Search found 4255 matches

by CAsage
Mon Feb 10, 2025 2:12 pm
Forum: Personal Investments
Topic: FA fees going up on my 401k plan.
Replies: 18
Views: 1450

Re: FA fees going up on my 401k plan.

SmallCityDave wrote: Mon Feb 10, 2025 10:52 am I just got a letter that my FA fees are going up from 1.25% to 1.5%,... only have $79k with him ...just a simple Shwab index fund and I just sit on it for the next 10 years.
So, you are paying (now) $1,000 USD now, going up to $1200 USD for - not much. If the stock market returns an average of 6%, he's eating 25% of your profits - every year. Without your total portfolio you won't get a good recommendation. A quick answer would be to terminate the relationship with the advisor, then roll it over to a Target Date fund or a Total Stock ETF.
by CAsage
Mon Feb 10, 2025 12:20 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversions - Net Investment Income Tax
Replies: 6
Views: 728

Re: Roth Conversions - Net Investment Income Tax

cyfairslam wrote: Mon Feb 10, 2025 11:42 am For those who have not run across it before, for couples who have modified adjusted gross income over $250K, you pay an additional tax of 3.8% of the amount over the $250K limit. I only got over that limit because of the Roth conversion.
While the Roth conversion does drive up your overall taxable income (and that's IRMAA inducing), the 3.8% NIIT is only on "other investment income" not the Roth conversions or future RMD themselves. In our case, it makes a more compelling excuse for Muni bonds, which are not taxable at all (i.e. we save NIIT on those too). This is very taxpayer specific - if your income is mostly SS and RMD/Roth conversions, NIIT will be minimal (bites us every bloody year with capital gains etc).
by CAsage
Mon Feb 10, 2025 12:14 pm
Forum: Personal Finance (Not Investing)
Topic: Proving Cost Basis of Home
Replies: 24
Views: 2708

Re: Proving Cost Basis of Home

razorbacker wrote: Sun Feb 09, 2025 9:49 pm Yes, I'm sure most all of these costs were paid by check. No, I would not still have the bank statements or checks. Does the average taxpayer keep checks and bank statements over a 34-year period?
Lordy, no. But I kept the escrow papers for house purchase, and some major receipts for remodels - by no means complete, and that's bad on me. I am not tracking every single receipt for our second home. Reconstruct it as best you can - likely good enough. As others have noted, it's your net sale (sale, less broker, fees, title, more fees), then subtract the $500K, then a reasonable estimate of upgrades - honestly with 4 additions you should not have any issues.
by CAsage
Mon Feb 10, 2025 12:07 pm
Forum: Personal Finance (Not Investing)
Topic: how long for a vanguard order?
Replies: 14
Views: 912

Re: how long for a vanguard order?

2ball wrote: Wed Feb 05, 2025 9:51 pm I hope there is not a 7 day hold every time I transfer money.
Generally, new money transferred in shows up in 1 day, and you can buy ETF/funds with it immediately. You cannot withdraw those funds until 7 days (and there may be other rules), but if your account has more than that amount in "old" money, you can withdraw that. See the many, many examples of fraud and theft to explain this - it's a good thing. Take a deep breathe, let it settle, move it then.
by CAsage
Mon Feb 10, 2025 11:12 am
Forum: Personal Consumer Issues
Topic: Mom is upside down on car she can't afford nor drive
Replies: 60
Views: 6042

Re: Mom is upside down on car she can't afford or drive

psteinx wrote: Mon Feb 10, 2025 11:05 am There's a lien, so it won't be that simple.
One option is for OP to buy the car from mother for the amount owed, have mother settle the lien, then OP sells the car. But, that adds an extra transaction, and *possibly* an extra round of sales tax, so that may not be so wise.
Good point about the lien - I had forgotten that, since all my recent decades of getting rid of cars, they were all paid off (since, like, my 20's). Likely one can avoid the first sales tax (gift from Mom to OP, or leave it in Mom's name and just get the pink).
by CAsage
Mon Feb 10, 2025 10:46 am
Forum: Personal Consumer Issues
Topic: Mom is upside down on car she can't afford nor drive
Replies: 60
Views: 6042

Re: Mom is upside down on car she can't afford or drive

mrmass wrote: Mon Feb 10, 2025 9:46 am Tough to sell a car privately without a title. Gotta get that title if you want to sell it on your own. Carmax can handle that situation better.
OP can get Mom to sign the title in 1 minute, then sell the car for her (maybe with POA, may not be needed). Agree with other posts that his likely best option is to sell the car privately, pay that money off on the loan.... and then see. Though I'm trying to understand why a 90-year-old woman bought a car like that lol! I will also note with 25% tariffs on aluminum and steel, used cars may likely be worth a tad more shortly.
by CAsage
Sun Feb 09, 2025 8:09 pm
Forum: Personal Finance (Not Investing)
Topic: Does Dad have to file Federal tax return over $17.20?
Replies: 7
Views: 1896

Re: Does Dad have to file Federal tax return over $17.20?

fsrph wrote: Sun Feb 09, 2025 3:42 pm My father passed in August, 2023. Accountant filed his final tax return in 2024. Fine so far.
Recently, Vanguard sent him a tax statement that he had dividend of $17.20 in 2024. He has no other income in 2024. Does this require completing a 2024 Federal tax return? I guess I should call the IRS but does anyone have any thoughts? Thanks!
Pity you didn't close out his accounts in 2023. In theory, the dividend should be reported by whoever got it - if you inherited that account the income belongs to you. You should report it on your tax return with an explanation and Dad's SSN. Practically speaking, I would ignore anything that small. The IRS isn't going to bother going after the few dollars in tax that might require....
by CAsage
Sun Feb 09, 2025 8:04 pm
Forum: Personal Investments
Topic: Questions about two "bonds"
Replies: 10
Views: 1325

Re: Questions about two "bonds"

Do you have lots of other gains you would like to offset with these losses? I'm not sure I'd be willing to wait decades to clean up my portfolio.
by CAsage
Sun Feb 09, 2025 7:15 pm
Forum: Personal Investments
Topic: Looking for some advice for my niece [investing inheritance]
Replies: 5
Views: 1202

Re: Looking for some advice for my niece

Does she have the records (statement) from the date of inheritance? Was the correct cost basis updated for those shares at that time? If she has the statement, she can enter the correct cost basis in her Schedule D reporting any sales - which would have included the withdrawal (i.e. sold something...) for the car. Could check the current 'unrealized capital gains" to get a feel for what the long term capital gains taxes would be when sold. When did she buy the car? What did she do with that 1099-B statement (hoping it was 2024). Roth is a great idea.
by CAsage
Sun Feb 09, 2025 5:28 pm
Forum: Personal Finance (Not Investing)
Topic: Fraudulant 1099/Taxes
Replies: 7
Views: 1515

Re: Fraudulant 1099/Taxes

Will you owe a payment for your correctly calculated taxes? That still needs to be paid by April 15, after which you can file your taxes at your leisure by October 15 (I think extensions are automatic, or request one). But you can't owe money (minor interest penalties). Now, this does get muddled due to your fraudulent 1099, but I'd stick to the truth and (when/if the IRS) asks, show them it's not yours.
Lock down your credit/ID at all sites listed herein, and keep good books.
https://www.bogleheads.org/wiki/Credit_freeze
by CAsage
Sun Feb 09, 2025 10:28 am
Forum: Personal Finance (Not Investing)
Topic: San Jose house purchase
Replies: 24
Views: 1630

Re: San Jose house purchase

Think about your overall portfolio, job security, savings for retirement, any college expenses? If you do buy, I would put down enough to ensure the entire mortgage is deductible ($750k or $1M). One can have appreciation and more privacy in a SFH, but then again stuff breaks and needs updating regularly. Right now, biggest issue vould be job security (which seems remarkably fluid in many fields this month) and unknown future tax changes - can you afford without the mortgage deduction?
Klangfool thinks everyone should live in one rented room and keep all the money in cash - never a recommendation to buy!
by CAsage
Sun Feb 09, 2025 9:46 am
Forum: Personal Finance (Not Investing)
Topic: Roth Conversions and RMDs
Replies: 3
Views: 413

Re: Roth Conversions and RMDs

Terminology and careful transactions are required here - be very OCD. It's safer to initiate a Roth Conversion from your IRA to the Roth and withdraw the funds separately (and do the RMD first). You can do a "rollover" from an IRA to a Roth, which may need special handling on the incoming Roth to ensure it isn't a contribution. Read this Wiki on how to do it.
https://www.bogleheads.org/wiki/Roth_conversion
https://www.bogleheads.org/wiki/IRA_rol ... _transfers
by CAsage
Sat Feb 08, 2025 7:59 pm
Forum: Personal Investments
Topic: Inherited IRA - Take it out or Let it ride!
Replies: 14
Views: 1898

Re: Inherited IRA - Take it out or Let it ride!

Are you maxing out the 401K at work? Do you have a Roth IRA (do a backdoor Roth annually, start now). Do you have any other pre-tax IRAs? Assuming taxes remain flat (not taking any bets, either way), what would your income look like over the next 10 years? One consideration is whether you can do Roth conversions at a hot clip, and use some of Mom's money to pay the taxes. Also.... you (may, again, no bets) start on Medicare in 8 years, and at that point IRMAA income limits begin (i.e. higher Medicare premiums) with higher income so I would try to wipe out that account with withdrawals (and then either Roth conversions, backdoor Roth, or tax-efficient investing) by 65. Other posters may point you to optimizing software, but I'm a pencil ...
by CAsage
Sat Feb 08, 2025 7:15 pm
Forum: Personal Investments
Topic: Roth Conversion with 20% Withholding for 1099-R
Replies: 39
Views: 2738

Re: Roth Conversion with 20% Withholding for 1099-R


I understand your point about the tax being due when the income is realized. So if you realize the income, and hence the tax liability, in the first quarter, then you should pay the estimated tax due in the first quarter.
Anyone with specific knowledge on this point? My question is not so much directed to what is the right or less risky thing to do, but whether the IRS is actually checking the dates on these transactions to determine the correct timing of estimated payments.


In my non-CPA opinion, only if you have a deep dive audit would this come up. The 1099-R does not have those details. IMO, the IRS appears to be tardy in processing even correctly filed returns. We all make choices about how to report things; better to be aware of ...
by CAsage
Sat Feb 08, 2025 7:07 pm
Forum: Personal Finance (Not Investing)
Topic: US Gov Obligations & State Tax Filing
Replies: 7
Views: 1333

Re: US Gov Obligations & State Tax Filing

Yup, you've got it, show Total in Column A, the subtraction in Column B for Line3. If you are using tax software, there is likely a flag that you can check on the dividend entry, which then brings up a query for you to enter the amount of dividends that are tax free in Ca.
by CAsage
Sat Feb 08, 2025 2:48 pm
Forum: Personal Investments
Topic: Roth Conversion with 20% Withholding for 1099-R
Replies: 39
Views: 2738

Re: Roth Conversion with 20% Withholding for 1099-R



Quarterly estimated payments are just fine; they are timely if equal and your income is even throughout the year (Plan A). If you have a high amount of income in January, e.g. a big Roth conversion, then payments are required to mirror the income flow, hence due in April. No free lunch there.

Equal quarterly payments are timely regardless of when the income is realized . There is a free lunch.... If a windfall late in the year occurs you'd either suck up the penalty or suck up filling in the AI part of form 2210.


Please see the IRS regulations on unequal income during the year - From 2210. There's a reason people doing Roth conversions early in the year pay via withholding instead of inappropriate 4 equal payments - you are ...
by CAsage
Sat Feb 08, 2025 1:18 pm
Forum: Personal Investments
Topic: Roth Conversion with 20% Withholding for 1099-R
Replies: 39
Views: 2738

Re: Roth Conversion with 20% Withholding for 1099-R


Are you saying the payments are not considered timely if one makes estimated tax payments? For those that have to pay estimated taxes how do you suggest they make them so they are considered timely? To me making quarterly tax payments means folks get to keep more of their money (so it can earn interest) vs giving Uncle Sam an interest free loan, but I could be missing something


Quarterly estimated payments are just fine; they are timely if equal and your income is even throughout the year (Plan A). If you have a high amount of income in January, e.g. a big Roth conversion, then payments are required to mirror the income flow, hence due in April. No free lunch there. I used to pay my taxes from IRA withholding in December, counts as ...
by CAsage
Sat Feb 08, 2025 1:00 pm
Forum: Personal Finance (Not Investing)
Topic: Is my Roth still valid after a direct pretax transfer?
Replies: 7
Views: 403

Re: Is my Roth still valid after a direct pretax transfer?

It is perfectly permissible to "convert" pretax accounts to Roth IRA accounts, as long as you paid the taxes by including the full amount in the year you rolled it over. There could be an issue if Vanguard processed that as a contribution.
To have kept it clean and proper, you should have rolled it over to a new Vanguard IRA, and then quickly converted the entire balance to a Roth.
How did you report the amounts on your 2019 tax return? Look at form 8606. And yes, going over the contribution limit is a bad thing, there are complex rules about unwinding it (recharacterizing it to a regular IRA, possible penalties). Alan S. is the expert on this forum for this....
by CAsage
Fri Feb 07, 2025 6:12 pm
Forum: Personal Investments
Topic: inherited ira company
Replies: 4
Views: 495

Re: inherited ira company

Was the person taking RMD (i.e. older than 72) when they died and left it to you? Might need to continue their RMD, so you might not want to tie it up in a bank CD (i.e. you need to withdraw some each year). A bond fund might be a good choice, Vanguard has a lot of good choices. What is your tax bracket? If it's low enough... you can withdraw the money, pay the taxes, and invest it any way - such as funding your own IRA in the future or increasing your 401k etc. Not enough info to really advise, but CDs are available at any bank or CU, and bond funds in any brokerage. Watch the expense rations, avoid Edward Jones or Raymond James like the plague.
Your prior posts indicate that you "several hundred thousand" in cash/cashlike investments. Any ...
by CAsage
Fri Feb 07, 2025 6:08 pm
Forum: Personal Finance (Not Investing)
Topic: Car inheritance and probate
Replies: 15
Views: 1897

Re: Car inheritance and probate

Find out what the Dept of Motor Vehicles requires in the state (either of the decedent or new owner) to transfer a title. In some cases, it's pretty easy if you have the pink slip. E.g. next of kin can sign it over with a death certificate. Cars don't sit well.
by CAsage
Fri Feb 07, 2025 8:38 am
Forum: Personal Investments
Topic: Inherited IRA
Replies: 8
Views: 569

Re: Inherited IRA

Once you take the money out of the inherited IRA, it doesn't know where it came from. It's just money. So you are held to the same rules on contributing to an IRA as you were without the inherited IRA. You need to read those carefully. If working, one could also increase your 401k contributions to (partially) offset that. Depending on what year you inherited this, you may have 10 years to empty the account.
https://www.bogleheads.org/wiki/IRA
https://www.bogleheads.org/wiki/Inheriting_an_IRA
by CAsage
Thu Feb 06, 2025 5:27 pm
Forum: Personal Finance (Not Investing)
Topic: Executor Fee
Replies: 10
Views: 1782

Re: Executor Fee



... AFAIK the executor would not have specific knowledge of any other assets, since they pass outside of probate.


this did not involve probate. Probate was avoided with affadavit of heirship and a non contested will.
Executor DID have knowledge of all other assets, and facilitated the distribution of such via the direction of the will and through proper procedures and legalities.


I am further confused. In my understanding, an "executor" really only exists in relation to a probated will - i.e. you file the will at your local court, and someone is then appointed executor. One can omit this step if all assets are TOD or beneficiary, and the family just quietly sorts the household goods (if any). But there is no formal executor ...
by CAsage
Wed Feb 05, 2025 7:13 pm
Forum: Personal Finance (Not Investing)
Topic: Executor Fee
Replies: 10
Views: 1782

Re: Executor Fee

In my experience, it applies to the "probate estate" - annoyingly, the market value of (for example) the real estate, not discounted for mortgage. AFAIK the executor would not have specific knowledge of any other assets, since they pass outside of probate. Everything is included if your estate is subject to state inheritance tax limits....
by CAsage
Tue Feb 04, 2025 7:03 pm
Forum: Personal Finance (Not Investing)
Topic: Is a Life Insurance Company Trying to Scam Me After My Mom's Passing?
Replies: 49
Views: 5421

Re: Is a Life Insurance Company Trying to Scam Me After My Mom's Passing?

The bit about the "nationwide phone outage" sounds remarkably like b.s. But I did find a search option that appears to provide information on policies based on the decedent. I'd try that first, or dig through Mom's old tax returns - there could be an old employee policy, if she ever worked there.
I will add, in my experience, they won't talk to anyone who isn't a beneficiary. Unclear.

https://content.naic.org/article/learn- ... cy-locator
by CAsage
Tue Feb 04, 2025 6:37 am
Forum: Personal Finance (Not Investing)
Topic: Turbotax RMD glitch
Replies: 6
Views: 1070

Re: Turbotax RMD glitch

Can you simply enter a whole dollar amount for the RMD - rounding per IRS convention?
by CAsage
Tue Feb 04, 2025 6:35 am
Forum: Personal Finance (Not Investing)
Topic: Tax filing for marriage in 2024
Replies: 9
Views: 1111

Re: Tax filing for marriage in 2024

The only complexity to your 2024 return is the dual-state "problem". Many states will assess income taxes for income earned while living in their state, and it's usually offset by the second state. Our VITA/AARP tax prep center locally won't handle dual state returns (very simply, we cannot train volunteers on other state laws). You should research how much (if any...) income tax is even due to State A. In general, your taxes 2025 and forward are very simple, and learning to DIY with either Turbotax, HRBlock Taxcut, or another software will be far cheaper. Extra states usually cost a bit more, and again they will charge for e-filing a state return (which can be avoided by simply mailing in the forms).
by CAsage
Mon Feb 03, 2025 12:37 pm
Forum: Personal Finance (Not Investing)
Topic: IRA Beneficiary (primary/secondary) w/trusts
Replies: 1
Views: 183

Re: IRA Beneficiary (primary/secondary) w/trusts

When the first spouse passes, it's usual for the surviving spouse to transfer the deceased spouse's IRA into their own names - something you can do as a spouse but not any other heir. Then, it's completely up to the surviving spouse to update the beneficiary. I do not think that there is anything "automatic" about it. I will note, this is a good time to decide whether other heirs should be considered as a fraction of primary, for example 50% to my Wonderful Spouse and 50% to (other loved ones). Trusts and IRA are messy, from what I hear, and need to be very carefully considered due to taxation issues (such as higher rates and faster requirements to liquidate). Research!

https://www.bogleheads.org/wiki/Inheriting_an_IRA
by CAsage
Mon Feb 03, 2025 12:23 pm
Forum: Personal Finance (Not Investing)
Topic: Does my "renter's" insurance cover a relative who owns and also lives in the house?
Replies: 9
Views: 1463

Re: Does my "renter's" insurance cover a relative who owns and also lives in the house?

I'm guessing that, unless you are on the title, your parents will have to take out a HO policy. I also think it's likely that they cannot get a liability or umbrella policy unless they first have a HO policy. Unfortunately for them, if you do anything about the house that incurs harm, the harm-ee is likely to sue your parents as the homeowners and the potential deep pockets. So... you might look into a HO and an umbrella liability policy and offer to pay it for them, in lieu of rent?
by CAsage
Mon Feb 03, 2025 12:19 pm
Forum: Personal Finance (Not Investing)
Topic: Selling investments to meet mortgage payment
Replies: 27
Views: 3479

Re: Selling investments to meet mortgage payment

Go talk to some lenders and get prequalified for a mortgage. See what they will give you. As others have said, they look at current verified income alone for the payment (and could include property taxes). Pity your life goals don't include some sweat equity in buying a fixer upper - that's a great way to get in cheaper and build up net worth. Also... the stock market returns in the last couple years are rare - things don't last. In my experience, there were big market crashes in 2000, 2008/9, 2020... Who knows what's next but you cannot count on this.
by CAsage
Sun Feb 02, 2025 7:26 pm
Forum: Personal Finance (Not Investing)
Topic: Selling investments to meet mortgage payment
Replies: 27
Views: 3479

Re: Selling investments to meet mortgage payment

Specifically, how much are you thinking of liquidating to put as a down payment, and how much mortgage can you afford? Lenders assume that you will be paying the mortgage and property taxes out of current income, so unclear on why you think you need to take out money each month - maybe just put more down. And you need to very carefully calculate how much you will be paying for capital gains taxes when you cash out, assuming this is a brokerage account. You are too young to withdraw from any IRA.
by CAsage
Sun Feb 02, 2025 7:07 am
Forum: Personal Finance (Not Investing)
Topic: Missed the Foreign Tax Credit the last two years - next steps?
Replies: 16
Views: 1156

Re: Missed the Foreign Tax Credit the last two years - next steps?

For others, one can always get the PDF forms and fill out by hand. Or, there is an excellent free resource that includes all years of IRS 1040 and schedules to download, and then fill out in Excel to print. I did this when I had to amend a return and no longer had software installed.

www.excel1040.com
by CAsage
Sat Feb 01, 2025 8:22 pm
Forum: Personal Finance (Not Investing)
Topic: H&R BLOCK IRA Tax Penalty
Replies: 7
Views: 925

Re: H&R BLOCK IRA Tax Penalty

Does a penalty actually show up in the return? That sounds odd.....
by CAsage
Sat Feb 01, 2025 6:37 pm
Forum: Personal Investments
Topic: Best approach to minimize taxes Fed and State (CA) calculators tools?
Replies: 27
Views: 2690

Re: Best approach to minimize taxes Fed and State (CA) calculators tools?



...Another consideration - in my case, any CA muni income helps us remain below MAGI income limits for IRMAA Medicare pricing and reduce NIIT. I don't optimize these accounts; majority bond allocation is in my IRA.


Interesting perspective, i didn't take into consideration IRMAA, when you state "... any CA muni income helps us remain below the MAGI income limits..." I assume you mean having a fund like VCTXX reduces your FTB tax liability but how does that impact MAGI and Medicare since that is a federal program?


I was partially correct - having less income makes it easier to stay under MAGI limits, though they still add it back in to calculate MAGI, the number is smaller on the total income side, so... it's slightly better. The ...
by CAsage
Sat Feb 01, 2025 6:10 pm
Forum: Investing - Theory, News & General
Topic: Large Roth conversions against conventional wisdom?
Replies: 95
Views: 9300

Re: Large Roth conversions against conventional wisdom?

If I had converted my whole IRA in March 2020, and paid 32% or more... it would have doubled by now and I would be way ahead. Hindsight. However.... it's tough to plan that. Since we are now getting bit by IRMAA.... hmmm..... more thinking....
by CAsage
Sat Feb 01, 2025 5:53 pm
Forum: Personal Investments
Topic: Best approach to minimize taxes Fed and State (CA) calculators tools?
Replies: 27
Views: 2690

Re: Best approach to minimize taxes Fed and State (CA) calculators tools?

My (simple) formula was meant to calculate the net after-tax yield of broad categories. First, there are 3 categories of income which are taxed differently - some fully taxed by IRS and FTB, some just the IRS (treasury) and some neither the IRS nor the FTB (Ca bond funds). Then compare yields - those annoyingly fluctuate, but the 30 day SEC yield at least gives you a current snapshot and allows you to compare funds. Money markets are more stable, but bond funds return more over time. Another consideration - in my case, any CA muni income helps us remain below MAGI income limits for IRMAA Medicare pricing and reduce NIIT. I don't optimize these accounts; majority bond allocation is in my IRA.
by CAsage
Sat Feb 01, 2025 5:40 pm
Forum: Personal Finance (Not Investing)
Topic: Married filing jointly
Replies: 19
Views: 1600

Re: Married filing jointly

Let's focus on the tax issues (avoid relationship to keep thread alive)! This is quite common with second marriages, people marrying later with time to accumulate assets etc. In our case, MFJ is still an advantageous filing bracket, and we maintain separate assets/income. So... nuts and bolts. I have a spreadsheet which mimics our 1040 return - all income, deductions etc. Then, I create a second sheet, carry all the line items and amounts - with two more columns for "His" and "Hers". Calculate what we would each pay if we were still single. The spouse with the lower tax liability pays 100% of that amount in estimated payments or withholding, and the spouse who would have paid more pays the balance. One can negotiate this, or use tax ...
by CAsage
Sat Feb 01, 2025 12:04 pm
Forum: Personal Consumer Issues
Topic: Wallet stolen in Rome, no money, now what?
Replies: 102
Views: 12376

Re: Wallet stolen in Rome, no money, now what?

You can probably pay for his hotel/lodging over the phone with your credit card. If he has a phone, I thought all of Europe was pretty much cash free, so can he set up Paypal or Venmo or something on his phone for dining/food? Western Union for cash, or pay to overnight him new cards.
by CAsage
Fri Jan 31, 2025 5:06 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Implications of Land Gifted to Child
Replies: 32
Views: 3325

Re: Tax Implications of Land Gifted to Child

WVRick wrote: Fri Jan 31, 2025 4:49 pm ...When I go, it will TOD to a trust in support of my two kids. Once they get control, if they decide for one sibling to buy out the other, would capital gains taxes be due then for that value? I'm assuming yes.
Your cost basis is the same as your Great Aunt - since she gave it to you. However, when you die, your children will inherit the property and the brand new cost basis will be the value as of your death. Advise them to get an appraisal or two, to document the fair market value. High is better for taxes, low is better if one wants to buy out the other.
by CAsage
Fri Jan 31, 2025 12:03 pm
Forum: Personal Investments
Topic: Roth Conversion Scenario Options
Replies: 7
Views: 976

Re: Roth Conversion Scenario Options

Would that be before or after taxes? I am actively doing Roth conversions which - on paper - reduce my net worth because I'm paying the taxes now, to leave my heirs a big fat Roth account. I choke a bit at 35% taxes, but should have taken that in March 2020....
by CAsage
Fri Jan 31, 2025 11:53 am
Forum: Personal Consumer Issues
Topic: Heat Pump for 1838 Farm House?
Replies: 38
Views: 4020

Re: Heat Pump for 1838 Farm House?

A lot of this depends on your floor plan/layout. You might put a heat pump on the newer sections, allowing for a smaller dead-fuel heat supply on the old section. New heat pumps are incredibly efficient, and will work to much lower temps than those even a few years older. I will note - insulation and weatherstripping has the best return on your money, and has current Inflation Reduction Act rebates which are quite helpful. We are trying to do that to our circa 1965 house - built with no insulation! Incredible, trying to fix that....
by CAsage
Fri Jan 31, 2025 10:42 am
Forum: Personal Investments
Topic: Best approach to minimize taxes Fed and State (CA) calculators tools?
Replies: 27
Views: 2690

Re: Best approach to minimize taxes Fed and State (CA) calculators tools?

All you need is excel or a calculator, and you need to know which tax bracket you are in. For example, we are in the 24% IRS and 9.3% CA FTB brackets. I would suggest using the current SEC 30 day yield, since yields move fast. I have owned several of the Vanguard Ca funds, currently own the CA Money Market and VTEC.

CD/MM/Corp interest equals Taxable rate times tax hit, or Net% = Rate* (1-.24-.093) = Rate*.667.
Treasury Net Interest equals Rate times Fed only (not CA) = Rate * (1-.24) = Rate*.76.
by CAsage
Fri Jan 31, 2025 10:32 am
Forum: Personal Finance (Not Investing)
Topic: Inherited IRA and Deceased RMD
Replies: 5
Views: 600

Re: Inherited IRA and Deceased RMD

If you took it in 2024, you could not have claimed/reported it for 2023 as it did not occur that year. For 2024, the 1099-R income goes on your tax return Line 4, IRA distributions. The withholding goes on the 1040 as well. How do you do your taxes? In most software, it will simply ask you to enter all the information from the little boxes, including the special code for Death benefit.

You are probably overdue on missed 2023 RMD - did you double up for 2024? If you don't make that up (and get current, i.e take the 2023, 2024, 2025 RMD all by the end of 2025) there might be penalties, though they can be waived if asked. Note that an RMD is a calculated number, not a special kind of transaction.

https://www.bogleheads.org/wiki/Required ...
by CAsage
Fri Jan 31, 2025 10:25 am
Forum: Personal Finance (Not Investing)
Topic: What are Refinancing Closing Costs
Replies: 8
Views: 652

Re: What are Refinancing Closing Costs

It can be anything that the new lender wants it to be. I refinanced several times (decades ago), before I finally figured out the only way to compare two real loan offers is with strictly no-cost, no-fee loans. Of course there are still fees, but they are included in the APR, i.e. the lender manages those costs internally. They are FAR more motivated to scrub costs, whereas when they simply bill you, it's easy to run up the tab. Frankly, I think there's a lot of padding in new loans - but then again, a new mortgage holder has to cover their risk, so due diligence (checking your current credit, getting a new title policy, appraisal) are likely to be needed. Assume the worst, get it in writing.
by CAsage
Thu Jan 30, 2025 6:06 pm
Forum: Personal Finance (Not Investing)
Topic: Seeking assistance on settling a simple estate
Replies: 38
Views: 3638

Re: Seeking assistance on settling a simple estate

No one on this planet is tracking your mother's personal possessions - unless you think some relative will emerge to claim anything, which seems unlikely since you and Sis are sole heirs. Everything else appears to be joint tenant, so the money is legally yours. IMO close the accounts, pay the bills, have a lovely dinner with your sister to commemorate your mother's memory, split the balance and move on. You can also file her final 2024 tax return and sign it as "personal representative" without going to court. That's what I did with my Mom; kept the will in my pocket but never needed it.
Also, you won't need to file a tax return if there is any small income in 2025 for your Mom because it would be below the minimum, but I would recommend ...
by CAsage
Thu Jan 30, 2025 5:50 pm
Forum: Personal Investments
Topic: How to withdraw from 401k incurring least amount of taxes
Replies: 30
Views: 3809

Re: How to withdraw from 401k incurring least amount of taxes

Your taxes are gonna be what they gonna be; the withdrawal from the IRA is fully taxable income. There are no angles to work here. You can use any of the free tax models to estimate what your taxes (to the IRS and the CA FTB) for that $50K upper in 2024 and 2025. We can ballpark it if you know your 2024 income tax bracket - or tell us your taxable income. Likely to be not that bad (considering), since your income overall seems modest, you are filing MFJ, and Social Security is not taxed in CA. Who does your taxes? That's who you need.

https://www.bogleheads.org/wiki/Tax_estimation_tools
by CAsage
Thu Jan 30, 2025 1:12 pm
Forum: Personal Finance (Not Investing)
Topic: State Taxes and Allowances
Replies: 4
Views: 851

Re: State Taxes and Allowances

When I was working, I would compulsively and thoroughly detail income and taxes for each year and adjust withholding (fed and state) to more or less break even by year end. After each adjustment, I would recalculate the taxes (current year) to yearend and readjust if necessary. I found that calculating it gets you a great first number, but just tweak until it's correct.
by CAsage
Thu Jan 30, 2025 12:18 pm
Forum: Personal Finance (Not Investing)
Topic: 2024 Turbo Tax Problem
Replies: 13
Views: 2741

Re: 2024 Turbo Tax Problem

As a diehard DIY for taxes, investment and home upgrades.... This is likely a code or entry boo-boo. If you prepared your taxes in excel or paper by hand.... what exactly would you expect to see on those lines? For example, the QCD - was that excluded from your taxable income? You need to drill down on each line of the tax return, find out where that entry came from, what you think it should be, and see what income input was somehow entered wrongly. Trace back every line on the 1040 (and in Turbotax) to the supporting/feeding schedule. If you know the amounts of the discrepancies, you might be able to pick which ones to scrub.
by CAsage
Wed Jan 29, 2025 6:07 pm
Forum: Personal Finance (Not Investing)
Topic: Treasury 10 Year TIPS matured - report how?
Replies: 10
Views: 1752

Re: Treasury 10 Year TIPS matured - report how?


So, I've computed the cost basis he should use for all six on row 14 of the table below. The May re-opening auction of the Jan 2024 maturity was at a premium. I assume that TreasuryDirect amortized this premium over the years 2014-2024 and reported it on the 1099-INT. Therefore, I've included it in the calculation of cost basis (which makes the cost basis equal the proceeds).

14 Cost basis 1,313.95 1,314.18 1,317.41 1,309.28 1,275.31 1,286.47 =B10+B12+MIN(0,B11)
15 Accrued Mkt Discount 3.46 3.23 0.00 12.21 46.18 35.02 =B13-B14[/code]


Thank you! Now, to attempt to interpret this (aka explain it to me like I was 5)...
Actual Purchases: 1/31/2014: $9957.56, 7/31/2014 $9,896.45 (this I know).
Reconstructed total OID $5,328.7 (add to ...
by CAsage
Wed Jan 29, 2025 5:36 pm
Forum: Personal Finance (Not Investing)
Topic: Treasury 10 Year TIPS matured - report how?
Replies: 10
Views: 1752

Re: Treasury 10 Year TIPS matured - report how?


The amount taxed as a capital gain is the difference between the price paid for the inflation-adjusted principal and the inflation-adjusted principal at the time of the purchase. The capital gain is not calculated using the proceeds, which include inflation adjustments after the purchase, and then adjusting the proceeds for those inflation adjustments.


That seems clear enough for me to understand (i.e. explain it to me like I was 5). Actual purchases were 1/31/2014: $9957.56, and 7/31/2014 $9,896.45 (so that narrows down which auction). If I understand, I pay long term capital gains on the difference between the face value of $10K (each) and the purchase price, for a modest capital gain of $145.99 total? I can totally live with that ...
by CAsage
Wed Jan 29, 2025 3:04 pm
Forum: Personal Finance (Not Investing)
Topic: HR Block 'free' online tax prep
Replies: 4
Views: 1022

Re: HR Block 'free' online tax prep

Yes, it's a ripoff. The government (used to...) require companies to offer free tax software use to the public with simple tax returns or modest income, as a trade to not "competing" for the business of doing taxes. But they make is super hard, and lobbyists with $$$$ have more clout than you do. Try free fillable forms, or the other options listed, or download a very reliable Excel version and fill it in:

www.excel1040.com

The metaphor here is like your credit card company sending you a bill, but not telling you what your transactions or balance are, and penalizing you if you don't pay it in full. Fun!