17 Oct Pink or Blue

News of a newly expectant grandchild was once met with great anticipation but only limited preparation.  The tradition of buying everything from receiving blankets to booties in pink for girls and blue for boys fueled a frenzied dash to the mall upon the birth.  And then, in all the excitement with all that pent up anticipation, an uncontrolled ‘binge buying spree’ ensued.  Thus resulted a mountain of pink or blue garments – all sized for newborns –  you just knew would be outgrown before having ever been worn.

Nowadays, an ultrasound  provides ample advance notice, enabling a more thoughtful and orderly selection of items of the appropriate color for the newborn, the six-month old, and the twelve month old.  You still come home with a mountain of garments, but over the course of several relaxed shopping trips and spanning enough of the child’s growth to provide at least the possibility each might be worn once before being outgrown.

Such is the advantage of one form of technological advancement.  In the world of tax planning we have moved in the opposite direction.  Whereas we used to be able to accelerate or delay capital gains and losses with the advance knowledge of how they would be treated, Congress has the tax code in such disarray that we find ourselves doing precisely the opposite of what used to be considered commonsense just to be on the safe side should they change the rules at the last minute.  Instead of holding off on the sale of appreciated stocks last year for example, to minimize taxes, planners were counseling clients to sell before the end of the year so at least the tax bite would be known.  There was that  strong a chance the capital gains rate would rise in the following tax year.  When it didn’t, folks were left with  a mountain of capital gains no one needed or wanted.

Fortunately, we planners have an arsenal of weaponry with which to hedge such uncertainties.  Things like donor-advised endowment funds that enable tax-deductible charitable gifts to be concentrated in one or more years but actually distributed out to the charities over time as desired.   Congress’s dalliances with inept tax planning thankfully keeps the services of we financial advisors in healthy strong demand.

And, thanks to technological advancement, Jeanette and I know what color we are dealing with as our third grandchild’s arrival approaches this fall.  Early this past spring daughter, Jennifer, brought us a cupcake covered in white frosting and filled with a frosting colored to reveal the baby’s gender.  With excitement and anticipation, Jeanette raised a knife to split the cake.  But, before she could lower it, our on-looking four-year-old granddaughter, Alina,  exasperated by her grandparents’ apparent failure to grasp the obvious blurted out with disdain,  ” It’s going to be pink, Grammy, it’s a girl!”