Search found 343 matches

by bobsmith
Fri Dec 15, 2017 6:20 pm
Forum: Investing - Help with Personal Investments
Topic: Changing cost basis on Noncoverd shares
Replies: 22
Views: 1490

Re: Changing cost basis on Noncoverd shares

bobsmith, concerning: " So, while I could have sold the noncovered shares, I believe it would have created a rule violation with the IRS once they figured out I shouldn't have been able to use SpecID on them." There would not have been any rule violation as long as on your tax return you indicate t...
by bobsmith
Fri Dec 15, 2017 7:08 am
Forum: Investing - Help with Personal Investments
Topic: Changing cost basis on Noncoverd shares
Replies: 22
Views: 1490

Re: Changing cost basis on Noncoverd shares

bobsmith, concerning: "So far as I understand, Vanguard doesn't let me chose different basises for covered and noncovered shares within the fund." Vanguard needs to know the method a shareholder wants used for covered shares so Vanguard can report to the IRS and the shareholder the capital gain of ...
by bobsmith
Wed Dec 13, 2017 10:02 pm
Forum: Investing - Help with Personal Investments
Topic: Changing cost basis on Noncoverd shares
Replies: 22
Views: 1490

Re: Changing cost basis on Noncoverd shares

You've gotten meaty replies on the tax law. In addition, I like to think outside the box when things get so complicated. Some ideas: 1) If you make regular donations to charity, you can donate the noncovered shares, and use the cash you would have donated for other purposes. This is a great techniq...
by bobsmith
Wed Dec 13, 2017 10:01 pm
Forum: Investing - Help with Personal Investments
Topic: Changing cost basis on Noncoverd shares
Replies: 22
Views: 1490

Re: Changing cost basis on Noncoverd shares

So I can change to SpecID and sell all the covered shares, then switch back to ACB to sell all the Noncovered shares treating them forever more as one lot? (This would mean I change BACK to ACB after selling off all the covered shares using SpecID) Is that correct? If you sell all remaining shares,...
by bobsmith
Wed Dec 13, 2017 6:36 am
Forum: Investing - Help with Personal Investments
Topic: Changing cost basis on Noncoverd shares
Replies: 22
Views: 1490

Re: Changing cost basis on Noncoverd shares

TravelGeek wrote:
Wed Dec 13, 2017 12:57 am
Average, not adjusted, I think.
Yes, I was referring to Average Cost Basis.
by bobsmith
Tue Dec 12, 2017 9:38 pm
Forum: Investing - Help with Personal Investments
Topic: Changing cost basis on Noncoverd shares
Replies: 22
Views: 1490

Re: Changing cost basis on Noncoverd shares

Upon rereading the opening post, some details in my original version of this post were incorrect. I have deleted the first two paragraphs of what I posted and left the final paragraph. You cannot change to SpecID for non-covered shares of a mutual fund if you have sold non-covered shares of the fun...
by bobsmith
Tue Dec 12, 2017 11:54 am
Forum: Investing - Help with Personal Investments
Topic: Changing cost basis on Noncoverd shares
Replies: 22
Views: 1490

Re: Changing cost basis on Noncoverd shares

I think - but do not know for sure - that if you switch to Specific ID for the fund, you will regain the option to specify whether to sell the covered shares or the non-covered shares. So, you would be able to do your Transaction 1. (Selling all the covered shares you have.) Well that alone would b...
by bobsmith
Mon Dec 11, 2017 2:51 pm
Forum: Investing - Help with Personal Investments
Topic: Changing cost basis on Noncoverd shares
Replies: 22
Views: 1490

Re: Changing cost basis on Noncoverd shares

You may want to read this: "Changing Cost Basis Methods" http://fairmark.com/investment-taxation/mutual-fund-tax-guide/averaging/changing/ (Or, to get it from the horse's mouth, IRS Publication 550, starting about p. 46 https://www.irs.gov/pub/irs-pdf/p550.pdf . ) From the Fairmark article: For non...
by bobsmith
Mon Dec 11, 2017 12:42 pm
Forum: Investing - Help with Personal Investments
Topic: Changing cost basis on Noncoverd shares
Replies: 22
Views: 1490

Changing cost basis on Noncoverd shares

Hi, I'd like to sell some shares of a mutual fund but it's complicated because some shares are covered while others are not and because my intention is to switch from Average-Cost-Method to SpecID and then, in the future I'll likely need to switch back to Average-Cost-Method again. I'd like to prese...
by bobsmith
Mon Nov 20, 2017 4:00 pm
Forum: Investing - Help with Personal Investments
Topic: Cashed out Inherited IRA used to justify IRA contribution?
Replies: 20
Views: 1174

Re: Cashed out Inherited IRA used to justify IRA contribution?

One last nuance if you're still checking back on this thread.... 1. I make $5,500 in 2017 in earned income and no other income. 2. I contribute $5,500 to my 401K Roth. 3. I contribute $5,500 to my Roth IRA. So far so good, but can I then contribute yet ANOTHER $5,500 to my wife's Roth IRA? If no, c...
by bobsmith
Mon Nov 20, 2017 3:58 pm
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Re: Cost basis question about Vanguard's covered/uncovered mutual fund shares

Just want to say thanks to everyone who posted a reply to help me understand. Even if I didn't respond directly to you, I did read and do appreciate your response.
by bobsmith
Mon Nov 20, 2017 3:49 pm
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Re: Cost basis question about Vanguard's covered/uncovered mutual fund shares

What I'm having trouble understanding is how average cost basis can be considered the same as FIFO or SpecID. With average costs basis, you just gather all the purchases over all time in the fund, compare them as a group to the sale price, and use that percent of unrealized gain for all sales of sh...
by bobsmith
Mon Nov 20, 2017 10:33 am
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Re: Cost basis question about Vanguard's covered/uncovered mutual fund shares

Whenever one sells at Average Cost, one sells shares FIFO. One can also sell with Specific ID and identify the shares to shares FIFO. FIFO is a method of identifying shares for record keeping. It is not a cost basis method. I can also say this: If you sell the first shares you bought, what is the c...
by bobsmith
Mon Nov 20, 2017 8:21 am
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Re: Cost basis question about Vanguard's covered/uncovered mutual fund shares

However, at this point if I could just sell the covered shares portion of the investment all together at once using average-cost-basis for those only, that would be a good solution for me. You cannot do that, so that won't be a solution for you. As soon as you are using Average Cost, that means you...
by bobsmith
Mon Nov 20, 2017 7:55 am
Forum: Investing - Help with Personal Investments
Topic: Cashed out Inherited IRA used to justify IRA contribution?
Replies: 20
Views: 1174

Re: Cashed out Inherited IRA used to justify IRA contribution?

Yes, that is correct. It is cut and dried. One last nuance if you're still checking back on this thread.... 1. I make $5,500 in 2017 in earned income and no other income. 2. I contribute $5,500 to my 401K Roth. 3. I contribute $5,500 to my Roth IRA. So far so good, but can I then contribute yet ANO...
by bobsmith
Sat Nov 18, 2017 11:13 am
Forum: Investing - Help with Personal Investments
Topic: Cashed out Inherited IRA used to justify IRA contribution?
Replies: 20
Views: 1174

Re: Cashed out Inherited IRA used to justify IRA contribution?

One final thought on the original question: If your friend has no income and intends to continue to have no income through his lifetime and into retirement, why does he need an IRA? His taxes in retirement will be zero, so there is no difference between holding this money as cash and putting it int...
by bobsmith
Sat Nov 18, 2017 11:10 am
Forum: Investing - Help with Personal Investments
Topic: Cashed out Inherited IRA used to justify IRA contribution?
Replies: 20
Views: 1174

Re: Cashed out Inherited IRA used to justify IRA contribution?

Yes, that is correct. It is cut and dried. Compensation as defined in IRS Publication 590-A is required for an IRA contribution. Traditional and/or Roth combined up to the limit. Traditional (pre-tax) 401k employee deferrals reduce compensation reported on your W-2 Box 1 wages, Roth (post-tax) 401k...
by bobsmith
Sat Nov 18, 2017 11:07 am
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Re: Cost basis question about Vanguard's covered/uncovered mutual fund shares

And here is a link to a previous discussion with a link to some IRS regulations posted by sscritic that may be helpful: https://www.bogleheads.org/forum/viewtopic.php?t=143743 Yes that was helpful. One thing that old thread referenced was the idea to use VanG's transaction history for your own reco...
by bobsmith
Fri Nov 17, 2017 1:06 pm
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Re: Cost basis question about Vanguard's covered/uncovered mutual fund shares

You can always call Vanguard again and see if you get a different answer than your previous call. :twisted: Personally, I don't think the demarcation will be the covered / non-covered date necessarily. That's because if you sold shares AFTER that date, but did not use Specification Identification, ...
by bobsmith
Fri Nov 17, 2017 10:34 am
Forum: Investing - Help with Personal Investments
Topic: Cashed out Inherited IRA used to justify IRA contribution?
Replies: 20
Views: 1174

Re: Cashed out Inherited IRA used to justify IRA contribution?

The only time you can make both 401k employee deferrals and IRA contributions on the same money is when it is a Roth 401k deferral. To adjust your scenario a little. If you had $10,000 in compensation. You could make a $4,500 traditional 401k deferral, a $4,500 Roth 401k deferral and you could stil...
by bobsmith
Fri Nov 17, 2017 10:10 am
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Re: Cost basis question about Vanguard's covered/uncovered mutual fund shares

You do not have to sell uncovered shares first. Or ever. Only the covered shares will change when you select SPEC ID--those purchased after 2012. What you say makes sense, but when I called Vanguard, they said I would have to sell the uncovered shares first, no matter what. Have you actually confir...
by bobsmith
Fri Nov 17, 2017 9:55 am
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Re: Cost basis question about Vanguard's covered/uncovered mutual fund shares

I also noticed that even for the "covered" shares, there was no record shown of when I bought and sold the shares and at what amounts as I typically see with funds using the specified share method. (I assume some information can be found looking at transaction history). <skip> I never kept any buy/...
by bobsmith
Fri Nov 17, 2017 9:35 am
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Re: Cost basis question about Vanguard's covered/uncovered mutual fund shares

You do not have to sell uncovered shares first. Or ever. Only the covered shares will change when you select SPEC ID--those purchased after 2012. What you say makes sense, but when I called Vanguard, they said I would have to sell the uncovered shares first, no matter what. Have you actually confir...
by bobsmith
Fri Nov 17, 2017 9:28 am
Forum: Investing - Help with Personal Investments
Topic: Confused about IRA deduction Limts
Replies: 15
Views: 856

Re: Confused about IRA deduction Limts

Meanwhile annual gains (dividends, etc.) are not taxed each year as they would be in a taxable account. Then, when you rolled it over into a Roth, you would have had to pay income taxes on it again, right? Only the gains, not the original contribution. Ah, okay. Light Bulb! Thanks for your patient ...
by bobsmith
Thu Nov 16, 2017 7:51 pm
Forum: Investing - Help with Personal Investments
Topic: Confused about IRA deduction Limts
Replies: 15
Views: 856

Re: Confused about IRA deduction Limts

#1. First, I get confused about what Modified AGI is. Say our combined income is 155k, but we contribute 10K to a 403b plan. Then, we claim the standard deduction and two personal exemptions ($12,700 + $4050 x2 = $20,800). So is my Modified AGI 145k? (155K-10K) or is my Modified AGI 124.2k? (155k-1...
by bobsmith
Thu Nov 16, 2017 7:41 pm
Forum: Investing - Help with Personal Investments
Topic: Confused about IRA deduction Limts
Replies: 15
Views: 856

Re: Confused about IRA deduction Limts

Still, why would anyone want to make a Traditional IRA contribution if they couldn't deduct it? It seems you're allowed to do the full amount even if you can only deduct a portion of it, or am I wrong about that? Person X makes too much to contribute to a Roth IRA but can't use the backdoor method ...
by bobsmith
Thu Nov 16, 2017 4:03 pm
Forum: Investing - Help with Personal Investments
Topic: Confused about IRA deduction Limts
Replies: 15
Views: 856

Re: Confused about IRA deduction Limts

#1. First, I get confused about what Modified AGI is. Say our combined income is 155k, but we contribute 10K to a 403b plan. Then, we claim the standard deduction and two personal exemptions ($12,700 + $4050 x2 = $20,800). So is my Modified AGI 145k? (155K-10K) or is my Modified AGI 124.2k? (155k-1...
by bobsmith
Thu Nov 16, 2017 3:59 pm
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Re: Cost basis question about Vanguard's covered/uncovered mutual fund shares

I have one single mutual fund in a taxable account at Vanguard. The shares are all uncovered. I set the cost basis method to Specific ID whenever Vanguard.com allowed that to be done through the web interface. Vanguard.com even says the cost basis method is Specific ID. Nevertheless, when I have so...
by bobsmith
Thu Nov 16, 2017 3:53 pm
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Re: Cost basis question about Vanguard's covered/uncovered mutual fund shares

This is what I've done and I can't guarantee it's the best way, but it works for me. *All shares before 2012 are uncovered. They'll sell at Average Cost, when I sell them *All shares after 2012 I set to SPEC ID. I can choose which tax lots to sell, when I sell them. Go into your account, to Cost Ba...
by bobsmith
Thu Nov 16, 2017 3:13 pm
Forum: Investing - Help with Personal Investments
Topic: Cashed out Inherited IRA used to justify IRA contribution?
Replies: 20
Views: 1174

Re: Cashed out Inherited IRA used to justify IRA contribution?

It's my understanding that Life Insurance death benefits are tax free (except interest accumulated after time of death). Why would you want a tax free Life Insurance death benefit placed in an IRA where it will be taxed as ordinary income when withdrawn. Am I missing something? Nope, you understand...
by bobsmith
Thu Nov 16, 2017 3:11 pm
Forum: Investing - Help with Personal Investments
Topic: Cashed out Inherited IRA used to justify IRA contribution?
Replies: 20
Views: 1174

Re: Cashed out Inherited IRA used to justify IRA contribution?

A person "earns" $10,000 working a real job for an employer and has no other income. He decides to put $7,000 into a 401k plan (traditional NON-roth), leaving him with only $3,000 to report as income for the tax year. Does this mean the most he can put into an IRA is $3,000 or can he do the full $5...
by bobsmith
Thu Nov 16, 2017 3:10 pm
Forum: Investing - Help with Personal Investments
Topic: Cashed out Inherited IRA used to justify IRA contribution?
Replies: 20
Views: 1174

Re: Cashed out Inherited IRA used to justify IRA contribution?

There should be minimal taxes if he withdraws the funds. Perhaps withdraw $5000 in 2017 and $5000 in 2018 to spread out the income. Standard deduction covers the first $3400(?) so he is paying 10% of perhaps $1600 or $160 each tax year. I understand your point about minimal taxes. I simplified the ...
by bobsmith
Thu Nov 16, 2017 2:57 pm
Forum: Investing - Help with Personal Investments
Topic: Cashed out Inherited IRA used to justify IRA contribution?
Replies: 20
Views: 1174

Re: Cashed out Inherited IRA used to justify IRA contribution?

First, thanks everyone for your replies. Always great help here at bogleheads! Okay, I got my answer. I now understand it's not an option because it's not "earned" income. Follow up. Does it make any difference if the contribution was Roth or Traditional? Along these same lines, let me throw out a d...
by bobsmith
Thu Nov 16, 2017 2:43 pm
Forum: Investing - Help with Personal Investments
Topic: Cost basis question about Vanguard's covered/uncovered mutual fund shares
Replies: 28
Views: 1470

Cost basis question about Vanguard's covered/uncovered mutual fund shares

So I've had this Vanguard fund I've held at Vanguard for 20 years. It was never held anywhere else. Long ago I established it to use the average-cost-basis method. Then, after the rules changed (2014?) requiring Vanguard to keep records of the sales, I found myself holding uncovered shares. For a co...
by bobsmith
Thu Nov 16, 2017 2:21 pm
Forum: Investing - Help with Personal Investments
Topic: Cashed out Inherited IRA used to justify IRA contribution?
Replies: 20
Views: 1174

Cashed out Inherited IRA used to justify IRA contribution?

I have a friend who doesn't work at all. No pension or social security.. no income at all. However, a family member died leaving him an IRA which contained a life insurance policy that paid a death benefit to the IRA. The Life insurance company would not allow him to inherit the IRA directly, so ins...
by bobsmith
Thu Nov 16, 2017 2:07 pm
Forum: Investing - Help with Personal Investments
Topic: Confused about IRA deduction Limts
Replies: 15
Views: 856

Confused about IRA deduction Limts

I'm a little confused by the IRA deduction limit. So if I'm married filing jointly, and I participate in a state pension plan through my employer while also participating in my employers 403b plan, how is my (traditional non-roth) IRA contribution affected? I meet all the typical IRA requirements. S...
by bobsmith
Thu Nov 16, 2017 1:38 pm
Forum: Investing - Theory, News & General
Topic: Vanguard and Newport Group first experience
Replies: 1
Views: 572

Vanguard and Newport Group first experience

Hi, long time Vanguard customer and fan. Just wanted to say I'm not all that thrilled with Newport Group so far. My wife holds a 403b through her employer which uses Vanguard as a vendor which, of course, is now Newport Group. She waited on the phone for OVER AND HOUR before she was able to speak to...
by bobsmith
Fri Dec 23, 2016 6:20 pm
Forum: Personal Finance (Not Investing)
Topic: Understanding AMT
Replies: 19
Views: 2688

Re: Understanding AMT

kanohe,

Threshold? Just me mixing up terms again. I meant "AMT exemption amount". I think I now know enough to be dangerous. I'm a ways off from being able to take advantage of this, if ever, but when I time comes I'll check with a good tax CPA.

http://www.savingtoinvest.com/alternati ... n-amounts/
by bobsmith
Thu Dec 22, 2016 8:21 am
Forum: Personal Finance (Not Investing)
Topic: Understanding AMT
Replies: 19
Views: 2688

Re: Understanding AMT

Qualified dividends and long-term capital gains. The marginal rate on these is 15% for most investors paying regular tax, but 22% in the phase-out range under the AMT, and 15% outside the phase-out. Thanks for giving me an idea of what triggers the AMT. To be clear, with regards to my example, I wo...
by bobsmith
Thu Dec 22, 2016 8:19 am
Forum: Personal Finance (Not Investing)
Topic: Understanding AMT
Replies: 19
Views: 2688

Re: Understanding AMT

Qualified dividends and long-term capital gains. The marginal rate on these is 15% for most investors paying regular tax, but 22% in the phase-out range under the AMT, and 15% outside the phase-out. Thanks for giving me an idea of what triggers the AMT. To be clear, with regards to my example, I wo...
by bobsmith
Thu Dec 22, 2016 8:07 am
Forum: Personal Finance (Not Investing)
Topic: Understanding AMT
Replies: 19
Views: 2688

Re: Understanding AMT

kaneohe,

You're "nitpicks" are dead on and I appreciate the correction.
by bobsmith
Wed Dec 21, 2016 12:53 pm
Forum: Personal Finance (Not Investing)
Topic: Understanding AMT
Replies: 19
Views: 2688

Re: Understanding AMT

You might pay AMT if you have a lot of income which is ignored by federal tax but is taxed under the AMT, such as incentive stock options or AMT-taxable municipal bonds. I'm a passive investor so pretty much everything is invested in index stocks and the bonds are inside retirement accounts. I'm no...
by bobsmith
Wed Dec 21, 2016 12:44 pm
Forum: Personal Finance (Not Investing)
Topic: Understanding AMT
Replies: 19
Views: 2688

Re: Understanding AMT

Thanks everyone for the links, advice, and information. Very helpful as I'm come to expect from bogleheads. Although the kind of data I plugged into Tax Caster never showed me paying any AMT, it does appear Tax Caster provides a field showing AMT, so I was wrong to assume it didn't calculate AMT. I'...
by bobsmith
Wed Dec 21, 2016 11:31 am
Forum: Personal Finance (Not Investing)
Topic: Understanding AMT
Replies: 19
Views: 2688

Re: Understanding AMT

kaneohe, I don't see an option for "View full report", but when I do turbo tax just above the taxes owed in big red numbers, there's a caption, "Estimated Amount Owed". There's a carrot next to it (^) that, when I click it, gives me the information you describe. Thanks, that was ...
by bobsmith
Tue Dec 20, 2016 12:26 pm
Forum: Personal Finance (Not Investing)
Topic: Understanding AMT
Replies: 19
Views: 2688

Understanding AMT

I'm trying to understand Alternative Minimum Tax. First, if there's an online calculator somewhere, please let me know. I'm aware of the online free version of Tax Caster, but either I'm wrong on some variable, or it doesn't know how to recognize and process the AMT. For 2016, say I'm married, filin...
by bobsmith
Fri Jun 24, 2016 4:22 pm
Forum: Investing - Theory, News & General
Topic: [Vanguard Total International] ETF currently down 7.09% - Time to sell?
Replies: 39
Views: 4923

Re: Vang TIn'tSMI ETF currently down 7.09%

Is looking at Vanguard Total International Stock ETF price movement near close good prediction of the price movement equivalent mutual fund will get? Yes. VTIAX hasn't posted yet, but it should be pretty close to the 7.74 the ETF closed at for the day. m I'm a long term buy and hold investor and I'...
by bobsmith
Thu Mar 10, 2016 9:48 am
Forum: Investing - Theory, News & General
Topic: Warren Buffet & Ted Seidas Bet: Passive vs Active Trading
Replies: 35
Views: 3865

Index vs. Hedgefund? <--- Warren Buffet Places Bet

[Thread merged into here, see below. --admin LadyGeek]

Eight years ago, Warren Buffett made a $1 million bet with some hedge fund managers. We learn what the bet tells us about one of the most important questions in investing.

http://www.npr.org/2016/03/10/469897691 ... e-fund-bet
by bobsmith
Fri Feb 19, 2016 8:49 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard unexpected Wash Sale
Replies: 9
Views: 1271

Re: Vanguard unexpected Wash Sale

The Fund was a Vanguard mutual fund held with them since 2005. I've never used anything except average cost basis. Currently Vanguard records what's left of this fund as containing only covered shares with no short term gain or loss but with a large unrealized long term loss. If I were to sell the ...
by bobsmith
Fri Feb 19, 2016 8:46 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard unexpected Wash Sale
Replies: 9
Views: 1271

Re: Vanguard unexpected Wash Sale

To be clear I should wait to sell the remainder of the fund because otherwise it will create another wash sale, right? Nope, I think if you sell ALL remaining shares that there will be no wash sale and the previously disallowed loss will be applied to the cost basis. After all, if you sell all shar...