Search found 143 matches

by sdvan
Sun Feb 19, 2023 6:30 pm
Forum: Personal Investments
Topic: Tax Loss Harvesting And Potential Replacement Funds
Replies: 2
Views: 489

Re: Tax Loss Harvesting And Potential Replacement Funds

Thank you! I had searched and for some reason the wiki did not come up from my search.
by sdvan
Sat Feb 18, 2023 7:51 pm
Forum: Personal Investments
Topic: Tax Loss Harvesting And Potential Replacement Funds
Replies: 2
Views: 489

Tax Loss Harvesting And Potential Replacement Funds

I am planning some tax loss harvesting for portions of a few mutual fund holdings. I'd like to keep the money invested in something similar that still allows tax loss harvesting. I'd appreciate any thoughts on potential replacement funds for the following:

Fidelity
Total Market (FSKAX)--thinking S&P 500
Extended Market (FSMAX)
International Market (FSPSX)

Vanguard
International (VTIAX)
Total Stock (VTSAX)--thinking S&P 500
Cal. Intermediate Muni Fund (FCADX)--thinking I will just hold the funds for 30 days in Cal Muni Money Market and reinvest

Thanks for your thoughts!
by sdvan
Tue Feb 14, 2023 5:35 pm
Forum: Investing - Theory, News & General
Topic: Taxation of Treasury bills, notes and bonds
Replies: 1028
Views: 149526

Re: Taxation of Treasury bills, notes and bonds

Can I use a specific example to help understand: I recently purchased a .75% treasury note that matures on Dec. 31, 2023. I purchased at a discount and the yield to maturity should be 5.09%. I plan to hold this note to maturity. Based on prior threads, I suspect that the sale will show up as a 2024 sale. So, my 2023 tax implications should just be non-state taxable interest. The question I am wondering is how the sale proceeds will be handled. Will the proceeds be "interest", a combination of interest and capital gains, or capital gains? Will the proceeds be state tax free in California? Thanks for helping me understand by using an example. There's probably more information far upstream on this thread because it's been pretty tho...
by sdvan
Tue Feb 14, 2023 3:32 pm
Forum: Investing - Theory, News & General
Topic: Taxation of Treasury bills, notes and bonds
Replies: 1028
Views: 149526

Re: Taxation of Treasury bills, notes and bonds

Can I use a specific example to help understand:

I recently purchased a .75% treasury note that matures on Dec. 31, 2023. I purchased at a discount and the yield to maturity should be 5.09%. I plan to hold this note to maturity.

Based on prior threads, I suspect that the sale will show up as a 2024 sale. So, my 2023 tax implications should just be non-state taxable interest.

The question I am wondering is how the sale proceeds will be handled. Will the proceeds be "interest", a combination of interest and capital gains, or capital gains? Will the proceeds be state tax free in California?

Thanks for helping me understand by using an example.
by sdvan
Sat Feb 08, 2020 3:37 pm
Forum: Personal Finance (Not Investing)
Topic: Savings Bond Wizard File Saved to Calculator File in Chrome--Now Can't Make Changes?
Replies: 4
Views: 1283

Re: Savings Bond Wizard File Saved to Calculator File in Chrome--Now Can't Make Changes?

Thank you for the reminder. I also put most of my bonds into Treasury Direct. However, I held out a few paper bonds so that the totals don’t match (and I sometimes have a heart attack when I look at my TD bond total and I forget that I left out some of the bonds . . .).

So, it would still be nice to have the bond calculator because then everything would be in one place, as it was until I redeemed some bonds last month.
by sdvan
Sat Feb 08, 2020 1:25 pm
Forum: Personal Finance (Not Investing)
Topic: Savings Bond Wizard File Saved to Calculator File in Chrome--Now Can't Make Changes?
Replies: 4
Views: 1283

Savings Bond Wizard File Saved to Calculator File in Chrome--Now Can't Make Changes?

When Savings Bond Wizard stopped working, I switched my file to Savings Bond Calculator and saved in using Google Chrome. I just redeemed my first EE-bond since the change and I learned that Google Chrome is not supported for saving the file and any changes. I have tried to open the file using other browsers without any luck.

So, I came to this body of great knowledge in hopes that someone may have a solution. I have a very large number of bonds and it would take me many many hours to reenter them all in the new calculator.

Thanks for any thoughts!
by sdvan
Thu Mar 28, 2019 6:04 pm
Forum: Personal Investments
Topic: Considering No 401K Contribution or Profit Sharing For 2018
Replies: 21
Views: 2442

Re: Considering No 401K Contribution or Profit Sharing For 2018

Can you help me understand the benefit of a Roth contribution for 2018? I retired on March 1, 2019. My income will be lower going forward. I do plan to make some Roth conversions in the next few years. Wouldn't those be better than making Roth contributions for 2018 that would be taxed at a higher tax bracket? Pre-tax 401k contributions reduce your QBI, which effectively reduce the value of the pre-tax deduction. This moves the traditional vs. Roth decision point. If you are only saving 17.6% taxes with pre-tax 401k contributions would it be better to make Roth or traditional contributions. Most people would make Roth contributions for the higher QBI deduction. This all assumes that you are eligible for the QBI deduction. Thanks. I am elig...
by sdvan
Thu Mar 28, 2019 5:40 pm
Forum: Personal Investments
Topic: Considering No 401K Contribution or Profit Sharing For 2018
Replies: 21
Views: 2442

Re: Considering No 401K Contribution or Profit Sharing For 2018

One additional consideration for 2018 and later. That is the new 20% QBI deduction. Pre-tax employee deferrals and pre-tax employer contributions reduce your QBI which is that starting basis for your QBI deduction. There can be two opposite considerations depending on personal circumstance. If your business is a specified service trade or business SSTB, there is a taxable income phase out for 2018. For single taxpayer's it is $157,500 - $207,500 and MFJ taxpayers it is $315K - $415K. If you are in or above the phase out range it may actually help to increase your QBI deduction by making pre-tax contributions to decrease your taxable income even though it is decreasing your QBI. If you are fully eligible for the QBI deduction because either...
by sdvan
Thu Mar 28, 2019 5:37 pm
Forum: Personal Investments
Topic: Considering No 401K Contribution or Profit Sharing For 2018
Replies: 21
Views: 2442

Re: Considering No 401K Contribution or Profit Sharing For 2018

Yes, I thought about the QBI deduction. In fact, that is why I didn't make the 401K contribution earlier. And, yes, if I make additional profit sharing contributions, my QBI deduction goes down about $5K. But, my federal taxes are still $5.2K lower (including less in the medicare tax from obamacare) and my state taxes are $2.2K lower.

I'm having a hard time not taking the bird in the hand.
by sdvan
Thu Mar 28, 2019 3:48 pm
Forum: Personal Investments
Topic: Considering No 401K Contribution or Profit Sharing For 2018
Replies: 21
Views: 2442

Re: Considering No 401K Contribution or Profit Sharing For 2018

Another update:

My accountant just gave me my draft tax analysis. I ended up with higher income than anticipated (I know a good problem to have). I still have some profit sharing contributions that I can make. So, I am debating making a $23K profit sharing contribution to save $5200 on federal taxes and $2200 on state taxes.

I think it is almost a no brainer to go ahead and make the contribution and save the current taxes, right? I can always do a Roth conversion this year or later.

Anyway, before sending in the money for the profit sharing, I thought I'd see if anyone has thoughts on this new development. Thanks!
by sdvan
Fri Mar 08, 2019 2:39 pm
Forum: Personal Finance (Not Investing)
Topic: Quicken 2019 and forward
Replies: 1061
Views: 114307

Re: Quicken 2019 and forward

I've used Quicken for probably 20 years. But, I only use it to track my investments and track the cost basis. Is there any other tool available that would allow me to track cost basis going forward? I use Quicken perhaps quarterly to download my transactions and sometimes to help me decide what lot to donate to charity. Any other options?

I hate to start on the subscription treadmill with such limited use.
by sdvan
Mon Jan 21, 2019 7:48 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion and Capital Gains
Replies: 8
Views: 1171

Re: Roth Conversion and Capital Gains

Thanks for the replies and helpful thoughts. To answer a few questions: The $20K taxable income guesstimate is net of deductions, etc. Much of that is interest on CD's and savings that I plan to use for expenses. The $100K guesstimate is mostly dividends and LTCG's from index investment funds and similar after tax investments. So, I have limited flexibility to move things around and dramatically change this picture. Long term there is no doubt that I will pay a significant tax on my RMD's. I knew that going in. But, I was lucky enough to have a high enough income that it was well worth that cost to defer the tax and hopefully pay at a lower bracket when the money comes out. With that in mind, I was thinking through Roth conversions at lower...
by sdvan
Mon Jan 21, 2019 1:31 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion and Capital Gains
Replies: 8
Views: 1171

Re: Roth Conversion and Capital Gains

That is the ultimate question of course. But, it is hard to predict future rates and rmd’s. Thank you for confirming my math. I just hadn’t realized the loss of the 0% bracket until I started running the numbers. I am having a hard time giving up a bird in the hand without knowing for sure that I will pay significantly more later.
by sdvan
Sun Jan 20, 2019 8:22 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion and Capital Gains
Replies: 8
Views: 1171

Roth Conversion and Capital Gains

I will be closing my business in a few months. As a result, I will no longer have business income. Without business income, I am guesstimating that for a few years I will end up with approximately $20-30K/year in taxable income from interest and non-qualified dividends, plus around $100K in long-term capital gains/year. I also have significant balances in traditional IRA's. I was initially thinking that I would start Roth conversions, perhaps up to the 12% bracket or potentially higher. But, I am struggling with losing the 0% bracket for the capital gains. Am I looking at this correctly? Without any Roth conversion I would pay 10-12% on the $20-30K taxable income, 0% on $50-60K capital gains, and 15% on $40-50K capital gains. With Roth conv...
by sdvan
Fri Dec 07, 2018 2:28 pm
Forum: Personal Investments
Topic: Considering No 401K Contribution or Profit Sharing For 2018
Replies: 21
Views: 2442

Re: Considering No 401K Contribution or Profit Sharing For 2018

Thought that I would provide an update. I made my full 401K contribution and some profit sharing contributions earlier in the year. In hindsight now, I think I would not make those contributions. It turns out that I should be able to take advantage of the 20% deduction for this year. With that in mind, it is very unlikely that I will ever have a lower federal tax opportunity for the funds involved. Oh well, I still avoid the state taxes. I have decided to "retire" as of March 1, 2019. With that in mind, I am now considering Roth conversion options. That raises a question for me. Is there any advantage to creating a Roth 401K for 2018 and making the remaining allowed 401K contributions for 2018 into a new Roth 401K? I am thinking t...
by sdvan
Fri Jun 08, 2018 5:50 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401K Excess Employer Profit Sharing Contribution--Ugh
Replies: 21
Views: 3303

Re: Solo 401K Excess Employer Profit Sharing Contribution--Ugh

Thanks Spirit Rider. I filed an extension. So, at least I don't have to amend my personal return!

For next years Form 5330: I believe that all of the action would be on Schedule A. I would put my 2018 contributions on Line 1 and my allowable contributions on Line 2 (which would be at least $830 higher than Line 1), right? Then, I'd put $830 on line 4 as a nondeductible contribution made for a prior year. Then, I'd put $830 on line 7. Everything else would be zero including on Form 5330 itself. Do I have that right?
by sdvan
Fri Jun 08, 2018 4:14 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401K Excess Employer Profit Sharing Contribution--Ugh
Replies: 21
Views: 3303

Re: Solo 401K Excess Employer Profit Sharing Contribution--Ugh

I just filed my Form 5330 and paid my $83 in tax for overcontributing in 2017. My last question is whether I now need to change the amount that I claim on my personal 1040 for 2017? Can I still claim the entire $60K that was contributed on my personal 1040?
by sdvan
Wed May 02, 2018 4:53 pm
Forum: Investing - Theory, News & General
Topic: The Final, Definitive Thread on Brokerage Transfer Bonuses
Replies: 7737
Views: 1337835

Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

I am considering moving IRA assets to Merrill for the bonus. But, primarily as a way to qualify for higher cash back on the BofA credit card. I have a few questions: 1. I assume that my first step is to move $200K of my IRA assets (I will move some from a Fidelity rollover IRA) to Merrill using the best link I can find? It looks like I just missed the $900 cash back offer and that the current offer is $600. But, I also see references to a $1000 offer. Is there anything other than the $600 offer outstanding now? What happens to my taxes on the bonus money at BofA? 2. Set up a BofA checking account at the same time as the asset transfer hopefully using the bonus code for an extra $100. If I'm going to do this, I might as well go all the way. ...
by sdvan
Wed Apr 25, 2018 6:11 pm
Forum: Personal Investments
Topic: Considering No 401K Contribution or Profit Sharing For 2018
Replies: 21
Views: 2442

Re: Considering No 401K Contribution or Profit Sharing For 2018

I did some quick searches and it appears that 401K contributions do not stop social security or medicare payments on the contributed funds.

Nevertheless, after this discussion, I am planning to make 401K/profit sharing contributions for 2018. After considering the pros and cons, I don't think I know enough about my future RMD taxes to justify advancing the taxes to 2018.

Thanks for all of your thoughts!
by sdvan
Tue Apr 24, 2018 11:22 pm
Forum: Personal Investments
Topic: Considering No 401K Contribution or Profit Sharing For 2018
Replies: 21
Views: 2442

Re: Considering No 401K Contribution or Profit Sharing For 2018

Thank you for all of these points that I hadn’t considered. When you add FICA to my state taxes, that may be enough to go ahead and do the regular 401K contributions. My instincts are to defer taxes whenever possible. But, I was just wondering whether a 22% marginal tax rate was worth foregoing the deferral. However, I would pay a significant amount of taxes when you add state taxes and FICA taxes. Deferring all of those taxes seems like the way to go and is consistent with my instincts.
by sdvan
Tue Apr 24, 2018 2:53 pm
Forum: Personal Investments
Topic: Considering No 401K Contribution or Profit Sharing For 2018
Replies: 21
Views: 2442

Re: Considering No 401K Contribution or Profit Sharing For 2018

Retirement date is uncertain. I am down to less than 1/2 time. But, I will probably continue for at least a few years, probably several. That is one of my problems. I don't know the future. :? If I make 401K contributions this year and my tax rate is higher than 22% when I later am forced to take out that money, then I made a bad bet. In fact, a few years ago I was considering Roth conversions and was thinking that I might make them up to 25% because I thought that my tax rate would be higher than that in retirement. But, I didn't do any Roth conversions because I just couldn't get myself to "prepay" the taxes even if I might have a lower rate now. However, perhaps the biggest thing pushing me toward making the contribution is the...
by sdvan
Tue Apr 24, 2018 2:23 pm
Forum: Personal Investments
Topic: Considering No 401K Contribution or Profit Sharing For 2018
Replies: 21
Views: 2442

Considering No 401K Contribution or Profit Sharing For 2018

I am in the slow down phase of my work life. That combined with the new tax rates appear to leave me in the 22% federal bracket. (By the way, I still haven't found a good online tax calculator that handles the new 20% deduction for sole proprietors). I have large balances in a rollover IRA and a 401K that have caused me to worry about RMD's already. So, I am considering whether it is worth not making a 401K/profit sharing contribution for this year (and potentially into the future). Upside is that I don't make my RMD's even higher. Plus, the current tax rates are supposed to be temporary. Downsides are paying taxes now with an uncertain tax in the future. In addition, I live in a high tax state that counts capital gains income as ordinary i...
by sdvan
Fri Apr 20, 2018 3:14 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401K Excess Employer Profit Sharing Contribution--Ugh
Replies: 21
Views: 3303

Re: Solo 401K Excess Employer Profit Sharing Contribution--Ugh

The check did not arrive at my office until January 3, 2018. I presume that it was mailed on Dec. 28, 2017. However, it was in transit and not available to me until it was delivered to me on January 3, 2018. With the change in tax rates between 2017 and 2018, I would pay about $1000 if I say that I constructively received the payment in 2017. Yes, that would solve my excess contribution to my 401K/profit sharing. But, at a pretty significant cost. I reviewed the language about constructive receipt and I think I am correct to say that I received it in 2018. I just read the Form 5330 instructions and I think I can put this together and pay the $83 excise tax. That seems preferrable to paying an extra $1K in taxes, right? Can I confirm a few d...
by sdvan
Fri Apr 20, 2018 1:25 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401K Excess Employer Profit Sharing Contribution--Ugh
Replies: 21
Views: 3303

Re: Solo 401K Excess Employer Profit Sharing Contribution--Ugh

Thanks Spirit Rider. So, I think I am down to two options. 1. Treat the $30K as paid in 2017. I double checked and the check was dated Dec. 28, 2017. However, I didn't receive it until January 3rd. In the past, when the rates were the same for both years, my accountant has encouraged me to just treat the income as received in the earlier year because that avoids having to explain the difference in the 1099 amount on my return. However, this year we agreed that it made sense to treat the money as received in 2018 because of the change in tax rates. I calculate about a $1K difference in taxes. So, this option isn't very attractive other than it is simple and doesn't require spending money on my accountant. 2. File Form 5330 and pay the excise...
by sdvan
Fri Apr 20, 2018 12:15 am
Forum: Personal Finance (Not Investing)
Topic: Solo 401K Excess Employer Profit Sharing Contribution--Ugh
Replies: 21
Views: 3303

Re: Solo 401K Excess Employer Profit Sharing Contribution--Ugh

Sorry if this is a red herring. I did maximize my employee contributions first. Then, I put in the employer profit sharing. I am over $830 regardless. Would it help me if it were an excess employee contribution?

I had net earnings of $186K. I contributed $24K (including catch up) as employee 401K contributions and I contributed $36K as profit sharing. Two online calculators tell me that I contributed about $830 too much profit sharing.
by sdvan
Thu Apr 19, 2018 10:15 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401K Excess Employer Profit Sharing Contribution--Ugh
Replies: 21
Views: 3303

Re: Solo 401K Excess Employer Profit Sharing Contribution--Ugh

Thanks Spirit Rider! One follow up question: Could I recharacterize my “employer” contribution as an “employee” contribution? I submit all of the money I give to Fidelity on the same form (401K contributions and profit sharing). I do have to list what amounts go to what category. So, I think it could be tough to say that I overcontributed as an employee with the documentation showing that I directed the money be handled as profit sharing. Nonetheless, as I try to figure out the cheapest (read no accountant cost) resolution, I thought I’d at least ask this question. Thanks.
by sdvan
Thu Apr 19, 2018 6:04 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401K Excess Employer Profit Sharing Contribution--Ugh
Replies: 21
Views: 3303

Re: Solo 401K Excess Employer Profit Sharing Contribution--Ugh

In a quick look at the tax brackets for 2017/2018, it might only cost me about $150 in extra taxes if I could count $5K of my income as 2017 income. In the past, my accountant has suggested that we count income in the earlier year when it didn't make any tax rate difference. So, follow up question:

Could I count the January 2018 income as 2017 income? If so, do I have to count all of it ($30K)?

If I could just count $4,211.48 as 2017 income, that would only cost me about $127 in extra taxes. That would be worth it to me to avoid the $83 excise tax and to avoid having to figure all of this out and/or to pay my accountant a bunch of money to figure it out/fix the problem.

Is this a possibility?
by sdvan
Thu Apr 19, 2018 5:15 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401K Excess Employer Profit Sharing Contribution--Ugh
Replies: 21
Views: 3303

Solo 401K Excess Employer Profit Sharing Contribution--Ugh

It appears that I (as employer) over contributed profit sharing dollars to my solo 401K by $830.32 for 2017. I had two clients that sent checks on Dec. 31, 2017 that I didn't receive until 2018. That missing income left me just shy of the net earnings to cover my last 2017 profit sharing check of $3K. I've spent some time reading this site and searching the web for next steps. I also spoke with Fidelity's solo 401K folks. I have not yet contacted my accountant. I am trying to avoid spending a bunch of accountant money to correct such a minor error that I believe will cost me $83 in excise tax. I would love to ask this group some questions and for some advice: 1. Fidelity told me to send them a letter telling them that I made an excess contr...
by sdvan
Sat Nov 04, 2017 8:36 pm
Forum: Personal Investments
Topic: Bond Options
Replies: 9
Views: 2025

Re: Bond Options

I've been looking into one additional option. I can buy CD's in my Fidelity IRA from a huge number of banks. Why not buy a 5 year CD with a 2.4% rate as opposed to a Fidelity Bond fund with a duration longer than 5 years and a return over the last 5 years of less than 2%? With FDIC insurance, there is zero risk and inside an IRA there is no tax difference. If interest rates go up, I am happy because my bond fund value didn't go down and I can reinvest at the end of 5 years. If interest rates go down, I am happy to lock in a higher rate. It is certainly more work than a bond fund. But, not much work using the Fidelity website to buy CD's from a huge variety of banks. And, the available rates for new issue CD's appear to be very close to the ...
by sdvan
Wed Nov 01, 2017 7:59 pm
Forum: Personal Investments
Topic: Bond Options
Replies: 9
Views: 2025

Re: Bond Options

Thanks for the responses. In thinking about this I am really asking two questions (and debating them with myself): 1. I have over 20% of my portfolio in stocks in non-Roth IRA's and 401K's. I know traditional logic is to put bond funds in the tax deferred accounts to lower future RMD's. I have individual muni bonds that are being called early (gradually). I could take that money and buy stock in the after tax account and then sell stock in the IRA/401K to buy bond funds. The net result is that I then have the same amount of stock but it is in after tax and the same amount in bonds but it is now in the pretax and in a bond fund. This is appealing simply because I am starting to really worry about RMD craziness. So, the first question is shou...
by sdvan
Mon Oct 23, 2017 7:20 pm
Forum: Personal Investments
Topic: Bond Options
Replies: 9
Views: 2025

Bond Options

I have decided to buy bond mutual funds with the proceeds from individual California muni-bonds that are redeemed early. But, I'm struggling with deciding the right fund. Up to this point, I've put the money into Vanguard's Cal Tax exempt fund (VCADX) and I've been very happy with that fund. It does better than vanguard total bond and I don't have to pay tax on the distributions. Win/Win. However, I still have stocks in my IRA (long story). As a result, I've been considering Vanguard's total bond (VBTLX). Also, many of the bonds are held at fidelity. As a result, it would be easiest to buy Fidelity funds and I could use this opportunity to buy bonds in the IRA and buy stock in the after tax accounts. I have looked at Fid US Bond (FSITX) and...
by sdvan
Fri Feb 10, 2017 2:52 pm
Forum: Investing - Theory, News & General
Topic: The Final, Definitive Thread on Brokerage Transfer Bonuses
Replies: 7737
Views: 1337835

Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Earl Lemongrab wrote:As new accounts can be opened with the offer code automatically applied, I would suggest that you and your spouse both just open individual accounts and see what happens.
I think that I will try this. For $100K Schwab gives $500. Most competitors are $200K for $600. So, only $100 lost and no need to leave the money there. The tricky part is that the funds are coming from a Trust account. I'm not sure that will fly and that is why I called initially.
by sdvan
Thu Feb 09, 2017 4:11 pm
Forum: Investing - Theory, News & General
Topic: The Final, Definitive Thread on Brokerage Transfer Bonuses
Replies: 7737
Views: 1337835

Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

I am annoyed with Schwab. I planned to open 2 accounts (1 for me, 1 for spouse) and put $100K in each for the $500 bonus X 2. However, the 1-800 person told me it is 1 bonus per household and referred me to the local branch which just called me back and also said that it is 1 per household. However, the online language says that the offer is "valid for individuals" "limited to one per account, with no more than one account enrolled per client." The only language that talks about a household limit is: "The cash bonus, when combined with the value received from all other offers in the last 12 months, may not exceed $5,000 per household."

Has anyone faced this issue?
by sdvan
Sun Feb 05, 2017 10:46 pm
Forum: Personal Investments
Topic: Bond Premium Amortization
Replies: 17
Views: 2550

Re: Bond Premium Amortization

I still have one more question. I am trying to move the bonds from Zions to other brokerages. Therefore, I am trying to record the basis of the bonds in Quicken just in case the basis doesn't transfer electronically. Unfortunately, when I set up the Zions account the cost basis didn't come over electronically. So, I need to go in and enter the purchase prices and dates. However, the only information in the Zions Direct system is the date and total original purchase price (and the later reduction for bond premium amortization). Quicken wants the bond purchase amount plus accrued interest. I don't have the accrued interest at the time of purchase. Any idea how to determine and record the basis in Quicken? Thanks. The accrued interest may be ...
by sdvan
Fri Feb 03, 2017 8:02 pm
Forum: Personal Investments
Topic: Bond Premium Amortization
Replies: 17
Views: 2550

Re: Bond Premium Amortization

Artsdoctor wrote:Actually, amortization matters a great deal if it's an out-of-state bond. So to the OP, were all of your individual bonds in-state? Or did you have out-of-state bonds as well?

Also, you need to amortize the premium even on in-state bonds if you're paying for Medicare and are paying surcharge premiums based on your MAGI.
All bonds in-state.
by sdvan
Fri Feb 03, 2017 5:18 pm
Forum: Personal Investments
Topic: Bond Premium Amortization
Replies: 17
Views: 2550

Re: Bond Premium Amortization

So, I think that I just learned a fairly big downside to buying individual municipal bonds at a premium. If I understand correctly, that premium is amortized so that there is no capital loss when the bond matures. However, the annual deduction for the amortized premium is deducted from tax exempt interest. As a result, there is no tax benefit. Is this correct? If so, another lesson learned the hard way . . . I still have one more question. I am trying to move the bonds from Zions to other brokerages. Therefore, I am trying to record the basis of the bonds in Quicken just in case the basis doesn't transfer electronically. Unfortunately, when I set up the Zions account the cost basis didn't come over electronically. So, I need to go in and en...
by sdvan
Fri Feb 03, 2017 4:41 pm
Forum: Personal Investments
Topic: Bond Premium Amortization
Replies: 17
Views: 2550

Re: Bond Premium Amortization

I just checked my 1099's and tax return from last year. It appears that the amortized bond purchase premium is reported on the 1099 and that the amortized amount of the premium is deducted from the interest earned. However, given that these are tax exempt muni bonds, doesn't that process effectively remove the potential capital loss when the bonds are redeemed without giving me a current year deduction?
by sdvan
Fri Feb 03, 2017 4:00 pm
Forum: Personal Investments
Topic: Bond Premium Amortization
Replies: 17
Views: 2550

Re: Bond Premium Amortization

The gain or loss is based on the purchase price adjusted by the amortization. If held until maturity, then the adjusted cost will be equal to the maturity value and there will be no capital gain or loss. If disposed of before maturity, then the adjusted cost will be the purchase price adjusted by the amortization up to when the bonds are disposed of.[/quote]

Right. My questions are whether the 1099 reports the amortization and my accountants have all the information they need to take care of this detail and does the amortization effectively lower my basis without a counter benefit year by year? Basically, I am wondering how the amortization is handled for muni bonds. Thanks.
by sdvan
Fri Feb 03, 2017 3:57 pm
Forum: Personal Investments
Topic: Bond Premium Amortization
Replies: 17
Views: 2550

Re: Bond Premium Amortization

The bonds have been purchased over the last 5 years or so. They are currently held at Zions Direct.
by sdvan
Fri Feb 03, 2017 2:54 pm
Forum: Personal Investments
Topic: Bond Premium Amortization
Replies: 17
Views: 2550

Bond Premium Amortization

I purchased a number of municipal bonds a few years ago. I purchased some of the bonds at a premium given the prevailing interest rates. Sad to say, I never paid much attention to the basis in the bonds. I assumed that when I sold the bonds or they matured or were called early, that I would just either have a capital gain or loss based on the original purchase price, including the premium. I am preparing to move my bond holdings so I started checking on the bond basis so that I would have it just in case it didn't follow to the new brokerage firm. Upon checking, I learned that my basis in the bonds purchased at a premium had been decreased using an amortization schedule pursuant to IRS publication 550. You learn something new every day. My ...
by sdvan
Mon Jan 23, 2017 8:04 pm
Forum: Investing - Theory, News & General
Topic: The Final, Definitive Thread on Brokerage Transfer Bonuses
Replies: 7737
Views: 1337835

Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

I have over $900K in individual municipal bonds at Zions Direct. They are changing their systems in a way that I don't like. So, I am motivated to move all of my bonds elsewhere. I was going to add some cash and move $1 million to Fidelity for the $2500 bonus. But, the airline mileage option was so tempting that I started thinking about multiple transfers. If I moved $900K to Fidelity over 5 years (using one account for me and one for my spouse), I'd get 450K miles. So, where to hold the bonds in the interim? That got me searching and I saw this thread. Tell me if this plan is too crazy (all transfers would be muni bonds and I don't know for sure if everyone would take those): 1. $200K to Fidelity now for 100K miles. I know this will work a...
by sdvan
Thu Sep 01, 2016 4:47 pm
Forum: Personal Finance (Not Investing)
Topic: Parent Obamacare Tax Penalty For College Student
Replies: 31
Views: 4046

Re: Parent Obamacare Tax Penalty For College Student

Big Saver, I don't think you can skirt the penalty just by not receiving a refund. Wouldn't the IRS just track it for the next year?

As I read the rules, there is an IRS document that says that parents must pay for their dependent children or pay the penalty. My daughter absolutely qualifies for an exemption on her own (makes very little money). But, as I understand things, that doesn't help me. Perhaps I am missing something.

She just returned to school, so moving allows her to sign up for Obamacare now.
by sdvan
Thu Sep 01, 2016 2:50 pm
Forum: Personal Finance (Not Investing)
Topic: Parent Obamacare Tax Penalty For College Student
Replies: 31
Views: 4046

Re: Parent Obamacare Tax Penalty For College Student

dode's post about lack of IRS support for my argument has me leaning toward signing up my daughter for her own Obamacare policy. But, I have to vent a little (sorry). Prior to Obamacare, I had a great high deductible policy that covered my entire family. It worked in good years and bad. Unfortunately, my carrier decided to leave my state because of Obamacare. That left me with no choice but to sign up for one of the new Obamacare policies at literally double the annual premium cost and doubled the maximum out of pocket costs. The last three years have brought 10% increases or higher each year to our premiums. As a result, when my daughter was offered great insurance at her school for less than 1/2 the Obamacare price, I enrolled her in that...
by sdvan
Wed Aug 31, 2016 6:23 pm
Forum: Personal Finance (Not Investing)
Topic: Parent Obamacare Tax Penalty For College Student
Replies: 31
Views: 4046

Re: Parent Obamacare Tax Penalty For College Student

Thanks all. As stated, daughter is at a college with a plan that is no longer Obamacare compliant. I am self-employed with individual plans for each family member-so not help there. College plan is light years better than Obamacare alternative and would cover minor things and major things as well. Very frustrating to have excellent insurance coverage and also have to pay a penalty for Obamacare.

Any insights on the dependent question? If I can legitimately claim that my daughter is not a dependent, then this is all moot. Thanks for any help on that one.
by sdvan
Wed Aug 31, 2016 4:34 pm
Forum: Personal Finance (Not Investing)
Topic: Parent Obamacare Tax Penalty For College Student
Replies: 31
Views: 4046

Re: Parent Obamacare Tax Penalty For College Student

Self Employed with individual policies for each family member. I am trying to understand my options. The IRS test for a "dependent" (from the link provided and other places) includes: 3.The child must have lived with you for more than half of the year. (footnote says: "There are exceptions for temporary absences . . . .") Later the IRS defines "Temporary absences": "Your child is considered to have lived with you during periods of time when one of you, or both, are temporarily absent due to special circumstances such as: •Illness, •Education, •Business, •Vacation, •Military service, or •Detention in a juvenile facility." My daughter is not "temporarily absent" in the sense that she has no in...
by sdvan
Wed Aug 31, 2016 3:26 pm
Forum: Personal Finance (Not Investing)
Topic: Parent Obamacare Tax Penalty For College Student
Replies: 31
Views: 4046

Parent Obamacare Tax Penalty For College Student

Esteemed Bogleheads, I solicit any ideas or insights for the following scenario: Daughter attends college full-time. She obtains health insurance through her school. Half way through 2015, school decides that its insurance will no longer be considered "minimum essential coverage" under Obamacare. Dear daughter neglects to inform parents of this change (but, parents still love her . . .). School health insurance provides excellent coverage at a low premium with low copays and essentially no deductibles unless she goes out of network. When she is away from school the costs are higher, but still OK. Parent's accountant informs parents that they will owe a penalty of at least $828 for the "uncovered" months of 2015 (tax retu...
by sdvan
Tue Oct 28, 2014 12:44 pm
Forum: Personal Investments
Topic: Quicken Transaction History
Replies: 8
Views: 1904

Re: Quicken Transaction History

I want to thank the bogelheads for helping me solve this problem. I should have asked here first. What I ended up doing (for the benefit of anyone searching this issue in the future) was to simply transfer the shares from my old joint account into my new Trust account. I clicked the box that said to include specific lots. It was as simple as that. When I synced with Vanguard, Vanguard added its own transfer transactions and I simply deleted the Vanguard transactions. Very simple and very easy to do. Thank you again. I even double checked that a later transaction in the Trust account came through correctly and all seems perfect. The only problem this creates for me is a dilemma. :happy I didn't know this trick back when Vanguard changed my s...
by sdvan
Fri Oct 24, 2014 3:42 pm
Forum: Personal Investments
Topic: Quicken Transaction History
Replies: 8
Views: 1904

Re: Quicken Transaction History

You didn't specify what version on Quicken you are using. I did some experiments in Quicken 2013 Deluxe. If you downloaded data from Vanguard, it may be useful or not. I don't use Vanguard anymore as I prefer Fidelity's service. After keeping careful note of the contents for the downloaded transactions you can delete them if you wish and do it manually. However, you may be able to get it fixed just by editing the downloaded transactions. Also, if you have already downloaded from Vanguard, you may see a "Placeholder Transaction" in the new account. You can edit this transaction to provide the basis information for Quicken to track going forward. Manual Method: Quicken can do the basis tracking for you. It can either be done using:...