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Re: Tax Planning for 2015

Living in CA (SF Bay area) 2. Use HSA if available CA does not recognize HSAs, so the HSA will save you on federal but not state taxes. (It's still likely to be a good deal.) Interest on the HSA will be taxed by CA, but the amount will be trivial if you are just getting started and have a bank acco...
by grabiner
Mon Dec 22, 2014 12:22 am
 
Forum: Personal Finance (Not Investing)
Topic: Tax Planning for 2015
Replies: 7
Views: 1505

Re: Stolen car recovered, need a plan

I would donate the car, and bunch up deduction this year. (prop tax and charitable deductions) Is using Kelley Blue Book or NADA value for such a car acceptable to the IRS for Fair market value on a stolen car? If you're talking about charitable donations, the charity is usually required to give yo...
by grabiner
Sun Dec 21, 2014 10:33 pm
 
Forum: Personal Consumer Issues
Topic: Stolen car recovered, need a plan
Replies: 25
Views: 2475

Re: Car purchase: Buy or Finance

Something that might be helpful, car dealerships make more money with their finance departments than the actual sales of the cars. So of course, they want you to choose financing. And whoever said to put down payment so you don't feel obligated to get GAP: Don't make the down payment and keep it ea...
by grabiner
Sun Dec 21, 2014 10:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Car purchase: Buy or Finance
Replies: 24
Views: 2263

Re: Do I Pay Cash for my home?

You'll save thousands just in closing costs by paying all cash (1 to 3% of purchase price). Plus the interest. Total interest saved on 30 year loan @ 4% = $178k Total interest saved on 15 year loan @ 3.3% = $66k It never makes sense to pay $1 in interest in order to take a tax deduction worth up to...
by grabiner
Sun Dec 21, 2014 10:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I Pay Cash for my home?
Replies: 33
Views: 2302

Thoughts on real estate allocation and owning your home

I have seen advice that you should have a lower REIT allocation if you own your home, because you have your own exposure to real estate. Since I don't recommend viewing your home as an investment, I believe this is mostly incorrect. However, you might have a higher REIT allocation if you currently r...
by grabiner
Sun Dec 21, 2014 10:02 pm
 
Forum: Investing - Theory, News & General
Topic: Thoughts on real estate allocation and owning your home
Replies: 4
Views: 615

Re: Tax Gain Harvesting Question

I think the OP may be referring to: https://personal.vanguard.com/us/insights/article/vg-investment-policies-022014 Our frequent-trading policy restricts fund investors from making rapid out-and-back round trips. It prohibits shareholders who redeem or exchange any amount out of a Vanguard mutual f...
by grabiner
Sun Dec 21, 2014 9:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Gain Harvesting Question
Replies: 5
Views: 693

Re: Need Cash if Hold Target or LS Fund ?

The strategy you are considering is a variation of Placing cash needs in a tax-advantaged account . If you need to sell $10,000 in bonds and don't have any bonds to sell, you could sell $20,000 of LifeStrategy Conservative Growth (which is 40% stock), spend $10,000, and buy $10,000 of LifeStrategy G...
by grabiner
Sun Dec 21, 2014 9:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need Cash if Hold Target or LS Fund ?
Replies: 6
Views: 525

Re: What "actively" managed funds do you own?

I am all-index now, but I have held actively managed funds when they were the best way to get the asset-class exposure I wanted, and some mistakes when getting started. Of the non-mistakes: Vanguard Growth and Income (1998): My first investment in a Roth IRA; Vanguard charged a $10 fee for index fun...
by grabiner
Sun Dec 21, 2014 9:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: What "actively" managed funds do you own?
Replies: 76
Views: 3590

Re: Question about Tax Deferred / Taxable Acct Allocations

Is it always best to use tax deferred accounts for bonds and taxable accounts for stocks? Here is my situation. I have roughly equal amounts (over $1.5 million each) in a Schwab Taxable account and the rest in tax deferred accounts (mainly a Schwab IRA rollover plus other employer linked accounts w...
by grabiner
Sun Dec 21, 2014 9:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about Tax Deferred / Taxable Acct Allocations
Replies: 5
Views: 722

Re: How would 84 year old lady manage $400,000 from house so

At 84, she may be too old for an annuity, but if she can get an inflation-indexed annuity, this would cover her rent even if inflation is high and thus rents go up. She would buy an annuity to pay the $1500 per month, and leave the rest of the money invested in something simple such as a bond fund o...
by grabiner
Sun Dec 21, 2014 8:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: How would 84 year old lady manage $400,000 from house sold
Replies: 14
Views: 1214

Re: Help me understand taxes with non-retirement accounts

DSInvestor wrote:What are they doing for health insurance? If they're buying through the healthcare exchange and want to get a subsidy, they may need to file tax returns.


Given the Social Security and ages, they are presumably on Medicare, not the health insurance exchange.
by grabiner
Fri Dec 19, 2014 11:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help me understand taxes with non-retirement accounts
Replies: 29
Views: 2506

Re: Home Mortgage payoff

The real (inflation adjusted) after-tax cost of the mortgage is less than 1%. You know the expected results: it will come out in favor of the investments. The key word here is "expected". You do expect higher returns from stocks than from bonds, but you probably aren't planning to sell al...
by grabiner
Thu Dec 18, 2014 10:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: Home Mortgage payoff
Replies: 22
Views: 2464

Re: State tax deducation & AMT

I still think there may be a glitch in the TT program in the way it runs the calculation. In simple words, if the deduction reduces your tax by more than zero, then tax benefit and refund taxable. That is correct as I understand it, the tax benefit rule for AMT is an all or nothing rule. Bsteiner, ...
by grabiner
Thu Dec 18, 2014 10:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: State tax deducation & AMT
Replies: 31
Views: 2860

Re: Help me understand taxes with non-retirement accounts

I'm pretty sure their SS is between $18K-$22K (not exactly sure) and it looks like there are $6000 worth of dividends from their 1099-DIV, half of which are qualified dividends. $250 in capital gains. Those are the only sources of their only income. This is too little to require them to pay federal...
by grabiner
Wed Dec 17, 2014 11:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help me understand taxes with non-retirement accounts
Replies: 29
Views: 2506

Re: On average, how often do you check your investment balan

I check whenever I need to. If I am about to make a new investment (taxable or Roth IRA), I need to check my balances to decide where to put the money; it goes into the most underweighted available asset class. Also, if the market has dropped, I check occasionally whether I need to tax-loss harvest....
by grabiner
Wed Dec 17, 2014 11:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: On average, how often do you check your investment balances?
Replies: 53
Views: 3310

Re: For you slicers/dicers out there [rebalancing/adding new

I have automatic investments only in my employer plan, which is natural because I invest from every paycheck. Since I hold all my bonds there, I set my contribution in an effort to keep my bond allocation constant. For example, when I held 10% bonds, and half my new investments were in the employer ...
by grabiner
Wed Dec 17, 2014 10:41 pm
 
Forum: Investing - Theory, News & General
Topic: For you slicers/dicers out there [rebalancing/adding new $]
Replies: 20
Views: 1895

Re: Vanguard's stockpickers outperform.... [news article]

Hi: Vanguard's stockpickers outperform despite firm's passive push - Yahoo Finance UK Over the last three years, 20 out of Vanguard's 30 actively managed stock funds outperformed their benchmarks by an average of 1.1 percentage points a year, according to Lipper data For most firms, such performanc...
by grabiner
Wed Dec 17, 2014 10:31 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard's stockpickers outperform.... [news article]
Replies: 14
Views: 1935

Re: Fund placement across 401(k), Roth IRA, taxable

Just one last question: Is it typically advisable to adjust the 401(k) and taxable balances by 1-marginal tax rate? I do; see Tax-adjusted asset allocation on the wiki. It is a significant effect for me because I have a large Roth IRA, and hold different asset classes in the Roth from those in my o...
by grabiner
Wed Dec 17, 2014 10:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Fund placement across 401(k), Roth IRA, taxable
Replies: 21
Views: 1699

Re: Vanguard High-Yield Corporate Bond Fund (VWEAX) ?

Anyone have a opinion on how much lower Vanguard High-Yield Corporate Bond Fund (VWEAX) will drop. Its down about 3.5% this year and down about 35 cents from this years high of $6.17. Thanks ! VWEAX is not a growth oriented investment. If you look at its historical price, it is fairly flat. So I wo...
by grabiner
Wed Dec 17, 2014 10:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard High-Yield Corporate Bond Fund (VWEAX) ?
Replies: 15
Views: 1489

Re: Help me understand taxes with non-retirement accounts

Thanks for all the quick replies, I REALLY appreciate it. So let me get this straight, every year, they need to pay income taxes on both funds, less with Total Stock Market and more with Total Bond? Only on the amount distributed. If a fund pays a $5000 dividend, they will pay taxes on that $5000 d...
by grabiner
Wed Dec 17, 2014 10:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help me understand taxes with non-retirement accounts
Replies: 29
Views: 2506

Re: What is the best strategy for HSA?

The CA tax issue that grabiner brings up is something I don't have expertise on, but my instinct tells me that equity returns probably trump state tax concerns. Your investments are all one portfolio. If you are going to hold TIPS, then holding TIPS in your HSA and stocks in your Roth IRA (or your ...
by grabiner
Wed Dec 17, 2014 9:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: What is the best strategy for HSA?
Replies: 6
Views: 1431

Re: Foreign tax credit if I sell?

I seem to remember some situation where you can end up with only a little foreign sourced income (capital gains on foreign stocks are still US gains), and so the FTC is limited to some similar tax rate to your regular one but on that small foreign income amount. This is the rule. If you pay 10% of ...
by grabiner
Wed Dec 17, 2014 9:48 pm
 
Forum: Investing - Theory, News & General
Topic: Foreign tax credit if I sell?
Replies: 14
Views: 1362

Re: State tax deducation & AMT

Part of the issue is that the terminology is confusing. There are two tax rules, with different tax rates and deductions: the regular rules, and the AMT rules. You compute your tax under the AMT rules to find your Tentative Minimum Tax (TMT). If the TMT is less than the regular tax, you pay the regu...
by grabiner
Wed Dec 17, 2014 12:21 am
 
Forum: Personal Finance (Not Investing)
Topic: State tax deducation & AMT
Replies: 31
Views: 2860

Re: TLH question

I guess I dont understand this. I also did a tax loss exchange from VTIAX to VFWAX on 10/15. If I today switch back, I would avoid the dividend on VFWAX, but I would pick up the non-qualified dividend on VTIAX. What am I missing? How did you keep your dividends qualified? If you hold a fund share f...
by grabiner
Wed Dec 17, 2014 12:14 am
 
Forum: Investing - Help with Personal Investments
Topic: TLH question
Replies: 6
Views: 676

Re: How long should I wait to convert to Roth

Your account balance isn't affected by the timing of the conversion relative to market movements; your Roth IRA balance will be equal to your traditional IRA balance at the time of conversion, whether the market rises or falls before you convert. (Actually, if the market rises, it would hurt you by ...
by grabiner
Wed Dec 17, 2014 12:10 am
 
Forum: Investing - Help with Personal Investments
Topic: How long should I wait to convert to Roth
Replies: 3
Views: 703

Re: Inovative way to maximize company 401K match.

Seems like I was on the same page as many of you. The 401K is a Roth, I forgot to mention that. Is it Roth only, or do you have a traditional option? If you have a traditional option, it's better to use that option when you can't get the full match on the Roth, as this allows you to get a larger ma...
by grabiner
Wed Dec 17, 2014 12:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Inovative way to maximize company 401K match.
Replies: 13
Views: 1745

Re: What is the best strategy for HSA?

Wiki article link: Health Savings Account If you are maxing out your retirement plans, it's better to let the HSA grow tax-deferred and pay medical expenses out of pocket. You would then treat the HSA as if it were part of your IRA; thus, if you choose to hold bonds in your HSA, you can hold fewer b...
by grabiner
Wed Dec 17, 2014 12:04 am
 
Forum: Investing - Help with Personal Investments
Topic: What is the best strategy for HSA?
Replies: 6
Views: 1431

Re: Upcoming distributions and TLH

If the dividend is qualified (holding for 61 days) does it make sense to capture the dividend as long as it is not re-invested and do the TLH the day after to capture a bigger loss? Yes, particularly for an international fund; you get the foreign tax credit as well. Your capital loss will increase ...
by grabiner
Tue Dec 16, 2014 11:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Upcoming distributions and TLH
Replies: 17
Views: 1317

Re: Foreign tax credit if I sell?

Under some situations, you may not be able to take the FTC, or only take it a little bit each year. There's a deduction available, but it's much worse than a credit (worth 1/3 as much, give or take). This is unlikely if your foreign tax is only from mutual funds. Typically, the foreign tax is about...
by grabiner
Tue Dec 16, 2014 11:48 pm
 
Forum: Investing - Theory, News & General
Topic: Foreign tax credit if I sell?
Replies: 14
Views: 1362

Re: Should I surrender my annuity and whole life policy?

Variable annuities don't get much love on this site, but you have high earning power and a long time horizon. A low cost VA is probably not a bad thing in your situation. It wouldn't be such a bad thing, except that he is not maxing out his 401(k) and IRA yet: I am about to qualify for a pension an...
by grabiner
Tue Dec 16, 2014 1:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Should I surrender my annuity and whole life policy?
Replies: 17
Views: 1246

Re: Dilemma with Turbo Tax & NJ-Lady Geek, Grabiner, others?

I don't know how to make this adjustment in NJ. I lived in NJ but didn't own any Qualified Investment Funds. If you make the correction as suggested, and include a note for your own records, it shouldn't cause a problem. The 1099 that you store with your TurboTax isn't sent to the IRS, so it doesn't...
by grabiner
Tue Dec 16, 2014 12:45 am
 
Forum: Personal Finance (Not Investing)
Topic: Dilemma with Turbo Tax & NJ-Lady Geek, Grabiner, others?
Replies: 1
Views: 510

Re: Pay down mortgage or save for next house

The key is that you will be able to get at that equity when you need it. If you buy another house while waiting to sell the current one, you can take out the equity with a bridge loan or home-equity loan to get your down payment; the rate may be higher than on your current mortgage, but it won't mat...
by grabiner
Tue Dec 16, 2014 12:18 am
 
Forum: Personal Finance (Not Investing)
Topic: Pay down mortgage or save for next house
Replies: 3
Views: 624

Re: Five questions to determine Financial Health

I fail #4. I don't have 10% of my own net worth in safe and liquid assets. I do have more than 10% of my net worth in bonds, but those bonds are all in my retirement accounts; my taxable account is all stock except for a money-market fund, and the money-market fund plus my checking account is nowher...
by grabiner
Tue Dec 16, 2014 12:15 am
 
Forum: Personal Finance (Not Investing)
Topic: Five questions to determine Financial Health
Replies: 7
Views: 979

Re: Foreign tax credit if I sell?

If you are thinking of hanging on just to get the foreign tax credit, don't. Lets assume $51 NAV and a $3 dividend soon. After the dividend, you will have a $48 NAV, $2 in cash, and a $1 tax credit. Still $51. The foreign tax credit is not part of the NAV loss, because it is money the fund has alre...
by grabiner
Mon Dec 15, 2014 11:50 pm
 
Forum: Investing - Theory, News & General
Topic: Foreign tax credit if I sell?
Replies: 14
Views: 1362

Re: Dollar Cost Averaging with commission free ETFs

If you buy an ETF which trades at a large spread, you may have a time cost rather than a dollar cost; you may have to wait half an hour to avoid losing a large spread on your trades. (I have had this happen several times when buying low-volume ETFs, but the half-hour is worthwhile when it saves me $...
by grabiner
Mon Dec 15, 2014 11:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Dollar Cost Averaging with commission free ETFs
Replies: 2
Views: 342

Re: Should I surrender my annuity and whole life policy?

The surrender charge on the annuity is already lost. If you wait for the charge to go away, you'll pay it to the insurance company in higher expenses. If you cash out the annuity, you will owe tax at your regular tax rate, plus a 10% penalty, but only the the gains, not the total amount. (You don't ...
by grabiner
Mon Dec 15, 2014 11:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should I surrender my annuity and whole life policy?
Replies: 17
Views: 1246

Re: Debt payoff scheme

What would be a good/quick liquid investment I could do? I was given a personal loan for $20,000 from my parents when I first graduated to help with buying a house. They want the money back in five years and I thought instead of just paying them the chunk of cash I could invest some money now and t...
by grabiner
Sun Dec 14, 2014 8:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Debt payoff scheme
Replies: 11
Views: 1062

Re: Help with seeing tax consequences, scenios for low incom

I graduated with my BA this summer. I have education expenses, and thus tax credits. I have to read on rules, especially since I had IRA distributions, but if I contribute to an IRA, and I didn't make much, can I get use the Saver's Credit? Not this year; see the Form 8880 instructions . If you are...
by grabiner
Sun Dec 14, 2014 8:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help with seeing tax consequences, scenios for low income
Replies: 7
Views: 916

Re: Does AMT affect using harvested loss against regular inc

You may have a different amount of capital gains and losses under AMT (for example, if you exercised an incentive stock option and thus have different regular and AMT basis for the stock), but the rules for the taxable amount are still the same: losses offset gains, up to $3000 of losses offsets reg...
by grabiner
Sun Dec 14, 2014 8:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does AMT affect using harvested loss against regular income?
Replies: 1
Views: 248

Re: Medical Necessity and the Insurance Appeals Process

If there was written proof that the insurance company authorized the testing then i would have the patient take his/her case to the state insurance commissioner. Agreed. In this case, the insurance company incorrectly authorized test. That is, they gave pre-approval for a test which was not covered...
by grabiner
Sun Dec 14, 2014 8:12 pm
 
Forum: Personal Finance (Not Investing)
Topic: Medical Necessity and the Insurance Appeals Process
Replies: 15
Views: 1138

Re: Roth IRA is not completely free of tax considerations?

(And the five-year rule applies only to when you opened the Roth. If you opened a Roth IRA in 2009 or earlier and are 59-1/2 now, you can withdraw all your gains tax free, even gains from your 2014 contribution. You would owe a 10% penalty on any taxable conversion from 2010-2014 withdrawn in 2014,...
by grabiner
Sun Dec 14, 2014 7:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA is not completely free of tax considerations?
Replies: 19
Views: 2470

Re: tax exempt muni fund questions

So the accounting would be different than it is for my other taxable account because any capital gains on the bond fund are taxable but the dividends are not? Does Vanguard track this or would I have to keep my own accounting? Your brokerage statement for any fund will have the information for the ...
by grabiner
Sun Dec 14, 2014 7:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: tax exempt muni fund questions
Replies: 13
Views: 1824

Re: Tax loss harvesting total int. etf (vxus)

am wrote:Do you know what the % are for veu and vss?


85% VEU and 15% VSS is a good approximation to the total stock market.
by grabiner
Sat Dec 13, 2014 11:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax loss harvesting total int. etf (vxus)
Replies: 5
Views: 521

Re: Bid-Ask spread

Any other words of wisdom on how to best deal with large spreads when buying/selling? Stay away from ETFs with big spreads. $1 spread on a $24 etf is like a 4.5% sales load. Also, don't use market orders. If anything place a limit order a few cents through the market. Never trade after hours as the...
by grabiner
Sat Dec 13, 2014 11:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bid-Ask spread
Replies: 7
Views: 816

Re: Roth IRA is not completely free of tax considerations?

A Roth withdrawal of gains on funds held for less than five year would be a taxable event. Or before age 59-1/2. (And the five-year rule applies only to when you opened the Roth. If you opened a Roth IRA in 2009 or earlier and are 59-1/2 now, you can withdraw all your gains tax free, even gains fro...
by grabiner
Sat Dec 13, 2014 11:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA is not completely free of tax considerations?
Replies: 19
Views: 2470

Re: TD Ameritrade portfolio help

Thank you Grabiner, in my haste I put Total World, forgetting that includes US, duh on my part. I should have put VEU Vanguard FTSE All-World ex-US Index Fund ETF Shares ER 0.15 as the International of the 3 fund I proposed. ( with VTI and BND) VEU is on the commission free trade list. What do you ...
by grabiner
Sat Dec 13, 2014 11:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: TD Ameritrade portfolio help
Replies: 15
Views: 899

Re: Debt payoff scheme

I have a 3% fixed loan that I once told myself I would never pay off early, given the low rate. The other day I considered again buying some EE bonds for the 20-year feature where they double in value, earning an effective PRE-tax 3.5%, which I get ONLY if I wait 20 year. Wait, what? Why wouldn't I...
by grabiner
Sat Dec 13, 2014 2:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Debt payoff scheme
Replies: 11
Views: 1062

Re: Debt payoff scheme

Welcome to the forum! See the Wiki article: Paying down loans versus investing Paying down your student loans gives you a risk-free return of 5.9%. Investing in a taxable account might give you a higher return, but only if you take a lot of risk; I would expect a 5.9% after-tax return on a portfolio...
by grabiner
Sat Dec 13, 2014 2:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Debt payoff scheme
Replies: 11
Views: 1062

Re: Car Loan vs Cash Flow

2.09% tax-free and risk-free earned in three years is a very good rate of return, and that's what the OP gets by paying down the car loan. It's equivalent to buying a three-year CD, at much better than the market rate. Yeah but if I had $35k in cash right now, I wouldn't invest it in a 3-year CD. I...
by grabiner
Sat Dec 13, 2014 2:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Car Loan vs Cash Flow
Replies: 22
Views: 1468

Re: investing advice

Welcome to the forum! In order to give good advice, we need more information about your situation; please follow the format in Asking Portfolio Questions and edit your first post. For example, I would recommend that you put part of your portfolio in the G fund to reduce risk, but I don't have a good...
by grabiner
Sat Dec 13, 2014 12:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: investing advice
Replies: 3
Views: 418
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