Search found 2655 matches

by Electron
Sun Mar 17, 2024 5:24 pm
Forum: Investing - Theory, News & General
Topic: It seems that intermediate bond funds generate the lowest yield now
Replies: 11
Views: 2312

Re: It seems that intermediate bond funds generate the lowest yield now

I just compared the 30 day SEC Yields and the Distribution Yields on the Vanguard Short Term (VFSUX), Intermediate Term (VFIDX), and Long Term (VWETX) Investment Grade Bond Funds.

The yields increase as the average maturity and duration of the fund increases.

30 Day SEC Yield: VFSUX 5.07%, VFIDX 5.16%, VWETX 5.23%

Distribution Yield: VFSUX 4.05%, VFIDX 4.71%, VWETX 5.18%

Average Maturity: VFSUX 2.9 years, VFIDX 7.5 years, VWETX 22.7 years

I recently moved from the Short Term to the Intermediate Term fund in one of my IRAs. The income stream should hold up better if shorter term rates decline over the next year. The average maturities selected by the Portfolio Managers may explain why the Intermediate Term yield is higher.
by Electron
Wed Mar 13, 2024 2:20 pm
Forum: Investing - Theory, News & General
Topic: Any investors from the 1981 - 1984 time period here???
Replies: 36
Views: 4319

Re: Any investors from the 1981 - 1984 time period here???

The load charge on Fidelity Magellan was dropped in June 2003 along with four other Fidelity funds.

The announcement would have been after the 2000-2003 Bear Market that followed the Technology Bubble.

https://www.thinkadvisor.com/2003/06/24 ... llan-fund/
by Electron
Tue Mar 12, 2024 6:47 pm
Forum: Investing - Theory, News & General
Topic: Any investors from the 1981 - 1984 time period here???
Replies: 36
Views: 4319

Re: Any investors from the 1981 - 1984 time period here???

I just reviewed my copy of Growth Fund Guide from September 1982. This issue is very interesting to read after nearly 42 years. Here are a few items of interest from the cover page. "There is considerable evidence that a new Bull Market has begun. Should purchases be made in this area or should one wait for a significant pull back in fund prices before buying?" "The cash position of the fund industry seems to have peaked in June at 12.2%. Since the 1950s, cash peaks have come just before or just after major market lows." The next section shows the August performance of their best performing funds. All had double digit gains for the month. The publication covered twenty eight Mutual Funds in four categories (Aggressive Gr...
by Electron
Sun Mar 10, 2024 11:14 pm
Forum: Investing - Theory, News & General
Topic: Any investors from the 1981 - 1984 time period here???
Replies: 36
Views: 4319

Re: Any investors from the 1981 - 1984 time period here???

I bought my first Mutual Funds in 1982 and they were all No-Load funds.

The funds were either on the Forbes Honor Roll or listed in Growth Fund Guide.

The funds I bought included Mutual Shares, Janus Fund, Lindner Fund, Twentieth Century Growth, Nicholas Fund, Pennsylvania Mutual, The Value Line Fund, and possibly a few others.

Brokers did have a long list of load funds that were available. They also sold bond unit trusts that carried a somewhat smaller load.

Investing in the No-Load funds required that you find out about the fund and either call them or write for a prospectus and application. There may also have been a few funds with a 2% load.

One of the great funds at that time was Templeton Growth Fund which was a load fund.
by Electron
Sun Mar 10, 2024 6:38 pm
Forum: Personal Finance (Not Investing)
Topic: NYS Tax Questions - Capital Carryover Loss & Short Term Gain Distributions
Replies: 3
Views: 438

Re: NYS Tax Questions - Capital Carryover Loss & Short Term Gain Distributions

1) I did my first Tax Loss Harvest in 2022 (VTSAX) and ended up with a Capital Loss Carryover (VTSAX) of $2,000. Is the Capital Carryover Loss allowed in NYS? It looks like it is as it appears to flow from the Federal 1040. Am I correct? 2) Are the Short Term Gain Distributions (STGD) reported on 1099-Div Consolidated treated differently in NYS? That is do STGD's receive any special treatment in NYS or do they simply flow from the Federal 1040, Schedule B into the NYS return? The New York State Tax Return would accept the Federal reporting in both cases. The New York Additions (Lines 20-24) and New York Subtractions (Lines 25-33) on New York Resident Tax Form IT-201 do not reference either of the two issues. I also checked New York State M...
by Electron
Mon Mar 04, 2024 2:21 pm
Forum: Personal Investments
Topic: Why Wellington?
Replies: 13
Views: 3153

Re: Why Wellington?

I would check the Vanguard 1099-DIV entries for Wellington Fund one more time. Look for a Nonqualified and Qualified Dividend in each of the four quarters and a Short Term and Long Term Capital Gains Distribution in December. Wellington Fund also paid Section 199A dividends in each quarter. Make sure this information is reflected on your tax return as Section 199A dividends provide an additional tax benefit. I would continue to hold the fund in the 24% bracket. Wellington Fund has performed very well recently under the new lead equity manager. The additional tax impact should be acceptable with Qualified Dividends at 45.45%. The Long Term Capital Gains Distribution will be taxed at a lower rate and the Section 199A dividends provide a tax b...
by Electron
Sun Mar 03, 2024 5:47 pm
Forum: Personal Investments
Topic: Why Wellington?
Replies: 13
Views: 3153

Re: Why Wellington?

Vanguard has a tax center that provides all kinds of tax information.

https://advisors.vanguard.com/tax-cente ... end-income

VWELX - 2023 Year-end QDI figures for dividends - 45.45%

I have shares in Vanguard Wellesley Income fund going back to 1990. The fund is even less tax efficient than Wellington. The capital gains exposure is fairly high so I just continue to hold the fund and not worry about the taxes. I also enjoy following mutual funds that I have held for many years.

Vanguard is showing capital gains distributions in both 2022 and 2023.

https://investor.vanguard.com/investmen ... tributions
by Electron
Sun Mar 03, 2024 3:55 pm
Forum: Personal Investments
Topic: Why Wellington?
Replies: 13
Views: 3153

Re: Why Wellington?

We hold Wellington in Taxable. It is a great fund , our first investment at Vanguard, and it is not suitable for us now, at 24% bracket, retired, and drawing RMD. This year 82% of its dividends was ordinary income rather than qualified dividends. The latest Morningstar report on Vanguard Wellington mentions that Daniel Pozen took over as lead equity manager in July 2020. There is now more emphasis on security selection with fewer holdings and a reduced exposure to value. The top five holdings are currently Microsoft, Google, Apple, Amazon, and Meta. The increased emphasis on growth relative to value helps explain the recent outperformance relative to Vanguard Wellesley. These changes in the fund may explain the lower percentages seen in Qu...
by Electron
Sat Mar 02, 2024 4:15 pm
Forum: Investing - Theory, News & General
Topic: VFWAX: 2023 1099-DIV reconciliation "increase to cost basis". what does this mean, exactly?
Replies: 30
Views: 4635

Re: VFWAX: 2023 1099-DIV reconciliation "increase to cost basis". what does this mean, exactly?

VTIAX (total international stock market index, Adm) doesn't seem to have this problem this year. Was wondering if this is the result of luck, or is it constructed differently so permanently avoids this issue? I recall it used to be a fund-of-funds, so didn't qualify for FTC; but then something changed and it did qualify for FTC. This was at the same time (mid-'00s) when VFWAX did qualify for FTC. So the way VFWAX was constructed, bestowed a benefit not initially available to VTIAX. VTIAX and VFWAX track different indexes and the portfolios appear to have noticeable differences. Morningstar currently shows 8512 equity holdings in VTIAX and 3786 equity holdings in VFWAX. Here is an interesting site with detailed information on the difference...
by Electron
Mon Feb 19, 2024 3:14 pm
Forum: Investing - Theory, News & General
Topic: VFWAX: 2023 1099-DIV reconciliation "increase to cost basis". what does this mean, exactly?
Replies: 30
Views: 4635

Re: VFWAX: 2023 1099-DIV reconciliation "increase to cost basis". what does this mean, exactly?

I own VEU the ETF share class of VFWAX. I didn't see any hint of "increase to cost basis" in any of my tax documents for my VEU shares. I assume your Form 1099-DIV reflects the other issue where reported dividend income is higher than what is actually received. As an example, here is my information for the VFWAX dividend paid in December. Qualified Dividend $1265.93, Nonqualified Dividend $745.29, Foreign Tax Withheld -$92.00 which represents a total of $1919.22. The dividend actually paid was $1912.31 leaving a shortfall of $6.91. Tax will be paid on the higher reported dividend. The Vanguard Consolidated Form 1099 has a section called Other Receipts and Reconciliations showing an "increase to cost basis" for each of t...
by Electron
Sun Feb 18, 2024 3:18 pm
Forum: Investing - Theory, News & General
Topic: VFWAX: 2023 1099-DIV reconciliation "increase to cost basis". what does this mean, exactly?
Replies: 30
Views: 4635

Re: VFWAX: 2023 1099-DIV reconciliation "increase to cost basis". what does this mean, exactly?

If adjusting the cost basis turns out to be the correct approach, it can be done quite easily using IRS Form 8949. The letter B would be entered in column f and the amount of the adjustment would be entered in column g. A negative number in column g would reduce the capital gain. Code letter B indicates that the cost basis provided on Form 1099-B is incorrect. Basis could be adjusted on a pro rata basis for each tax lot. Let's hope that these basis adjustments are not done every year. That would require good record keeping and additional work when shares are eventually sold. This overall issue may be quite complicated and I wonder if guidance from the IRS is entirely clear. Here is a paragraph from the Statement of Additional Information fo...
by Electron
Wed Feb 14, 2024 9:57 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's Personal Rate Of Return Calculation Is Embarassing
Replies: 73
Views: 8056

Re: Vanguard's Personal Rate Of Return Calculation Is Embarassing

IDpilot wrote: Wed Feb 14, 2024 6:30 pm They give you the date range right on the page and even let you pick various different ones.
There are different versions of the Dashboard for some unknown reason. See this post from earlier in the thread.

viewtopic.php?p=7306064#p7306064

I am talking specifically about the Dashboard tab seen at the left of the other tabs after logging in. In my case, no starting dates or time periods are shown. I don't believe this tab even appeared until recently.
by Electron
Wed Feb 14, 2024 5:04 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's Personal Rate Of Return Calculation Is Embarassing
Replies: 73
Views: 8056

Re: Vanguard's Personal Rate Of Return Calculation Is Embarassing

Thanks gerontius for the reply. I'm happy to see that they are showing the Internal Rate of Return (IRR).

The only thing missing is the starting date. It could very well be the inception date of the account if the necessary information is available. The features on the site continue to evolve so maybe we will know more in the coming months.
by Electron
Wed Feb 14, 2024 1:42 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's Personal Rate Of Return Calculation Is Embarassing
Replies: 73
Views: 8056

Re: Vanguard's Personal Rate Of Return Calculation Is Embarassing

The Personal Rate of Return for each account shown on the Vanguard Dashboard was mentioned earlier in this thread.

Has anyone learned anything new on the calculation?

I don't know if they are showing a ten year return, the return since inception of each account, or something else.
by Electron
Tue Feb 06, 2024 1:48 pm
Forum: Investing - Theory, News & General
Topic: VFWAX: 2023 1099-DIV reconciliation "increase to cost basis". what does this mean, exactly?
Replies: 30
Views: 4635

Re: VFWAX: 2023 1099-DIV reconciliation "increase to cost basis". what does this mean, exactly?

Here is some information from Harbor International Fund relating to foreign tax reclaims that might be of interest. This information was in the 2022 Semiannual Report. Harbor International Fund did not provide any foreign tax credit in 2022. The fund had always paid foreign taxes in the past and provided foreign tax credits. "During 2020 and 2022, Harbor International Fund received payments, including interest, from member countries of the European Union (“EU”) based on foreign tax reclaims relating to amounts withheld on dividends received by the Fund during fiscal years October 31, 2009 through 2021. A portion of the foreign tax reclaims and interest received is due to the Internal Revenue Service (“IRS”), in the form of a tax compli...
by Electron
Sat Feb 03, 2024 3:22 pm
Forum: Personal Finance (Not Investing)
Topic: CA residents: 2023 VG 1099 DIV & VCADX tax-exempt div
Replies: 11
Views: 1038

Re: CA residents: 2023 VG 1099 DIV & VCADX tax-exempt div

My 1099-DIV has no such notation for the two funds I own (VCADX and VWIUX). Perhaps it was just a mistake on your form? FWIW, I'm still on the old mutual fund platform. My funds are held in a Vanguard Brokerage Account rather than the Mutual Fund Accounts. It looks like there is different reporting. Other Vanguard funds including Vanguard High-Yield Tax-Exempt show Note 03 for all or many of the dividends. 03 - The tax character of the distribution has been allocated based on information provided by the security issuer. Z6 - For California Residents - Under California law, we are required to inform you that we are reporting to the California Franchise Tax Board the information contained in this statement that presents payments of exempt-in...
by Electron
Sat Feb 03, 2024 3:00 pm
Forum: Personal Finance (Not Investing)
Topic: CA residents: 2023 VG 1099 DIV & VCADX tax-exempt div
Replies: 11
Views: 1038

Re: CA residents: 2023 VG 1099 DIV & VCADX tax-exempt div

The 'Detail for Dividends and Distributions' section has breakdown of monthly dividend payments. For two funds, CA INT tax-exempt (VCADX) and Ultra ST tax-exempt (VWSUX), the dividend payments for last 2 months of 2023 paid on 12/1/23 and 01/02/24 has Z6 under Notes column.
My Form 1099-DIV has the exact same notation for three of my holdings:

VCLAX - California Long-Term Tax-Exempt
VCADX - California Intermediate-Term Tax-Exempt
VWIUX - Vanguard Intermediate-Term Tax-Exempt

I don't think there is much we can do unless Vanguard discloses more information on the November and December distributions.
by Electron
Sat Feb 03, 2024 2:48 pm
Forum: Investing - Theory, News & General
Topic: VFWAX: 2023 1099-DIV reconciliation "increase to cost basis". what does this mean, exactly?
Replies: 30
Views: 4635

Re: VFWAX: 2023 1099-DIV reconciliation "increase to cost basis". what does this mean, exactly?

I also have my tax return in a spreadsheet and faced the same problem with VFWAX this year. To deal with the increased ordinary dividend amount in Box 1a of Form 1099-DIV, I added the amount of the basis adjustment as an additional dividend. The adjustment is $15.18 and I will pay a small additional tax as a result. The confusing part to me is that the basis adjustment is presented as a negative number. A decrease in cost basis would result in a higher tax when shares are sold in the future. An increase in cost basis would reduce the tax and compensate for the additional tax in 2023. Closed-End Funds often distribute Return of Capital (ROC) but the amount is generally not taxed. A Return of Capital distribution is entered in Box 3 of Form 1...
by Electron
Tue Jan 23, 2024 2:06 pm
Forum: Personal Finance (Not Investing)
Topic: Received Vanguard Brokerage 2023 Consolidated Form 1099
Replies: 21
Views: 1807

Re: Received Vanguard Brokerage 2023 Consolidated Form 1099

I checked my available tax forms this morning and was very surprised to see the Consolidated Form 1099. That was great to see and everything looks correct. Last year was nearly a month later.

One surprise is that my Section 199A dividends from index funds are quite a bit higher this year.

There is also an adjustment for International Index fund VFWAX which appears to be a decrease in cost basis by a small amount.
by Electron
Mon Jan 22, 2024 5:14 pm
Forum: Investing - Theory, News & General
Topic: Muni Funds: Why is VWIUΧ preferred over VWLUX?
Replies: 57
Views: 7896

Re: Muni Funds: Why is VWIUΧ preferred over VWLUX?

In the top tax bracket, you would only owe AMT if you have an unusually large amount of tax preference items, such as incentive stock options. Out of curiosity, I looked at the 37% bracket to see how much Tax Preference Income might be needed to trigger the AMT. I used the tax spreadsheet referenced in the Wiki that is labeled 2022/2023/2024 taxes version. https://www.bogleheads.org/wiki/Tools_and_calculators#Personal_finance_toolbox Ordinary Income of $600,000 places a person filing single into the lower part of the 37% bracket. Ordinary Income $600,000 Tax Preference Income $100,000 AMT = $144.00 AMT 28% bracket 35% marginal tax rate Ordinary Income $600,000 Tax Preference Income $200,000 AMT = $35,144 AMT 28% bracket 35% marginal tax ra...
by Electron
Thu Jan 11, 2024 2:33 pm
Forum: Personal Finance (Not Investing)
Topic: PSA: EFTPS login change [IRS - Electronic Federal Tax Payment System]
Replies: 19
Views: 2777

Re: PSA: EFTPS login change [IRS - Electronic Federal Tax Payment System]

I just found this thread after attempting to log into EFTPS. Thanks to all for your posts.

My estimated tax payment was just completed using IRS Direct Pay. That was quite easy to use and will be my first choice in the future.

I noticed that EFTPS also has a telephone payment option as shown below. Has anyone tried that method? That might be a good alternative.

"Your tax payment is due regardless of this Web site's availability. You can always make a tax payment by calling our voice response system at 1.800.555.3453. Follow the prompts to make your payment."

https://www.eftps.gov/eftps/
by Electron
Mon Jan 08, 2024 5:58 pm
Forum: Personal Investments
Topic: VUSXX taxable for state and local now
Replies: 353
Views: 59406

Re: VUSXX taxable for state and local now

retiringwhen wrote: Sat Jan 06, 2024 4:15 pm I track the monthly asset weighted percentages of USGO and taxable amounts for the fund that comes out to 81%/19%.
Did you also consider the increase in assets in the fund during the year? The asset level increased as the percentage in T-Bills increased which should increase the actual USGO percentage distributed over the calendar year.

VUSXX Assets 08/31/22 $34.355 Billion
VUSXX Assets 02/28/23 $41.178 Billion
VUSXX Assets 12/31/23 $64.5 Billion

Note also that the yield increased during the first seven months of the year and was the highest from August through December.
by Electron
Tue Jan 02, 2024 6:02 pm
Forum: Investing - Theory, News & General
Topic: Municipal bond basics
Replies: 28
Views: 3745

Re: Municipal bond basics

Here is some information that I received from PIMCO that might be of interest. "For the year ended December 31, 2008, substantially all income dividends paid were derived from California state municipal securities. During 2008, PIMCO California Municipal Income Fund II invested in market discount municipal bonds, whose accretion is taxable. Accordingly, 3.17% of dividends paid from January 1, 2008 through May 31, 2008 and 2.67% of dividends paid from June 1, 2008 through December 31, 2008 were taxable. For 2008, 0% of dividend income was subject to the alternative minimum tax (“AMT”). Shareholders should consult their tax advisors as to the state and local status of dividend income received." I believe the taxable income percentag...
by Electron
Tue Jan 02, 2024 3:03 pm
Forum: Investing - Theory, News & General
Topic: Municipal bond basics
Replies: 28
Views: 3745

Re: Municipal bond basics

When I do secondary market searches for munis with the best YTM on top, I am similarly seeing a tremendous amount of ones that are low coupon, low price, and hence gains could be taxed as ordinary income as per the referenced articles. Related questions: - Who / what entities would therefore be buying these? Only those who deem the return "good" at taxable levels? - Would major tax free muni funds have to similarly report gains on such bonds as ordinary income? If so, I assume those would avoid these as well? 1. That's a good question. One case might be investors in lower tax brackets if the yield is high enough. I've wondered if anyone buys those securities in tax sheltered accounts. 2. Mutual funds do have to report the ordinar...
by Electron
Thu Dec 28, 2023 6:33 pm
Forum: Personal Finance (Not Investing)
Topic: Online Tax Calculators - Unexpected Result
Replies: 10
Views: 994

Re: Online Tax Calculators - Unexpected Result

Thanks all once again for the help. It looks like everyone is in agreement. I just checked the online TaxAct calculator and it does appear to handle the transition correctly from the AMT 26% rate to the AMT 28% rate. However, this calculator doesn't appear to handle Tax-Exempt Interest subject to AMT so I had to use a modified case. The variety of marginal tax rates seen in these tax cases is quite amazing. On occasion, I will try to explain the marginal tax rates seen in my spreadsheet. In the example presented, I noticed a 41.3% marginal tax rate when increasing the Taxable Interest from $226,000 to $227,000. The explanation appears to be the following: 26% x 1.25 = 32.5% (phaseout of AMT Exemption), plus 3.8% NIIT, plus 5% (portion of ca...
by Electron
Thu Dec 28, 2023 4:03 pm
Forum: Personal Finance (Not Investing)
Topic: Online Tax Calculators - Unexpected Result
Replies: 10
Views: 994

Re: Online Tax Calculators - Unexpected Result

Using the toolbox spreadsheet (one of the Tax estimation tools covered in that wiki article): Taxable Interest $226,000, AMT adder=$10,262 Taxable Interest $227,000, AMT adder=$10,267 Taxable Interest $228,000, AMT adder=$10,292 Taxable Interest $229,000, AMT adder=$10,322 Many thanks! Those are the same numbers produced by my spreadsheet. I just downloaded the toolbox spreadsheet and will enter the data later today. I believe I used that spreadsheet several years ago for some other case. With so few people being subject to the AMT now, others may not have noticed the problem with the online calculators. That could change as the AMT exemption and phaseout threshold may return to lower levels in 2026 depending on future legislation.
by Electron
Thu Dec 28, 2023 3:07 pm
Forum: Personal Finance (Not Investing)
Topic: Online Tax Calculators - Unexpected Result
Replies: 10
Views: 994

Re: Online Tax Calculators - Unexpected Result

Thanks nalor511 and lstone19 for the replies. I use my own tax spreadsheet rather than tax software. I'll see if I can find another spreadsheet to confirm my results. lstone19 - Thanks for posting your results. It looks like you may not have included the $10,000 of Tax-Exempt Interest subject to AMT. The Alternative minimum tax (AMT) income adjustment is entered in the section labeled "Total tax before credits". If I remove the Tax-Exempt Interest subject to AMT from my tax spreadsheet, I see the same values that you posted. Taxable Interest $226,000, AMT=$7012.25 Taxable Interest $227,000, AMT=$7017.25 Taxable Interest $228,000, AMT=$7022.25 Taxable Interest $229,000, AMT=$7027.25 It does appear that the online tax calculators ar...
by Electron
Thu Dec 28, 2023 1:48 pm
Forum: Personal Finance (Not Investing)
Topic: Online Tax Calculators - Unexpected Result
Replies: 10
Views: 994

Online Tax Calculators - Unexpected Result

I came across an unexpected result with the Alternative Minimum Tax when checking a few tax cases. The results were the same with the Mortgage Calculator and the Dinkytown Calculator. Single taxpayer, 32% Bracket, Standard Deduction $13,850, Tax-Exempt Interest $40,000, Tax-Exempt Interest subject to AMT $10,000, Taxable Interest $228,000, Long Term Capital Gain $600,000. Taxable Interest $226,000, AMT=$10,262.38 Taxable Interest $227,000, AMT=$10,267.38 Taxable Interest $228,000, AMT=$6,495.64 Taxable Interest $229,000, AMT=$6,525.64 Note how the AMT dropped suddenly when increasing the Taxable Interest to $228,000. I believe this is the transition point from the AMT 26% rate to the AMT 28% rate. If anyone can confirm that this result is i...
by Electron
Sun Dec 24, 2023 5:22 pm
Forum: Investing - Theory, News & General
Topic: Muni Funds: Why is VWIUΧ preferred over VWLUX?
Replies: 57
Views: 7896

Re: Muni Funds: Why is VWIUΧ preferred over VWLUX?

If you use tax software, you can look at the Form 6251 it generates. The online tax calculators can also be quite useful and many of them do handle the AMT. I just ran a test case on the following site and the results exactly matched my tax spreadsheet. https://www.mortgagecalculator.org/calcs/1040-calculator.php The test case was for an investor in the 24% bracket with ordinary income of $150K. The AMT tax ($6206) was mostly triggered by qualified dividends and capital gains with some contribution from $10K of tax-exempt interest subject to AMT. Taxable interest $150,000 Tax-exempt interest $40,000 ($10,000 subject to AMT) Ordinary dividends $200,000 [Qualified dividends $200,000] Long term capital gain $400,000 Alternative minimum tax (A...
by Electron
Fri Dec 22, 2023 10:58 pm
Forum: Investing - Theory, News & General
Topic: Muni Funds: Why is VWIUΧ preferred over VWLUX?
Replies: 57
Views: 7896

Re: Muni Funds: Why is VWIUΧ preferred over VWLUX?

How much VWALX do you need to own to trigger AMT? Also, does VWLUX trigger AMT? A modest percentage of income from VWALX has been subject to AMT. This relates to tax-exempt income from Private Activity Bonds. In 2021 the amount was 18.13%. Vanguard's other tax-exempt bond funds have been AMT free. Vanguard Tax-Exempt Money Market fund had 18.5% of income subject to AMT. These percentages should not be a problem unless you have very high income along with other tax preference items. I am in the top tax bracket and plan to be for the foreseeable future. So I should avoid the high yield bond fund? The AMT exemption and phaseout threshold increased significantly in 2018. It now takes a very high income to trigger the Alternative Minimum Tax de...
by Electron
Fri Dec 01, 2023 5:22 pm
Forum: Investing - Theory, News & General
Topic: Unexpected T-bill auction
Replies: 6
Views: 1256

Re: Unexpected T-bill auction

I'm currently holding CUSIP 912797GD3 in my T-Bill ladder.

I purchased it at the regular Treasury Auction as a 13 week T-Bill on 10-16-23. It matures on 1-18-24.

The Investment Rate for that auction was 5.503%.

Treasury Direct provides the results for recent auctions. Click on the tab labeled CMBs.

https://www.treasurydirect.gov/auctions ... a-results/
by Electron
Sun Nov 26, 2023 3:45 pm
Forum: Investing - Theory, News & General
Topic: We need to talk about Vanguard Wellesley ( VWIAX )
Replies: 135
Views: 31213

Re: We need to talk about Vanguard Wellesley ( VWIAX )

Wellesley should perform much better going forward with the increase in bond yields. Vanguard is currently showing an SEC yield of 4.73% for the fund based on the bond holdings yield-to-maturity and the stock dividends. The Total Bond Market index is currently showing an SEC yield of 4.83%. The SEC yield for bond funds has been a good predictor of returns going forward. The higher dividend yield on the stock holdings also looks attractive. Vanguard's Intermediate-Term Investment-Grade Bond fund (VFIDX) is currently showing an SEC yield of 5.81%. The Total Bond Market index has had a long stretch of negative returns. Morningstar shows VBTLX with a return of -1.67% for 2021 and -13.16% for 2022. The 2023 year-to-date return is currently + 0.7...
by Electron
Wed Nov 22, 2023 3:14 pm
Forum: Personal Investments
Topic: Frustrated Trying to Edit RMD on Vanguard Website
Replies: 53
Views: 7272

Re: Frustrated Trying to Edit RMD on Vanguard Website

This problem has not been fixed yet. I received an email from Vanguard stating that I need to fill out an online version of IRS Form W-4R which is now integrated into the RMD Automatic Distribution Edit dialog. My Automatic Distribution has been set up all year for a December withdrawal with 0% withholding. The Vanguard email listed nine steps to fill in the W-4R form. I don't believe the steps worked as described. I found two ways to get to the Retirement Summary screen that for my case shows "On Track with Automatic Distribution". Edits can be made starting with that screen. 1. Transact tab, Required Minimum Distribution, find and click on "Previous Version" link, Required Minimum Distribution Service, Retirement Summa...
by Electron
Thu Nov 16, 2023 5:32 pm
Forum: Investing - Theory, News & General
Topic: Municipal bond basics
Replies: 28
Views: 3745

Re: Municipal bond basics

I was on the Vanguard site this morning and took a quick look at the Municipal bond (01170RMB5) mentioned at the start of this thread. Here is the relevant information. 01170RMB5 Aa1/AA+ Alaska Housing Finance Corporation, 12/01/2030, 1.750% coupon, price $81.440, 4.903% yield-to-maturity The quick search feature on the platform starts with the highest yields. All the bonds shown for the same approximate maturity had low coupons and were trading at significant discounts. The yield-to-maturity in each case was relatively high and generally close to 5%. The discount on all of the bonds shown if purchased today would be taxed at ordinary income tax rates as a result of the de minimis rule. There was a very large number of these low coupon bond...
by Electron
Mon Nov 13, 2023 1:59 pm
Forum: Investing - Theory, News & General
Topic: Municipal bond basics
Replies: 28
Views: 3745

Re: Municipal bond basics

Here is a site with some interesting information on the market discount rule (de minimis rule). The market discount was taxed as a capital gain prior to 1993. https://www.parametricportfolio.com/blog/understanding-the-market-discount-rule "In 1993 the IRS contended that any market discount should be fully taxable. Issuers and underwriters pushed back. They were quick to point out that this would mean bond prices would decline faster than they would rise, because the additional return provided by any accretion back to par would be taxed. To appease the market participants, the IRS agreed to a compromise and created the market discount rule." The site includes quite a bit of additional information including examples. The article als...
by Electron
Sun Nov 12, 2023 3:02 pm
Forum: Investing - Theory, News & General
Topic: Municipal bond basics
Replies: 28
Views: 3745

Re: Municipal bond basics

Bonds are quoted with a yield-to-maturity that takes into account the coupon and any discount or premium that is paid. The following site provides some information on the bond that you mentioned. It appears to be a Mortgage Revenue bond issued by Alaska Housing Finance Corporation. The credit rating is not shown. The bond is not insured. The recent trades indicate that it is trading at a substantial discount to par which you would expect at current interest rates with a 1.75% coupon. https://www.municipalbonds.com/bonds/issue/01170RMB5/ You may want to review the following information from PIMCO. Buying municipal bonds at a discount can result in some of the return being taxed as ordinary income. The article mentions that PIMCO managers pre...
by Electron
Fri Nov 10, 2023 2:39 pm
Forum: Investing - Theory, News & General
Topic: VUSXX vs. VMFXX in A Traditional IRA (State Taxes Not an Issue)
Replies: 9
Views: 1560

Re: VUSXX vs. VFMXX in A Traditional IRA (State Taxes Not an Issue)

Is there any drawback to having the settlement fund (VMFXX) act as my main MMFund in a brokerage traditional IRA over using VUSXX which needs to have outgoing funds go through VMFXX anyway thus adding an extra step and more numbers to deal with? For the sake of simplicity, it makes sense to have one MM fund. State taxes are not an issue since these funds are in a traditional IRA. The VMFXX settlement fund is fine for one of your IRA investments. VUSXX and VMFXX are both classified as Government Money Market funds and are very safe. The 7 day SEC yields of the two funds are very close. The yield on VMFXX was a little higher following Fed rate hikes over the last year but VUSXX would then catch up after a few weeks due to the slightly longer...
by Electron
Tue Nov 07, 2023 12:12 pm
Forum: Personal Investments
Topic: Exchanging BND for VUSXX
Replies: 5
Views: 1355

Re: Exchanging BND for VUSXX

You could also invest in Treasury Bills directly which would be 100% exempt for the state tax. They can be purchased at auction or in the secondary market. You should be able to outperform VUSXX by a small margin using 13 week, 17 week, or 26 week Treasury Bills. Some brokerage firms offer an auto roll service.

Moving to VUSXX does change your asset allocation which would lower expected long term returns to some extent. If you would like to maintain your current asset allocation there would be options to do that and still avoid a wash sale. There are many intermediate term bond funds available including Treasury funds.
by Electron
Sun Nov 05, 2023 1:40 pm
Forum: Investing - Theory, News & General
Topic: Money Market v. Bond Fund Distribution Yields
Replies: 14
Views: 2923

Re: Money Market v. Bond Fund Distribution Yields

1) Under what circumstances would the distribution yield of the money market funds be less than what they are in the short term, limited term, and intermediate term funds? As mentioned earlier, that would occur with an upward sloping yield curve when rates are reasonably stable. However, note that both the slope and shape of the yield curve are changing all the time. The yield curve will also differ among different types of bonds and credit quality will also be a factor. Here is a link where you can see the Treasury yield curve for the current month and year on a daily basis. It is difficult to answer your question because you would need to consider changes in the yield curve over the duration of the fund's holdings. https://home.treasury....
by Electron
Sat Nov 04, 2023 3:04 pm
Forum: Investing - Theory, News & General
Topic: Money Market v. Bond Fund Distribution Yields
Replies: 14
Views: 2923

Re: Money Market v. Bond Fund Distribution Yields

I look at both the SEC yield and distribution yield when considering the monthly income and potential total return from a bond fund.

As an example, Vanguard Fixed Income Short Term Corporate Admiral Shares has a distribution yield of 3.57% while the SEC yield is 5.78%.

This tells me that the fund holds some lower coupon bonds that have fallen in price as a result of rising interest rates. As those bonds mature, total return should be higher than the current coupon rate.

The difference between SEC yield and distribution yield will vary with each fund depending on the nature of the holdings and recent trends in interest rates.
by Electron
Thu Oct 26, 2023 12:45 pm
Forum: Personal Consumer Issues
Topic: Thunderbird saying "no new email"
Replies: 56
Views: 5190

Re: Thunderbird saying "no new email"

The latest update to Thunderbird version 115.4.1 is showing 23 fixes.

https://www.thunderbird.net/en-US/thunderbird/releases/

There have now been 12 updates since version 115 was released. Let's hope the fixes and improvements continue at this pace.
by Electron
Wed Oct 25, 2023 10:31 pm
Forum: Personal Consumer Issues
Topic: Thunderbird saying "no new email"
Replies: 56
Views: 5190

Re: Thunderbird saying "no new email"

tj wrote: Wed Oct 25, 2023 9:27 pm I like the concept of Thunderbird, but when I have websites send codes to my email address, its much quicker to just open up the web browser than to wait for it to lag into Thunderbird. How are others managing that situation?
If a website tells me that it sent a code, I just go to Thunderbird and click on Get Messages.

Opening Thunderbird would have the same effect. Either way, the code usually arrives in a second or two.
by Electron
Tue Oct 24, 2023 12:45 pm
Forum: Personal Consumer Issues
Topic: Thunderbird saying "no new email"
Replies: 56
Views: 5190

Re: Thunderbird saying "no new email"

If anyone is interested Thunderbird now has a software fork named Betterbird.

https://www.betterbird.eu/index.html

The program is headed by a former key member of the Thunderbird development team. Betterbird works with the same profile folder as Thunderbird and either program can be run. Betterbird is also at version 115.

I tested it last night on my backup computer and it looked just like Thunderbird. It was necessary initially to bring up a Run window and run betterbird.exe -p to access the existing profile.
by Electron
Mon Oct 23, 2023 6:20 pm
Forum: Personal Consumer Issues
Topic: Thunderbird saying "no new email"
Replies: 56
Views: 5190

Re: Thunderbird saying "no new email"

Here is a page showing all recent Thunderbird versions and release notes.

https://www.thunderbird.net/en-US/thunderbird/releases/

Version 115 has already had 11 updates. You can click on any version and see a list of What's New, Changes, and Fixes.
by Electron
Mon Oct 23, 2023 5:20 pm
Forum: Personal Consumer Issues
Topic: Thunderbird saying "no new email"
Replies: 56
Views: 5190

Re: Thunderbird saying "no new email"

I'm using the latest Thunderbird version 115.3.3 with POP access to two different email providers. Everything has been working with the exception of a minor problem with the message filter log.

The introduction of Thunderbird Supernova seemed to bring on a lot of problems. See the Thunderbird support forum referenced below.

http://forums.mozillazine.org/index.php?c=4

Also see the information in the Thunderbird blog referenced below.

https://blog.thunderbird.net/2023/02/th ... ground-up/

The title is "Why We’re Rebuilding the Thunderbird Interface from Scratch".
by Electron
Wed Oct 04, 2023 3:22 pm
Forum: Personal Investments
Topic: How to roll over a maturing T-Bill at Vanguard?
Replies: 13
Views: 1153

Re: How to roll over a maturing T-Bill at Vanguard?

Auction. I just need to know if I can put in the order now for a new T-Bill in the same amount as the old T-Bill that matures tomorrow. Will Vanguard take the funds from the old T-Bill and use them to buy the new T-Bill? Here is an article that may help with specific information for Vanguard brokerage. https://thefinancebuff.com/treasury-bills-cd-money-market.html You should be able to sign up for an auction purchase starting tomorrow for the auction that takes place on Tuesday, October 10. This is for the 13 week and 26 week T-Bills. Settlement would be Thursday, October 12. Your maturing T-Bill will fund the settlement account and you should be all set. The site below has a link to the auction schedule. https://www.treasurydirect.gov/auc...
by Electron
Wed Oct 04, 2023 2:57 pm
Forum: Personal Investments
Topic: How to roll over a maturing T-Bill at Vanguard?
Replies: 13
Views: 1153

Re: How to roll over a maturing T-Bill at Vanguard?

Decide if you would like to purchase at Auction or on the Secondary Market.

Buying at Auction generally offers a slightly higher yield. You will also need to select the desired term.

This thread has a lot of information on the subject. viewtopic.php?t=378350
by Electron
Sun Oct 01, 2023 4:09 pm
Forum: Investing - Theory, News & General
Topic: Dividend Fund Provides More Income Than Bond Fund
Replies: 134
Views: 22006

Re: Dividend Fund Provides More Income Than Bond Fund

Here is a very interesting chart showing S&P 500 Dividend Growth by year.

https://www.multpl.com/s-p-500-dividend-growth

Note the wide variation in dividend growth including the negative years.

Code: Select all

Current S&P 500 Dividend Growth: 7.33%
S&P 500 Dividend Growth for Jun 2023

Mean:    5.99% 	
Median:  6.83% 	
Min:   -21.07% (Dec 2009)
Max:    18.25% (Dec 2012)
There are several additional links of interest at the bottom of the page.
by Electron
Wed Sep 27, 2023 2:55 pm
Forum: Investing - Theory, News & General
Topic: Trading Treasuries (nominal and TIPS)
Replies: 4107
Views: 455484

Re: Trading Treasuries (nominal and TIPS)

Here is a chart showing T-Bill yields from the weekly Treasury auction along with Vanguard Treasury Money Market fund.

The yield variations in May were related to concerns about the debt ceiling. The 17 week T-Bill has been included in the weekly auction since October of last year.

The 17 week T-Bill has been offering an attractive yield somewhat higher than the 13 week T-Bill.

Image
by Electron
Wed Sep 27, 2023 1:54 pm
Forum: Personal Investments
Topic: VUSXX taxable for state and local now
Replies: 353
Views: 59406

Re: VUSXX taxable for state and local now

Let's hope the increased use of repurchase agreements in VUSXX is seen only when the Federal Reserve is steadily raising rates. The current high percentage in T-Bills is a good sign and hopefully the fund will return to normal in 2024. As of 8-31-23, the percentages were T-Bills 94.40%, Treasury Floating Rate Notes 2.20%, and Repurchase Agreements 3.50%. I'm holding eleven T-Bills at the present time as an alternative to VUSXX. The average yield of the eleven holdings is currently 5.45%. I have a T-Bill maturing almost every week. I started buying Treasuries in the secondary market but have gone back to the weekly Treasury auction for the slightly higher yields. Today I bought the 17 week T-Bill at auction. I hope Vanguard offers an Auto-Ro...