Market Recap – November
Major Benchmark Returns in November 2024, Year-To-Date, & Since Election
The election came and went with a resounding victory for Donald Trump and Republican control of the Senate and the House. The following day, the market reacted to the news with its best day in two years. So far, those gains have held up, indicating that investors believe the economy will benefit from a more business-friendly administration. The full force of “Trump Trade,” coupled with seasonality, will likely cause the stock market to notch new highs through the end of the year!
Artwork Has Gone Bananas!
The extravagant price of upscale art is mind-boggling to the average person, but does it say something about euphoria in the broader market? In March 2021, an NFT named Everydays: The First 5000 Days was auctioned at $69.3 million. In fact, the top ten most expensive NFTs sold between 2021 and 2022 fetched almost $230 million1. On November 20 of this year, a 2019 artwork dubbed Comedian, which consists of a banana duct-taped to a wall, sold for $6.2 million! Is this a sign of the froth we are witnessing in the asset market?
‘Tis The Season
December is the merriest time of the year! It is not only filled with festivities, but also gifts that accompany the holiday cheer.
Family gifts are predominantly made in cash (or checks). The annual gift-tax exclusion amount is $18,000 for 2024, per recipient. If you have 3 children, you can give them $54,000 ($18,000 x 3) without filing a gift-tax return. Your spouse can double that amount! Be sure the recipients cash the checks before year end for the gifts to be counted toward 2024.
Although it requires some understanding of the recipient’s income and tax situation, appreciated assets can be a better choice for gifting than cash under certain circumstances. Family members with little or no income may be able to completely avoid capital gains tax on the appreciated assets.
Most charities can receive stock donations, too. By transferring appreciated stocks to a charity, you can avoid realizing capital gains while receiving the fair market value as a tax deduction, subject to eligibility. This is a win-win!
Those with an IRA who are at least 70½ years old can enjoy tax-free qualified charitable distributions (QCDs) to charities up to $105,000 in 2024. If QCDs are taken before you any other distributions from an IRA, they will reduce your RMD, if applicable – a win-win-win!
Year-End Reminders
Finally, here are some important things to do before the calendar turns to 2025!
Take your RMD.
- For qualified plan owners who turned 73 or older in 2024
- For those with an inherited IRA
Review retirement plan contributions.
- Salary deferrals for 401(k) and 403(b) plans must go into your plan account by December 31st for them to count toward 2024.
- IRA contributions (regular and Roth) can be made up to the tax-filing day. For 2024, the contribution limits are $7,000 ($8,000 for taxpayers 50 and older).
Consider Roth conversions.
- Consider whether a Roth conversion makes sense in 2024 based on your estimated income.
Footnotes:
1 https://nftnow.com/features/most-expensive-nft-sales/
