Search found 416 matches

by ted123
Tue May 22, 2012 8:54 pm
Forum: Personal Finance (Not Investing)
Topic: How Do You Assess Association Funding/Reserves for a Condo?
Replies: 2
Views: 356

Re: How Do You Assess Association Funding/Reserves for a Con

Condo boards will often commission reserve studies, in which an independent engineer/building inspector will assess the building and estimate reserve requirements.

One question...has the developer relinquished control to the condo board? I know in some cases, a developer that retains ownership of a certain percentage of units remains responsible for maintaining the building and can't relinquish control to the board.
by ted123
Thu May 17, 2012 4:04 pm
Forum: Personal Finance (Not Investing)
Topic: Student Loan Payment Help
Replies: 14
Views: 1492

Re: Student Loan Payment Help

Khanmots wrote:In your second scenario between loan and taxes they'd be paying $600 a month. How long would it take to pay the loan off if they file jointly and put that full $600 towards the loan?

I'm guessing that it'll be pretty close to 10 years... hm, a bit of number crunching shows 11 years for a 7% loan. Under 10 years for a 5% loan.

Personally I'd just pay it off at an accelerated rate.
Ah, and this suggests that the extra taxes may totally wipe out the loan forgiveness benefit, depending on the interest rate.
by ted123
Thu May 17, 2012 3:59 pm
Forum: Personal Finance (Not Investing)
Topic: Student Loan Payment Help
Replies: 14
Views: 1492

Re: Student Loan Payment Help

bungalow10 wrote:How much would the total payments be if they tighten the belt and pay them off in 1-2 years? Seems like that would be the best option.

eta: what is the interest rate?

If it is 8% and they pay it off in 3 years they will pay a total of 62,000. Monthly payment of $1724.
If they pay it off in 2 years their total payments are less than $60k - less than $5k in interest!

Obviously if the interest rate is lower the payment and total interest paid will be less.
But aren't they giving up $20k in loan forgiveness if they pay it off faster than that?

I assume the idea is that, if she remains a teacher after 10 years, the balance will be forgiven. If there's no balance, there's nothing to forgive.
by ted123
Thu May 17, 2012 10:52 am
Forum: Personal Finance (Not Investing)
Topic: All Three Services through Cable
Replies: 32
Views: 3903

Re: All Three Services through Cable

I must live in a different part of the country or have worse internet service. Internet service going out and power going out are only slightly correlated (true for every internet provider I have ever had, including the university service). The lights are all on when you can't connect to the internet, can't watch tv (it's still on), and can't use your internet phone. The stereo works as well, as does my wireless lan within my house. It's just the internet that doesn't work when the internet doesn't work. I have the opposite situation. Our (Verizon FIOS) internet never goes out, AFAICT. And because the Optical Network Terminal (ONT) has a battery back up and the ethernet cable can be plugged into my laptop, I have internet even when I have ...
by ted123
Thu May 17, 2012 10:18 am
Forum: Personal Finance (Not Investing)
Topic: Car Registration Dilemma
Replies: 11
Views: 1117

Re: Car Registration Dilemma

Actually, if I'm reading this correctly, your registration expires on June 10th.
by ted123
Thu May 17, 2012 10:12 am
Forum: Personal Finance (Not Investing)
Topic: Car Registration Dilemma
Replies: 11
Views: 1117

Re: Car Registration Dilemma

Does your current registration expire on the same date that payment is due? If the payment is due before the registration actually expires, then you may have no problem. (I'm guessing that you or sscritic would know if this was the case, though.)

I would consider notifying the California DMV that I am moving (and checking the "registered in other state" box) prior to the payment due date. I might risk driving without a valid registration for a short period, if the expired registration wouldn't be an issue when I registered in AZ.
by ted123
Wed May 16, 2012 2:58 pm
Forum: Investing - Theory, News & General
Topic: Loan Paydown effect on AA
Replies: 39
Views: 4082

Re: Loan Paydown effect on AA

I think most investing advice of AA based on age in bonds roughly assumes a 30 year mortgage with a person planning to fully own a home before reaching retirement. I really don't know where the "age in bonds" rule of thumb came from, so I can't say for sure what it assumed. However, I suspect that it's most strongly related the risk/return expectations of various allocations of invested assets (as informed by Modern Portfolio Theory) and the assumption that willingness and need to take risk decline as someone approaches retirement. By counting extra mortgage payments as bonds [and holding 100% of investments in stocks?], your investments are going to have a different expected risk/return than than the "age in bonds" tha...
by ted123
Fri May 11, 2012 8:00 pm
Forum: Personal Investments
Topic: Received IRS CP2000 for Child Care Credit
Replies: 25
Views: 5255

Re: Received IRS CP2000 for Child Care Credit

As for what to do next, my plan is to respond to the letter by checking off option 3 ("I do not agree with any of the changes") on the CP2000 response, and writing a letter similar to what I have explained above. I’m not quite sure what supporting documents to send (my entire tax return for 2010?, Form 2441?, child care expense receipts?, W2?), so I think I’ll call the number on the front of the CP2000 (anyone with success resolving a CP2000 by the phone alone?). That's what I'd do. There's been a lot of discussion on the boards recently about erroneous CP2000 (I got one about another issue). If you get someone on the phone, it may be that they'll tell you that the matter can be resolved over the phone -- I've heard other folks h...
by ted123
Fri May 11, 2012 2:17 pm
Forum: Personal Finance (Not Investing)
Topic: Is there a hierarchy of Boglehead Principles?
Replies: 33
Views: 3228

Re: Is there a hierarchy of Boglehead Principles?

Bob's not my name wrote:...
Rule #8: Minimize taxes (tax cost can far exceed investing cost, especially in phaseouts)
...
I think it's clearly true that tax costs will far exceed investing cost if someone is using low-cost mutual funds, but does that remain true for someone who doesn't invest through low-cost mutual funds? Do tax costs far exceed investing costs for someone that's paying a one percent wrap fee or a 5 percent load to an advisor who puts them in funds with 1.3 percent ERs?
by ted123
Wed May 09, 2012 11:41 am
Forum: Personal Finance (Not Investing)
Topic: Mortgage - rebate paid to borrower?
Replies: 5
Views: 1124

Re: Mortgage - rebate paid to borrower?

It means that at settlement the mortgage company will provide a credit for that amount to the borrower (and would presumably offset other payments from the borrower due at settlement).

It's basically a product of the fact that -- despite being published in decimals -- mortgage rates are set in fractions of 1/8. Because the mortgage lender offerings are actually more precise than that, the borrower or the lender needs to provide a bit of cash to even things out. In your example, you need to pay Amerisave an extra $803 to even things out, while goodmortgage.com needs to pay you $497.
by ted123
Tue May 08, 2012 10:19 pm
Forum: Personal Investments
Topic: Roth IRA Conversion
Replies: 4
Views: 600

Re: Roth IRA Conversion

If I understand correctly: A. You made a $5000 deductible contribution to a tIRA in 2011. B. You would like to make a $5000 contribution to a tIRA or a Roth IRA for 2012, as soon as possible. C. You would prefer to make a deductible tiRA contribution for 2012, but you are concerned that your income may end up being too high for the contribution to be (fully?) deductible. D. If the contribution isn't deductible, you want to make a Roth IRA contribution for 2012. E. It's not clear that you really want to convert and pay taxes on your prior deductible contributions. If this is all correct, I don't think a Roth conversion really addresses your issue. I think you want to make a $5000 tIRA contribution and then recharacterize all or some of it wh...
by ted123
Tue May 08, 2012 9:09 am
Forum: Personal Finance (Not Investing)
Topic: PenFed rate lock
Replies: 4
Views: 1077

Re: PenFed rate lock

When we got our first mortgage in 2003, our mortgage broker told us we were permitted to "float down" once during our lock-in period, so it is at least a thing that can be done.

That said, it's a very different lending market now and when we refinanced a couple years ago, I asked him whether that was still an option and he said it was not.

I wouldn't lose any sleep over an 1/8 of a point anyway.
by ted123
Fri May 04, 2012 10:53 am
Forum: Personal Investments
Topic: Can I Expect the IRS to Respond?
Replies: 10
Views: 1736

Re: Can I Expect the IRS to Respond?

I recently responded to a CP2000 letter from the IRS that stated that I hadn't reported the distributions associated with a Roth IRA conversion. I sent a response indicating that I had properly reported the distributions but they were not taxable due to a nontaxable basis of nondeductible contributions. About 4 weeks later, I received a follow up letter acknowledging that my return was correct.
by ted123
Tue May 01, 2012 3:38 pm
Forum: Personal Investments
Topic: Cost basis for retirement accounts
Replies: 33
Views: 9970

Re: Cost basis for retirement accounts

rangersuck wrote:There some states that do not allow a deduction for traditional IRA's. If you are resident of one of those states and believe you will eventually have distributions while you are a resident of such state it would be important to track your state basis as well.
This is a good point. My mom is in this circumstance and I recently had to spend a couple afternoons determining the state basis of her IRAs. Luckily, she saved her tax records for virtually her whole working life.
by ted123
Tue May 01, 2012 2:38 pm
Forum: Personal Investments
Topic: Roth TSP or Not?
Replies: 12
Views: 4675

Re: Roth TSP or Not?

tfb wrote:
alisa4804 wrote:However in some recent columns giving feds advise on the Roth TSP, they say the Roth TSP can be rolled over into your standard Roth IRA. So the question remains whether there will be RMDs required or not, if one rolls it into a standard Roth.
No RMD once rolled out. So no issue there.
But remember that you are limited to one partial withdrawal from TSP, and the distribution will be allocated proportionally to Roth and traditional TSP. This isn't a problem if you were planning to roll everything over after retirement, but if you have other plans they might be complicated.
by ted123
Tue May 01, 2012 12:14 pm
Forum: Investing - Theory, News & General
Topic: Bad News for 529 plans?
Replies: 2
Views: 709

Re: Bad News for 529 plans?

It actually seems like good news that states are pushing toward lower cost administrators. Good riddance to the higher cost advisor sold plans.
by ted123
Tue May 01, 2012 12:06 pm
Forum: Personal Investments
Topic: Roth TSP or Not?
Replies: 12
Views: 4675

Re: Roth TSP or Not?

I haven't looked into it too carefully because I know we'd prefer to get the current year tax deduction of the Traditional TSP, but the Roth TSP seems somewhat complicated. For example, I understand you won't be able to take Roth-only distributions; all distributions will be proportionally distributed from Roth and Traditional. (Essentially, you'll have a single account that is x percent Roth and 100-x percent traditional, not two accounts.)

I'd think those issues through carefully if I were considering going the Roth TSP route.
by ted123
Fri Apr 20, 2012 12:01 pm
Forum: Personal Investments
Topic: Tax implication for my issue
Replies: 6
Views: 1096

Re: Tax implication for my issue

YDNAL wrote:
* I know that you put $500 in Roth IRA, but you also said the old 401K was "less than $1000." Are we to assume you did something separate with the difference?
I had 401K in my previous employer. When I left the I had less than 1000 so they asked to me transfer to some other 401K or they will charge penalty.
My head is about to explode! :)
I assumed he meant that the employer's policy was not to maintain the 401k account if it had a balance of less than $1000 -- in his case, because his balance was $500, he had to rollover or take a distribution.
by ted123
Thu Apr 19, 2012 1:04 pm
Forum: Personal Investments
Topic: Tax implication for my issue
Replies: 6
Views: 1096

Re: Tax implication for my issue

Thanks for the reply. I understand it was my fault and I went with what Vanguard said. I should take out 500 from my Roth IRA and transfer to traditonal IRA???? I'm still having trouble figuring out what the issue is here. As best I can understand, in 2010, you completed a $500 trustee-to-trustee 401k to Roth IRA conversion. You also separately contributed $5000 to the Roth IRA. This is fine. Potential problems: 1) The $500 should have been reported as income in 2010. Was it? If not, amend your 2010 return, pay taxes and penalties. I imagine these would be small. 2) Maybe you lack the documentation to demonstrate to the IRS that the $500 was a rollover/conversion, so it appears (to the IRS) that you made an excessive Roth IRA contribution....
by ted123
Fri Apr 13, 2012 8:32 am
Forum: Personal Investments
Topic: Roth IRA Contribution Complication
Replies: 6
Views: 805

Re: Roth IRA Contribution Complication

This is a very common issue.

Make the Roth contribution and locate the additional assets there. You don't want to forgo Roth contributions.

If there's one asset that you hold in both, that can become your "swing" asset, into and out of which you rebalance across both accounts.
by ted123
Wed Apr 11, 2012 7:27 pm
Forum: Personal Investments
Topic: Impending Tax Law Changes
Replies: 41
Views: 2310

Re: Impending Tax Law Changes

Muchtolearn wrote:
Duckie wrote:There will be no changes for me. I have set things up as tax-efficiently as I can without getting too complicated. If/when qualified dividends disappear I will just pay more in taxes. Sigh.
Its not an if. They are disappearing.
Based on current law. I don't know what's going to happen, but the odds are pretty good that some change to 2013 tax law will be adopted between November 6 and, say, December 14, 2012. I wouldn't make any significant changes to my plans before then.
by ted123
Wed Apr 11, 2012 7:21 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Audit - Backdoor Roth
Replies: 59
Views: 23638

Re: IRS Audit - Backdoor Roth

BTW, I received a letter from the IRS saying that my issue had been resolved and that I do not owe any further taxes.
by ted123
Wed Apr 11, 2012 5:17 pm
Forum: Personal Investments
Topic: Impending Tax Law Changes
Replies: 41
Views: 2310

Re: Impending Tax Law Changes

I suppose, for an affected taxpayer to have all of their bond allocation in municipal bonds and hold them in a taxable account, and put all of their stocks in a tax-deferred account. what if interest from muni bonds count as income for AMT? http://www.investinginbonds.com/learnmore.asp?catid=8&subcatid=60 The tax-exempt status of municipal bonds does not extend in all instances to the alternative minimum tax. The alternative minimum tax (“AMT”) is a separate tax calculation that must be performed by both individual and corporate taxpayers and the resulting tax is then compared to the regular tax. Whichever tax is higher is the one that must be paid. rai, if you have munis susceptible to the AMT, it will still affect the AMT. It will ha...
by ted123
Tue Apr 10, 2012 1:36 pm
Forum: Investing - Theory, News & General
Topic: Why Asset Allocation May Not Matter
Replies: 24
Views: 3267

Re: Why Asset Allocation May Not Matter

Yes, Otar said it first...p. 52, Uneiling the Retirement Myth, as he looked at studies of the importnace of asset allocation. The “Importance” of Asset Allocation “ Research has shown that asset allocation is the single largest contributor to a portfolio's success. It is much more important than security selection. In fact, one study concluded that asset allocation accounted for over 90% of the difference in a portfolio's investment return.” Different variations of this mantra appear in articles, sales brochures, and newsletters in the financial media. Each time I read it, I imagine myself at an auction: I can almost hear the auctioneer shouting: “I have 90% for asset allocation, do I hear 100%!” Lesson number 1: Save, save, save. Lesson n...
by ted123
Mon Apr 09, 2012 11:33 pm
Forum: Personal Finance (Not Investing)
Topic: estimated tax help
Replies: 10
Views: 1523

Re: estimated tax help

travelnut11 wrote: I went through all of the worksheets and read as much as I can and think that I am not required to file estimated taxes as long as I have enough taxes withheld in 2012 to cover my total tax (line 61 on the 1040) from 2011. Is that correct?
Yes, there's a safe harbor if you have withheld at least 100 percent of your 2011 tax (110 percent if your AGI exceeded 150k).
by ted123
Sun Apr 08, 2012 9:23 pm
Forum: Personal Finance (Not Investing)
Topic: Documenting an IRA to 401k rollover
Replies: 6
Views: 15973

Re: Documenting an IRA to 401k rollover

Interesting. There was another thread recently in which a couple of us discussed having received CP2000 notices that were generated for Roth conversions despite everything having been reported accurately. http://www.bogleheads.org/forum/viewtopic.php?f=1&t=93608 I would submit all of the documentation you have, plus a copy of the 1099-R, under a letter explaining how the rollover was properly reflected on your 1040 and supporting forms. (As well as the response form, indicating that you do not agree with the changes, of course.) I don't think there's anything you can do to avoid these kinds of notices -- it's the IRS's mistake, not yours. Obviously, you could choose not to do IRA-to-401k rollovers, but if they're worth doing, they're pr...
by ted123
Sun Apr 08, 2012 12:09 pm
Forum: Personal Finance (Not Investing)
Topic: roll over ira combined roth ira conversion question
Replies: 4
Views: 511

Re: roll over ira combined roth ira conversion question

So far the year 2012, because I started a new job, I did an ira rollover of a profit sharing plan to an ira. I haven't done so yet, but I also want to make a nondeductible ira contribution of $5k. The question is, when I do a roth rollover for 2012, I understand I will have to pay tax on the profit sharing money that was part of the ira rollover, but do I have to pay tax again on the nondeductible ira part of 5k that I plan to contribute, or does vanguard know not to double tax that? Vanguard doesn't know anything about the taxes you'll pay. That's between you and the IRS. Vanguard just reports a total distribution, coded as "exception applies" if it was a direct conversion to the Roth. In order to avoid paying taxes again on the...
by ted123
Wed Apr 04, 2012 3:48 pm
Forum: Personal Investments
Topic: Contributing to / backdoor converting non-deductible TIRA
Replies: 6
Views: 615

Re: Contributing to / backdoor converting non-deductible TIR

BigOilTexan wrote:If this is correct, then why is there an income limit on Roth IRA eligibility?
I think the answer is "because this is how the sausage got made." Not very satisfying, I know.
by ted123
Fri Mar 30, 2012 9:11 pm
Forum: Personal Finance (Not Investing)
Topic: Why was I advised against a 529?
Replies: 22
Views: 3597

Re: Why was I advised against a 529?

gwrvmd wrote:Two point that hasn't been made yet:
1) 529 plans are not sold through brokers so it obvious he would steer you to something that he sells. There are no sales commissions on 529 plans
2) You can use any state's plan and the available options vary considerably.
1) Actually, some plans are sold through brokers (not that I would recommend them). In fact, I think the OP asked the advisor about them because the bank he works at advertised them.

Virginia actually has two separate 529 plans, one self-advised (VEST) and one sold through advisors (College America).

2) It's true that you can use any state's plan and the options vary, but the OP is a NY resident and will receive state tax deductions for using the NY plan (which is fine, IIRC).
by ted123
Fri Mar 30, 2012 10:31 am
Forum: Personal Finance (Not Investing)
Topic: Why was I advised against a 529?
Replies: 22
Views: 3597

Re: Why was I advised against a 529?

It's not clear whether you are talking about 529 plans owned by you or your spouse for the children's benefit, or 529 plans owned by the children for their own benefit. Assuming you meant the former, here are some arguments against 529 plans (there may be others): 1) Saving for retirement should be a priority over saving for college. 2) The relative tax benefits of 529 plans might be overstated, especially as compared to stock mutual funds held in taxable. 3) 529 plans are at a disadvantage to retirement plans and mortgage debt reduction when student aid is calculated. 4) If your child doesn't use the 529 funds, you may struggle to avoid a penalty on withdrawal. That said, assuming retirement savings and consumer debt are under control (and...
by ted123
Fri Mar 30, 2012 9:38 am
Forum: Investing - Theory, News & General
Topic: How you got to be a Boglehead, with a twist
Replies: 42
Views: 4336

Re: How you got to be a Boglehead, with a twist

I voted no. I had done my reading and become a fan of low-cost investing before I had any money to invest.
by ted123
Wed Mar 28, 2012 2:50 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Audit - Backdoor Roth
Replies: 59
Views: 23638

Re: IRS Audit - Backdoor Roth

It is semantics, but sometimes words do matter. The Backdoor Roth Contribution term that was first used by TFB means one is making a non-deductible annual contribution to a zero balance Traditional IRA then converting it to a Roth (immediately, or after some period of time). It is a way for someone who is otherwise not eligible to make a Roth IRA contribution to do so through a two step process. Converting an existing Traditional IRA balance to a Roth IRA generates a lot of current year tax revenue -- and is likely what Congress intended -- but this is not what the board now refers to as a Backdoor Roth. It is unclear whether Congress intended to create a "back door" for individuals to fund a Roth IRA who are otherwise ineligible...
by ted123
Wed Mar 28, 2012 11:29 am
Forum: Personal Finance (Not Investing)
Topic: Over $95 million in Roth IRA. Bodes ill for the little guy?
Replies: 20
Views: 4886

Re: Over $95 million in Roth IRA. Bodes ill for the little

Interesting. A demonstration of the upside benefits of putting assets with the highest expected return in the Roth.

In my mind, the significant issue raised by the article isn't the accumulation of large balances in Roth IRAs, it's the possibility of abuse associated with closely held stocks in a Roth. Stuffing your Roth full of assets at nominal values below their fair values would be a great way to "maximize" your contributions.
by ted123
Wed Mar 28, 2012 9:34 am
Forum: Personal Finance (Not Investing)
Topic: IRS Audit - Backdoor Roth
Replies: 59
Views: 23638

Re: IRS Audit - Backdoor Roth

The topic is not correct. What is being described is a standard Roth Conversion .... not a Backdoor Roth. Agree this looks like a bug in the IRS's auditing software. Out of curiosity--what's the difference between a "backdoor roth" and a "standard Roth conversion" where the conversion consists principally of nondeductible contributions? A "standard Roth conversion", as likely intended by the framers of the original legislation, is one where individuals convert Traditional IRAs funded with deductible contributions and/or deductible 401(k) contributions subsequently rolled over into a Roth IRA. Under this scenario, the IRS collects a large tax bill, as you are paying tax not just on the growth in value of the IR...
by ted123
Tue Mar 27, 2012 9:40 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Audit - Backdoor Roth
Replies: 59
Views: 23638

Re: IRS Audit - Backdoor Roth

stan1 wrote:The topic is not correct. What is being described is a standard Roth Conversion .... not a Backdoor Roth.
Agree this looks like a bug in the IRS's auditing software.
Out of curiosity--what's the difference between a "backdoor roth" and a "standard Roth conversion" where the conversion consists principally of nondeductible contributions?
by ted123
Tue Mar 27, 2012 9:08 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Audit - Backdoor Roth
Replies: 59
Views: 23638

Re: IRS Audit - Backdoor Roth

It is possible that IRS is going to stop this and has started with individuals who have done this. Clearly the back door ROTH is an intent to do what it does. We all know it is not what it was intended for. I suspect back door ROTH's will be disallowed and penalized. I wouldn't do it anymore if I were you (you being all of you). If so, the IRS is doing it wrong. My CP2000 didn't challenge the conversion at all. It merely suggested that the amount of the distribution that I reported as taxable was incorrect. The remedy for that would be to pay more taxes on the conversion. Except there's no really a valid argument that I should pay taxes on my basis of nondeductible contributions. I am fairly sure this is just poor programming. Leaving asid...
by ted123
Mon Mar 26, 2012 10:47 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Audit - Backdoor Roth
Replies: 59
Views: 23638

Re: IRS Audit - Backdoor Roth

Bimmer wrote:Thanks Ted. Would you mind giving the details of your 1099-R (without distribution amounts) to see if they are the same as mine?

Mine:
Box 1 = Gross Distribution Values = as listed above
Box 2 = Taxable Amount = same value as box 1
Box 2b = Taxable amount not determined = "X"
Box 4 = Federal Income Tax withheld = 0.00
IRA/SEP/SIMPLE = "X"
Box 10 = State Tax Withheld = 0.00
Box 11 = State/Payer's state no. = my state
Box 12 = State distribution = same value as box 1

Thanks.
What was the distribution code in box 7? It should be "2" (early distribution -- exception applies).

Like I said, mine (which was otherwise the same as yours) had the correct distribution code -- even the CP2000 acknowledged that code.
by ted123
Mon Mar 26, 2012 10:30 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Audit - Backdoor Roth
Replies: 59
Views: 23638

Re: IRS Audit - Backdoor Roth

By the way, Vanguard correctly coded our 1099s as direct rollovers. That wasn't the problem in our case.
by ted123
Mon Mar 26, 2012 10:28 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Audit - Backdoor Roth
Replies: 59
Views: 23638

Re: IRS Audit - Backdoor Roth

Is it actually an audit, or is it a CP2000 Examination? I received the latter about a month ago. It said I hadn't reported IRA distributions, when I in fact had reported them as part of the total distributions, but excluded them from taxable distributions, consistent with the instructions and Form 8606. I checked the box to indicate that I didn't agree with the changes to my return and attached a letter explaining how I correctly completed my taxes. Based on some cursory internet searches, it appears that CP2000 examinations are often easily resolved, and I expect my letter to resolve mine. (I've read that other folks have been able to resolve similar -- but not identical -- CP2000s with phone calls to the IRS, but I'd prefer to communicate...
by ted123
Sun Mar 25, 2012 9:16 pm
Forum: Personal Investments
Topic: form 8606
Replies: 10
Views: 904

Re: form 8606

i must be making a mistake on form 8606 because when finished it states that i have a 10,000 taxable amount but 1) 2011 was first year my wife and i did trad IRA to roth conversion (ie backdoor roth IRA) - we purchased the 2011 trad ira march 2012 and converted march 2012 2) no previous non-roth IRA at all (but do have $10,000 previous direct roth IRA purchase) ........???? Based on this you didn't have any conversion in 2011 -- you had a conversion in 2012. You should just be reporting the $5000 nondeductible contribution in Part 1 of Form 8606 (and there should be one for each of you). ooh i see......so we dont even fill out part II?? Not until next year. I think you should just have $5000 on line 1, 0 on line 2, 5000 on line 3. Then ent...
by ted123
Sun Mar 25, 2012 9:13 pm
Forum: Personal Investments
Topic: I don't understand my wife's 401k offerings
Replies: 10
Views: 2018

Re: I don't understand my wife's 401k offerings

What is a collective investment trust?

It's basically a mutual fund, but not regulated as one, probably because it isn't marketed and traded as one. This is supposed to reduce costs.

It wouldn't bother me to invest through one in my 401k.
by ted123
Sun Mar 25, 2012 9:02 pm
Forum: Personal Investments
Topic: form 8606
Replies: 10
Views: 904

Re: form 8606

sanfran2012 wrote:i must be making a mistake on form 8606 because when finished it states that i have a 10,000 taxable amount but

1) 2011 was first year my wife and i did trad IRA to roth conversion (ie backdoor roth IRA) - we purchased the 2011 trad ira march 2012 and converted march 2012
2) no previous non-roth IRA at all (but do have $10,000 previous direct roth IRA purchase)

........????
Based on this you didn't have any conversion in 2011 -- you had a conversion in 2012. You should just be reporting the $5000 nondeductible contribution in Part 1 of Form 8606 (and there should be one for each of you).
by ted123
Fri Mar 23, 2012 3:09 pm
Forum: Personal Consumer Issues
Topic: Law school
Replies: 78
Views: 6433

Re: Law school

To be clear, I'm just as down on law school and the practice of law as everyone else in this thread. It's just that I do know lawyers who love their work, many of whom work in smallish firms in non-major markets. If that kind of thing would appeal to you, I'm not sure going to a top 10 or 20 law school matters so much. But that's part of understanding what the realistic options are.
by ted123
Fri Mar 23, 2012 3:04 pm
Forum: Personal Consumer Issues
Topic: Law school
Replies: 78
Views: 6433

Re: Law school

If, fully informed by experience, she still wants to be a lawyer, and if she thinks she'd be happy with the kind of opportunities available to someone graduating from the middle of her class, then maybe law school would be a good choice for her. There's plenty of time to go to law school when you're in your mid- or late-20s. I think the problem is these days there just aren't ANY opportunities available to someone graduating from the middle of their class from a non-top law school. You are looking at stuff like temp work mostly (and even that, if you are lucky). Of course this doesn't apply if you have strong personal connections of some sort, but that's in any walk of life. That may be. I think it may depend on what market you're talking ...
by ted123
Fri Mar 23, 2012 2:38 pm
Forum: Personal Consumer Issues
Topic: Law school
Replies: 78
Views: 6433

Re: Law school

My advice is that she should not go to law school without first getting deep firsthand experience regarding the practice of law. She could work as a legal assistant or in some other similar position to get a substantial look at what the practice of law entails. If, fully informed by experience, she still wants to be a lawyer, and if she thinks she'd be happy with the kind of opportunities available to someone graduating from the middle of her class, then maybe law school would be a good choice for her. There's plenty of time to go to law school when you're in your mid- or late-20s. I agree with others -- DON'T GO TO LAW SCHOOL THINKING THERE'LL BE OTHER, NON-TRADITIONAL OPPORTUNITIES FOR YOU. There may be, but they won't be very easy to fin...
by ted123
Thu Mar 22, 2012 2:07 pm
Forum: Personal Investments
Topic: TSP to Roth IRA rollover
Replies: 7
Views: 1576

Re: TSP to Roth IRA rollover

I've never done it, but Fairmark confirms you can make conversions to a Roth IRA inherited from a spouse just as you may to your own Roth IRA. www.fairmark.com/rothira/inherit.htm

TSP beneficiary withdrawal form (TSP-90) includes instructions for direct rollover/conversion to Roth IRA.

So, yes, it appears so.

Remember that you can make only one partial withdrawal from the TSP account (if you are withdrawing less than the full amount in the account).
by ted123
Thu Mar 22, 2012 12:02 pm
Forum: Personal Investments
Topic: TSP to Roth IRA rollover
Replies: 7
Views: 1576

Re: TSP to Roth IRA rollover

You need to analyze the near- and long-term tax consequences based on your own particular facts. I don't think you can just assume that any rollover/conversion for any dollar amount is necessarily tax efficient.
by ted123
Mon Mar 19, 2012 9:09 pm
Forum: Personal Consumer Issues
Topic: Can public storage be used as a private library?
Replies: 30
Views: 2887

Re: Can public storage be used as a private library?

I've put utility shelves in a storage unit. I see no reason why you couldn't put bookshelves. A 5x10 storage unit would get you 23 linear feet of book shelves. In a bigger unit, you bring in an easy chair and a table with a lamp, in case you wanted to browse some books and not bring them all home.
by ted123
Mon Mar 19, 2012 1:18 pm
Forum: Personal Investments
Topic: College savings - 529 Plan
Replies: 12
Views: 1441

Re: College savings - 529 Plan

mickens16 wrote:http://www.bogleheads.org/forum/viewtop ... =2&t=87220

Good info regarding the Virginia 529 tax deductions.
Thanks for the link to that other discussion. The Tax Commissioner ruling quoted there confirms my intuition about about the deductible of contributions to separate accounts even within owner-beneficiary combinations.