Thank you all so much for your responses. I know I can always count on the folks here. I have taken the advice and read up on Schedule D, at least preliminarily, and plan to a do a more in-depth read before long.
Thanks again folks.
Search found 346 matches
- Sun Mar 01, 2020 9:29 pm
- Forum: Personal Finance (Not Investing)
- Topic: Tax Loss: Carryover & Short vs Long-Term Capital Gains
- Replies: 4
- Views: 594
- Fri Feb 28, 2020 8:42 pm
- Forum: Personal Finance (Not Investing)
- Topic: Tax Loss: Carryover & Short vs Long-Term Capital Gains
- Replies: 4
- Views: 594
Tax Loss: Carryover & Short vs Long-Term Capital Gains
Hi folks, Apologies - it's been a minute. I've got a quick set of tax loss questions, hopefully which are pretty simple & quick: 1) Do capital gains losses carry over indefinitely from year to year? 2) Is there a cap to the amount of capital gains losses I can use in future years to offset capital gains? 3) If I have a long-term capital gains loss, can that be used to offset short-term capital gains, both in present & future years? So, quick example: Let's say I sell Delta stock at a (long-term) capital gains loss of $23,000, and that's my only stock sale this year. I use that to buy Apple stock, which I sell in 10 months (January 2021) for a short-term capital gain of $20,000. Can I apply the leftover long-term capital gains loss o...
- Mon Mar 11, 2019 10:12 am
- Forum: Personal Investments
- Topic: Should I go all in with Vanguard or "diversify" with Fidelity?
- Replies: 48
- Views: 7622
Re: Should I go all in with Vanguard or "diversify" with Fidelity?
I watched Mr. Robot and opened more accounts. Diversifies risk.
Also, a main concern for me as a long-term investor with taxable accounts is the idea of liquidation of an account, forcing me to take massive capital gains. In 30 years, if for somer reason Vanguard decides to close and all of my funds are there, I'll have to pay capital gains on all of those "profits" even if I decide to simply reinvest the proceeds in an identical fund somewhere else.
Also, a main concern for me as a long-term investor with taxable accounts is the idea of liquidation of an account, forcing me to take massive capital gains. In 30 years, if for somer reason Vanguard decides to close and all of my funds are there, I'll have to pay capital gains on all of those "profits" even if I decide to simply reinvest the proceeds in an identical fund somewhere else.
- Wed Jan 09, 2019 12:14 pm
- Forum: Investing - Theory, News & General
- Topic: VMMXX - Interest or Dividend Tax?
- Replies: 10
- Views: 2329
Re: VMMXX - Interest or Dividend Tax?
That makes sense. Always good to know the reason behind things.sport wrote: ↑Tue Jan 08, 2019 1:57 pm The idea behind "qualified dividends" is that when companies pay stock dividends, the money comes from profits that have already been taxed at their corporate rate. So, the money in these dividends is actually being taxed twice, once at the corporate level, and again at the shareholder level. Money Market and Bond Funds do not have "profits" that have been taxed. They are just paying out interest that they have received on their holdings. In other words, these dividends are really interest payments. However, since they come from a mutual fund, they technically get called dividends.
- Tue Jan 08, 2019 1:11 pm
- Forum: Investing - Theory, News & General
- Topic: VMMXX - Interest or Dividend Tax?
- Replies: 10
- Views: 2329
Re: VMMXX - Interest or Dividend Tax?
Ah, got it - so, basically there are no money market funds that are considered qualified dividends, correct?
- Mon Jan 07, 2019 12:06 pm
- Forum: Investing - Theory, News & General
- Topic: VMMXX - Interest or Dividend Tax?
- Replies: 10
- Views: 2329
Re: VMMXX - Interest or Dividend Tax?
Hmm sounds like two different experiences you all have had - are these both from personal experience? Wonder why it would be different for two different people
- Mon Jan 07, 2019 11:40 am
- Forum: Investing - Theory, News & General
- Topic: VMMXX - Interest or Dividend Tax?
- Replies: 10
- Views: 2329
VMMXX - Interest or Dividend Tax?
Simple question I couldn't figure out from some initial research - is VMMXX (Vanguard Money Market) a mutual fund that pays dividends taxed as dividends, or does it accrue interest taxed as ordinary income?
Relatedly, are other money market funds (e.g., Ally's money market fund) also dividend yielding, or interest yielding? Trying to estimate taxes for 2019.
Thanks in advance
Relatedly, are other money market funds (e.g., Ally's money market fund) also dividend yielding, or interest yielding? Trying to estimate taxes for 2019.
Thanks in advance
- Sun Nov 18, 2018 10:53 am
- Forum: Personal Investments
- Topic: Is it 'Market Timing' (i.e., Bad) to Have an Investment Plan Where You Increase Stock Allocation if Market Declines?
- Replies: 24
- Views: 3115
Re: Is it 'Market Timing' (i.e., Bad) to Have an Investment Plan Where You Increase Stock Allocation if Market Declines?
I've been thinking a lot about this as well recently, and here's my take from a non-professional/non-expert perspective: "Market timing" has come to take on different meanings and different connotations, and has such - to some degree - outlived its usefulness in terms of categorically avoiding something simply because it has that label. Much better would be to understand the principles/forces that are present in market timing and, assuming you're against them, avoid them. Whether or not "rebalancing" falls within the category of "market timing" depends on connotation. Rebalancing is, by definition, a rules-based system of shifting assets based on current valuation/cost of different assets in your portfolio. If ...
- Fri Sep 14, 2018 3:49 pm
- Forum: Personal Consumer Issues
- Topic: How to help teenager fix silly mistakes in math?
- Replies: 50
- Views: 5587
Re: How to help teenager fix silly mistakes in math?
Haven't read all the responses so apologize if this has been said, but if the issue is that she gets the answer correct when she self-checks, but doesn't self-check and often makes careless answers, a simple strategy is just to have her place a check mark next to the number of the problem indicating that she has checked her work. Then, before turning in the assignment, she should review to be sure she has check marks next to each problem number, then put a check mark at the top right of the first page. Also have her tell her teacher(s) so they get what's up. Even at my age, I constantly make spelling mistakes, etc. and even errors with numbers. None of us are perfect, and re-checking work is just part of being a non-flawless human ;). Some ...
- Mon Sep 10, 2018 12:01 pm
- Forum: Investing - Theory, News & General
- Topic: Breaking down BND (and all bond funds)
- Replies: 14
- Views: 2250
Re: Breaking down BND (and all bond funds)
I completely understand your confusion... here's my understanding of the quandary. The Vanguard site shows the Distribution yield for VBTLX based on the 8/31 distribution to be 2.78%, while the SEC yield is 3.13%. As cited above, the SEC yield uses yield-to-maturity based on the trailing 30-day period. Distribution yield uses only the current monthly income dividend paid, annualized as a percentage of the fund's average net asset value (NAV) for the past month. The conceptual difference is that the SEC yield is forward looking, and includes capital gains that are embedded in the bond portfolio, which arose from the purchase of bonds at prices below their face value. Thanks! So, interestingly BND doesn't include that calculate "distrib...
- Mon Sep 10, 2018 12:00 pm
- Forum: Investing - Theory, News & General
- Topic: Breaking down BND (and all bond funds)
- Replies: 14
- Views: 2250
Re: Breaking down BND (and all bond funds)
... Thank you for this - I just responded to the other post maybe indicating my understanding of what you're saying? But please correct me if I'm still off base! Thanks again Vanguard's description of its Total Bond Market ETF , BND, does show distributions. I'm not sure what you're referring to. Most bond funds, including Vanguard's Total Bond in all of its share class forms, do not hold bonds to maturity, because in the final bits of time their yields frequently fall below what is readily obtainable at the target average duration. That's about when short-term, and ultra-short and money market funds start buying them. PJW They do show the distributions but not the yield. It's a simple one-step calculation, but a bit annoying to have to ca...
- Sun Sep 09, 2018 12:49 pm
- Forum: Investing - Theory, News & General
- Topic: Breaking down BND (and all bond funds)
- Replies: 14
- Views: 2250
Re: Breaking down BND (and all bond funds)
Thank you for this - I just responded to the other post maybe indicating my understanding of what you're saying? But please correct me if I'm still off base! Thanks againPhineas J. Whoopee wrote: ↑Sun Sep 09, 2018 10:40 am Yield to Maturity, YTM, which is what yield conventionally means if not otherwise specified, and on which the SEC yield is based (notice how I specified that?), also includes reinvestment of coupons and the inevitable convergence of the bond's market price with its face value as it approaches maturity. I believe the latter is the main thing you're leaving out. Who would accept very much less, or pay very much more, than $1,000 for a $1,000 face value bond that matures tomorrow?
PJW
- Sun Sep 09, 2018 12:48 pm
- Forum: Investing - Theory, News & General
- Topic: Breaking down BND (and all bond funds)
- Replies: 14
- Views: 2250
Re: Breaking down BND (and all bond funds)
I completely understand your confusion... here's my understanding of the quandary. The Vanguard site shows the Distribution yield for VBTLX based on the 8/31 distribution to be 2.78%, while the SEC yield is 3.13%. As cited above, the SEC yield uses yield-to-maturity based on the trailing 30-day period. Distribution yield uses only the current monthly income dividend paid, annualized as a percentage of the fund's average net asset value (NAV) for the past month. The conceptual difference is that the SEC yield is forward looking, and includes capital gains that are embedded in the bond portfolio, which arose from the purchase of bonds at prices below their face value. Thanks! So, interestingly BND doesn't include that calculate "distrib...
- Sun Sep 09, 2018 12:42 pm
- Forum: Investing - Theory, News & General
- Topic: 3 fund portfolio with Money Market instead of Bonds
- Replies: 26
- Views: 4227
3 fund portfolio with Money Market instead of Bonds
With concern over performance of bond funds in the coming years and the ability to quickly move out of a money market fund into a bond fund, has anyone considered building their three fund portfolio using money market fund (e.g., VMMXX) over a bond fund (e.g., BND)? Historically, this may not have made sense, for example when the three fund portfolio was first conceptualized, because money market yields over time will underperform inflation. That may still be true, but there seems to be widespread concern at the moment that bond funds could easily lose value or, at the very least, be much more unstable, over the coming years. As a side note, I should indicate my intention: I want to start off with a 3 fund (ish) portfolio with TSM, TISM, &a...
- Sat Sep 08, 2018 3:08 pm
- Forum: Investing - Theory, News & General
- Topic: Breaking down BND (and all bond funds)
- Replies: 14
- Views: 2250
Re: Breaking down BND (and all bond funds)
Your response is much appreciated! Interest rates have gone up since the beginning of 2018 and since a year ago. Here is what Vanguard tells clients about SEC yield for BND: https://i.imgur.com/fRSadFU.png So it appears to me the SEC yield only uses the past 30 days of income paid by bonds owned by the fund. Thus if the January SEC yield was say 1.8%, there is no way one would have gotten 1.8% nor 3.13% YTD in income annualized for the first 8 months (Jan-Aug) of 2018. I actually ignored yield-to-date yield and just focused on the current distribution divided by recent price. As price has only gone down recently, the only effect recent price changes would have had would be to indicate an even lower distribution yield. Furthermore, the last ...
- Sat Sep 08, 2018 2:23 pm
- Forum: Investing - Theory, News & General
- Topic: Breaking down BND (and all bond funds)
- Replies: 14
- Views: 2250
Breaking down BND (and all bond funds)
Folks, I have to start out with an apology. Understanding bond funds has been like understanding debits & credits - the more I learn, the less I feel like I know. So, I'm researching my actual distribution yield from BND to try to make an apples to apples comparison with my Ally high-yield savings account. I can't, for the life of me, understand what the SEC yield is. Here's my math: Based on the most recent distribution a few days ago ($0.18764), I've extrapolated a current annual distribution yield of just over $2.25 per share, yielding 2.854% based on the current market price of $78.89. In contrast, the SEC yield on Vanguard's website 3.13%. I can't figure out the discrepancy. Here are other variables I've tried to include: • Expense...
- Mon Sep 03, 2018 12:20 pm
- Forum: Investing - Theory, News & General
- Topic: "6 Reasons The Rich Should Pay-Off Their Mortgage"
- Replies: 196
- Views: 43383
Re: "6 Reasons The Rich Should Pay-Off Their Mortgage"
Late to this thread, but to me: Largely a math question based on personal circumstances (e.g., how relatively beneficial is the mortgage interest deduction), but overall I love the comment on the first page that it's really an asset allocation question. For those with larger amounts of money looking to diversify, paying off a loan may just be another conservative asset allocation strategy that doesn't involve today's ambiguity of bond benefits.
- Fri Aug 31, 2018 2:25 pm
- Forum: Personal Consumer Issues
- Topic: Need recommendation for home alarm system
- Replies: 48
- Views: 5877
Re: Need recommendation for home alarm system
Good article in the WSJ this week about DIY home security systems, some that came with the option of having a company monitor them. I haven't looked into those options, but I wonder if insurance would treat them the same. Paywall notice, but here's the link: https://www.wsj.com/articles/home-security-systems-that-are-fast-easy-and-totally-not-creepy-1535288400 There is no discount for you monitoring yourself. It needs to be a central station, and depending on the insurance company may need to be a UL central monitoring solution (which most are). You may need to ask for them to check on what you get discounts for - burglary and fire is usually one discount, freeze is another (temp sensor), and water is another (leakage from water heater / s...
- Wed Aug 29, 2018 11:58 am
- Forum: Personal Consumer Issues
- Topic: Need recommendation for home alarm system
- Replies: 48
- Views: 5877
Re: Need recommendation for home alarm system
Good article in the WSJ this week about DIY home security systems, some that came with the option of having a company monitor them. I haven't looked into those options, but I wonder if insurance would treat them the same.
Paywall notice, but here's the link:
https://www.wsj.com/articles/home-secur ... 1535288400
Paywall notice, but here's the link:
https://www.wsj.com/articles/home-secur ... 1535288400
- Sat Aug 25, 2018 11:05 am
- Forum: Personal Consumer Issues
- Topic: Need recommendation for home alarm system
- Replies: 48
- Views: 5877
Re: Need recommendation for home alarm system
Interesting about the discount on the homeowners insurance - hard to believe folks are getting discounts of $400+ on their yearly premium on homeowners insurance - may need to call USAA again and see what the difference is
- Thu Aug 23, 2018 11:57 am
- Forum: Personal Consumer Issues
- Topic: Need recommendation for home alarm system
- Replies: 48
- Views: 5877
Re: Need recommendation for home alarm system
Does anyone have experience with self-monitoring, meaning not hiring a company to do the monitoring, but using tech to feed data back to you, send alerts, etc.
Honestly, it seems foolish in 2018 for someone to monitor some data and call the police.
Honestly, it seems foolish in 2018 for someone to monitor some data and call the police.
- Fri Aug 10, 2018 1:05 pm
- Forum: Personal Investments
- Topic: SEC yield vs (Schwab) 7-day yield vs Bank Interest
- Replies: 8
- Views: 1476
Re: SEC yield vs (Schwab) 7-day yield vs Bank Interest
Thanks Grabinar for the clarification - too bad reporting by Vanguard isn't a little more straightforward
- Thu Aug 09, 2018 12:51 pm
- Forum: Personal Investments
- Topic: SEC yield vs (Schwab) 7-day yield vs Bank Interest
- Replies: 8
- Views: 1476
Re: SEC yield vs (Schwab) 7-day yield vs Bank Interest
Sorry for the delay in this. So, I think I'm now more confused. So, you're saying the SEC yield is the dividend PLUS any gain in the value of the fund? Put more simply, how do I simply determine the dividend yield without having to manually calculate it manually by looking at actual monthly dividend payments? BND is an ETF, yet you're saying the yield for BND reported on Vanguard's website means something different than, say, the yield on Vanguard VTI?
- Sat Aug 04, 2018 12:36 am
- Forum: Investing - Theory, News & General
- Topic: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)
- Replies: 814
- Views: 112327
Re: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
The question of hidden expenses leads me to ask what Bogleheads estimate to be the hidden fees in your typical TSM fund, both at Vanguard and the competitors. Are the Vanguard supporters here saying that Vanguard exposes all of their fees in the 0.03 ER for those particular funds? What are the average "hidden fees" Bogleheads have uncovered at other funds at Fidelity, etc.? Tracking error, I'm assuming, could be due to things other than fees - so that can't be a direct comparison.
- Sat Aug 04, 2018 12:31 am
- Forum: Investing - Theory, News & General
- Topic: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)
- Replies: 814
- Views: 112327
Re: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
This is very unpersuasive - he basically argues against his own company and business model when he says to be skeptical of low-cost funds.G-Force wrote: ↑Fri Aug 03, 2018 8:14 pm Vanguard's CIO issued a statement about Fidelity's move:
https://www.bloomberg.com/news/articles ... free-funds
- Sat Aug 04, 2018 12:21 am
- Forum: Personal Investments
- Topic: SEC yield vs (Schwab) 7-day yield vs Bank Interest
- Replies: 8
- Views: 1476
Re: SEC yield vs (Schwab) 7-day yield vs Bank Interest
One thing that may be confusing is that the computation of SEC yield differs depending on product. For money-markets, the SEC yield is a 7-day SEC yield while for most bond funds it is a 30-day one. So, your Schwab 7-day yield is likely precisely the SEC yield. Ah, that makes sense. So, am I correct in assuming that - presuming the rate stays exactly the same - my yearly interest/dividend from a $10,000 with a 2% SEC yield would be $200? I'm not trying to get overly technical and count pennies, but want to make sure I'm not leaving off any significant math when comparing funds. This is correct in a money-market fund. In a bond fund, your return would be 2% if rates don't change, but the dividend might not be 2%. Suppose that the fund holds...
- Thu Aug 02, 2018 6:24 pm
- Forum: Personal Investments
- Topic: Park more than $250,000 in cash
- Replies: 24
- Views: 4115
Re: Park more than $250,000 in cash
Thanks! Yeah, keeping it simple is good. Just want to make sure it's good & simple!bikechuck wrote: ↑Thu Aug 02, 2018 11:21 am Don't overlook the beauty of simplicity. Your original plan is a good one, this is a temporary situation and how much time, effort and complexity do you want to go through for what will be at best a marginal improvement over your proposed approach.
I am in a similar situation as I am selling my home of 28 years and purchasing a better home to age in this fall. I have money parked in already existing accounts at ALLY to use this fall when I need them.
- Thu Aug 02, 2018 6:08 pm
- Forum: Personal Investments
- Topic: SEC yield vs (Schwab) 7-day yield vs Bank Interest
- Replies: 8
- Views: 1476
Re: SEC yield vs (Schwab) 7-day yield vs Bank Interest
Ah, that makes sense. So, am I correct in assuming that - presuming the rate stays exactly the same - my yearly interest/dividend from a $10,000 with a 2% SEC yield would be $200? I'm not trying to get overly technical and count pennies, but want to make sure I'm not leaving off any significant math when comparing funds.triceratop wrote: ↑Thu Aug 02, 2018 5:50 pm One thing that may be confusing is that the computation of SEC yield differs depending on product. For money-markets, the SEC yield is a 7-day SEC yield while for most bond funds it is a 30-day one. So, your Schwab 7-day yield is likely precisely the SEC yield.
Thank you so much!
- Thu Aug 02, 2018 5:40 pm
- Forum: Personal Investments
- Topic: SEC yield vs (Schwab) 7-day yield vs Bank Interest
- Replies: 8
- Views: 1476
SEC yield vs (Schwab) 7-day yield vs Bank Interest
I've got another thread going inquiring about parking some cash temporarily, and trying to figure out how to compare yields across savings instruments: I'm seeing SEC yields. 7-day yields (Schwab), and of course traditional yields such as savings account interest rates. Obviously, rates fluctuate so my exact payment will change based on the fund's rate change, but in general are all of those rates equivalent? Are they all after expense ratios are deducted?
I've read through some previous posts on SEC yields, etc., but responses seem to get a bit technical with bond duration, etc. Just looking for a rough guide here. Thanks, as always!
I've read through some previous posts on SEC yields, etc., but responses seem to get a bit technical with bond duration, etc. Just looking for a rough guide here. Thanks, as always!
- Thu Aug 02, 2018 11:17 am
- Forum: Investing - Theory, News & General
- Topic: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)
- Replies: 814
- Views: 112327
Re: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
Newbie question here: If a funds ER changes, do existing owners of shares receive that lower ER? Is this uniform across all funds/ETFs and all companies?
That's a great point about waiting to withdraw funds from competitor accounts such as SCHB and SCHF - there won't be much lost in the next few months, except if there is another streak of capital appreciation then withdrawing will just generate even more capital gains.
That's a great point about waiting to withdraw funds from competitor accounts such as SCHB and SCHF - there won't be much lost in the next few months, except if there is another streak of capital appreciation then withdrawing will just generate even more capital gains.
- Thu Aug 02, 2018 11:12 am
- Forum: Personal Investments
- Topic: Park more than $250,000 in cash
- Replies: 24
- Views: 4115
Re: Park more than $250,000 in cash
The CD unfortunately still counts toward the FDIC limit, and I don't want to lock up money that long, although the early withdrawal penalties aren't that terrible.
- Thu Aug 02, 2018 11:12 am
- Forum: Personal Investments
- Topic: Park more than $250,000 in cash
- Replies: 24
- Views: 4115
Re: Park more than $250,000 in cash
Ah, this is a good and interesting point. Thanks - will have to research this. Is that just money market accounts, or all SEC yields?
- Thu Aug 02, 2018 11:10 am
- Forum: Personal Investments
- Topic: Bottom of the MAGI bucket - Interest vs dividends
- Replies: 10
- Views: 1070
Re: Bottom of the MAGI bucket - Interest vs dividends
Thanks FiveK - this is very clear. Much appreciated!FiveK wrote: ↑Thu Aug 02, 2018 12:54 amOne could equally say interest on the bottom, then salary. All "ordinary income" items get mixed, the standard (or itemized) deduction gets subtracted, then qualified dividends and long term capital gains go together on top.frankmorris wrote: ↑Thu Aug 02, 2018 12:09 am Sorry, you're saying salary is bottom, then bank interest, and then dividends on top?
If so, is that specified somewhere, or is it just because salary and bank interest are taxed at a higher rate than dividends?
- Thu Aug 02, 2018 11:09 am
- Forum: Personal Investments
- Topic: Bottom of the MAGI bucket - Interest vs dividends
- Replies: 10
- Views: 1070
Re: Bottom of the MAGI bucket - Interest vs dividends
Here's my question: In what order are dividends and bank interest "stacked?" Let's say that I received no salary, $30,000 of bank of interest, and $30,000 of qualified dividends. Would the interest be at the "bottom of the bucket" and taxed at the 10% and 12% ordinary tax levels, then the dividends "stacked" on top of that, with each dollar under $37,700 incurring no tax, and each dollar over incurring a 15% tax? Yes but note the number for 0% rate on qualified dividends (I thought it should be $38,600 for single in 2018) applies to taxable income not gross income and it includes the ordinary income (salary and interest). Thanks - this is confusing to me. Would you mind explaining a bit more? In graphical form...
- Thu Aug 02, 2018 12:50 am
- Forum: Personal Investments
- Topic: Bottom of the MAGI bucket - Interest vs dividends
- Replies: 10
- Views: 1070
Re: Bottom of the MAGI bucket - Interest vs dividends
Thanks - this is a fantastic article!Eagle33 wrote: ↑Thu Aug 02, 2018 12:38 am A good explanation by Kitces including a couple great graphics. Brackets are different now, but concept the same.
https://www.kitces.com/blog/understandi ... -in-basis/
- Thu Aug 02, 2018 12:43 am
- Forum: Personal Investments
- Topic: Bottom of the MAGI bucket - Interest vs dividends
- Replies: 10
- Views: 1070
Re: Bottom of the MAGI bucket - Interest vs dividends
Thanks - this is confusing to me. Would you mind explaining a bit more?tfb wrote: ↑Thu Aug 02, 2018 12:17 amYes but note the number for 0% rate on qualified dividends (I thought it should be $38,600 for single in 2018) applies to taxable income not gross income and it includes the ordinary income (salary and interest).frankmorris wrote: ↑Wed Aug 01, 2018 11:52 pm Here's my question: In what order are dividends and bank interest "stacked?" Let's say that I received no salary, $30,000 of bank of interest, and $30,000 of qualified dividends. Would the interest be at the "bottom of the bucket" and taxed at the 10% and 12% ordinary tax levels, then the dividends "stacked" on top of that, with each dollar under $37,700 incurring no tax, and each dollar over incurring a 15% tax?
- Thu Aug 02, 2018 12:09 am
- Forum: Personal Investments
- Topic: Bottom of the MAGI bucket - Interest vs dividends
- Replies: 10
- Views: 1070
Re: Bottom of the MAGI bucket - Interest vs dividends
Sorry, you're saying salary is bottom, then bank interest, and then dividends on top?
If so, is that specified somewhere, or is it just because salary and bank interest are taxed at a higher rate than dividends?
Are there other "ordering rules" I should be aware of?
Thanks!
- Thu Aug 02, 2018 12:07 am
- Forum: Investing - Theory, News & General
- Topic: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)
- Replies: 814
- Views: 112327
Re: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
I too share the questions about the tax efficiency of these new funds vs other mutual funds vs ETFs - if an ETF has better tax efficiency, I'm struggling to see why this would be better. Would be great to know the proposed or anticipated capital gains distributions as well as general turnover rates, perhaps even with some backtesting between how this fund will be managed vs others. Guessing we won't get that. In general, do folks think that the tax efficiency of an ETF would be worth the 3 basis points in cost over the mutual fund version? If so, there's an answer. As others have said, I'd be curious as to whether this is a "new" financial instrument, and what risk that poses with massive selling, etc. I can't help but daydream (n...
- Wed Aug 01, 2018 11:54 pm
- Forum: Personal Investments
- Topic: Park more than $250,000 in cash
- Replies: 24
- Views: 4115
- Wed Aug 01, 2018 11:52 pm
- Forum: Personal Investments
- Topic: Bottom of the MAGI bucket - Interest vs dividends
- Replies: 10
- Views: 1070
Bottom of the MAGI bucket - Interest vs dividends
So sorry - I'm sure this is answered somewhere, but I couldn't find it, and am honestly having a hard time putting this into words. I understand the following to be true when calculating marginal tax brackets & dividends vs ordinary income such as salary: The "bottom of the bucket" so to speak would be salary or ordinary income, so if you earned $37,000 of income, and an additional $10,000 of dividend income, the $37,000 would be at the "bottom of the bucket" and taxed at the 10% and 12% rates. Then, the $10,000 would be added "on the top of the bucket," with any amount over the 12% bracket ($38,700) leading to a 15% tax on each dollar over that amount. Here's my question: In what order are dividends and ba...
- Wed Aug 01, 2018 12:51 pm
- Forum: Investing - Theory, News & General
- Topic: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)
- Replies: 814
- Views: 112327
Re: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
First, I'm quite thankful for Bogleheads to be able to come online and instantly read (and participate in) reactions after I read a news story! Second, does anyone expect any tax implications of owning this Mutual Fund versus a similarly portfolio'd ETF? I don't understand the mechanics fully, but my understanding is that traditionally ETFs are slightly more tax efficient structures. Third, I share everyone's sentiments that I'll be paying close attention to the response from Schwab & Vanguard, as ultimately I don't see a "no response to competition" as sustainable. The only question is how long it would take. Fourth, and this is probably a newbie question: One strong advantage to me of an ETF is that, when I go to sell share...
- Wed Aug 01, 2018 12:50 pm
- Forum: Investing - Theory, News & General
- Topic: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)
- Replies: 814
- Views: 112327
Re: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
Just watching Fidelity on CNBC now with a more full explanation, including the addition that the "Total Market" fund is a Total US market fund, which is a bit of helpful clarification.
- Wed Aug 01, 2018 12:44 pm
- Forum: Personal Investments
- Topic: Park more than $250,000 in cash
- Replies: 24
- Views: 4115
Re: Park more than $250,000 in cash
Thanks everyone - really great replies, and some great options here. DIY bond laddering may be a bit beyond my ability level, and honestly I'm not entirely sure where I want to direct funds at this point, so I really would like to preserve as much liquidity as possible. I'll be going through each of your suggestions so far and comparing the relative benefits for each.
Again much appreciated!
Again much appreciated!
- Wed Aug 01, 2018 12:39 pm
- Forum: Personal Investments
- Topic: Park more than $250,000 in cash
- Replies: 24
- Views: 4115
Re: Park more than $250,000 in cash
Thanks for the heads up on this. I'll check this out. With the new Fidelity zero expense ratios, I may need to open an account there too/alternatively - wondering if they have some sort of deal. Will do some research.jacoavlu wrote: ↑Tue Jul 31, 2018 10:20 pm If I didn’t need the funds too soon I would open a new account at E*TRADE for a $600 cash bonus, and then buy the vanguard treasury money market there because it trades free at E*TRADE I’m pretty sure. That’s like an extra 0.3% if we’re looking for max yield with safety.
- Wed Aug 01, 2018 12:31 pm
- Forum: Personal Investments
- Topic: Sell securities without a commission - advice needed
- Replies: 6
- Views: 665
Re: Sell securities without a commission - advice needed
Thanks everyone - the inherited assets will be a mix of a few things - bonds, individual stocks, mutual funds, etc. I've definitely presented the option I'll personally be using of Schwab, Vanguard, and now potentially Fidelity with these ZERO funds (no expense ratio), but I think she's committed to staying in house at her brokerage, so is just looking for transfer options. That's good to hear that things are negotiable, and considering the broker will really be providing no service related to the transferred in-kind assets, yet stands to benefit from the 1% management fee, I'd imagine he'd be likely to agree to a zero commission transfer of assets in. Has anyone else had luck with this?
- Wed Aug 01, 2018 12:26 pm
- Forum: Investing - Theory, News & General
- Topic: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)
- Replies: 814
- Views: 112327
Re: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)
First, I'm quite thankful for Bogleheads to be able to come online and instantly read (and participate in) reactions after I read a news story! Second, does anyone expect any tax implications of owning this Mutual Fund versus a similarly portfolio'd ETF? I don't understand the mechanics fully, but my understanding is that traditionally ETFs are slightly more tax efficient structures. Third, I share everyone's sentiments that I'll be paying close attention to the response from Schwab & Vanguard, as ultimately I don't see a "no response to competition" as sustainable. The only question is how long it would take. Fourth, and this is probably a newbie question: One strong advantage to me of an ETF is that, when I go to sell shares...
- Tue Jul 31, 2018 9:25 pm
- Forum: Personal Investments
- Topic: Sell securities without a commission - advice needed
- Replies: 6
- Views: 665
Sell securities without a commission - advice needed
Hello everyone: My family is working through figuring out how to handle an inheritance. Personally, I'm choosing to go my own route with a simple Boglehead-esque portfolio, complete with no/little sales commissions. However, a family member is wanting to eventually keep a managed account with a taxable account that charges (somewhat hefty) sales commissions on securities. She is interested in receiving the inherited securities, but wants to sell them relatively quickly (though not immediately), generate cash, then invest them within her taxable/managed accounts. Here's the issue: If she receives the securities from the inherited trust, I'm assuming she'll have to pay a commission on the sale of those securities. This will not be insignifica...
- Tue Jul 31, 2018 9:06 pm
- Forum: Personal Investments
- Topic: Park more than $250,000 in cash
- Replies: 24
- Views: 4115
Re: Park more than $250,000 in cash
Thanks for the reply - So, I may not need to worry too much about the state and local taxes. This seems to be pretty equivalent to the VMMXX vanguard money market account, so probably not worth investing in that specifically because of the higher minimum and lower yield, right?folkher0 wrote: ↑Tue Jul 31, 2018 8:50 pm If you need to carry more than $50,000, vanguard treasury money market is great. Current sec yield 1.87. State and local income tax exempt, which for some will make the taxable equivalent yield higher than prime money market. 100% in t bills so no need for FDIC insurance.
Otherwise you can do a variety of cds or treasuries depending on what your time frame is.
Thanks again
- Tue Jul 31, 2018 9:03 pm
- Forum: Personal Investments
- Topic: Park more than $250,000 in cash
- Replies: 24
- Views: 4115
Re: Park more than $250,000 in cash
Thanks mpsz - is there an advantage over the Vanguard VMMXX with the much higher yield?mpsz wrote: ↑Tue Jul 31, 2018 8:47 pm If you want FDIC insurance with simplicity and the most liquidity, look into Fidelity's Cash Management Account (CMA). The CMA uses 5-10 other banks under the hood (you ONLY deal with Fidelity) and pays 0.53% on amounts over $100k. Other brokerages offer similar accounts but Fidelity's is the best I have seen.
If you're okay with slightly less liquidity, and want a better rate, consider T-Bills. You still sell them on the secondary market before maturity.
- Tue Jul 31, 2018 8:39 pm
- Forum: Personal Investments
- Topic: Park more than $250,000 in cash
- Replies: 24
- Views: 4115
Park more than $250,000 in cash
Hi everyone,
I've searched forums and thought I'd go ahead and create a new thread with the current interest rate environment. I'll be dealing with some cash flows over the coming months and will end up with more than $250,000 in cash, and am wondering current suggestions on safely parking that cash for future investments, house purchase, etc.
Here are my thoughts:
Max out Ally high-yield savings account at $250,000 (FDIC limit) - current yield @ 1.85%
Rest of funds: Vanguard VMMXX money market account - current SEC yield @ 2.06% (with 0.16 expense ratio)
Any other creative ideas? Does anyone see any new risk to VMMXX with rates changing as they are? Sorry, newbie question - I know. My assumption is no.
I've searched forums and thought I'd go ahead and create a new thread with the current interest rate environment. I'll be dealing with some cash flows over the coming months and will end up with more than $250,000 in cash, and am wondering current suggestions on safely parking that cash for future investments, house purchase, etc.
Here are my thoughts:
Max out Ally high-yield savings account at $250,000 (FDIC limit) - current yield @ 1.85%
Rest of funds: Vanguard VMMXX money market account - current SEC yield @ 2.06% (with 0.16 expense ratio)
Any other creative ideas? Does anyone see any new risk to VMMXX with rates changing as they are? Sorry, newbie question - I know. My assumption is no.