Here are three of the week's top pieces of financial insight, gathered from around the web:
A $350,000 aid line for business
Business owners are rightly frightened about the impact of the coronavirus on their cash flow over the next few months, said Ami Kassar at Inc. There are a few financial options to consider beyond emergency loans issued by the Small Business Administration, which can come with a tedious application process and a lot of unpredictability. On the other hand, "the application process for regular SBA loans is simpler, if you are applying for $350,000 or less and have the historical cash flow to support the payment." Such loans can be spread over 10 years, with no lien on a house, at an interest rate of 7 percent. But keep in mind that while the federal government is considering delaying the April 15 tax deadline, filing your 2019 tax returns as soon as possible "could make a difference in being approved," since 90 percent of such loans require tax documentation.
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Biden tax plan takes aim at inheritance
Former Vice President Joe Biden's tax plan spotlights a decades-old form of generational wealth transfer, said Darla Mercado at CNBC. The "step-up in basis" is among the provisions of the tax code that "wealthy households hold most dear." The rules of step-up in basis mean that heirs don't pay capital gains taxes on an asset that has risen in value over years before it gets passed on. Biden's $4 trillion tax plan would hit heirs with a tax at the transfer. Wealthy taxpayers have turned to complex instruments, such as life insurance policies, to benefit from the step-up in basis. It also encourages some investors to hold on to shares until death so that they can be transferred tax free.
Financial advice via Instagram
"Financial influencers" on social media are booming in popularity, said Dieter Holger at The Wall Street Journal. Young investors eager for advice are turning to Instagram accounts such as @MrsDowJones, run by a 28-year-old "self-taught investor who posts investing memes, including one that humorously compares actual earnings and adjusted earnings to Khloe Kardashian before and after makeup." On YouTube, "monthly uploads of videos on investing increased nearly ninefold between 2013 and 2019." The Instagram influencers are succeeding because "many Millennials view traditional wealth managers as old-fashioned" and look to apps as their investing platforms. But some are paid by companies whose products they recommend, creating conflicts of interest that aren't always disclosed.
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