free for college tuition, room and board, and fees. Plus, in many states, you get a state income tax deduction for your contribution. Many 529 plans require you to make your contributions by December 31 to count for that tax year (although some give you until April 15 of the following year). For details, see SavingforCollege.com. Also see Tax Breaks for Grandparents Who Help With College Costs.

9. Buy health insurance on the exchanges. For coverage that takes effect on January 1, you must buy the policy before December 23 (the deadline was extended from December 15 because of the problems with HealthCare.gov). If your income is below 400% of the federal poverty level -- about $46,000 for an individual and $94,000 for a family of four -- you may qualify for a subsidy to help with the premiums. See Calculating the Health Insurance Subsidy for details. After a very rocky start, HealthCare.gov is working better, and many states that run their own exchanges have improved their Web sites, too. See Navigating Around the Obamacare Sign-Up Problems for more ways to sign up for coverage.

10. Take advantage of other tax breaks. If you were planning to sell stocks soon, pulling the trigger before December could make a difference in your tax bill. See 4 Year-End Moves to Trim Your 2013 Tax Bill and 12 Smart Tax Moves to Make Now for more information about timing your capital gains and losses and other tax moves to make before New Year’s Eve.

Oil Investment Yields Income, Tax Break

Alex Coppola for the Wall St Journal writes: The doctor was a partner in a private medical practice that had enjoyed a good year. He was expecting a $50,000 bonus, but wasn't happy about having to pay taxes on that money.

He brought his concerns to his adviser, Clint Gharib, founder of the Gharib Group in Atlanta. "This was a client in the top tax bracket," explains Mr. Gharib, whose firm manages about $200 million for 300 family and corporate clients. "Between state and federal taxes, as much as $20,000 of that bonus was going straight to the government."

The doctor had maxed out his 401(k) contributions for the year and earned too much to qualify for a tax-deductible IRA contribution. He wanted a vehicle that would significantly offset the tax hit, while giving him the opportunity to make a return on his money.

Mr. Gharib had already used alternative investments in the client's portfolio, so he thought of another non-traditional strategy that could help the man achieve both of his goals: investing in oil wells.

Mr. Gharib has used oil and gas investments in his clients' portfolios since 2008 and believed that such an investment could be a good fit for this client. He also knew that the strategy was uncommon, so he started by explaining exactly how the investment would work.

To invest in a land-based oil drilling project, the client could buy into an oil partnership. For a minimum investment--usually about $20,000--he would become a partner and receive a percentage of profits generated by those wells.

But in the first year of his investment, the client would also receive a deduction against his taxable income for money the partnership spent on intangible drilling costs, or IDC. These costs, which include expenses like labor and insurance, typically constitute about 85% of a project's initial investment.

The client was intrigued, but before they went any further Mr. Gharib laid out the risks involved--primarily, that he could lose his principal if the wells didn't produce oil. "There are plenty of horror stories about investors losing money because they didn't do their homework on the general partner who organized the partnership," says Mr. Gharib.

However, Mr. Gharib had spent three years researching a particular general partner and had placed other clients into well investments with the company. The general partner had decades of experience, a good track record, and was starting a new drilling project. Together, Mr. Gharib and his client reviewed the new project's private placement memorandum, a document that includes a detailed budget outlining expected intangible drilling costs as well as estimates for the wells' production.

Mr. Gharib also shared the information with the client's accountant, who worked with the oil partnership's accounting firm to review the procedures the client would need to follow to claim the IDC tax credit. With the client ready to invest, Mr. Gharib then gave the client's $50,000 to the partnership.

In the first year, the partnership spent 88% of the money on IDC, which meant the client received a $44,000 deduction against his income taxes in 2011. By the second year, he had received about $7,692 in income from the wells' yield, and can expect additional income for as long as the wells are still productive--typically 10-20 years, says Mr. Gharib.

As successful as this strategy was for this client, Mr. Gharib notes that it isn't for everyone. Investors typically need at least $250,000 in net worth to qualify for an oil partnership. And because there's no secondary market for the partnerships, they must also be comfortable holding illiquid assets.

"If you're looking for an investment you can sell in three years, this isn't it," warns Mr. Gharib. "But for clients with the right assets and the right appetite, it can be a very useful and rewarding opportunity."

Year-end tax planning for individuals

Jeff Stathopulos writes:  Opportunities to Be Aware of This Year

As the 2013 year is coming to an end, individuals should be mindful of year-end tax planning opportunities that will need to be implemented prior to December 31st. The following are some popular tax planning items that individuals should be aware of this year.

Tax Considerations for Individuals

Tax Loss Selling

Where an individual owns investments with accrued losses, he or she may consider selling these investments before the end of the year in order to offset any capital gains realized in 2013. Any unused capital losses realized can either be carried back three years or forward indefinitely to offset capital gains in any of those years. In order to ensure that trades are settled prior to the end of the year, all trades should take place no later than December 24th, 2013. Please note that the superficial loss rules will apply to deny capital losses on any investments sold and repurchased within 30 days by either you or an affiliated person (i.e. your spouse, a corporation controlled by you, or a trust where you have a major beneficial interest, including an RRSP or TFSA). If the superficial loss rules apply on the sale and the capital loss is denied, it will be added to the adjusted cost base of the investments for the person who purchased them.

Donating Public Securities with Gains

Where an individual owns publicly traded securities that have appreciated in value, one strategy to consider is to donate the actual shares with accrued gains instead of donating cash. There are two main tax advantages derived from doing so. Firstly, the individual will receive a charitable donation tax credit based on the fair market value of the shares donated. In addition, there will be no capital gains tax payable on the donated shares. Please note that all donations must be made prior to December 31st in order to receive a tax receipt for 2013¹.

First-Time Donor’s Super Credit

As part of the 2013 Federal Budget, a temporary first-time charitable donor’s tax credit was introduced. First-time donors will be entitled to a 40% federal tax credit on donations of $200 or less, and a 54% federal tax credit on donations that are over $200, but limited to $1,000. The credit will be applicable on donations made on or after March 21, 2013 and can only be claimed once between 2013 and 2018. An individual qualifies for this tax credit if neither the individual nor their spouse has claimed the charitable donations tax credit or first-time donor’s super tax credit in any taxation year after 2007.

Tax Instalments

Individuals may be required to pay income tax instalments if their tax liability is more than $3,000 ($1,800 for Residents in QC) for the current year or in either of the two preceding years (2012 or 2011). Individual investors are often required to pay tax instalments since tax is not deducted at source on investment income. Tax instalments are due quarterly and the due date for final instalments is December 15, 2013.

Withdrawing From Your TFSA

Any planned withdrawal from your Tax-Free Savings Account (“TFSA”) should be done prior to December 31, 2013 to ensure that the withdrawal creates additional contribution room in 2014. If TFSA withdrawals are made in 2014, the contribution room will not be reinstated until the following year. It is important to note that if you withdraw funds from your TFSA and re-contribute in the same year, certain over contribution penalties may apply if there is insufficient contribution room available.

RRSP Contributions

December 31st is the last day for final RRSP contributions for individuals who have turned 71 years of age during the 2013 year. Making a final contribution can be beneficial for individuals who have unused RRSP contribution room remaining as the amount of the contribution can be deducted against income generated in 2013. Thus, this will reduce the individual’s 2013 overall tax liability.

Opportunities for Self-Employed Individuals

For individuals who carry on and operate an unincorporated business, some additional tax planning opportunities may be available.

Paying a Salary to Family Members

Consider paying a spouse or a child a reasonable salary based on their involvement in your business. The salary should be a reasonable amount considering the type of work performed and should be comparable to what a third party would be paid to perform the same type of service. For individuals who originally had little to no income, the salary paid will be taxed at a lower marginal tax rate. In addition, the salary will be considered earned income and will

also generate future RRSP contribution room for each of those individuals.

Deferral of Income

For those individuals who have a larger control over the timing and final delivery of their services, one can consider delaying the final completion of work and billing until after

December 31st. Any income received after the year-end will be taxed in 2014 instead, providing a one year deferral of the tax liability.

Purchasing Capital Assets

Purchasing capital assets before the end of the year can provide your business with a deduction for Capital Cost Allowance (CCA). As long as the capital assets are available for use prior to December 31st, the business can claim the CCA deduction in 2013. This idea is suitable in situations where the individual was originally planning to purchase an asset for their business in the near future.

Other Important Items

Income Splitting Loans

On October 1st, 2013, the CRA increased its prescribed interest rate on income splitting loans from 1% to 2%. Many individuals have finalized income splitting loan arrangements prior to this date in order to take advantage and lock into the 1% prescribed rate. One very important reminder is that the interest payable on these types of income splitting loans must be paid annually by January 30th of the following year (within 30 days after year-end). This is a very important point as many individuals forget to maintain the annual interest payments, which would cause the income splitting plan to be ineffective. Even one late payment can cause the attribution rules to apply for not only that year, but also all subsequent years.