To our Valued Producers!

As we move rapidly into the last month of 2010, all of us at Sumrall would like to offer a very sincere "Thank You" for a fantastic year! We recognize that success in this industry does not come without hard work and dedication to excellence, and we are truly blessed to be surrounded by such a tremendous group of professionals.

Thanks to you, Sumrall has seen incredible growth this year. We've added new staff members, additional carriers & products, and have implemented new marketing strategies to assist you in your business.

With growth comes good change! Beginning in January, you will notice a new "look and feel" to the Sumrall website. It will have expanded capabilities and better resources to serve you in your selling efforts. In our monthly newsletter, the "Informer", we will give you information that can increase your knowledge of our profession, and set you apart from the competition. Stay tuned for upcoming workshops and seminars, as we roll out new Structured Success Programs and introduce exciting incentives and marketing allowances to all of our producers!

As always, providing you with world-class support from our experienced staff is our number one goal. We are here to help you succeed in your business. Please call our office and let us assist you on your next case. We welcome the opportunity to help you make the sale!

Best Regards!

Dave Shields

In this issue

Will you pay 0% capital-gains taxes on your 2010 profits.

If you are a taxpayer in one of the two lowest income-tax brackets, 2010 marks the last opportunity for you to sell winning assets and cash in capital gains tax-free. The 0% rate applies to long-term capital gains, as well as qualified dividends, realized before December 31, 2010 by taxpayers in the 10% and 15% federal tax brackets. Any gains that lift your income above that threshold would be taxed at the maximum 15% capital-gains rate.

It is amazing to me that relatively few investors are even aware of this opportunity that has been in effect since 2008, but is now coming to a close. Here are some ways to take advantage of this fleeting opportunity for tax-free profits, but you must act before year-end:

• Sell some stock or other long term capital gain items (LTCG) to take advantage of these tax-free profits before the year-end exclusion; you could then
• Repurchase some shares of the same stock to lock in a higher basis for future sales. (Unlike the "wash sale rule", which prohibits you from buying an asset within 30 days before or 30 days after selling a similar asset at a loss, there are no time restrictions on repurchasing an investment that you sell at a profit).
• Reallocate the proceeds of the LTCG to other financial instruments that could help reduce your over-all income tax liability as well as potentially reduce or eliminate income tax on your Social Security benefits.
• Leverage the proceeds of the LTCG to purchase financial instruments that can be completely income tax-free and estate tax-free to your heirs at usually 3 to 4 times the original value of the LTCG investment.

To qualify for preferential treatment for long-term capital gains, you must hold shares of your stocks or mutual funds for more than 12 months before selling. (This rule applies to assets in taxable accounts; This rule does not apply to assets held in retirement accounts, because profits inside a tax shelter, such as an IRA, are not taxed when the gains are realized, but are taxed at your ordinary rates upon withdrawal.) Short-term capital gains on assets held for less than a year are taxed at a maximum 35% in 2010.

To take advantage of the 0% capital-gains rate this year, your taxable income can not exceed $34,000 if you are single, $45,500 if you are a single head of household or $68,000 if you are married filing jointly, otherwise you would be in a "greater than 15% tax bracket" Click here to see the Federal Income Tax Bracket table.

Note that taxable income is what is left after you subtract your personal exemption ($3,650 per taxpayer and each dependent) and your deductions (i.e. standard deduction or itemized deduction) from your adjusted gross income. (The standard deduction for 2010 is $5,700 for individuals, $8,400 for heads of household and $11,400 for married couples. Plus, there's an added standard deduction of $1,100 per person for married people 65 or older and $1,400 for single filers 65 or older.)

There are other special rules that pertain to the certain situations (example: "kiddie tax"), therefore, you should seek competent professional help before implementing any of the items discussed in this article. Call us for more details!

Sumrall & Associates, Inc. is excited to welcome Troy McMahon to the Sumrall team. We know you will find his many years of experience as well as his extensive knowledge, understanding and application of complex estate planning strategies make him a great addition to our staff and a valued resource for our producers.

Stay tuned for exciting workshops and marketing programs that Troy will lead in the upcoming months.

Read Troy's Estate Planning Tip "Get more Generous with Gifting".

The 159 year-old powerhouse you may have never heard about!

Recently, Sumrall has begun marketing for Phoenix, one of the oldest and most trusted names in the industry. Phoenix has roots dating back to 1851, and their history includes insuring President Abraham Lincoln and being the first carrier to lower life insurance rates on women and non-smokers.

• » 10 year walk-away.
• » 5% premium bonus.
• » 10% penalty-free withdrawals in the 1st year.
• » 6 index crediting options.
• » 3 income rider options - all at the low cost of 50 bps.
• » Income 25- gives the client's IAV a 31.25% immediate increase.
• » Income Plus- gives the client a 5% immediate increase in their IAV, and an annual roll-up of 8% compounded for up to 10 years.
• » Income Max- gives clienta a 1% increase in their payout percentage for life.
• » 7.5% GA-level compensation.

Call Sumrall today for your free Phoenix Marketing Kit!

Every month we will feature a question from our producers.

If you need answers, email Kimberly here.

IRA Wealth Transfer

How many of your clients are sitting on tax time bombs?

If you are like most agents, the majority of your client base has diligently contributed to Qualified Plans throughout their working years. Upon retirement, they learn that the IRS stands ready to take a huge bite out of their savings. This tax bite is hard to chew while living, but even tougher when these "nest eggs" get passed on to children or grandchildren. As a matter of fact, between income taxes and estate taxes, the potential is great that 50%-70% of the value will be lost upon transferring these retirement plans to beneficiaries.

As trusted advisors, we need to help our clients de-fuse these tax time bombs. How? First, be sure that the client's goals line up with the solution that you are providing. If they are truly interested in Wealth Transfer, and do not need the qualified funds for income or emergencies, then we have the solution!

With one simple application we can turn a 100% Taxable IRA into a 100% Tax-Free benefit to the kids. Let's review the solution:

Assumption: Client - Susan Jones, age 63, Non-Smoker, $200,000 IRA, General Health

Option 1:Susan can leave the $200,000 IRA to her beneficiaries. At age 70 1/2, the IRS will force her to begin liquidating the account through RMD's. Upon her death, the kids will receive a fully taxable benefit. Assuming the IRA has grown to $250,000 by that time (RMD's have kept it from growing significantly), her kids will receive approximately $175,000 ($250,000 less 30% income tax). If her estate is large enough, there may be additional estate taxes which would diminish it further.

Option 2:Susan can move the $200,000 IRA into a solution that provides a 100% Tax-free benefit of $417,524 to her kids. She will defuse the TAX TIME BOMB over 10 years by paying tax on $23,540 each year. In the event of death within the first 10 years, the remaining payments of $23,540 will go to the kids in addition to the $417,524. To make this solution even more attractive, Susan will have access to Living benefits as well. If she becomes unable to perform 2 of 6 ADL's and requires Home Health Care, Adult Day Care or Nursing Care, Susan can pull $208,762, leaving the remaining $208,762 to the kids.

In the right situation, Option 2 is by far a superior solution. There are a few moving parts to be understood, but that's where Sumrall & Associates comes in. Call us today for more details on this incredible IRA Wealth Transfer product.

By the way, did I mention that it pays more than double the commission of a deferred annuity?

Call us today for more details.

Coming soon!

Stay tuned for more details.