Search found 877 matches

by rai
Thu Apr 21, 2016 8:36 pm
Forum: Personal Finance (Not Investing)
Topic: Cannot Pay Huge Tax Burden
Replies: 107
Views: 8450

Re: Cannot Pay Huge Tax Burden

I find it hard to believe that there are people here advocating about how to game the system. That seems to be the point of many threads on this forum. What is a backdoor Roth, if not "gaming the system?" Unbelievable, some people are in the 50%+ marginal tax bracket and some people pay u...
by rai
Thu Apr 21, 2016 6:29 pm
Forum: Personal Finance (Not Investing)
Topic: Cannot Pay Huge Tax Burden
Replies: 107
Views: 8450

Re: Cannot Pay Huge Tax Burden

When you look at paying off the loan to avoid this situation, it is hard to make the math work out. Paying 300k to avoid a 200k charge isn't going to work. Instead of paying off the loan, you could save the money and come out ahead unless you get large income increases later. And of course you will...
by rai
Thu Apr 21, 2016 9:17 am
Forum: Personal Finance (Not Investing)
Topic: Cannot Pay Huge Tax Burden
Replies: 107
Views: 8450

Re: Cannot Pay Huge Tax Burden

I ran some numbers for you. I assumed that your SO will pay just the interest on this loan of $200k at 7%, or $14,000 per year. You are concerned that your SO will owe income tax on the value of the forgiven loan after 20 years - which will be valued at $200k at the end. So, your SO might owe $60k ...
by rai
Thu Apr 21, 2016 7:58 am
Forum: Personal Finance (Not Investing)
Topic: Mortgage advice for second home.
Replies: 18
Views: 1380

Re: Mortgage advice for second home.

I also would try to avoid LTC gains taxes in your situation. The best mortgage rate will be likely for your primary home. In MD you also pay state and county income tax on LTC gains. I live in a high-tax rate county (like you probably too). My LTC gains taxes in MD for an investment last year that ...
by rai
Thu Apr 21, 2016 7:48 am
Forum: Personal Finance (Not Investing)
Topic: Cannot Pay Huge Tax Burden
Replies: 107
Views: 8450

Re: Cannot Pay Huge Tax Burden

yellowgirl wrote:There is a difference between cannot pay and don't want to pay.

Totally true.
by rai
Wed Apr 20, 2016 7:32 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage advice for second home.
Replies: 18
Views: 1380

Re: Mortgage advice for second home.

You might want to consider this from an asset protection perspective. Many states have laws that protect primary residences (the homestead exemption) in case something terrible happens, but not second homes. In that case, you might be better off with a mortgage on the second home, which is unlikely...
by rai
Wed Apr 20, 2016 4:56 pm
Forum: Personal Finance (Not Investing)
Topic: Cannot Pay Huge Tax Burden
Replies: 107
Views: 8450

Re: Cannot Pay Huge Tax Burden

I'd do everything in my power to pay off the loans. I don't believe in not paying a debt.
by rai
Wed Apr 20, 2016 3:03 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage advice for second home.
Replies: 18
Views: 1380

Re: Mortgage advice for second home.

You can potentially keep the HELOC open and get a new 1st mortgage, but you will have to get the HELOC lender to sign a subordination agreement. This is common, but of course the HELOC lender isn't required to sign it. Another alternative may be to open a new HELOC on your existing home, which you ...
by rai
Wed Apr 20, 2016 3:02 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage advice for second home.
Replies: 18
Views: 1380

Re: Mortgage advice for second home.

Is more than $100k of a primary home cash out refi tax-deductible, if used to purchase a second home? I would get a mortgage on the second home, and figure out when and how to pay it off later. From what I'm reading, it is deductible for a second home. Just not if you use it for 'other' non house r...
by rai
Wed Apr 20, 2016 1:19 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage advice for second home.
Replies: 18
Views: 1380

Re: Mortgage advice for second home.

If you want to get some kind of mortgage/financing for your second home, I think you might be better off with a cash-out refi on your current primary residence. That refi would likely pay off your HELOC too. I think you would get the best possible rate if the mortgage was on your current primary re...
by rai
Wed Apr 20, 2016 12:58 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage advice for second home.
Replies: 18
Views: 1380

Re: Mortgage advice for second home.

I'd sell, take the tax hit and move on. What's the alternative on the taxable investments? Say they drop in value so you have no gains anymore. You'd then pay no tax (yay!), but of course, you'd also have no gains (booo). Everyone wants to minimize taxes. I get that. But I'd rather pay taxes on a g...
by rai
Wed Apr 20, 2016 11:26 am
Forum: Personal Finance (Not Investing)
Topic: Mortgage advice for second home.
Replies: 18
Views: 1380

Re: Mortgage advice for second home.

Any advice?
by rai
Wed Apr 20, 2016 8:38 am
Forum: Personal Finance (Not Investing)
Topic: Mortgage advice for second home.
Replies: 18
Views: 1380

Mortgage advice for second home.

Any advice is greatly appreciated. We're in the process of looking at buying a vacation home. Our current home value $600K+ paid off except HELOC $100K located in MD Our vacation home (not to be rented) value $200k-300K yet to be determined will be in FL All our money in our taxable accounts is tied...
by rai
Mon Apr 18, 2016 8:30 am
Forum: Personal Finance (Not Investing)
Topic: [Tax filing mistakes made by your CPA (or yourself)]
Replies: 69
Views: 4076

Re: [Tax filing mistakes made by your CPA (or yourself)]

My account one time changed my taxable gain to a loss. What happened Etrade reported my (correct) capital gain on a sale orf Apple stock. The Accountant just looked at my trade and saw that the purchase price was much different than the sale price, gave me a loss on the sale. She disregarded the Etr...
by rai
Mon Apr 18, 2016 8:20 am
Forum: Personal Finance (Not Investing)
Topic: [Tax filing mistakes made by your CPA (or yourself)]
Replies: 69
Views: 4076

Re: [Tax filing mistakes made by your CPA (or yourself)]

Here's a doozie. I sell options to make some spare money. But it's a high tax method since I sell options in my taxable account and I'm in the highest tax bracket possible. Now, I was not aware of the tax code, (partly my fault) but my accountant didn't correct me. So we were paying the same year th...
by rai
Mon Apr 18, 2016 8:07 am
Forum: Personal Finance (Not Investing)
Topic: mortgage pre payment, why?
Replies: 101
Views: 10414

Re: mortgage pre payment, why?

What about the phase out in the tax code? High earners can have up to 80% of their tax deduction phased out.
by rai
Wed Apr 13, 2016 7:51 am
Forum: Personal Finance (Not Investing)
Topic: Second house vacation home advice.
Replies: 7
Views: 790

Second house vacation home advice.

I know the wisdom of having one house, one tax bill, one set of utilities and upkeep. Etc... But my wife has us thinking of a small house or condo near Disney World. We seem to go quite a lot. Lately we've been staying on property so that's a lot of money each time we go. The idea was to look for a ...
by rai
Tue Apr 12, 2016 11:29 am
Forum: Investing - Theory, News & General
Topic: "The Four Pillars of Investing" is one of today's Kindle daily deals
Replies: 11
Views: 1967

Re: "The Four Pillars of Investing" is one of today's Kindle daily deals

Thanks, I was looking at this a while back but held off, now it's just a great deal. $1.99 :sharebeer
by rai
Tue Apr 12, 2016 9:54 am
Forum: Investing - Help with Personal Investments
Topic: Bonds are such a lousy investment
Replies: 43
Views: 4896

Re: Bonds are such a lousy investment

Bonds also provide a relatively safe return, which can be used for income. There's an old Grouch Marx line. Someone remarked, "you can't make any money in bonds" and he replied, "you can if you have enough of them". Good point However aren't dividends also a relatevly safe retur...
by rai
Tue Apr 12, 2016 9:42 am
Forum: Investing - Help with Personal Investments
Topic: Help me understand wash sales — can they offset anything at all?
Replies: 9
Views: 579

Re: Help me understand wash sales — can they offset anything at all?

If I have a loss, say I buy a stock and the next day it's down. Can I sell it immediately as a loss without any other considerations?

(or am I prohibited from buying that stock for 31 days after?).
by rai
Tue Apr 12, 2016 9:32 am
Forum: Investing - Help with Personal Investments
Topic: 529 college savings plan (a good idea)?
Replies: 38
Views: 3566

Re: 529 college savings plan (a good idea)?

@rai, of course you would use a 529 plan since you are (a) wealthy being in the 45% tax bracket and (b) max out your retirement accounts. It's a no brainer for you. The OP is not like you at the present time. True, but is the OP in the 20% tax bracket? For most people I think tax free savings 401k ...
by rai
Tue Apr 12, 2016 8:51 am
Forum: Investing - Help with Personal Investments
Topic: 529 college savings plan (a good idea)?
Replies: 38
Views: 3566

Re: 529 college savings plan (a good idea)?

IMO It's good to have some eggs in each basket. If you need to pay for college tuition, money in your 401k might not be ideal for that. Also while your 401k might not be great, believe me I've been there. The benifit is you can invest pre tax money. I'm in the 45% tax bracket (fed and state) so in e...
by rai
Tue Apr 12, 2016 8:22 am
Forum: Investing - Help with Personal Investments
Topic: Bonds are such a lousy investment
Replies: 43
Views: 4896

Re: Bonds are such a lousy investment

The purpose of bonds is to protect one's capital from significant and permanent capital erosion on a nominal basis. If you want excitement, including the kind that can result in the permanent decline of your capital - the stock market is the place to be. I wonder this, if there is a certain number ...
by rai
Sat Apr 09, 2016 8:16 pm
Forum: Personal Consumer Issues
Topic: Honda Odyssey
Replies: 41
Views: 3176

Re: Honda Odyssey

NVH is not poor, it's above average IMO, but I've got the Touring Elite which may have extra sound deadening.

The car drives smooth, it doesn't feel small bumps, I have zero wear at all on the interior after 106k miles.

Seats are ok, nothing special but not bad, we've done 15 hr days in them.
by rai
Sat Apr 09, 2016 7:32 pm
Forum: Personal Consumer Issues
Topic: Honda Odyssey
Replies: 41
Views: 3176

Re: Honda Odyssey

Additionally our front brake pads just now needed replacmet at 106k miles, I can't swear that's the only time, but according to my records it is. The rear as I said were replaced like 60k miles but might have been incorrectly placed by the dealer leading to the rotors needing to be replaced shortly ...
by rai
Sat Apr 09, 2016 7:16 pm
Forum: Personal Consumer Issues
Topic: Honda Odyssey
Replies: 41
Views: 3176

Re: Honda Odyssey

We also owned a second gen Oddy 1999 but that was plagued with power door issue would not always work by power but we could close them manually this problem was intermittent and never fixed but that was the prior gen car. This current gen car we have no issues whatsoever with the power doors. Betwee...
by rai
Sat Apr 09, 2016 7:11 pm
Forum: Personal Consumer Issues
Topic: Honda Odyssey
Replies: 41
Views: 3176

Re: Honda Odyssey

I have a 2011 Touring Elite which has every possible option. We've been driving a lot long road trips to Orlando twice NY/NJ etc, lots of HW driving but also town driving with 106K miles currently. So far we've done the front (pads) and rear brakes (pads and rotors). The rear, had to do the rotors a...
by rai
Sat Apr 09, 2016 8:50 am
Forum: Investing - Theory, News & General
Topic: What is Your Bond Allocation & Location
Replies: 48
Views: 5211

Re: What is Your Bond Allocation & Location

I'm a bond agnostic (what I mean is that I'm unsure how much to own I believe some are good but I don't want to have too much so I err on the side of more stocks) I understand that some people follow the age in bonds or age -20 in bonds (whatever) I'm more of the belief that I should have some bonds...
by rai
Tue Apr 05, 2016 4:32 pm
Forum: Personal Finance (Not Investing)
Topic: 50/ can I cross the finish line?
Replies: 51
Views: 6758

Re: 50/ can I cross the finish line?

Good discussion :sharebeer I'm also just turned 50, and have a similar nest egg, only difference is *we* are not slowing down our contributions, IOW we are still saving $100K/year. But I have a few questions. OP said you need $90K to live from. Is that before or after taxes? I am not sure which $90K...
by rai
Mon Nov 02, 2015 3:42 pm
Forum: Investing - Theory, News & General
Topic: "5 Scary Assumptions Investors Are Making"
Replies: 15
Views: 2661

Re: "5 Scary Assumptions Investors Are Making"

So what's the idea about TIPS? I was thinking they're not worth having until you retire, or are a negative drag while you are still accumulating. Not sure what to do, as stocks have higher dividends and I'd assume also have some inflation protection built in. And while we're still working theoretica...
by rai
Sat Oct 24, 2015 4:41 pm
Forum: Investing - Help with Personal Investments
Topic: Is a 100% S&P Index fund portfolio all that risky?
Replies: 29
Views: 4942

Re: Is a 100% S&P Index fund portfolio all that risky?

Could you say more, like how old are you? Married? any Pension or Social Security? Is house paid off? (etc..). How do you expect to decrease withdrawal without any decrease in standard of living? Is your holding in a taxable account? If so you could have a hefty tax bill for changing over. I don't t...
by rai
Tue Aug 11, 2015 7:21 pm
Forum: Personal Finance (Not Investing)
Topic: Physician Asset Protection
Replies: 35
Views: 4405

Re: Physician Asset Protection

Regarding the first respondent's advice to purchase a $1M umbrella policy: Not enough! How much more only you can say, but it is one of the cheapest insurance policies out there. Ralph I have $5M Umbrella, really quite cheap. Just read the post below, as I've been in practice 18 years so my assets ...
by rai
Tue Jul 28, 2015 6:01 pm
Forum: Investing - Theory, News & General
Topic: Apple individual stock, what am I missing here?
Replies: 55
Views: 4685

Re: Apple individual stock, what am I missing here?

This may be a small (minor) facet, but some people may be over weight in Apple, this would be the case with most insiders. For example if you are an AAPL exec and you got 50k shares or $50M shares in your pocket, you may indeed think it's a cheap price but you probably should sell some or at least n...
by rai
Tue Jul 28, 2015 5:45 pm
Forum: Personal Finance (Not Investing)
Topic: Would umbrella insurance cover this?
Replies: 3
Views: 854

Re: Would umbrella insurance cover this?

Umbrella insurance is very cheap for the dollars it covers. I'd recommend to all especially if you have a large net worth or assets or future earning potential. One thing to be aware of, (at least was my experience) you need to have the full maximum liability on your auto policy such as $300k/$600k ...
by rai
Thu Jul 23, 2015 11:48 am
Forum: Investing - Help with Personal Investments
Topic: Balance between saving in taxable account and retirement account? (mega backdoor version)
Replies: 13
Views: 1763

Re: Balance between saving in taxable account and retirement account? (mega backdoor version)

I'd say, for myself. There is never enough allowable room in my tax shelter, meaning if I could put more money in I would. So the excess money is put into taxable account by default. I have been able to save more in quasi tax shelter that is 529 plan for kids. But I don't want to over save in the 52...
by rai
Sat Jul 18, 2015 4:24 pm
Forum: Investing - Theory, News & General
Topic: Taxes when selling reinvested dividends
Replies: 13
Views: 1418

Re: Taxes when selling reinvested dividends

TwoByFour wrote:Personally, I avoid the whole mess by not reinvesting dividends in a taxable account.

Me too. I just drop all the dividends into a common pool and buy a round number of shares of whatever I'm underweight in.
by rai
Sat Jul 18, 2015 4:19 pm
Forum: Personal Finance (Not Investing)
Topic: A retiree's personal experience...
Replies: 39
Views: 8611

Re: A retiree's personal experience...

But I still expect the result to be the same - a portfolio cannot grow if you are spending part of it and the market is crashing. So I will expect the recovery to be very slow - at least a couple of years after accumulators say "I'm back!" And I suppose that is all OK. :happy not much to ...
by rai
Sat Jul 18, 2015 3:58 pm
Forum: Personal Finance (Not Investing)
Topic: A retiree's personal experience...
Replies: 39
Views: 8611

Re: A retiree's personal experience...

We both have been collecting SS since turning 62 and have been withdrawing 4-5% from our 50/50 AA portfolio since I retired. Our portfolio remains up roughly 10% overall since I retired. I guess history would say I am much better off starting retirement in a bull market than in a bear market.....so...
by rai
Sat Jul 18, 2015 3:48 pm
Forum: Personal Finance (Not Investing)
Topic: A retiree's personal experience...
Replies: 39
Views: 8611

Re: A retiree's personal experience...

To retiredjg, anything obvious you would have done differently? I don't mean looking backwards and rebalance all to stock after the crash. But something such as had 1-2 years of spending in one bucket (cash or short term bonds or CDs) and not sold any stocks as the marked turned south?
by rai
Sun Jun 21, 2015 1:21 pm
Forum: Investing - Theory, News & General
Topic: When saving money becomes an irrational obsession
Replies: 157
Views: 29557

Re: When saving money becomes an irrational obsession

I knew an older doc, he had been working for 50 years and was forced to retire at 80+ years old. But he could pinch pennies and worried about how much he was making (even though he had multi-millions) and never really spent much was driving a 15 year old car etc. So he died a few years later and his...
by rai
Sun Jun 21, 2015 12:47 pm
Forum: Investing - Theory, News & General
Topic: When saving money becomes an irrational obsession
Replies: 157
Views: 29557

Re: When saving money becomes an irrational obsession

I think it will be a big transition for me to change over from a saver to a spender (when I retire). While I do want to retire ASAP that is two distinct forces working against each other As Soon (stop working as soon as I have enough money). As Possible (meaning I need to have enough money and that ...
by rai
Sun Feb 15, 2015 9:26 am
Forum: Investing - Theory, News & General
Topic: why stocks outperform other asset classes in the long run ?
Replies: 51
Views: 4238

Re: why stocks outperform other asset classes in the long ru

Was reading about this, maybe only 20% of companies will still be around in 50 years. Don't recall the exact numbers , but the big winners like IBM, Microsoft, Appl could gain 20,000% or more so those stocks make up for the losers.
by rai
Sat Jan 03, 2015 11:34 am
Forum: Investing - Help with Personal Investments
Topic: Should I even be in bonds?
Replies: 40
Views: 4050

Re: Should I even be in bonds?

I think 20% is better than none. First, you can have some money to buy more stocks with if there is another crash. My biggest lament when there is a significant crash is not being able to buy MORE stocks (other than new contributions). I know you have doubled your money from the last crash, but it's...
by rai
Sun Dec 28, 2014 12:34 am
Forum: Investing - Help with Personal Investments
Topic: Why tilt to high yield bonds?
Replies: 29
Views: 2572

Re: Why tilt to high yield bonds?

I'm holding bonds more for stability or to hold up when stocks as doing poorly, not for their growth. So I'm mainly in total bond fund, investment grade cooperate and treasury bond funds intermediate. I suppose the argument would be that short term would hold up better, but my preference is to gain ...
by rai
Sat Dec 27, 2014 8:40 am
Forum: Investing - Help with Personal Investments
Topic: 'time in' the market vs 'timing' the market
Replies: 37
Views: 2785

Re: 'time in' the market vs 'timing' the market

The point is, what if the market doesn't pull back from this point? I mean there have been thresholds before that we have gone past that we are not going back to such as Dow 100, 1000... 10,000 who knows? We may be past that and never return or we may return there. But at some point when we're at Do...
by rai
Thu Dec 25, 2014 12:11 pm
Forum: Investing - Help with Personal Investments
Topic: What are the deferred taxation compounding benefits (401k)?
Replies: 25
Views: 2259

Re: What are the deferred taxation compounding benefits (401

I guess if you really wanted just the idea of "tax deferral" - all money set aside for a 401K plan (for example or IRA) is on the last marginal dollar of income - i.e. the highest taxed dollar. You are in ultimate control on removing the money (however) and you are taxed at starting at th...
by rai
Wed Dec 24, 2014 6:01 pm
Forum: Investing - Help with Personal Investments
Topic: What are the deferred taxation compounding benefits (401k)?
Replies: 25
Views: 2259

Re: What are the deferred taxation compounding benefits (401

(And yes, there are more taxes involved in the taxable account that were only omitted in the interest of simplicity.) --Peter nicely said. I am sure we here on Boglehead forum understand this better than the average man on the street. Also, as many people own BONDS (taxable BONDS) it's murder to ha...
by rai
Wed Dec 24, 2014 5:17 pm
Forum: Investing - Help with Personal Investments
Topic: What are the deferred taxation compounding benefits (401k)?
Replies: 25
Views: 2259

Re: What are the deferred taxation compounding benefits (401

If you ultimately have to pay the same tax rate, it doesn't seem to matter if you pay it now or later incorrect. You forget that taxable accounts are not tax free, you need to pay tax on the gains (when you sell the assets at the end) and the dividends are taxed every year and you also ignore the f...
by rai
Wed Dec 24, 2014 4:28 pm
Forum: Investing - Help with Personal Investments
Topic: What are the deferred taxation compounding benefits (401k)?
Replies: 25
Views: 2259

Re: What are the deferred taxation compounding benefits (401

Year 2 No tax deferral = (14,700 * 1.1) + 7,000 = 23,170 Tax deferral = (21,000 * 1.1) + 10,000 = 33,100 Upon withdrawal the tax deferred funds = 0.7 * 33,100 = 23,170 which is the same You are making this too hard. First you forgot to tax the taxable accounts gains. When you did your summation, yo...
by rai
Tue Dec 23, 2014 7:22 pm
Forum: Investing - Help with Personal Investments
Topic: Depreciated Stock
Replies: 1
Views: 390

Re: Depreciated Stock

should i just leave everything well enough alone for now and only do a tax loss harvesting when we have exhausted the carryover capital loss? I would lessen my exposure to an overweighed individual stock and I would try to lower/eliminate the bonds/REITS in a taxable account. I would unwind more th...

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