Search found 6553 matches

by Alan S.
Fri Apr 28, 2017 7:40 pm
Forum: Investing - Help with Personal Investments
Topic: SIMPLE-IRA: all contributions (including match) immediately vested?
Replies: 3
Views: 187

Re: SIMPLE-IRA: all contributions (including match) immediately vested?

Yes. All contributions are immediately vested per Q F-1 of Notice 98-4.
by Alan S.
Thu Apr 27, 2017 6:03 pm
Forum: Personal Finance (Not Investing)
Topic: Can a reluctant executor simply reassign the role?
Replies: 31
Views: 2223

Re: Can a reluctant executor simply reassign the role?

Unfortunately, many people don't even realize there is any liability at stake or take the role seriously. People really need to think more carefully about which adult child they appoint. Spot on! Far too many otherwise very sharp people opt to name an irresponsible, procrastinating child as executo...
by Alan S.
Thu Apr 27, 2017 3:02 pm
Forum: Personal Finance (Not Investing)
Topic: CCRC Tax Deduction?
Replies: 14
Views: 845

Re: CCRC Tax Deduction?

In our case, about $100,000 of the entry fee and about $1,000/mo of the ongoing fee is a qualified medical expense. Whether it is deductible depends on your AGI. plannerman The year the entry fee was paid should generate a medical deduction even with the 10% of AGI floor. Did the facility give you ...
by Alan S.
Wed Apr 26, 2017 11:27 pm
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA Transfer-in-kind to Vanguard
Replies: 3
Views: 261

Re: Inherited IRA Transfer-in-kind to Vanguard

An IRA might have a cost basis, but the individual investments in it do not. An IRA cost basis comes from non deductible contributions made by the IRA owner over the years and tracked on Form 8606. When the IRA owner passes, the unrecovered basis in the IRA (line 14 of the last owner 8606) is inheri...
by Alan S.
Wed Apr 26, 2017 11:19 pm
Forum: Investing - Help with Personal Investments
Topic: Unable to rollover 401(k) at Schwab
Replies: 5
Views: 590

Re: Unable to rollover 401(k) at Schwab

It is rare that a plan would delay distribution after separation, but this is what ERISA indicates per the DOL: When can you begin to receive retirement benefits? There are several points to keep in mind in determining when you can receive benefits: Federal law provides guidelines for when plans mus...
by Alan S.
Wed Apr 26, 2017 8:12 pm
Forum: Personal Finance (Not Investing)
Topic: IRS form 8606 Inherited IRA w/ basis
Replies: 5
Views: 442

Re: IRS form 8606 Inherited IRA w/ basis

Just to clarify - your reference to estate taxes was specifically for: 1) Federal estate taxes Form 706 (unlikely)? 2) State estate taxes? 3) Income tax on estate income - Form 1041? While unlikely, if any Federal estate taxes were paid you qualify for an IRD deduction (misc. itemized deduction) for...
by Alan S.
Tue Apr 25, 2017 2:01 pm
Forum: Personal Finance (Not Investing)
Topic: Question on backdoor roth IRA
Replies: 3
Views: 354

Re: Question on backdoor roth IRA

Or if the contribution had gained 5, 10 or $300 before you converted it is no big deal. The gains would be taxable income, but most of these gains are so small as to be immaterial. The only fallout from having a gain is that if you have to withdraw this particular conversion before the 5 year holdin...
by Alan S.
Tue Apr 25, 2017 1:54 pm
Forum: Investing - Help with Personal Investments
Topic: tIRA rollover to 401k
Replies: 7
Views: 510

Re: tIRA rollover to 401k

Thank you Alan. I file electronically via Taxact, will the software generate the explanatory statement you suggest including with the return? Not sure about Tax Act, but most programs support an explanatory statement, but will not generate one automatically. You have to locate the entry screen for ...
by Alan S.
Tue Apr 25, 2017 1:38 pm
Forum: Personal Finance (Not Investing)
Topic: RMD for 2017?
Replies: 13
Views: 1256

Re: RMD for 2017?

If the tables are changed, the RMD reduction would not be much. For example, in the 2002 revised tables the RMD for a 71 year old was only reduced by around 4.5%. Of course, every little bit helps.
by Alan S.
Mon Apr 24, 2017 8:57 pm
Forum: Investing - Help with Personal Investments
Topic: tIRA rollover to 401k
Replies: 7
Views: 510

Re: tIRA rollover to 401k

How is a rollover from tIRA to 401k reported for tax purposes? Is a 1099 or any other reports issued? Thanks in advance. You will receive the 1099R and report the rollover on line 15a and 15b of Form 1040. However, unlike a 401k to IRA rollover there is NO 5498 issued by the plan to report receipt ...
by Alan S.
Mon Apr 24, 2017 8:37 pm
Forum: Personal Finance (Not Investing)
Topic: Delayed Mega Backdoor Roth
Replies: 8
Views: 982

Re: Delayed Mega Backdoor Roth

I have same question for Alan: would not contributing earnings to TIRA significantly complicate the "normal" backdoor Roth IRA conversions for those that don't want to mess with proportional allocations when going from tIRA to rIRA? If alternative is just investing in taxable, I would thi...
by Alan S.
Sun Apr 23, 2017 2:48 pm
Forum: Personal Finance (Not Investing)
Topic: RMD for 2017?
Replies: 13
Views: 1256

Re: RMD for 2017?

Alan S wrote: I wish the Tables would change, since that would lower RMDs somewhat. The tables last changed in 2002 and prior to that in the mid 80s so we are due for a change in the next couple of years. So, since the last change was part of a tax cut, can I assume the change was lower percentage ...
by Alan S.
Sun Apr 23, 2017 2:38 pm
Forum: Investing - Help with Personal Investments
Topic: Nondeductible tIRA Limits (Backdoor Roth)
Replies: 1
Views: 188

Re: Nondeductible tIRA Limits (Backdoor Roth)

Your maximum allowed contribution for a year if you are under 50 is 5500. Any additional amount is an excess contribution and incurs an annual 6% excise tax if it is not removed with allocated earnings by the extended due date for the return (generally 10/15/2018 for a 2017 contribution). If you wan...
by Alan S.
Sat Apr 22, 2017 1:28 pm
Forum: Personal Finance (Not Investing)
Topic: RMD for 2017?
Replies: 13
Views: 1256

Re: RMD for 2017?

I wish the Tables would change, since that would lower RMDs somewhat. The tables last changed in 2002 and prior to that in the mid 80s so we are due for a change in the next couple of years. However, mortality improvements have leveled off in the last couple of years and that could lengthen the inte...
by Alan S.
Sat Apr 22, 2017 12:56 pm
Forum: Personal Finance (Not Investing)
Topic: Delayed Mega Backdoor Roth
Replies: 8
Views: 982

Re: Delayed Mega Backdoor Roth

My 401k allows both in-service withdrawals and after-tax contributions so I was happy to set up a Mega Backdoor Roth. After several pay periods of after-tax contribution I called to start the first transfer to my Roth IRA. I was told that in-service withdrawals are not allowed unless the money has ...
by Alan S.
Thu Apr 20, 2017 10:03 pm
Forum: Personal Finance (Not Investing)
Topic: Filed form 8606 when not needed - should I amend?
Replies: 13
Views: 1743

Re: Filed form 8606 when not needed - should I amend?

Don't worry, just to even the score, I forgot to file my 8606 :-) I actually went to ammend but TurboTax told me there was nothing to amend! So I just sent the missing forms and called it a day. You lost me here. If you never made the contribution and never filed an 8606 to report a ND contribution...
by Alan S.
Thu Apr 20, 2017 5:31 pm
Forum: Personal Finance (Not Investing)
Topic: Any retired investors take a part-time/seasonal job just to qualify for Roth IRA contributions?
Replies: 3
Views: 729

Re: Any retired investors take a part-time/seasonal job just to qualify for Roth IRA contributions?

It is probably more likely that the Roth contribution would be an incidental benefit of the part time work rather than the leading motivator to work. The savers credit might be another contributing factor for those that would otherwise qualify.
by Alan S.
Wed Apr 19, 2017 5:21 pm
Forum: Personal Finance (Not Investing)
Topic: Filed form 8606 when not needed - should I amend?
Replies: 13
Views: 1743

Re: Filed form 8606 when not needed - should I amend?

Hello Forum, A new member here. I realized a mistake on my 2014 federal tax returns while doing 2015 returns. Apparently while doing 2014 tax returns using TaxAct, I did a what-if analysis on back-door Roth conversion. I entered $5500 each in non-deductible IRA contributions for myself and spouse t...
by Alan S.
Wed Apr 19, 2017 11:39 am
Forum: Investing - Help with Personal Investments
Topic: Roth IRA Conversion Question -- 5 year rule
Replies: 2
Views: 374

Re: Roth IRA Conversion Question -- 5 year rule

Hi All: I am 60. I have a regular post-tax IRA's. I also have a Roth 401k. If I do a partial conversion of my IRA to a Roth IRA, does that start the 5 year rule clock running even for later contributions? For example, if I convert half in 2017 and half in 2020, does the five years end in 2022 for b...
by Alan S.
Wed Apr 19, 2017 11:24 am
Forum: Investing - Help with Personal Investments
Topic: Missed RMD..... how to file for taxes?
Replies: 6
Views: 469

Re: Missed RMD..... how to file for taxes?

This is just what I hope is a correct, "common sense" response. Your dad was not obligated to take last year's RMD for 2016 until the end of the year. Unfortunately, he died before that could be done. I would assume that his estate would not be penalized due to that circumstance so long a...
by Alan S.
Tue Apr 18, 2017 8:09 pm
Forum: Personal Finance (Not Investing)
Topic: How Do Taxes Work With Rollover Roth IRA?
Replies: 11
Views: 710

Re: How Do Taxes Work With Rollover Roth IRA?

The latter. He would pay 15% plus state tax unless some of the conversion was in the 10% bracket. The 10% marginal rate increase above the 15% bracket is significant enough that for many people the top of the 15% bracket is a natural place to cap taxable income if you have the choice, and of course ...
by Alan S.
Tue Apr 18, 2017 7:51 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement Income - Pre-tax or Post-tax Withdraws
Replies: 2
Views: 431

Re: Retirement Income - Pre-tax or Post-tax Withdraws

It would help if you could clarify the pre tax/post tax status of each of these accounts, ie. how much of each has already been taxed.: 1) TSP will be pre tax as you indicated, but only if you never made any Roth TSP deferrals. The Roth option has been around for about 4 years now. 2) Taxable mutual...
by Alan S.
Tue Apr 18, 2017 3:02 pm
Forum: Investing - Help with Personal Investments
Topic: Accidental overcontribution of Roth IRA due to MFS
Replies: 3
Views: 228

Re: Accidental overcontribution of Roth IRA due to MFS

Yes, Schwab will calculate the allocated earnings for each contribution separately using the IRS formula. The earnings is based on the % gain or loss of the entire Roth account that received each contribution. Whatever investments were made in the account at different times is immaterial. Your 2016 ...
by Alan S.
Tue Apr 18, 2017 2:05 pm
Forum: Investing - Help with Personal Investments
Topic: Accidental overcontribution of Roth IRA due to MFS
Replies: 3
Views: 228

Re: Accidental overcontribution of Roth IRA due to MFS

If you do not have any non Roth IRA balance, just recharacterize both contributions as non deductible TIRA contributions and then convert back to Roth right away. The typical back door Roth approach applies to anyone whose MAGI is too high for a regular Roth contribution including your situation whe...
by Alan S.
Tue Apr 18, 2017 1:02 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard is requesting a certified power of attorney
Replies: 7
Views: 873

Re: Vanguard is requesting a certified power of attorney

I don't think any of these large firms are easy to deal with when it comes to POAs. I never was able to move my mother's accounts from the higher cost custodians because of the ever more restrictive requirements to accept POAs. Elder abuse fraudsters often including close relatives have made the fin...
by Alan S.
Tue Apr 18, 2017 12:49 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement before 59.5?
Replies: 4
Views: 1043

Re: Retirement before 59.5?

Yes, you can benefit from the recent expansion of PSOs who qualify for the age 50 penalty exception. The key to this exception is you must be working for a qualifying employer, and realistically have been working for that employer for several years upon reaching the year of your 50th birthday. Any c...
by Alan S.
Tue Apr 18, 2017 12:29 pm
Forum: Personal Finance (Not Investing)
Topic: How Do Taxes Work With Rollover Roth IRA?
Replies: 11
Views: 710

Re: How Do Taxes Work With Rollover Roth IRA?

You meant "convert to a Roth IRA". Yes, particularly if you have good future potential for advancement and increasing salary, now is the time to convert incremental amounts each year. Convert the whole 20k but not above the top of the 15% bracket if you can.
by Alan S.
Tue Apr 18, 2017 12:22 pm
Forum: Personal Finance (Not Investing)
Topic: "Vanguard's free RMD Service: Sign up before you turn 70½"
Replies: 23
Views: 2570

Re: "Vanguard's free RMD Service: Sign up before you turn 70½"

Kevin, I would try a phone call in a couple weeks after the filing rush is over, and see if you can talk to an RMD specialist if they have one. OK, I'll suggest this to my mom. I assume they cashed the check, which would at least indicate they received the waiver request? If you don't mind I would ...
by Alan S.
Tue Apr 18, 2017 11:18 am
Forum: Personal Finance (Not Investing)
Topic: "Vanguard's free RMD Service: Sign up before you turn 70½"
Replies: 23
Views: 2570

Re: "Vanguard's free RMD Service: Sign up before you turn 70½"

Kevin, I would try a phone call in a couple weeks after the filing rush is over, and see if you can talk to an RMD specialist if they have one. I assume they cashed the check, which would at least indicate they received the waiver request? If you don't mind I would like to know what response they gi...
by Alan S.
Tue Apr 18, 2017 11:08 am
Forum: Personal Finance (Not Investing)
Topic: How Do Taxes Work With Rollover Roth IRA?
Replies: 11
Views: 710

Re: How Do Taxes Work With Rollover Roth IRA?

If you are going to convert at all, do it before you end up in the 25% bracket. If you do a direct rollover from pre tax 401k to your Roth IRA, you will be taxed on the full 20k (assuming all pre tax). But if you rolled it to your TIRA, you could convert a smaller amount if you wanted to. Whether yo...
by Alan S.
Tue Apr 18, 2017 10:54 am
Forum: Investing - Help with Personal Investments
Topic: Roth conversion after recharacterization?
Replies: 16
Views: 1550

Re: Roth conversion after recharacterization?

To avoid taxation on your entire conversion, you should have filed Form 8606 with your 2016 return reporting a 5500 non deductible TIRA contribution for 2016. If you did not do that you can send in the 8606 separately now. I am assuming that you did not qualify to deduct that contribution, but in ce...
by Alan S.
Mon Apr 17, 2017 11:19 pm
Forum: Investing - Help with Personal Investments
Topic: Exceeded Roth IRA Contribution in 2015 ... now what?
Replies: 4
Views: 424

Re: Exceeded Roth IRA Contribution in 2015 ... now what?

Yes, you will get a 1099R reporting a non qualified Roth distribution of 1300. Report this on Form 8606, and indicate your total Roth IRA regular contribution balance on line 22. Since this balance will be greater than the 1300 distributed, the distribution is tax free. Of course, you need to know y...
by Alan S.
Mon Apr 17, 2017 9:25 pm
Forum: Personal Finance (Not Investing)
Topic: Transferring a ROTH on divorce.
Replies: 5
Views: 548

Re: Transferring a ROTH on divorce.

Once you secure the court order, submit it to her Roth IRA custodian. When they accept it, you will be able to request a non reportable transfer of her Roth balance into your Roth balance. There is no current tax reporting for the transfer. There is no distribution reported by her, and there will be...
by Alan S.
Mon Apr 17, 2017 7:49 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Excess Contribution Penalty Payment
Replies: 3
Views: 275

Re: Roth IRA Excess Contribution Penalty Payment

If the IRS was consistent regarding stand alone vs 1040X with the 5329, we could indicate with certainty. But they are not and the instructions are poorly written, so I would guess that about 80% of the time they will accept the stand alone 5329 form. Whether you complete a needless 1040X or not is ...
by Alan S.
Mon Apr 17, 2017 7:36 pm
Forum: Personal Finance (Not Investing)
Topic: "Vanguard's free RMD Service: Sign up before you turn 70½"
Replies: 23
Views: 2570

Re: "Vanguard's free RMD Service: Sign up before you turn 70½"

The IRS will usually waive the penalty if the late RMD is first removed and a 5329 filed to request the penalty be waived due to reasonable cause. The IRS has been accepting just about any reason including "I forgot and it will not happen again". My mom did not take her RMD in 2015, filed...
by Alan S.
Mon Apr 17, 2017 6:55 pm
Forum: Investing - Help with Personal Investments
Topic: withdrawing ineligible Roth contribution for 2016
Replies: 2
Views: 185

Re: withdrawing ineligible Roth contribution for 2016

Shares and positions and buying and selling within the Roth are immaterial to an excess Roth contribution. There are 4 ways to correct an excess Roth contribution: 1) Remove the excess with allocated earnings. Earnings taxable in 2016 and subject to 10% penalty. However, being in the income phaseout...
by Alan S.
Mon Apr 17, 2017 6:30 pm
Forum: Investing - Help with Personal Investments
Topic: Can you rollover a Traditional IRA into a 401k if some of the funds were non-deductible?
Replies: 25
Views: 1371

Re: Can you rollover a Traditional IRA into a 401k if some of the funds were non-deductible?

I have been poring through EPCRS corrective material for the recommended solution, but have not even been able to locate a reference to correcting IRA basis rolled into a QRP. The RR 2014-9 here https://www.irs.gov/irb/2014-17_IRB/ar05.html is not even a part of EPCRS, but it clearly indicates in SI...
by Alan S.
Mon Apr 17, 2017 12:28 pm
Forum: Investing - Help with Personal Investments
Topic: Exceeded Roth IRA Contribution in 2015 ... now what?
Replies: 4
Views: 424

Re: Exceeded Roth IRA Contribution in 2015 ... now what?

Yes, but in OP's case the due date expired last October. There are 2 ways to correct an excess contribution AFTER the due date passed so that the annual excise taxes stop. 1) Remove the excess amount (no earnings come out). Report on Forms 8606 and 5329. 2) Apply the excess as a later year Roth cont...
by Alan S.
Mon Apr 17, 2017 12:07 pm
Forum: Investing - Help with Personal Investments
Topic: [Rolling over IRA to 401(k), non-deductible contributions]
Replies: 8
Views: 471

Re: [Rolling over IRA to 401(k), non-deductible contributions]

Alan S., not to hijack the OPs thread, but if I am reading the above replies correctly, are you saying a person could rollover their tIRA into their 401K, leaving behind their basis in the tIRA? As an example, assume 3 tIRAs with a total of $100K ($90K pretax, $10K basis). Roll the $90K into the 40...
by Alan S.
Mon Apr 17, 2017 11:54 am
Forum: Personal Finance (Not Investing)
Topic: "Vanguard's free RMD Service: Sign up before you turn 70½"
Replies: 23
Views: 2570

Re: "Vanguard's free RMD Service: Sign up before you turn 70½"

The IRS will usually waive the penalty if the late RMD is first removed and a 5329 filed to request the penalty be waived due to reasonable cause. The IRS has been accepting just about any reason including "I forgot and it will not happen again". RMD service is good for people who are not ...
by Alan S.
Mon Apr 17, 2017 11:41 am
Forum: Investing - Help with Personal Investments
Topic: Best way to take RMD
Replies: 18
Views: 2289

Re: Best way to take RMD

Note that IRA custodians all have your DOB and therefore know exactly when you become eligible for a QCD. Now whether CSRs have enough training to check the taxpayer's age before a check to a charity is cut is another matter. They probably would catch a premature request in some cases and in others ...
by Alan S.
Mon Apr 17, 2017 11:31 am
Forum: Investing - Help with Personal Investments
Topic: Can you rollover a Traditional IRA into a 401k if some of the funds were non-deductible?
Replies: 25
Views: 1371

Re: Can you rollover a Traditional IRA into a 401k if some of the funds were non-deductible?

if you did have another non Roth IRA at the end of 2016 of sufficient value you probably did not roll any basis into the solo K. Actually, what about this... I didn't have another non-Roth IRA at the time, but I did just open a new Traditional IRA and contribute to it as a *2016* contribution this ...
by Alan S.
Mon Apr 17, 2017 10:29 am
Forum: Investing - Help with Personal Investments
Topic: [Rolling over IRA to 401(k), non-deductible contributions]
Replies: 8
Views: 471

Re: [Rolling over IRA to 401(k), non-deductible contributions]

Yes, if your 401k plan will accept IRA rollovers you can roll the pre tax balance of your IRA into the plan. It is very important to determine the current amount of IRA basis before doing the rollover, because the plan cannot legally accept any IRA basis. The amount you would roll over would be your...
by Alan S.
Sun Apr 16, 2017 10:34 pm
Forum: Investing - Help with Personal Investments
Topic: 2017 backdoor roth: mistake? how to fix?
Replies: 2
Views: 368

Re: 2017 backdoor roth: mistake? how to fix?

Yes, you could certainly do that - recharacterize the conversion and then recharacterize the TIRA contribution as a Roth regular contribution. You will end up as if you made a regular Roth contribution in the first place. Of course, it will involve some tax filing work with explanatory statements of...
by Alan S.
Sun Apr 16, 2017 10:03 pm
Forum: Personal Finance (Not Investing)
Topic: Is 5 year waiting rule applies to after tax 401k rollover to roth ira?
Replies: 18
Views: 2139

Re: Is 5 year waiting rule applies to after tax 401k rollover to roth ira?

No, the plan will track everything as long as the funds are in the designated Roth and will report distributions on a 1099R. But after the Roth 401k is rolled into a Roth IRA, then the Roth owner must track everything until the Roth IRA is qualified. Easier to just not take any Roth IRA distribution...
by Alan S.
Sun Apr 16, 2017 8:32 pm
Forum: Personal Finance (Not Investing)
Topic: Is 5 year waiting rule applies to after tax 401k rollover to roth ira?
Replies: 18
Views: 2139

Re: Is 5 year waiting rule applies to after tax 401k rollover to roth ira?

does same rules apply to non deductible traditional IRA contributions that get converted to Roth IRA, for example if I have $10000 non deductible contributions in traditional IRA that gained $26 in earnings, then I convert the full amount to Roth IRA and pay taxes on the $26, Can I withdraw the $10...
by Alan S.
Sun Apr 16, 2017 8:19 pm
Forum: Investing - Help with Personal Investments
Topic: State tax on Roth 401k
Replies: 2
Views: 371

Re: State tax on Roth 401k

Same for a Roth IRA with respect to CA taxation if your Roth IRA was qualified. You would normally roll your Roth 401k to your Roth IRA before age 70.5 to avoid RMDs on your Roth 401k. However, if you had creditor protection concerns regarding CA's weak IRA creditor protection, you might retain the ...
by Alan S.
Sun Apr 16, 2017 6:36 pm
Forum: Investing - Help with Personal Investments
Topic: Can you rollover a Traditional IRA into a 401k if some of the funds were non-deductible?
Replies: 25
Views: 1371

Re: Can you rollover a Traditional IRA into a 401k if some of the funds were non-deductible?

I have a Traditional IRA that includes a contribution during a year when the contribution wasn't tax-deductible because my wife contributed to her 401k account that year (and so I submitted a form 8606 that year). Last year I did a rollover of that entire Traditional IRA into my Solo 401k. Then I c...
by Alan S.
Sun Apr 16, 2017 6:10 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion of Excess Traditional Contribution
Replies: 1
Views: 136

Re: Roth Conversion of Excess Traditional Contribution

Yes, this is a real reporting mess due to limited IRS guidance relative to this fact pattern. The usual approach to this situation is to recharacterize one of the conversions and then withdraw the excess TIRA contribution. However, in your case the extended due date has passed, so you cannot rechara...
by Alan S.
Sun Apr 16, 2017 1:41 pm
Forum: Personal Finance (Not Investing)
Topic: 1099-R shows code 81 but TAXACT uses code 1 causing tax/penalty
Replies: 3
Views: 456

Re: 1099-R shows code 81 but TAXACT uses code 1 causing tax/penalty

The 1099R is completely correct, so the problem is likely related to how you are entering this into Tax Act. I am not familiar with Tax Act, so can only guess about the solution. Perhaps someone else who knows the program can comment. Of course, you should be taxed on the $70 on line 15b of Form 104...

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