For high-net-worth individuals and families, year-end tax planning goes beyond maximizing deductions. Decisions involving investments, charitable giving, and wealth transfers can have tax implications that extend well beyond the current year.

As we move closer to the end of the year, here are three areas worth reviewing before December 31.

Review Capital Gains and Concentrated Investments

How can high-net-worth investors manage capital gains taxes before year-end? Strategies may include tax-loss harvesting, timing the sale of appreciated assets, and evaluating alternatives for concentrated stock positions.

For investors with substantial taxable portfolios, realizing investment losses may help offset capital gains. However, the decision becomes more complex when portfolios contain concentrated equity positions, restricted stock, or significant unrealized appreciation.

For example, investors holding highly appreciated stock may consider staged sales, charitable contributions of securities, or exchange funds. Certain exchange funds allow eligible investors to diversify appreciated stock positions without immediately recognizing capital gains, although they involve significant restrictions, risks, and liquidity considerations.

Investors with previously deferred gains through Qualified Opportunity Funds should also review their positions, as certain deferred gains must generally be recognized in 2026. The goal is to evaluate tax exposure alongside investment risk, rather than allowing taxes alone to drive portfolio decisions.

Rethinking Charitable Giving Under the 2026 Tax Rules

What changed for charitable deductions in 2026? Taxpayers who itemize generally face a new charitable deduction floor of 0.5% of adjusted gross income (AGI), while those in the highest federal income tax bracket generally receive a maximum 35% marginal federal tax benefit from itemized deductions. 

For a household with $2 million in AGI, this means the first $10,000 of otherwise eligible charitable contributions generally would not be deductible.

These changes make the timing and structure of charitable giving particularly important. Families may want to evaluate bunching multiple years of donations into one tax year, contributing appreciated securities instead of cash, or using donor-advised funds to separate the timing of a charitable contribution from future grants.

For families with substantial philanthropic goals, charitable trusts may also warrant consideration as part of a broader wealth and estate planning strategy.

Revisit Estate Planning and Wealth Transfers

What should wealthy families consider before making year-end gifts? The key factors include gift tax exclusions, future asset appreciation, capital gains exposure, and the long-term implications of transferring wealth. In 2026, the federal estate and gift tax basic exclusion is $15 million per individual, and the annual gift tax exclusion is $19,000 per recipient.

While these exemptions provide significant planning flexibility, transferring assets during life is not always the most tax-efficient approach. Gifted assets generally retain the donor's cost basis, while inherited assets may receive a basis adjustment at death.

For families with substantial appreciated investments, that distinction can materially affect future capital gains taxes. More sophisticated strategies, including Spousal Lifetime Access Trusts (SLATs), Grantor Retained Annuity Trusts (GRATs), and intra-family loans, may also warrant consideration for families seeking to transfer future appreciation or address multigenerational wealth planning goals.

Looking Beyond December 31

For high-net-worth families, the greatest opportunities often arise when tax planning, investment management, and estate planning are considered together.

Before year-end, consider coordinating with your XML wealth advisor, and your trusted CPA, and estate planning attorney to evaluate which strategies align with your financial circumstances and long-term goals. 

Sources: Fidelity(linked above)

This communication is for information and educational purposes only. As Federal and state tax laws may change and state laws vary from state to state, only a licensed tax or estate professional can provide you with specific advice to rely on. XML Financial Group advisors are not licensed tax or estate professionals. They should not be considered a substitute for personal advice from a licensed professional, substitute for an attorney’s advice, or a legal reference.

Information provided has been prepared from sources believed to be reliable but is not guaranteed and does not represent all available data necessary for making investment or estate planning decisions.This is not a recommendation for the sale or investment in any product or strategy or to be perceived as individual advice. Information presented has been prepared from sources believed to be reliable but is not guaranteed and does not represent all available data necessary for making investment decisions. Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this presentation and are subject to change without notice. Forecasts do not consider the specific investment objectives, restrictions, tax and financial situation or other needs of an individual. Actual data will vary and may not be reflected here. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. The opinion expressed by this individual is based on facts and circumstances known at this time, is subject to change and does not reflect the opinions of all financial professionals of XML.