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by Karamatsu
Wed May 20, 2015 5:10 am
Forum: Investing - Help with Personal Investments
Topic: buying foreign based company stock that trade in the US
Replies: 5
Views: 266

Re: buying foreign based company stock that trade in the US

Wow... It never occurred to me that a PFIC would trade on a US exchange and not somehow be exempt from the horrors of PFIC treatment. Good to know!
by Karamatsu
Tue May 19, 2015 6:52 pm
Forum: Investing - Help with Personal Investments
Topic: buying foreign based company stock that trade in the US
Replies: 5
Views: 266

Re: buying foreign based company stock that trade in the US

when we buy a foreign based company stock, (the ones that trades in usa), is there a special paperwork before or during tax time? It depends on the company/country. For example, if, in a taxable account, you hold shares of a Canadian corporation that pays dividends, 15% tax will be withheld at the ...
by Karamatsu
Mon May 11, 2015 5:37 am
Forum: Investing - Help with Personal Investments
Topic: Extrapolating Future Trends From Past: Never or Just Sometimes?
Replies: 12
Views: 639

Re: Extrapolating Future Trends From Past: Never or Just Sometimes?

Does this mean that it is ok to rely on past performance for some things, but not others?


No, but in the investment world there is always a degree of "the emperor's new clothes" at work, in part because many of us have so little choice.
by Karamatsu
Thu May 07, 2015 6:43 pm
Forum: Investing - Help with Personal Investments
Topic: Capital Gains on individual stock?
Replies: 13
Views: 1432

Re: Capital Gains on individual stock?

I think they're not adjusting for splits. CSCO closed at 28.81 yesterday. The market price of one share of CSCO on 7 May 1999 was 108.50 but the stock split twice (both 2:1) between then and now, so absent any other kind of weirdness, the split-adjusted cost basis should be 27.125/share, right? Buye...
by Karamatsu
Thu May 07, 2015 6:13 pm
Forum: Investing - Theory, News & General
Topic: Round Numbers in Portfolio Allocations
Replies: 49
Views: 2889

Re: Round Numbers in Portfolio Allocations

For a spouse who is an accountant I doubt that it would make any difference at all, especially if you have Excel doing the computations. I mean, once you plug in the target percentage, it doesn't matter whether your allocation is 10% or (3*Pi)%, the spreadsheet will do the work. That said, I round m...
by Karamatsu
Mon May 04, 2015 10:30 pm
Forum: Investing - Help with Personal Investments
Topic: Capital Gains on individual stock?
Replies: 13
Views: 1432

Re: Capital Gains on individual stock?

Yep. Much depends on the timing.
by Karamatsu
Mon May 04, 2015 10:24 pm
Forum: Investing - Help with Personal Investments
Topic: taxes on REIT ETF
Replies: 6
Views: 552

Re: taxes on REIT ETF

If I have a REIT ETF, do I pay takes like regular income on dividends or only capital gains tax? As with any similar fund you'll pay tax on the dividends as well capital gains tax if you sell shares at a gain (or if the fund does so and distributes the gains). SCHH seems fine, but since the whole p...
by Karamatsu
Mon May 04, 2015 12:54 am
Forum: Investing - Help with Personal Investments
Topic: Capital Gains on individual stock?
Replies: 13
Views: 1432

Re: Capital Gains on individual stock?

Ah, 1999... that was a good year. I guess you're looking at account statements to determine the current market value, right? It's just that the shares you mention (CSCO, MSFT, ORCL) seem to be up compared to their 1999 prices, so you may need to take into account the stock splits that occurred betwe...
by Karamatsu
Thu Apr 30, 2015 5:59 pm
Forum: Investing - Help with Personal Investments
Topic: Help me understand preferred stock we own...
Replies: 9
Views: 996

Re: Help me understand preferred stock we own...

Oh, OK. Much better, in fact. But in any case, the core question still stands. Is this something you'd buy for the trust with new money? If not, then unless there are side-effects like tax consequences, that's an excellent reason to sell. The issue itself, well... essentially in exchange for your $1...
by Karamatsu
Wed Apr 29, 2015 11:21 pm
Forum: Investing - Help with Personal Investments
Topic: Help me understand preferred stock we own...
Replies: 9
Views: 996

Re: Help me understand preferred stock we own...

Well, I had this nice long note all written but then my session timed out and it vanished. The short answer is that you should read the prospectus, keeping in mind that it's a sales document, not an unbiased evaluation, and answer just this one question: If you had $2M in new cash to invest, would y...
by Karamatsu
Wed Apr 29, 2015 10:05 pm
Forum: Investing - Help with Personal Investments
Topic: S&P 500 foreign revenue at 50% - advice on impact of port.
Replies: 28
Views: 2409

Re: S&P 500 foreign revenue at 50% - advice on impact of por

Would you consider the S&P 500 partly international exposure similar to a total international market index fund? Of course I know not exactly, but in some form or shape? No, not really. What's being missed is that, when investing in equities, the driver of returns is share prices. Share prices ...
by Karamatsu
Wed Apr 22, 2015 8:50 pm
Forum: Investing - Help with Personal Investments
Topic: Best way to get rid of practically worthless stock
Replies: 15
Views: 1531

Re: Best way to get rid of practically worthless stock

Lots of ups and downs, but things are good. I hope all is well for you, too. If you don't have a broker then you might check to see if Schwab has an office near you. You could take in certificates and they'd be able to figure it out. I only recommend them because I know them (ironically I opened my ...
by Karamatsu
Tue Apr 21, 2015 3:29 am
Forum: Investing - Help with Personal Investments
Topic: Best way to get rid of practically worthless stock
Replies: 15
Views: 1531

Re: Best way to get rid of practically worthless stock

Wow, Evans and Sutherland! That brings back memories. Sorry to hear things didn't go better for them. I'm surprised that you have stock certificates, though. When I was there in the late 80's, the shares we received were deposited with a broker. I don't remember ever getting certificates. In any cas...
by Karamatsu
Sun Apr 19, 2015 6:34 pm
Forum: Investing - Help with Personal Investments
Topic: Coming to terms with low risk tolerance
Replies: 46
Views: 3573

Re: Coming to terms with low risk tolerance

According to Bernstein, my current allocation is okay. That obviously makes me feel better. Do you agree with his advice?


Yes, very much so. I think your allocation is wise.
by Karamatsu
Thu Apr 16, 2015 6:54 pm
Forum: Investing - Help with Personal Investments
Topic: Should I hold my Preferred Stocks?
Replies: 7
Views: 714

Re: Should I hold my Preferred Stocks?

Well, don't be too, too hard on the broker. After all you apparently just gave him carte blanche to manage your portfolio, and you did benefit from the yield (versus bonds) while it lasted. That said, depending on the details (where the devil lives), it may still be advisable to sell them.
by Karamatsu
Wed Apr 01, 2015 7:36 pm
Forum: Investing - Theory, News & General
Topic: Keep Cash in Yuan?
Replies: 11
Views: 1409

Re: Keep Cash in Yuan?

Something you'd want to look at before doing something like this is the tax treatment of foreign currency gains and losses. Depending on the rules in your country, it can be a bit of a headache.
by Karamatsu
Wed Apr 01, 2015 7:31 pm
Forum: Investing - Theory, News & General
Topic: Any tax software that handles Form 1116?(Foreign Tax Credit)
Replies: 19
Views: 2456

Re: Any tax software that handles Form 1116?(Foreign Tax Cre

The more complicated provisions are more likely to matter if you worked in a foreign country and were taxed there Yes, I imagine that, for a US citizen living in the US, and whose foreign investments are made via US-based funds, it's not nearly as big a problem. It's probably only when you step out...
by Karamatsu
Mon Mar 16, 2015 7:24 pm
Forum: Investing - Help with Personal Investments
Topic: Barron's article...Closed End Funds Advantage....
Replies: 13
Views: 1412

Re: Barron's article...Closed End Funds Advantage....

Although I used to invest in some closed-end funds, I don't currently hold any. They're tricky beasts. Expensive and with lots of risks and caveats, most notably leverage and inflation of yield numbers through return-of-capital. Like some preferred stocks, you have to read the prospectus and associa...
by Karamatsu
Mon Mar 16, 2015 6:41 pm
Forum: Investing - Help with Personal Investments
Topic: Is tax loss harvesting applicable to foreign-listed ETFs?
Replies: 4
Views: 418

Re: Is tax loss harvesting applicable to foreign-listed ETFs

You can deduct capital losses on your US taxes no matter what investment you sold at a loss, so you should be able to harvest a loss anywhere. It is worth noting, at least, that there are special considerations for foreign-domiciled funds, most of which are classified as Passive Foreign Investment ...
by Karamatsu
Tue Mar 10, 2015 7:37 am
Forum: Personal Finance (Not Investing)
Topic: Turbotax 2014: Buyer Beware
Replies: 74
Views: 8704

Re: Turbotax 2014: Buyer Beware

There is also that lingering question, as was pointed out, about why we need to give Intuit our password in order to encrypt our return data. Among other things it means that we can't access our own data if we're not connected to the net, and if Intuit ever lost that data, or went bankrupt, we might...
by Karamatsu
Mon Mar 09, 2015 11:23 pm
Forum: Personal Finance (Not Investing)
Topic: Should I use both Turbotax and TaxACT?
Replies: 8
Views: 1079

Re: Should I use both Turbotax and TaxACT?

One thing to be aware of with TT being discussed in another thread , but it's only an issue if you use the Macintosh and purchase the CD version of the software. As for cross-checking, it depends on how familiar you are with what to expect. Regardless of which software you use, or even if you use an...
by Karamatsu
Mon Mar 09, 2015 9:20 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax 2014: Buyer Beware
Replies: 74
Views: 8704

Re: Turbotax 2014: Buyer Beware

So I had to go away for a week and was off line. It's good to see that people have continued to investigate, and especially that someone at Intuit responded, if only through a back channel. For what it's worth, as the OP I was never suggesting that Intuit was doing this in order to obtain our tax in...
by Karamatsu
Fri Feb 27, 2015 9:46 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax 2014: Buyer Beware
Replies: 74
Views: 8704

Re: Turbotax 2014: Buyer Beware

Thanks for moving the thread. I really wasn't sure where it belonged, but since everybody here is, or soon will be, knee-deep in tax preparation, it seemed worthwhile to let people know.
by Karamatsu
Fri Feb 27, 2015 9:37 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax 2014: Buyer Beware
Replies: 74
Views: 8704

Re: Turbotax 2014: Buyer Beware

Also by the way thanks for the tip about the password-protected disk. Of course it's true that I can encrypt the TT data file separately, using a different product. It just creates another layer of inconvenience and concern. It would be great if they eliminate the flaw in the printing/saving functio...
by Karamatsu
Fri Feb 27, 2015 9:33 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax 2014: Buyer Beware
Replies: 74
Views: 8704

Re: Turbotax 2014: Buyer Beware

There are thousands of applications made for the Mac. How many of them are forced to do this sort of weird print work-around? Yes, I agree with you. I actually worked for a while as a cross-language software developer for the Macintosh, and I've never heard of anything like this with any application.
by Karamatsu
Fri Feb 27, 2015 9:25 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax 2014: Buyer Beware
Replies: 74
Views: 8704

Re: Turbotax 2014: Buyer Beware

As far as I know, it was never a problem in the past, but it's possible that my Mac was always connected to the net when I printed or saved files, and I just didn't notice. This year I've been working in a slightly different environment so wasn't connected when I worked through my return, then got t...
by Karamatsu
Fri Feb 27, 2015 6:47 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax 2014: Buyer Beware
Replies: 74
Views: 8704

Re: Turbotax 2014: Buyer Beware

Actually even if Apple wouldn't let Intuit use the print library they'd intended to use, any reasonable company would simply have switched to an acceptable print library. I have no doubt that Apple offers one. But reading between the lines (which isn't always accurate), I'm guessing that Intuit want...
by Karamatsu
Fri Feb 27, 2015 6:28 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax 2014: Buyer Beware
Replies: 74
Views: 8704

Re: Turbotax 2014: Buyer Beware

There are a whole bunch of Mac programs that will print to pdfs and I think you can print to .pdf within the Mac print dialog boxes so even if Intuit has that feature disabled within TurboTax you should still be able to generate a PDF by going through the print dialogs. The PDF feature will show up...
by Karamatsu
Fri Feb 27, 2015 6:24 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax 2014: Buyer Beware
Replies: 74
Views: 8704

Re: Turbotax 2014: Buyer Beware

Reading some of the links above... it's nonsensical but not beyond the realm of possibility that Apple may have required them to stop using a third-party printing library if that library is known to be insecure . On the other hand, no other software application I use has such a requirement, so somet...
by Karamatsu
Fri Feb 27, 2015 5:59 pm
Forum: Personal Finance (Not Investing)
Topic: Turbotax 2014: Buyer Beware
Replies: 74
Views: 8704

Re: Turbotax 2014: Buyer Beware

Encryption does require login in, but printing does not. I can print fine with no login. This is with the Premier version on a Mac. Would you mind doing an experiment? Disconnect your computer from the network (easy to do if it's a wired connection but less easy if it's wireless) and then try to pr...
by Karamatsu
Fri Feb 27, 2015 3:45 am
Forum: Personal Finance (Not Investing)
Topic: Turbotax 2014: Buyer Beware
Replies: 74
Views: 8704

Turbotax 2014: Buyer Beware

In addition to forcing people to upgrade to their Premier version in order to manage investments, it's important to know that you will not be able to save your data in encrypted form without Intuit credentials, essentially sharing your password with Intuit. Worse, you will not be able to save your r...
by Karamatsu
Mon Feb 23, 2015 8:26 pm
Forum: Investing - Theory, News & General
Topic: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit
Replies: 58
Views: 7652

Re: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit

Another key takeaway of this thread - the cost of compliance can easily exceed the higher economic value of the credit. Yes, I've certainly felt that way on occasion. But since I live overseas the FTC is significant and double-taxation of earnings would mean paying roughly 40% to various government...
by Karamatsu
Sun Feb 15, 2015 7:00 pm
Forum: Investing - Help with Personal Investments
Topic: [US Expat Investing] Portfolio Allocation
Replies: 9
Views: 779

Re: [US Expat Investing] Portfolio Allocation

Welcome to the joys of expatriate investing! If this was your situation, what would your portfolio look like and why? I'd start with something simple. Maybe 30% in a bond fund or two, 35% in US total market (SCHB), and 35% in developed foreign (SCHF). If you wanted you could split the foreign alloca...
by Karamatsu
Thu Feb 12, 2015 9:32 pm
Forum: Investing - Theory, News & General
Topic: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit
Replies: 58
Views: 7652

Re: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit

Those tables provide the breakdown by country for dividend income. I had mentioned the issue of capital gains distributions and especially for a global fund. You're right. Given that taxes paid on capital gains would also be a factor, I'm sure Vanguard would provide that information. In 2014 I wond...
by Karamatsu
Wed Feb 11, 2015 10:33 pm
Forum: Investing - Theory, News & General
Topic: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit
Replies: 58
Views: 7652

Re: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit

In fact, that brings up an interesting complication if you have a capital gains distribution from a global fund. You don't know the percentage that is foreign. Fund operating companies, like Vanguard, publish a detailed breakdown of the foreign composition of distributions, and foreign taxes paid o...
by Karamatsu
Wed Feb 11, 2015 10:29 pm
Forum: Investing - Theory, News & General
Topic: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit
Replies: 58
Views: 7652

Re: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit

Regarding Canadian taxation on Canadian assets held in a US IRA, I only know about this because I had some a few years back that suddenly started getting taxed even though they were in my IRA. The Canadian taxes were withheld, and then you had to file some paperwork with the Canadian tax authority t...
by Karamatsu
Wed Feb 11, 2015 8:46 pm
Forum: Investing - Help with Personal Investments
Topic: Clarifications on Foreign Earned Income Exclusion
Replies: 13
Views: 827

Re: Clarifications on Foreign Earned Income Exclusion

Oh, also, you can take the Foreign Housing Exclusion/Deduction even if you are renting. It's not just for people who receive housing through their work. See the instructions for Form 2555, Part IV. Housing expenses include rent, utilities (other than telephone charges), real and personal property in...
by Karamatsu
Wed Feb 11, 2015 8:36 pm
Forum: Investing - Help with Personal Investments
Topic: Clarifications on Foreign Earned Income Exclusion
Replies: 13
Views: 827

Re: Clarifications on Foreign Earned Income Exclusion

To understand what's going on with US taxes you may find it helpful to walk through the process of computing her tax liability in the instructions (PDF) for Form 1040. Since she's using Form 2555, she'd need to start with the Foreign Earned Income Tax Worksheet on page 42, then, for Line 4 of that W...
by Karamatsu
Mon Feb 09, 2015 11:50 pm
Forum: Investing - Theory, News & General
Topic: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit
Replies: 58
Views: 7652

Re: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit

Say you are paid a foreign nonqualified dividend in an IRA, for $1 - 60% foreign tax = .40. When you withdraw the 40 cents, you then pay income tax on it again, leaving 36 cents if in the 10% bracket. If the stock were held in taxable, you would have what, .40 - 10% income tax = .36 + 10% credit = ...
by Karamatsu
Fri Feb 06, 2015 3:52 am
Forum: Investing - Theory, News & General
Topic: Changing a submitted order at a broker
Replies: 34
Views: 1752

Re: Changing a submitted order at a broker

I've certainly changed orders at Schwab while they were pending, but never had a situation where the first order was partially filled. It seemed to me that a change notification was handled internally as cancellation of one order and submission of another, so the orders would be discrete, but I'm no...
by Karamatsu
Thu Feb 05, 2015 8:48 pm
Forum: Investing - Theory, News & General
Topic: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit
Replies: 58
Views: 7652

Re: Foreign Stocks in Taxable - Gotcha w/ foreign tax credit

It seems to me that this isn't so much a "gotcha" as just the way the FTC is supposed to work. That is, to prevent (or at least offset) double -taxation. If you're over the $300/$600 limit exemption, and the US taxes on a foreign income item are less than that the taxes imposed by the fore...
by Karamatsu
Fri Jan 30, 2015 5:10 am
Forum: Investing - Theory, News & General
Topic: The lowest stock allocation you plan to stay with
Replies: 79
Views: 4814

Re: The lowest stock allocation you plan to stay with

Interestingly I'm at 35% equities now, too. In the back of my mind I've always thought that 80/20 would be a good choice when I got older, though. The trick is accumulating enough in assets to make the return from that liveable, particularly given the tax treatment of bond interest.
by Karamatsu
Sun Jan 04, 2015 8:59 pm
Forum: Investing - Help with Personal Investments
Topic: foreign tax credit
Replies: 15
Views: 1394

Re: foreign tax credit

But that is the question: Can one take the foreign tax credit for foreign taxes paid by a TR or LF fund and reported on a 1099-DIV? According to the Fund of Funds article on the Wiki, it appears that this has been the case since passage of the Regulated Investment Company Modernization Act of 2010.
by Karamatsu
Sat Nov 08, 2014 5:26 am
Forum: Investing - Help with Personal Investments
Topic: International in tax-deferred?
Replies: 2
Views: 459

Re: International in tax-deferred?

It seems to me that 10-year tax cost ratios aren't very useful. From a global perspective tax rates are changing all the time, so if/when rates change in countries that are big parts of the indexes (such as Japan, where capital gains rates just doubled) that can have an impact. What you really want ...
by Karamatsu
Wed Oct 22, 2014 8:10 pm
Forum: Investing - Help with Personal Investments
Topic: Slice & Dice International
Replies: 11
Views: 1219

Re: Slice & Dice International

I suppose it depends on what you're looking for, but what I do is differentiate based on size. The correlation between regional funds like VGK (Europe) and VPL (Pacific) is really quite high (take a look at the graphs), so it's questionable whether there is much benefit to be had in separate allocat...
by Karamatsu
Thu Oct 16, 2014 6:38 pm
Forum: Investing - Theory, News & General
Topic: Investing in Japan with Yen Hedged to USD or EUR
Replies: 5
Views: 354

Re: Investing in Japan with Yen Hedged to USD or EUR

Assuming you're talking about equities, there are several hedged Japan equity funds. Wisdom Tree has DXJ (ER 0.48%) and iShares have HEWJ (ER 0.48%), so you'd just want to compare the investment philosophy of the two funds. The cleanest comparison is to an unhedged fund is the iShares fund (EWJ) whi...
by Karamatsu
Thu Oct 16, 2014 6:12 pm
Forum: Investing - Help with Personal Investments
Topic: ETF / Mutual Fund in Japan
Replies: 31
Views: 2705

Re: ETF / Mutual Fund in Japan

Ah, I see what you were doing, working out a kind of total cost. Usually when people around here talk about the ER it's just the expense ratio published for the fund, since (in most cases) any other factor will apply across the board. But with cross-border taxation things do get weird, and it's quit...
by Karamatsu
Wed Oct 15, 2014 7:44 pm
Forum: Investing - Help with Personal Investments
Topic: ETF / Mutual Fund in Japan
Replies: 31
Views: 2705

Re: ETF / Mutual Fund in Japan

It looks to me like the Mitsui and SBI funds may be needlessly complicated. I wonder if you could simplify and reduce costs by investing directly the underlying ETFs that represent the asset classes you're interested in? Alas I'm not sure what the options are. Although maybe it's worth paying SBI's ...
by Karamatsu
Wed Oct 15, 2014 6:18 pm
Forum: Investing - Help with Personal Investments
Topic: Question about stocks and taxes
Replies: 4
Views: 559

Re: Question about stocks and taxes

Yes, as with everything else in finance there are clever exceptions, so you really have to look carefully at the information you've received and see how that fits your particular situation. The few times I've had something like that the company usually included some general tax guidelines in the mat...
by Karamatsu
Tue Oct 14, 2014 6:47 pm
Forum: Investing - Help with Personal Investments
Topic: Question about stocks and taxes
Replies: 4
Views: 559

Re: Question about stocks and taxes

In the most common scenario you'd receive shares of C in exchange for the shares in A. There should be a formula defining how many shares of C you'll receive in the memo that you received describing the merger. There should be no taxes involved unless you received "cash in lieu" of fractio...

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