Bogleheads.org

The downside would be the 529 state tax break is realized when the kid(s) go to college and you don't get compound interest on that. Depending on college costs, you might exceed the state tax break in a year. Yeah the more I think about this, I think this is a tradeoff between a larger state tax deduction for the 529 contributions over the years, versus the flexibility of a combined pool of tax-advantaged money for retirement and college, plus the ability not to worry about a penalty if I overfund the 529. I think that tradeoff is worth it. Keep in mind that you only pay penalties on earnings. If you fund a 529 to get a state-tax break, and then arrange to put the fixed-income portion of your assets into the 529, then you won't have a ton ...

Question: Should I use a Mega-backdoor Roth for college savings instead of a 529? On some threads, you'll find advice that you should only contribute to a 529 after you have maxed out all retirement-specific tax-advantaged options. Even if you cannot withdraw from the Roth, simply having a well-funded Roth available allows you to redirect your cashflow towards educational expenses. The gist of this approach is that the best way to safeguard the futures of people who are dependent on you is to make sure that YOU are in a good place to provide that solid pillar for them, that they have a predictable foundation to base their planning on. Say between now and matriculation you max out your elective 401k contributions, matching, and mega-backdoo...

With the next 52-week auction incoming, I was reviewing stats before establishing the next rung of the ladder, and I notice that Ally has gotten back to some decent rates on their no-penalty CDs. At 4.75%, their no-penalty rates are about level with the 4.3% that is listed for 52-week T-bills, after you back out my state taxes. For me, "about level" means I'll stick with T-bills, given the past bit of banking news :-). Anyhow, it did cause me to look at a few non-ladder T-bills I had. AFAICT, if I sell the bills in the secondary market, and then reinvest the proceeds into the above-mentioned Ally no-penalty CD, then on the original maturity date of the T-bills, I will be in almost exactly the same position as if I simply held the ...

The main reason I know about the withholding thing is because I've been having estimated taxes most years for like 30 years. When I was working, it was easier to modify withholding safely. Since retiring, I have never used the IRA-rollover-withholding technique, because I never felt the complexity was warranted to offset saving some late-payment penalties. Part of this is because the penalties have been very low for quite some time (0.5%/month things remain underpaid (*)), so I wasn't willing to risk something getting screwed up to accomodate that. This calculation may change, because I think penalties somewhat track interest rates, otherwise people would contrive to underpay and book float net of penalties. As twh mentioned, there is a dif...

typical.investor wrote: ↑Fri Mar 10, 2023 9:00 pm

sport wrote: ↑Fri Mar 10, 2023 8:57 pm You will be insured for 250K for each bank.

per account type

I believe this works out something like:
- I can have a sole account with $250k
- My wife can have a sole account with $250k
- We can have a joint account with $500k (2x$250k)

But it's per account holder, so a checking account is not independent of a savings account if they are titled the same.

Now regarding this year's taxes, you do not have to pay tax now if you are not doing the conversion until the 4th quarter. You can pay estimated taxes by 1/15/2024 and not owe a penalty. This does require filling out IRS Form 2210, but that easier than people think. This is correct, what I did, worked great. With an IRA, you can often/usually specify withholding. Withholding is considered evenly applied through the year. So one option people use to cover for underpayment of estimated taxes is to do a late-year conversion with high withholding. This does require you to additionally contribute outside money to the Roth to make up for the withheld portion (otherwise that becomes a distribution). So the safe harbor is definitely the better opt...

Now regarding this year's taxes, you do not have to pay tax now if you are not doing the conversion until the 4th quarter. You can pay estimated taxes by 1/15/2024 and not owe a penalty. This does require filling out IRS Form 2210, but that easier than people think. This is correct, what I did, worked great. With an IRA, you can often/usually specify withholding. Withholding is considered evenly applied through the year. So one option people use to cover for underpayment of estimated taxes is to do a late-year conversion with high withholding. This does require you to additionally contribute outside money to the Roth to make up for the withheld portion (otherwise that becomes a distribution). So the safe harbor is definitely the better opt...

Don't know if you are using turbotax (?) - it continues to be a hot mess for entering information on employee stock sales (especially for RSUs) - Just for fun, when you get to the interview question of 'is this employee stock' click on the information button (the i with a circle around it) This is one of the reasons that used to tempt me to jump ship. Over the years I received ESPP shares, ISO's, NQ's, and RSU's, and the stock compensation defaults in both Quicken and TurboTax were so bad that I always had to reverse-analyze what they were doing in order to figure out how to fix it. That in turn made me concerned about whether my actions invalidated the results, and/or that they were making other fundamental errors. I get that it's a hard ...

My own opinion is that it is very acceptable to have the next year worth of spending in timeframe-matched T-bills. I won't do better in HYSA or CDs, MMFs will likely do slightly worse, I think. I think it would be very reasonable to extend that to two or five years of spending, if you're comfortable doing so. This is really tactical, though, and I think your question is more strategic, involving more than just that timeframe worth of spending.

He has a couple big inheritances on the horizon, and he was telling me how he factors some of that in in terms of his retirement savings. I told him not to count any eggs before they hatch. He said, “well, you guys are going to get a ton, right?” since we have wealthy parents or relatives on both sides. I told him that I don’t know the future, and even if we are in the wills, why would I bank on some thing that’s not already in my account or name? You cannot predicate retirement planning on "X share of their estate" without knowing if the estate will be 8 figures or 7 figures or whatever. It could be low 6 figures. Ooops. Likewise, you cannot retire on "a ton", my guess is that someone who thinks that way will receive a...

Currently running a 12-rung ladder of 52-week T-bills. 52 weeks because longer has seemed unrewarding lately. Once a month because that's how often the auction happens. I'm considering going to alternate months to reduce the overhead. This is my near-term spending money (we are retired). There is also a chunk in BIL (1-3mo Treasury ETF), BILS (3-12mo Treasury ETF), and VUSXX (Vanguard Treasury MMF), basically for liquidity as I continue to get comfortable with the T-bill ladder. My notion was to just keep rolling the ladder while spending from the ETFs. For the balance of my fixed-income allocation, it's a mix of iBonds (I still have a bunch from when the limits were higher) and Vanguard Total Bond Market in retirement accounts, mainly beca...

Wash sales act to REDUCE the basis of the replacement shares you retain. Say you have 100 shares you wish to sell at a loss of $5/share, and you vest 100 RSUs which you intend to retain for the long term. If the sale is within the wash window from when the vest happens, your RSU basis will be $5/share lower than the FMV on date of vest. Don't wash sales raise, not reduce, the cost basis of the shares remaining by the amount of the loss? I am confused. Hmm. Yes, you're right - the loss moves into the replacement shares, so when you have a share purchased for $110 and sold for $100, and you buy a share for $105 within 30 days of that sale, the $10 loss shifts over to give you a $115 basis on the replacement share. So the loss reduces the gai...

One of the problems when unloading company stocks is wash sales. My ESSP is biyearly (twice a year) and RSU is quarterly. It is difficult to avoid wash sales while trying to limit the capitals gains taxes. My company stocks have been on an upward trend for many years. Equity award is a large part of my compensation. Question: is it bad to have wash sales while trying to sell shares when the price is at temporary "peaks"? If your company is on an upward trend and you're selling at temporary peaks, you wouldn't have a wash sale. The only time you should have to worry about a wash sale is if you want to make a sale for a loss while at the same time you somehow acquire shares which you intend to hold. If you have an RSU vest which yo...

One of the problems when unloading company stocks is wash sales. My ESSP is biyearly (twice a year) and RSU is quarterly. It is difficult to avoid wash sales while trying to limit the capitals gains taxes. My company stocks have been on an upward trend for many years. Equity award is a large part of my compensation. Question: is it bad to have wash sales while trying to sell shares when the price is at temporary "peaks"? If your company is on an upward trend and you're selling at temporary peaks, you wouldn't have a wash sale. The only time you should have to worry about a wash sale is if you want to make a sale for a loss while at the same time you somehow acquire shares which you intend to hold. If you have an RSU vest which yo...

Don't let perfect be the enemy of good enough. Pick some guardrails for your long-term goals with this stock. Put up three or four hypothetical situations to help guide your guardrails (stock grows 2x as fast as the market, stock only matches the market, stock tanks for a few years, stock shoots to the moon, etc). Figure out a reasonable timeframe for when you want to reach those long-term goals, then define some routine action items to move you in the right direction. As a for-instance, I set a target ratio of employer stock to net worth, and then every month or quarter or whatever, I'd sell a fixed number of shares to move towards that ratio. I choose the share count based on the idea that it would always move me in the right direction (I...

FrugalInvestor wrote: ↑Thu Mar 02, 2023 11:53 pm I will be starting RMDs before too long and keeping them from pushing me over one of these limits (especially IRMAA) is one thing that triggers thoughts of doing conversions. I only have a couple of more years and then that window closes. But at this point that appears to be unlikely so I should probably just pull from taxable especially while capital gains rates are favorable.

I am currently doing conversions because I am retired and 20 years from RMDs and I want to make sure our RMDs will not be onerous.

But if I were 59.5 and needed spending money, I would simply take distributions from our tIRA/401k accounts, in preference to raising cash in other ways such as selling taxable investments or taking Roth distributions.

I have read quite a bit on this site about investing in treasury mutual funds/ETFs vs. buying treasuries on the secondary market trough Vanguard/Fidelity. I currently hold a very significant part of my bond portfolio in a few Vanguard funds: VUSFX, VBIRX, VTAPX, VAIPX. What I’ve learned the hard way - and what I’m sure everyone here already knows - when you own a lot of treasury funds before an increasing interest cycle their value drops significantly. And I understand that the bonds in those funds are worth less because they have lower interest rates than the new issues. What I wasn’t quite prepared for was the degree of the - so far - paper loss - virtually all of the bonds in these funds were paying some interest, yet they have all lost...

She should never withdraw the money at all. She should instruct the 529 plan to pay the school directly. The school likely has a business office who will be more than happy to help you figure out where to send them money. I would check with them rather than just making something up.

The value of having the plan make the payment directly is that it is quite clear that the funds are being used for school, and there should be no chance of mistakes. If she withdraws the money now and gives it to you, dozens of things could happen which derail your plans, and then she's stuck with a disqualifying disposition.

That’s why most people would say you made 250% (500k/200k) because the general assumption would be your monthly house payments would be similar to your monthly rent payments (although this varies greatly by location). They might be similar, but a difference of $500/month is something like $50k. Renting the place you bought might have cost less (or more) than PITI - but renting the place you would have rented might cost you substantially less, especially if you rent based on considerations of actual need rather than based on considerations of "Wouldn't it be nice?" I know that if I look at generally-comparable-to-us families I know who rent, almost to a fault the places they are renting are more compact than the place we own, with...

I'm trying to calculate the return not for IRS purposes. I just wanted to see how my home did as an investment. I know many people will say a home is NOT an investment, but I want to calculate just for fun. As a general rule, for every expenditure and revenue, you should sit down and think through how to compare it realistically. Every cost is debited from somewhere, there is no magic "property tax" wallet that homeowners have access to which renters don't, so your various comparison cases need to consider that cost on both sides of the comparison. Then, at the end point, you factor in sale transactions on both sides, perhaps taxes, and compare the resulting dollar amounts. So, for instance, if you make a down payment of $25,000,...

Huh, what do you know .... My scout troop used share sites since 2012, and many of the people involved are no longer active (or maybe not even reachable). So I wrote a script to scrape everything down for posterity, and I just finished cleaning it up a bit for sharing. https://github.com/dshess/shutdl if anyone is interested. It is based on Puppeteer (a node.js thing), it literally runs a captive browser to pull things down. This is about as reliable as it sounds like, and I rather expect you need to be a software engineer to run it successfully. Unfortunately, as best I can tell the only way to get full-res originals is for the person who originally uploaded the photos to download them. [EDIT: Apologies if this skirts any rules about self-...

I have $15K I just transferred into my Fidelity CMA. I'm only going to keep it there for the next 5 days. What is the most lucrative thing to do with it for that time? Thank you. 3%-4% in a money-market fund is easy to get. If you had really good luck, maybe you could get like 5%. 5% on $15k for a week is worth like $15 - but you have to compare with whatever easy-peasy MMF you have available, which would probably get you like $12. Personally, for amounts in this range for time periods in this range, I just default to the most appropriate MMF, which I probably already have some funds in (so I'm not figuring it out new every time I have a spare $5k or whatever, I just put it with the other cash). For me, right now, I find that that's genera...

Realized 10k capital gains as I cleared out my after-tax 401 to make room for mega-backdoor roths. This is due to early in my career assuming my "after tax" 401K was a Roth account :oops: I sure hope you reported that 401k outcome as taxable income, not as capital gains, because if you reported that as capital gains then you should amend your return (which will likely increase your payment amount). As far as how far off I've been ... I don't track it year to year, but I'm pretty much never close at all. For many years I was a 1099 contractor, then I worked for companies where a large proportion of my income was equity, and then I retired. Every year I make predictions, every year I'm wrong, so my goal is usually just to keep it u...

During the holidays I opened an Amazon credit card account to earn 5% on purchases and to get the $200 spiff. Chase, the card underwriter, is fairly aggressively emailing to encourage me to either setup a chase.com account or to install the Chase app. As a general rule, I try to avoid apps or accounts that I wouldn’t use on a regular basis. So, is a Chase.com account or the Chase app worth it? Alongside the others, I find the chase.com website to be pretty alright. It consolidates the cards I have with Chase in one place, and it seems to do the job. My main gripe is that asking for my cashback to be direct deposited involves entering my banking info every time, which seems error-prone to me, so I just do a statement credit (which is probab...

chatGPT cites books and papers that don't exists… You could probably get it to recommend a stock with a company name that it just made up I haven't bothered to look into it, but is this a flaw of the system or is it intentionally designed behavior? Fundamentally, ChatGPT is currently based on a large language model that isn't specifically trained on logical reasoning or specific recall. At its core, it predicts the most likely next word based on the context and the training process allows for "understanding" of related words and ideas of the context. The incremental display of the response isn't just for style -- it's literally coming up with the next best word that fits. So it can produce words that someone would use when explai...

This turned into a thread mostly about ChatGPT / Lnaguage models, which is quite interesting but not entirely relevant to the orginal question: In my view, the simple answer to the question is no; no technology that is good at predicting, no matter how good, will allow the aver invester to beat the index because any technology in the hands of the average investor that is effective will drive the index. Or, to put it another way, the index the average. Investors, regardless of what they are equiped with cannot on average beat the average. Insofar as ChatGPT engages in prediction, the predictions are about how a particular human, whether globally average or average in a particular subset of humans, will respond to a particular utterance. So ...

wbadbada wrote: ↑Tue Jan 31, 2023 11:12 pm I usually rebalance once a year in January. My allocation is 60/30/10 (us stock/international stock/bond) using a three-fund portfolio.

My current allocation right now is 66/28/7, so I'm going to need to sell US stock and buy international and bond.

With the market right now, should I still rebalance or wait it out?

The point of rebalancing is to sell the things which have gone up and buy the things which have not gone up - or, in this case, sell the things which haven't gone down as much to buy things which went down more. It's happening, this is your chance to take advantage of it.

PotashDoggerd wrote: ↑Tue Jan 31, 2023 12:31 pm

nisiprius wrote: ↑Tue Jan 31, 2023 12:19 pm

Here were produced rubbishy newspapers containing almost nothing except sport, crime and astrology, sensational five-cent novelettes, films oozing with sex, and sentimental songs which were composed entirely by mechanical means on a special kind of kaleidoscope known as a versificator.

--George Orwell, Nineteen Eighty-Four

That's ChatGPT: a special kind of kaleidoscope.

Sounds more like Orwell was describing CNN, actually.

This is my issue with it - ChatGPT seems impressive to many because it successfully replicates the bottom few rungs of our current system. I see that as an indictment of our current system, huge segments of our economy exist to satisfy manufactured needs and we think that's OK.

I think there's too much cynicism on investing forums around what ChatGPT represents. Rather comparing it to your own ability to write posts on a specific subject, I think you've got to look at the remote work listings on sites like Upwork.. Social media managers and strategists, blog and newsletter copywriters, virtual assistants, tutorial content creators, junior programmers, junior web designers, Javascript developers, proofreaders, content creators, scriptwriters for Youtube videos, etc. And consider how much of this very general, nonspecialised work could be handed over to ChatGPT right now. That 5 minutes assembling information to tell the algorithm what you want would replace paying someone's salary and waiting 6 hours for them to s...

boater07 wrote: ↑Sat Jan 28, 2023 6:08 pm Yes spam is going to the right folder, but I had never received anywhere close to that number.
I might get 10-12 emails a day but in 2 days time today, I got 168. All meaningless.
It's not a big issue since they are easy to delete

I don't think that means anything at all. There are layers of spam prevention which prevent spam from even getting to your folder, like I think some of the blocklists are used to block senders from even making connections. It's possible some spam setup shifted to a new IP range, and a burst got through which wouldn't normally even be accepted for delivery in the first place.

(Chatgpt is) like an automated version of Jim Cramer ..... Now that's a scary thought! :twisted: This is the part which frustrates me. Everyone is so amazed at the results, but they don't realize that the part it automates is mostly the part that we DON'T need more of, rather than the part that we DO need more of. Part of why ChatGPT depresses me is because it demonstrates how much of our economy is involved with "bullshit jobs", where it's basically a human being implementing ChatGPT-alike algorithms, rather than a computer system. To be clear, the net effect is similar - a lot of people lose their jobs because their jobs were intrinsically not very worthwhile in the first place. Maybe before you were part of a team writing scri...

I am suddenly getting bombarded with spam going ino that folder. In the past, I usually sent umwanted mail there if I couldn't block sender. It was never a problem till I suddently started getting hundreds. Anything I can do to correct that? You don't mention what system identifies your spam, so I'll just go with Gmail as an example. Gmail uses dozens/hundreds of signals for spam, plus training systems which learn new signals based on people marking things as spam (or not spam). So you should periodically review your spam folder for not-spam, and mark it as such using the button, and perhaps add certain people to your contacts list to help keep them out of spam in the future. But just having hundreds of messages in your Spam folder is not ...

is it possible that chatGPT(future more refined models, not as of current one ) could come up with ways to accurately pick individual stocks by incorporating immense mathematical knowledge and historical data on stocks in a way that is far more accurate than active investment managers? And then it becomes a historical scenario never seen before where the average investor picking individual stocks via chatgpt yields greater returns over index funds over 30 + years, effectively shifting people away from index funds? ChatGPT creates outputs which seem plausible - it does NOT create outputs which are actually predictive. It's like an automated version of Jim Cramer or an investment newsletter, it mostly adds noise to the system, rather than ex...

Oooh, I had an idea. You could perhaps get "smart switches" which independently feed a smart home controller, like Home Assistant or whatever. Then you could have each light coded as: - if lights off, flipping a switch from off to on turns them on. - if lights off, flipping a switch from on to off causes no state change. Then see previous step. - if lights on, flipping a switch from on to off turns them off. - of lights on, flipping a switch from off to on causes no state change. Then see previous step. In this case, your outcome is caused by a directional movement, and I think the movement to catch and fix the movement would be natural. Say the lights are off and you want them on, you make a move from down to up, but notice you n...

https://hackaday.com/2017/12/10/light-switch-for-the-lazy/ Somewhat more generally, you could maybe get a pair of SwitchBot devices for each location, maybe. As for myself, I've never had an issue with three-way switches. My issue is that in our kitchen/dining area, we have multiple three-way switches which control multiple lights and they aren't all the same three ways. So like the entryway has a switch by the stairs and in the kitchen, and the kitchen one shares a dual switchplate with the kitchen switch, which is three-way against a switch on the other end of the kitchen. That switch is a plate with three switches, where one of the others is the only control for the high-up lights, and the other controls the dining area ... which of cour...

SlowMovingInvestor wrote: ↑Fri Jan 27, 2023 3:59 am There may be slight variations, but I think Zillow gets its numbers from local government land records. Every state maintains records of sales prices and deeds (mostly at the county level). You can check your local land records office for the primary source.

And yes, many/most are online.

I did some spot checks on relatives in various states and in most cases I can only get the last few years of property-tax assessment information in online systems, I can't see back to the purchase. My guess is you might have to make an in-person visit to get that info in those cases. Of course, every county will vary, and it's surely worth spending five minutes to figure that out up front.

Using your hypothetical of $100k space in both taxable and tax-deferred but you are one who favors the minimum 20% international equities. So you have $100k in VTSAX and $100k in VTWAX. Where does each fund go and why? My personal preference would be to put all VTSAX (US Total Market) into taxable first, and then only put VTWAX (Intl Total Market) into taxable if there was not room for it in tax-deferred. So in this case, taxable would be VTSAX and tax-deferred would be a mix. To me, while the FTC is a worthwhile tweak if I am going to have international in taxable anyhow, I find it annoying and not good compensation for having higher dividends in the first place (and, well, intl has had lower returns, too). I guess I mean I find the FTC b...

I am curious now, if you read my prior post above about the lack of FTC pass-through for VTWAX, would this lead you to consider that fund one that should even more so be held in tax-deferred? If you have $100k of space in taxable and $100k of space in tax-deferred, the obvious solution would be to hold VTSAX in taxable and VTIAX in tax-deferred. I mean, you can tweak the proportions to 60/40 or whatever, my point being that two positions is two positions, might as well arrange them in a pleasing way. My query involved Total World (VTWAX), which is 59% domestic and 41% international equity. Because it does not pass through the foreign taxes paid to allow taking FTC (and does therefore not include those foreign taxes paid as dividends paid),...

My advice would be to go into the break with a plan, and maybe even some metrics. I mean, don't overdo it, it's not work! A bit over five years back, I was very burned out on my job, which was demoralizing because it was literally the job I had dreamed of since my youth. But it was no longer sparking anything remotely resembling joy. It was a good decision, but after a couple years I realized that my vague ideas of going back to work once the kids were launched into the world was not as easy as I thought it would be, because I no longer was tolerant of the bullshit work that lubricates working life. I wasn't in the kind of job where that was a big component of things, but I have gone from thinking of it as a minor background annoyance to ha...

OverseasBH wrote: ↑Tue Jan 24, 2023 1:19 pm I am curious now, if you read my prior post above about the lack of FTC pass-through for VTWAX, would this lead you to consider that fund one that should even more so be held in tax-deferred?

If you have $100k of space in taxable and $100k of space in tax-deferred, the obvious solution would be to hold VTSAX in taxable and VTIAX in tax-deferred. I mean, you can tweak the proportions to 60/40 or whatever, my point being that two positions is two positions, might as well arrange them in a pleasing way.

Does anyone have insight as to why the VTWAX (Total World Stock Index) fund, which currently consists of 41% international stock (59% US), does not show any foreign taxes paid for 2022? All the other funds holding international equities show up in the just-released "2022 Foreign tax credit information for eligible Vanguard funds" document except Total World Stock Index. Cannot account for its omission. Because the international holdings are less than 50%. It's one reason many recommend holding VTSAX+VTIAX in the appropriate proportion if you have larger holdings in taxable. That is interesting. Could you explain more what 50% has to do with the paying of foreign taxes? Btw, the STAR fund has around 19% international equities but ...

OverseasBH wrote: ↑Tue Jan 24, 2023 2:21 am Does anyone have insight as to why the VTWAX (Total World Stock Index) fund, which currently consists of 41% international stock (59% US), does not show any foreign taxes paid for 2022?

All the other funds holding international equities show up in the just-released "2022 Foreign tax credit information for eligible Vanguard funds" document except Total World Stock Index. Cannot account for its omission.

Because the international holdings are less than 50%. It's one reason many recommend holding VTSAX+VTIAX in the appropriate proportion if you have larger holdings in taxable.

zero_coupon wrote: ↑Fri Jan 20, 2023 10:54 pm Check out the following:

https://www.physicianonfire.com/international-stock/

He concludes placing international in tax-advantaged is best for most people.

Add to this that if your tax rate falls in retirement, the credit is effectively worth less. But replacing the position would require realizing gains.

[Well, unless your international is different than my international, there won't be all that many gains to worry about, but still.]

I lost mine, even though my last date of employment was 2 weeks before vesting That is brutal. One would think there would be a fair policy for cutoff. 90day period etc, especially if these units were earned 3-5 years ago, then the effort was extracted from the employee. Cold business practices. Tech companies often are pretty lax on their first round of layoffs, giving things like severance or healthcare extensions or vesting. They don't have to do any better, but they need to keep their remaining employees from freaking out. Later rounds generally don't do that, you're just gone and the remaining employees are not happy about it, but they will have realized that they're just lucky to still have the job, so maybe they don't rock the boat ...

I'm a former stock plan administrator. When it comes to taxes, I usually refer receipients to Turbotaxes' article for the fundamentals https://turbotax.intuit.com/tax-tips/investments-and-taxes/how-to-report-stock-options-on-your-tax-return/L3K0l47J2 I'm not a tax specialist. Regarding the zero basis, that seems very unusual for an ISO. Options for founders are typically greater than $0.01 because it should have some fair market value. Zero basis in my experience typically indicate that it is a restricted stock grant and when vested, the transaction is processed through payroll noting that it is a taxable earning and all of the associated employer and employee taxes processed. This would ultimately be reflected on the W2. I routinely recei...

I was imagining a more upside equity-like scenario where (through the hard work of me and others) the share price continued to climb and the grants multiplied on themselves such that in a scenario where the company's share price doubled annually, the second grant would be worth twice as much, the third grant would be worth 4x the first grant, etc. I'm still not sure on the terminology you are using. In cases I am familiar with, if you get a grant which vests over four years, then that grant will have a specific vesting schedule denominated in shares. So if the share price rises, the value of the vest increases proportionally, so you would participate in price growth. Separate grants HAVE NO RELATIONSHIP AT ALL, neither the shares granted n...

For example, if Grant 1 is for 1000 RSUs at a company share price of $10, and the following year the company share price is $20, would Grant 2 be closer to 500 RSUs or 1000 RSUs? Is this complete information? I think you might be confusing different things that are happening. In my experience, you'd get Grant 1 for $10k current value phrased as 1,000 units at $10/share, vesting over 4 years. Vesting might be yearly, quarterly, or monthly, generally with a one-year cliff. So you might vest 250 units after 12 months, then 20 or 21 units per month for the remaining 36 months. If the stock price was $20 after 12 months, you would receive 250*$20==$5000, so basically half of the starting value for vesting one quarter of the shares. Then every m...

Another advantage of DAFs (we use Fidelity) is the ability to make the donation anonymous. I've not taken advantage of that myself, but some people find that useful. I'm not sure if QCDs can be done anonymously to the charity. It's a great way to prevent them from spending all your money sending you letters asking for more money. I find that very frustrating. My approach is to donate in the fund's name, and then if/when they send me begging letters or excessively shiny "year-in-review" junkmail (or postage-prepaid Christmas cards), I login and check the anonymous box for future grants to that charity. I do this because some charities seem to have a pretty authentically earnest response to our gifts, and I want to honor that. The ...

I had a check sent from my Fidelity DAF to a local charity. The charity didn’t cash the check (probably lost somehow). I once was attempting to do a donation-match at work with a major national charity. The charity could not provide proof to the matching service for my contribution of a few thousand bucks, even though I provided dates and check numbers. I stopped donating to that charity. Now, one might say that this is unnecessarily harsh, that you have to cut them some slack because they are doing good. But my general opinion is that if a charity loses checks, there's a good chance they are also screwing up paying people, or misplacing goods, or doing their regulatory filings, or making other clerical errors. To me, that's a problem, I k...

I tried to understand the pro-rata rule but it’s gone over my head (yep, I am not a bright guy). So could you please help me understand how big this messed up situation is? Is it a matter of paying a few extra dollars in taxes or is the damage much bigger? Thanks. IMHO, a lot of times the easiest solution is to just download the tax form and work it out. Form 8606 in this case. It's not trivial, but it's not rocket science, just work the form from top to bottom and there you go. In this case, you probably enter $1 for the 12/31/22 amount. That said ... maybe give it another week before embarking on this, or wait for your 1099-R. Usually rollovers have a choice between a specific dollar amount or a percentage. Assuming you said "100%&q...