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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 3:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Fund sales: Covered vs Non Covered question?
Replies: 4
Views: 607

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 9:48 am
 
Forum: Personal Finance (Not Investing)
Topic: 39.6% Tax Bracket :(
Replies: 23
Views: 4196

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 3:03 pm
 
Forum: Investing - Theory, News & General
Topic: Bad Stock-Market Timing Fueled Wealth Disparity
Replies: 9
Views: 1062

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 12:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: Donee Unable to Accept Stock
Replies: 22
Views: 1885

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 7:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRS Relents! Notice 2014-54 permits Basis Isolation
Replies: 85
Views: 8375

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 5:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Question about Excluding the Gain from Sale of Home
Replies: 5
Views: 329

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 1:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRS Relents! Notice 2014-54 permits Basis Isolation
Replies: 85
Views: 8375

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 8:58 am
 
Forum: Personal Finance (Not Investing)
Topic: IRS Relents! Notice 2014-54 permits Basis Isolation
Replies: 85
Views: 8375

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 9:02 am
 
Forum: Investing - Theory, News & General
Topic: Wealthfront updates tax loss harvesting software
Replies: 11
Views: 1002

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 8:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1451

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 4:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1451

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 11:57 am
 
Forum: Personal Finance (Not Investing)
Topic: Using a Lump Sum Pension to buy Real Estate: 2 Options
Replies: 5
Views: 327

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 9:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1451

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 11:41 am
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1451

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 1:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Minimizing AMT impact
Replies: 18
Views: 1975

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 12:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Relatively new here. What did you do in 2008/09
Replies: 106
Views: 7008

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 9:15 am
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1451

Re: Headed for a 300+ point loss today?

I don't know. I don't care.
by Wagnerjb
Thu Oct 09, 2014 12:57 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 445
Views: 30462

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 1:28 pm
 
Forum: Investing - Theory, News & General
Topic: What was your initial AA and how has that worked out?
Replies: 32
Views: 2510

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 3:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: What bumps were along your road?
Replies: 44
Views: 3133

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 2:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Fidelity Offers A Round-Trip to Europe for New Account
Replies: 26
Views: 3087

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 7:19 am
 
Forum: Personal Finance (Not Investing)
Topic: Experience with big spike in earnings (stock options)
Replies: 8
Views: 1001

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 1:41 pm
 
Forum: Investing - Theory, News & General
Topic: Southwest Airlines Engulfing, Reversal Candle Signals Downsi
Replies: 55
Views: 3469

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 9:47 am
 
Forum: Personal Finance (Not Investing)
Topic: IRS Relents! Notice 2014-54 permits Basis Isolation
Replies: 85
Views: 8375

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 10:08 am
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 2065

"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 1:33 pm
 
Forum: Investing - Theory, News & General
Topic: "Money for Nothing", a stock pick from Morningstar
Replies: 2
Views: 601

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 9:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Options vesting period coming to close, need advice
Replies: 8
Views: 516

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 1:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Churning Account
Replies: 1
Views: 386

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 9:07 pm
 
Forum: Investing - Theory, News & General
Topic: An inefficient market creating drag on index returns
Replies: 54
Views: 3921

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 11:51 am
 
Forum: Investing - Theory, News & General
Topic: An inefficient market creating drag on index returns
Replies: 54
Views: 3921

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 10:06 am
 
Forum: Investing - Theory, News & General
Topic: DIY Index Fund
Replies: 25
Views: 2464

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 9:09 am
 
Forum: Personal Finance (Not Investing)
Topic: Process to gift securities to UGMA
Replies: 7
Views: 413

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 2:00 pm
 
Forum: Investing - Theory, News & General
Topic: How to become a millionaire retiree -- then and now
Replies: 67
Views: 10137

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 10:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Do Bogleheads worry about institutional risk?
Replies: 33
Views: 1796

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 9:59 am
 
Forum: Personal Finance (Not Investing)
Topic: 401(k) poll - lawyer/oil and gas worker/airline employee?
Replies: 29
Views: 1826

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 9:09 am
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 91
Views: 6626

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 5:31 pm
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 91
Views: 6626

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 3:49 pm
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 91
Views: 6626

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 1:16 pm
 
Forum: Investing - Theory, News & General
Topic: Kitces - Think Twice about those Conversions
Replies: 15
Views: 3045

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 9:59 am
 
Forum: Investing - Theory, News & General
Topic: Kitces - Think Twice about those Conversions
Replies: 15
Views: 3045

Re: Why don't utilities get any praise

Thanks to a recent thread by Gambler, I recently learned that utilities pays the highest dividend among all the Vanguard funds at 3.5%. For investors seeking income, why is it that utilities are not really suggested or brought up? It's usually bonds or REITs for income. I declare my own dividends, ...
by Wagnerjb
Fri Aug 22, 2014 9:15 am
 
Forum: Investing - Theory, News & General
Topic: Why don't utilities get any praise
Replies: 39
Views: 3836

Re: Pay cash for flight on sale, or use FF mileage quandry

I usually convert FF miles to dollars at 1 cent per FF mile, so anytime I get a flight for less than 1 cent a mile, I pay cash. I do the same. Also, keep in mind that you might need the miles some day for an urgent trip. If you find yourself needing to (for example) go to a funeral you will probabl...
by Wagnerjb
Fri Aug 22, 2014 8:43 am
 
Forum: Personal Consumer Issues
Topic: Pay cash for flight on sale, or use FF mileage quandry
Replies: 30
Views: 2253

Re: Way to maximize Retirement Savings Contribution Credit

So basically my best bet is to wait until tax time to find out the exact figure of what will maximize her tax credit. Then we can go from there. That's exactly what I do for my son. He is independent (barely) and not earning a significant amount....certainly not enough to save $2,000 in an IRA. But...
by Wagnerjb
Wed Aug 20, 2014 5:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Way to maximize Retirement Savings Contribution Credit
Replies: 11
Views: 621

Re: To be truly rich, take stock of your life before investi

Investing and LBYM leads to financial independence, which means freedom. It's as simple as that. Well said. I agree completely. Nobody is going to get rich working for $60,000 for 40 years - even if you save every dime. The truly rich achieve their status through high earnings power, not through &q...
by Wagnerjb
Wed Aug 20, 2014 3:19 pm
 
Forum: Investing - Theory, News & General
Topic: To be truly rich, take stock of your life before investing
Replies: 30
Views: 4617

Re: [live off dividends?] How the rich stay/get richer??

The rich are not rich because of dividends. It's because they work harder and are willing to take more risks than others. Perhaps a little luck helps, but it would be an anomaly for someone to make $2 million dollars one year and then drop everything to sit back and collect dividends. JT Having the...
by Wagnerjb
Wed Aug 20, 2014 11:41 am
 
Forum: Investing - Theory, News & General
Topic: [live off dividends?] How the rich stay/get richer??
Replies: 62
Views: 5074

Re: How the rich stay/get richer??

The example I'm thinking of is someone who can live off $40,000 in dividends might need $2 mil if invested in the total stock market index fund (dividend yield is around 2%?) Since the person has no need to tap principal they can invest for maximum growth (i.e., put it all in the total stock market...
by Wagnerjb
Tue Aug 19, 2014 10:08 pm
 
Forum: Investing - Theory, News & General
Topic: [live off dividends?] How the rich stay/get richer??
Replies: 62
Views: 5074

Re: HSA account debit cards for suckers?

I use the strategy that you suggest. I use my Visa card to pay for medical expenses, then I withdraw funds periodically from the HSA using a check. Seems like free money (or points) to me. This doesn't require any more bookkeeping by me, since I have always maintained a simple Excel spreadsheet with...
by Wagnerjb
Sat Aug 16, 2014 8:38 am
 
Forum: Personal Finance (Not Investing)
Topic: HSA account debit cards for suckers?
Replies: 5
Views: 999

Re: Are these 401l options terrible?

If the AMC/Asset fee is truly a cost that you - the employee - pays, then the plan is horrible due to the very high costs of all of the funds. And....if there is no company match, just skip the plan altogether. Not a hard decision, unless the AMC/Asset fee is something other than what it appears to ...
by Wagnerjb
Wed Aug 13, 2014 5:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Are these [401k] options terrible?
Replies: 28
Views: 2154

Re: "Cost" of foreign tax on international investing

A related conundrum: what is the "return" of an international fund? Is it the return net after withholding for foreign taxes, or should the hidden foreign tax be considered part of the return? For better or worse, fund companies are required to report the former. Fund returns are net afte...
by Wagnerjb
Tue Aug 12, 2014 9:36 am
 
Forum: Investing - Theory, News & General
Topic: "Cost" of foreign tax on international investing
Replies: 19
Views: 1453

Re: "Cost" of foreign tax on international investing

Irrelevant in what sense? You want to know what your tax liability will be when you hold $100 worth of international fund X in taxable versus $100 of something else. That's a key factor in fund placement decisions. I certainly agree that you want to know your tax liability. Of course. But for the g...
by Wagnerjb
Tue Aug 12, 2014 8:53 am
 
Forum: Investing - Theory, News & General
Topic: "Cost" of foreign tax on international investing
Replies: 19
Views: 1453
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