Category: Ask Garden State Trust

Dear Garden State Trust: I’ve read that when interest rates go up, bond prices go down. Why should this be so? It seems a bit irrational to me. —Cynical Investor Dear Cynical: It’s not irrational. It’s not emotional at all; it’s just math. Here’s a simplified example. You have a bond with a face value…

Dear Garden State Trust: My brother and I are trust beneficiaries. The trust was established more than ten years ago, when our father died, so we’ve been told it’s irrevocable, it can’t be changed. But we need a change, this trust structure isn’t working out for us. Is there some way that we could at…

Dear Garden State Trust: I see that President Biden has proposed bringing back the 39.6% income tax rate early, before its already scheduled return in 2026. Why is that tax rate a fraction, instead of a whole percentage rate as all the other tax rates are? Where did that extra 0.6% come from? Wouldn’t it…

Dear Garden State Trust: I’ve been working from home during the pandemic, and my employer has indicated that will probably continue for me at least part time this year as well. Can I take a tax deduction for my home office? —Former Commuter Dear Former: You are most likely not eligible to take a deduction…

Dear Garden State Trust: Have you read this year’s Berkshire Hathaway shareholder letter from Warren Buffett? What did you think? —Fan of the Oracle of Omaha Dear Fan: I read the letter, as I do every year, and I loved it. Mr. Buffett has a remarkable talent for communicating complicated financial ideas in language that…

Dear Garden State Trust: I have $6,000 to put into an IRA before I file my tax return for 2020. Which is better, the traditional IRA or the Roth IRA? —Tardy Saver Dear Tardy: There is no simple answer to your question, unfortunately. Do you qualify for the tax deduction for the contribution to a…

Dear Garden State Trust: I’m going to make a major charitable gift to my alma mater, but I also need to provide for my heirs. How can I balance these competing interests? —Budding Philanthropist Dear Budding: Explore a split-interest charitable trust.  Such a trust has both private and charitable beneficiaries (hence, the “split”). You contribute…