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Re: GAO Concerned your IRA may be too big!

a dual-professional couple who aggressively saved and invested in qualified 401k (with full employer contributions) beginning upon departure from school is in serious danger of running afoul of the 5,000,000 figure that is a recurring theme of the GAO report. In a country of over 300,000,000 people...
by Wagnerjb
Fri Nov 21, 2014 8:32 am
 
Forum: Personal Finance (Not Investing)
Topic: GAO Concerned your IRA may be too big!
Replies: 25
Views: 2748

Re: Tax Loss Harvesting in Gold Miners: GDX vs RING

Based on the top 25 holdings, in my opinion you would not have a wash sale.

Best wishes.
by Wagnerjb
Mon Nov 17, 2014 8:18 pm
 
Forum: Investing - Theory, News & General
Topic: Tax Loss Harvesting in Gold Miners: GDX vs RING
Replies: 4
Views: 349

Re: PEP and Pease phase out [understanding of]

I am pretty sure your understanding is correct. Why don't you "double down" on your charitable contributions as well? Either donate to a Donor Advised Fund in one year (and take the $14,000 deduction), then have the DAF disburse $7,000 each year.....or donate twice as much to the charities...
by Wagnerjb
Mon Nov 17, 2014 1:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: PEP and Pease phase out [understanding of]
Replies: 2
Views: 262

Re: HSA Contribution: Can I do a end of year lump sum?

I suggest calling your benefits department. I am retiring in early 2015 and I am hoping to contribute the full-year limit to my HSA in the first three months of 2015. The system where you sign up for benefits won't allow such an election, but I called our benefits department and - after two days of ...
by Wagnerjb
Sat Nov 15, 2014 10:48 am
 
Forum: Personal Finance (Not Investing)
Topic: HSA Contribution: Can I do a end of year lump sum?
Replies: 3
Views: 383

Re: If your networth is over $3 million, how did you do it?

I've known quite a few who planned on saving up the last 10 years before retirement so they could actually retire only to have the carpet yanked out underneath them. This is a perfect example of people creating their own "luck". It is certainly unfortunate when a 50 year-old loses his job...
by Wagnerjb
Wed Nov 12, 2014 1:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: If your networth is over $3 million, how did you do it?
Replies: 244
Views: 22161

Re: If your networth is over $3 million, how did you do it?

Worked hard in college, studied and passed the CPA test, worked hard at my first job, studied and get a good score on the MBA entrance test (GMAT), borrowed a small fortune and went to a good MBA school, worked hard in my job for 30 years, didn't quit when times seemed frustrating, accepted 5 transf...
by Wagnerjb
Tue Nov 11, 2014 11:32 am
 
Forum: Personal Finance (Not Investing)
Topic: If your networth is over $3 million, how did you do it?
Replies: 244
Views: 22161

Re: Find flaws in my plans for Deferred Compensation?

InertiaMan: my situation is fairly similar to yours: a) My NQDC plan is around 10% of my assets b) I am retiring early (at age 57 in March 2015) c) I work for a very large and stable company I am using a strategy very similar to yours - that is, electing to receive distributions during the window be...
by Wagnerjb
Mon Nov 10, 2014 7:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Find flaws in my plans for Deferred Compensation?
Replies: 13
Views: 762

Re: Deferred Compensation Strategies

I used the executive deferred comp plan at my company and it has provided me with substantial tax benefits. Here are some strategies to consider: a) Due to the bankruptcy risk, consider limiting the cumulative amount in the deferred comp plan to a certain % of your net worth. I used 10% as my target...
by Wagnerjb
Fri Nov 07, 2014 1:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Deferred Compensation Strategies
Replies: 7
Views: 1024

Re: How to avoid AMT

The ideas is good but you have to be very careful since there graduated income rates are working against you. . Imagine that the couple pays 10% in state taxes (income/property) 450k/yr = 122k(111k normal 10k amt) = 27% 300k/yr = 68k (62k/5k) = 22% 150k/yr = 23k = 12% so we have 122+23 =145k versus...
by Wagnerjb
Fri Nov 07, 2014 10:22 am
 
Forum: Personal Finance (Not Investing)
Topic: How to avoid AMT
Replies: 51
Views: 9200

Re: How to avoid AMT

The only way to really understand the AMT and minimize your overall tax is to play with a software program. It is essential to do this. As sscritic points out, one can easily be subject to the AMT with income over $400,000 and it doesn't really take a stingy high-income person to have that happen. ...
by Wagnerjb
Thu Nov 06, 2014 1:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to avoid AMT
Replies: 51
Views: 9200

Re: Fund sales: Covered vs Non Covered question?

So I have finally made a taxable sale since the new regulation and was pleased with the process. I sold half covered lots and was able to use SpecID as I had initially set. My old non-covered shares were all in a Various lot with average cost basis. I just wanted to make sure that for tax return pu...
by Wagnerjb
Tue Oct 28, 2014 2:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Fund sales: Covered vs Non Covered question?
Replies: 4
Views: 643

Re: 39.6% Tax Bracket :(

I don't believe your mortgage deduction or your charitable contribution deduction "won't be an option" for you. They should still be deductible. Separately, you will have a haircut applied to your itemized deductions (mortgage, charity, property tax, etc) due to your income exceeding a cer...
by Wagnerjb
Tue Oct 28, 2014 8:48 am
 
Forum: Personal Finance (Not Investing)
Topic: 39.6% Tax Bracket :(
Replies: 28
Views: 6039

Re: Bad Stock-Market Timing Fueled Wealth Disparity

Households with the highest education and strong portfolios to begin with were likely to keep buying stocks during the decline, they found. Those with less education and smaller account balances were more likely to sell during the downturn. When the subsequent rebound happened, the already rich got...
by Wagnerjb
Mon Oct 27, 2014 2:03 pm
 
Forum: Investing - Theory, News & General
Topic: Bad Stock-Market Timing Fueled Wealth Disparity
Replies: 9
Views: 1124

Re: Donee Unable to Accept Stock

Interesting. Looks like the OP certainly needs to check with the IRS or the library before counting on the tax deduction. The OP will get a tax deduction from the Donor Advised Fund when he/she donates the securites to the DAF. But they probably will be surprised to find out later that the DAF won'...
by Wagnerjb
Mon Oct 27, 2014 11:17 am
 
Forum: Personal Finance (Not Investing)
Topic: Donee Unable to Accept Stock
Replies: 22
Views: 1970

Re: IRS Relents! Notice 2014-54 permits Basis Isolation

If you simply pay tax on the earnings part of the after-tax "rollover" to Roth IRA, you can do both the ordinary back door contribution to Roth IRA and the after-tax rollover to Roth IRA. Edit: or find a 401k plan to roll that tIRA into before 12/31. You can even roll it back into the 401...
by Wagnerjb
Wed Oct 22, 2014 6:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRS Relents! Notice 2014-54 permits Basis Isolation
Replies: 99
Views: 10396

Re: Question about Excluding the Gain from Sale of Home

The capital gain is the difference between your cost basis (which is essentially what you paid for it plus any capital improvements you made to it) and the amount realized from the sale (which is the sale price minus the sales expenses). Then the $250K or $500K exclusion is subtracted from that. ji...
by Wagnerjb
Wed Oct 22, 2014 4:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Question about Excluding the Gain from Sale of Home
Replies: 5
Views: 333

Re: IRS Relents! Notice 2014-54 permits Basis Isolation

Am I understanding this correctly? If an individual made a back-door Roth contribution for the 2014 tax year and had after-tax contributions made to a 401k plan that also had an after-tax earnings component attached to it, then requesting an in-service distribution of the after-tax earnings would d...
by Wagnerjb
Wed Oct 22, 2014 12:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRS Relents! Notice 2014-54 permits Basis Isolation
Replies: 99
Views: 10396

Re: IRS Relents! Notice 2014-54 permits Basis Isolation

dillrob, note that if you do have them split the distribution into tIRA and Roth IRA, the presence of the tIRA will interfere with your ability to do back door contributions to Roth IRA. Is that an issue for you? It is an issue for some people who want to do both things (after-tax rolled into Roth ...
by Wagnerjb
Wed Oct 22, 2014 7:58 am
 
Forum: Personal Finance (Not Investing)
Topic: IRS Relents! Notice 2014-54 permits Basis Isolation
Replies: 99
Views: 10396

Re: Wealthfront updates tax loss harvesting software

https://blog.wealthfront.com/tax-loss-harvesting-improvements-intelligent-recovery-predictive-deposits/?mkt_tok=3RkMMJWWfF9wsRonua3MZKXonjHpfsX86u0oWLHr08Yy0EZ5VunJEUWy2YABSdQ%2FcOedCQkZHblFnVsAS62nVrUNqaQF On their updated whitepaper they state, "We will then hold that alternative ETF in your...
by Wagnerjb
Fri Oct 17, 2014 8:02 am
 
Forum: Investing - Theory, News & General
Topic: Wealthfront updates tax loss harvesting software
Replies: 11
Views: 1027

Re: Does "substantially identical" apply to combined securit

Andy, I don't think those are good analogies to the mid-cap/small-cap comparison. It's not a coincidence that these funds have similar performance, especially compared to a large-cap US fund. The median capitalization of the mid and small funds is similar, especially compared to large-cap. So the c...
by Wagnerjb
Thu Oct 16, 2014 7:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1516

Re: Does "substantially identical" apply to combined securit

My feeling is that those differences aren't enough to prevent the two funds from being substantially identical. The point of the wash sale rule is to determine whether you've changed your position relative to the market. If you can lay the price graph for your new investment on top of the price gra...
by Wagnerjb
Thu Oct 16, 2014 3:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1516

Re: Using a Lump Sum Pension to buy Real Estate: 2 Options

I cannot imagine how Option 1 would ever be the superior choice, period. Maybe you have used some rosy assumptions that show the leverage providing substantial benefits. I would suggest that you have a professional review your assumptions before putting your money down. Personally, I am faced with a...
by Wagnerjb
Thu Oct 16, 2014 10:57 am
 
Forum: Personal Finance (Not Investing)
Topic: Using a Lump Sum Pension to buy Real Estate: 2 Options
Replies: 5
Views: 367

Re: Does "substantially identical" apply to combined securit

On the other hand following this to its logical conclusion TSM could be a partial wash sale with any stock. This is may be one reason the IRS isn't very excited over this, they may have a basement full of exploded heads from trying to come up with something sane, for whatever definition of sane the...
by Wagnerjb
Thu Oct 16, 2014 8:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1516

Re: Does "substantially identical" apply to combined securit

Does anybody have links to relevant tax court rulings. To my knowledge, there are no court rulings that apply to mutual funds. So we are left with the task of interpreting how the Tax Court would rule when it comes to the particular set of mutual fund investments in question. The issue revolves aro...
by Wagnerjb
Wed Oct 15, 2014 10:41 am
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1516

Re: Minimizing AMT impact

You will find that your property tax deduction is effectively limited. I have developed a fairly basic Excel spreadsheet to model my income taxes, and I can do "what if" games to determine the impact on AMT from various moves. My income bounces around a fair amount (due to varying bonus am...
by Wagnerjb
Tue Oct 14, 2014 12:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Minimizing AMT impact
Replies: 18
Views: 2010

Re: Relatively new here. What did you do in 2008/09

Hello, I've been around for about a year on this forum. I am wondering what the tone was in 2008! Was it hold hold hold or was it like crap, this isn't working! Here is a thread from March 2, 2009 - which was within a week of the market bottom. Several of us were rebalancing, but there were a fair ...
by Wagnerjb
Tue Oct 14, 2014 11:06 am
 
Forum: Investing - Help with Personal Investments
Topic: Relatively new here. What did you do in 2008/09
Replies: 130
Views: 9927

Re: Does "substantially identical" apply to combined securit

That said, it seems to be a credible interpretation of the law that purchasing a position that effectively behaves the same is the intent of wash sale conditions. That clearly is the intent of the wash sale rules. No doubt about it. There have been cases ruled by the Tax Court that clearly demonstr...
by Wagnerjb
Tue Oct 14, 2014 8:15 am
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1516

Re: Headed for a 300+ point loss today?

I don't know. I don't care.
by Wagnerjb
Thu Oct 09, 2014 11:57 am
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 461
Views: 34339

Re: What was your initial AA and how has that worked out?

Hi all, Thought I ask the community how things have been working out since they started their Bogleheads plan. If you don't minding sharing 1. When you started. E.g. How many years ago? 2. How old you were? 3. Stock/bond ratio 4. Annual % return since the start. 5. Anything you would do different i...
by Wagnerjb
Mon Oct 06, 2014 12:28 pm
 
Forum: Investing - Theory, News & General
Topic: What was your initial AA and how has that worked out?
Replies: 32
Views: 2558

Re: What bumps were along your road?

Quit my job (with an accounting firm) in my early 20's to get an MBA. Went deep into debt for the MBA, which was at a private University. "Recovered" by finding a decent job post graduation and adjusting my spending so that I could pay off the student loans within five or six years. My wif...
by Wagnerjb
Thu Oct 02, 2014 2:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: What bumps were along your road?
Replies: 44
Views: 3281

Re: Fidelity Offers A Round-Trip to Europe for New Account

we got our 50k miles within a week of confirming the deal. Easiest money ever, and airline miles aren't taxable income. Will buy us a $1000 coach ticket at the holidays. I got my miles right away too. I opened a Fidelity taxable account over the summer and took advantage of this offer. It was my fi...
by Wagnerjb
Thu Oct 02, 2014 1:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Fidelity Offers A Round-Trip to Europe for New Account
Replies: 26
Views: 3186

Re: Experience with big spike in earnings (stock options)

Thanks for the advice all. I'm curious though how others hand handled the big differences in their annual income or an early spike that they never saw again later vs. specifics of stock options. Any additional thoughts would be appreciated! You cannot do much planning with RSUs since they vest auto...
by Wagnerjb
Tue Sep 30, 2014 6:19 am
 
Forum: Personal Finance (Not Investing)
Topic: Experience with big spike in earnings (stock options)
Replies: 8
Views: 1010

Re: Southwest Airlines Engulfing, Reversal Candle Signals Do

It would have been neater if he would have told us to buy Southwest Airlines at $10/share about 18 months ago. Full disclosure - I have owned shares of Southwest Airlines in my passive large cap portfolio for a dozen years and I have no intention of selling (and paying huge capital gains) because of...
by Wagnerjb
Mon Sep 22, 2014 12:41 pm
 
Forum: Investing - Theory, News & General
Topic: Southwest Airlines Engulfing, Reversal Candle Signals Downsi
Replies: 55
Views: 3547

Re: IRS Relents! Notice 2014-54 permits Basis Isolation

Alan - many thanks for posting this and highlighting the implications for us. It seems that while this is an improvement for many, it won't allow a Boglehead to cherry-pick his after-tax money out of his 401k plan. Let's say he has $200,000 in his 401k plan, of which $20,000 is after-tax money. He w...
by Wagnerjb
Fri Sep 19, 2014 8:47 am
 
Forum: Personal Finance (Not Investing)
Topic: IRS Relents! Notice 2014-54 permits Basis Isolation
Replies: 99
Views: 10396

Re: Randomly-weighted stock portfolios beat the index

If I were reviewing this for a journal I would insist on a running two additional tests: 1) Test the market-cap weight portfolio against a set of random- weight portfolios that are centered around market-cap weights , and 2) Test the random-weight portfolios in the current draft against a pure equa...
by Wagnerjb
Mon Sep 15, 2014 9:08 am
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 2106

"Money for Nothing", a stock pick from Morningstar

I was cleaning out old e-mails and I had saved an article from Morningstar in 2009 where the author insisted that the "inefficient market serves up a (near) freebie". http://news.morningstar.com/articlenet/article.aspx?id=303719 We subsequently purchased Myriad Pharmaceuticals (MYRX) for a...
by Wagnerjb
Fri Sep 12, 2014 12:33 pm
 
Forum: Investing - Theory, News & General
Topic: "Money for Nothing", a stock pick from Morningstar
Replies: 2
Views: 604

Re: Options vesting period coming to close, need advice

2) The estimated income from option #1 would increase my net worth by about 75% If you are 25 years old and your net worth is $2,000 I might recommend one course of action. If you are 55 years old and your net worth is $800,000 I would recommend a drastically different course of action. For the 25 ...
by Wagnerjb
Fri Sep 12, 2014 8:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Options vesting period coming to close, need advice
Replies: 8
Views: 525

Re: Churning Account

My father-in-law fell victim to a similar fate. He was in his 70's and was a widower, and I took a look at his brokerage statements once and noticed the volume of trades was rather high. I called the broker and complained, but the broker insisted that the FIL had approved every trade. I asked my FIL...
by Wagnerjb
Tue Sep 09, 2014 12:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Churning Account
Replies: 1
Views: 392

Re: An inefficient market creating drag on index returns

They are certainly not hedging the front running with options, as someone had suggested earlier. Can you prove that statement? I know that Vanguard and other indexers do use options, at least to manage cash flow. Not off hand but their tracking error would be a lot higher if they were. They may eng...
by Wagnerjb
Tue Sep 02, 2014 8:07 pm
 
Forum: Investing - Theory, News & General
Topic: An inefficient market creating drag on index returns
Replies: 54
Views: 4003

Re: An inefficient market creating drag on index returns

Gus Sauter of Vanguard has indicated that he believes their S&P500 fund (and all others I assume) lose 25bps to front running of the index. Owning the Total Stock Market index fund probably minimizes front-running, but that requires you to own a plain vanilla portfolio. If you want to tilt to hi...
by Wagnerjb
Tue Sep 02, 2014 10:51 am
 
Forum: Investing - Theory, News & General
Topic: An inefficient market creating drag on index returns
Replies: 54
Views: 4003

Re: DIY Index Fund

The best part about doing this would be the 0% expense ratio and only paying for transaction fees which for several brokers are inexpensive or free depending on how large your portfolio is. I am not sure this strategy is worthwhile if you are only saving the ER. You better be generating significant...
by Wagnerjb
Tue Sep 02, 2014 9:06 am
 
Forum: Investing - Theory, News & General
Topic: DIY Index Fund
Replies: 25
Views: 2525

Re: Process to gift securities to UGMA

In paying for educational expenses, I don't think it matters who actually pays. If you pay, be sure to keep a good record of the payments, and reimburse yourself from the UGMA. Obviously, it is better to have the UGMA pay directly if that is practical. I don't see anything wrong with your plan. Howe...
by Wagnerjb
Tue Sep 02, 2014 8:09 am
 
Forum: Personal Finance (Not Investing)
Topic: Process to gift securities to UGMA
Replies: 7
Views: 433

Re: How to become a millionaire retiree -- then and now

Why only a 30-year working career? If the person has a four year college education and then a 30-year career, they are retiring in their very early 50's. I would call that retiring quite early. Try running the models with a 40-year working career (which would also qualify as retiring early). I bet y...
by Wagnerjb
Sun Aug 31, 2014 1:00 pm
 
Forum: Investing - Theory, News & General
Topic: How to become a millionaire retiree -- then and now
Replies: 67
Views: 10237

Re: Do Bogleheads worry about institutional risk?

I keep the majority at Vanguard but I also keep a decent amount at Fidelity for exactly the reasons you suggest.

Best wishes.
by Wagnerjb
Thu Aug 28, 2014 9:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Do Bogleheads worry about institutional risk?
Replies: 33
Views: 1811

Re: 401(k) poll - lawyer/oil and gas worker/airline employee

Most small E&P companies pay well and have generous benefits. This is to make up for the fact that they probably won't be around more than a few years When I graduated in the early 1980's, most of us wanted to go to growing industries. My colleagues went to biomedical and tech industries, while...
by Wagnerjb
Thu Aug 28, 2014 8:59 am
 
Forum: Personal Finance (Not Investing)
Topic: 401(k) poll - lawyer/oil and gas worker/airline employee?
Replies: 29
Views: 1844

Re: Motif Investing - own the S&P500 for less

TLH will burn fees, so they're work opposite of saving fees. TLH is free if you don't pay commissions...and many people don't pay commissions these days. As a Flagship member at Vanguard, I sure don't. If you plan to cash out, and eventually pay taxes, I don't see tax deferment as a huge savings, u...
by Wagnerjb
Thu Aug 28, 2014 8:09 am
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 93
Views: 7363

Re: Motif Investing - own the S&P500 for less

I agree that at the 5bp level, you'll probably not get many takers for the time-vs-reward tradeoff. Agreed. In my opinion, the only way this makes sense is for the tax benefits. With the updated TLH value being worth ~50bp extra (not included in my original estimates), now you're talking $5k/year (...
by Wagnerjb
Wed Aug 27, 2014 4:31 pm
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 93
Views: 7363

Re: Motif Investing - own the S&P500 for less

More generally, I'd like to discuss any cost or benefit factors I may have overlooked, as well as practical aspects to implementing this approach to index investing. One factor to consider is your ability to diversify away from your employer. You may have employer stock options, or you may have Res...
by Wagnerjb
Wed Aug 27, 2014 2:49 pm
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 93
Views: 7363

Re: Kitces - Think Twice about those Conversions

Alan: I have been harping on this risk since the day I joined the old forum at Morningstar in 2002. As you indicate, it really only applies to those with higher incomes and asset levels. But anybody who has been paying attention to AMT, taxation of social security, phase outs of deductions and exemp...
by Wagnerjb
Fri Aug 22, 2014 12:16 pm
 
Forum: Investing - Theory, News & General
Topic: Kitces - Think Twice about those Conversions
Replies: 15
Views: 3085

Re: Kitces - Think Twice about those Conversions

I appreciate the link. I found the example he gave to be laughable. He described a married couple with income of $350,000 a year and $15,000 of itemized deductions. I can't imagine someone with that income having only $15,000 of deductions. Is there any state in the union that has taxes that low? E...
by Wagnerjb
Fri Aug 22, 2014 8:59 am
 
Forum: Investing - Theory, News & General
Topic: Kitces - Think Twice about those Conversions
Replies: 15
Views: 3085
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