Timothy Bock outlines the techniques he emplys to help clien\'ts achieve total return and minimize their tax exposure.

1. Strategies to Minimize Taxes
Keeping More of Your Investment Return
You may have heard a common investment expression “It’s not what you make that counts. It’s what you
keep.” Minimizing taxes from investment activities is important because it is one of the few aspects of
investing that an investor can gain significant control over. Paying attention to the tax consequences of
investing can substantially increase long-term wealth and increase spendable income. This is a brief summary
of techniques employed by Summit.
Equities Placement: Stocks should be held (owned) to the extent possible in taxable accounts. Conversely
fixed income (bonds) should be held in a tax deferred account when possible.
Fund Placement: Less tax efficient funds are placed in tax deferred accounts.
Tax Loss Harvesting: Paper losses that exceed 10% are generally claimed to minimize current and future
taxes.
Account Coordination: All accounts are coordinated to minimize taxes and trading costs.
Fees: Management fees are usually billed from taxable accounts to qualify for the potential tax deduction.
Tax-Sensitive Accounting: High cost tax lot accounting is employed to minimize tax costs when assets are
sold with a gain.
Tax-Managed Mutual Funds: While most index funds are relatively tax efficient, Summit employs
specialized institutional funds that are specifically designed to further control and minimize tax.
Variable Annuities: The tax deferral feature of VAs is a limited benefit compared to tax-efficient index funds
which typically retain 95% or more of their total return after taxes. The high expenses associated with VAs
more than offset the modest tax savings compared to index funds.
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