Search found 432 matches

by yosemite_mountain
Sun Dec 03, 2023 8:08 pm
Forum: Personal Investments
Topic: Should I pay cash for a house or keep funds in the market?
Replies: 30
Views: 4152

Re: Should I pay cash for a house or keep funds in the market?

This would be correct for a mortgage balance of $750K, but that is not your personal situation; you are buying a $600K house and thus would have at most a $480K mortgage. I appreciate the help walking me through this! This is very useful. I re -did the math and also plugged into HR block. Assumptions: Federal takes only. $750k mortgage. In this case the after tax interest rate is still high and it would make more sense to put as much money down. If the mortgage was lower, the after tax mortgage interest rate is even higher. Federal taxes: Mortgage interest rate: 7.5% Mortgage balance: $750k Marginal federal tax rate standard deduction = 35% Marginal federal tax rate itemized deduction = 32% Standard deduction: $13,850 Itemized deductions =...
by yosemite_mountain
Sun Dec 03, 2023 4:33 pm
Forum: Personal Investments
Topic: Should I pay cash for a house or keep funds in the market?
Replies: 30
Views: 4152

Re: Should I pay cash for a house or keep funds in the market?

Only if you can deduct all of the interest. Unless you donate a lot to charity, your itemized deductions without the mortgage are less than the standard deduction, so you only get a tax benefit from part of the interest, and your return for paying cash is more than 5% after tax. Is the math below correct, ie is this the correct way to think about the after tax mortgage interest rate? Mortgage interest rate: 7.5% Mortgage balance: $750k Combined tax rate = 33.3% Standard deduction: $14,600 Itemized deductions = SALT + Mortgage interest = $10k + (7.5% x $750k) = $66,250 If I took the standard deduction, I get back 33.3% of $14,600 = $4861 If itemize, I get back 33.3% of $66,250 = $22,061 Itemizing would save me 22,061 - 4861 = $17200 So alth...
by yosemite_mountain
Sun Dec 03, 2023 4:31 pm
Forum: Personal Investments
Topic: Should I pay cash for a house or keep funds in the market?
Replies: 30
Views: 4152

Re: Should I pay cash for a house or keep funds in the market?

KyleAAA wrote: Sun Dec 03, 2023 10:24 am At 7.5% I'd be tempted to pay cash, especially since the standard deduction is so high these days you might not even get to deduct a good chunk of the interest.
Is this the correct way to calculate how much mortgage interest can be deducted? Trying to understand why the standard deduction being high would matter.

Mortgage interest rate: 7.5%
Mortgage balance: $750k

Combined tax rate = 33.3%
Standard deduction: $14,600
Itemized deductions = SALT + Mortgage interest = $10k + (7.5% x $750k) = $66,250

If I took the standard deduction, I get back 33.3% of $14,600 = $4861

If itemize, I get back 33.3% of $66,250 = $22,061
by yosemite_mountain
Fri Dec 01, 2023 11:41 pm
Forum: Personal Investments
Topic: Should I pay cash for a house or keep funds in the market?
Replies: 30
Views: 4152

Re: Should I pay cash for a house or keep funds in the market?

grabiner wrote: Fri Dec 01, 2023 6:36 pm
Your combined federal and state tax rate is 33.3%. Therefore, if you pay 7.50% of deductible interest, you get back 33.3% of 7.50%, which is 2.50%.
So with this math, then after deductions my actual interest rate is 5%, correct?

Paying cash for the house would be a guaranteed 5% return, correct?

If I got a mortgage, and instead invested the money in the market, then the market return would have to be greater than 5% to come out ahead, correct?
by yosemite_mountain
Fri Dec 01, 2023 12:31 pm
Forum: Personal Investments
Topic: Should I pay cash for a house or keep funds in the market?
Replies: 30
Views: 4152

Re: Should I pay cash for a house or keep funds in the market?

grabiner wrote: Thu Nov 30, 2023 9:24 pm You appear to be in the 24% federal and 9.3% state tax bracket, so the after-tax return on a mortgage paydown is 5.00% if the interest is deductible on both federal and state tax, and 6.80% if it is deductible on state tax only. How much is deductible on federal tax depends on how much you donate to charity.
How did you do the math on this?
by yosemite_mountain
Fri Dec 01, 2023 12:29 pm
Forum: Personal Investments
Topic: Should I pay cash for a house or keep funds in the market?
Replies: 30
Views: 4152

Re: Should I pay cash for a house or keep funds in the market?

retired@50 wrote: Thu Nov 30, 2023 7:03 pm <- Can you get $350k out of the $1m portfolio without paying substantial taxes? [/color]
Yes, I can get $350k out of the $1m portfolio without paying substantial taxes.
by yosemite_mountain
Thu Nov 30, 2023 7:29 pm
Forum: Personal Investments
Topic: Should I pay cash for a house or keep funds in the market?
Replies: 30
Views: 4152

Re: Should I pay cash for a house or keep funds in the market?

retired@50 wrote: Thu Nov 30, 2023 7:03 pm

Depending on your asset mixture of stocks / bonds, a three fund portfolio may or may not return 7.5%.

Will mortgage interest be deductible in your case?

Regards,
Stocks 80%, bonds 20%
by yosemite_mountain
Thu Nov 30, 2023 7:00 pm
Forum: Personal Investments
Topic: Should I pay cash for a house or keep funds in the market?
Replies: 30
Views: 4152

Should I pay cash for a house or keep funds in the market?

Gross income: $250k
House purchase price: $600k
Investable assets: $1m ... (All invested in 3 fund portfolio at 80% stocks; 20% bonds)
Cash: $250k
State: CA

Mortgage rate: 7.5%

Question:
Should I pay cash for the house or keep funds in the market? I can get $350k out of the $1m portfolio without paying significant taxes.
by yosemite_mountain
Fri Oct 13, 2023 2:53 pm
Forum: Personal Investments
Topic: Are earnings on stock obtained before the marriage separate property in a divorce?
Replies: 14
Views: 1585

Re: Are earnings on stock obtained before the marriage separate property in a divorce?

Beensabu wrote: Fri Oct 13, 2023 2:46 pm The dividends you earned and reinvested in that account during marriage are community property and so you've comingled funds. You'll have to track which shares you held before marriage and which ones you bought with dividends distributed during marriage. You're gonna need a lawyer on this one.
Would the appreciation on the stock during the marriage also be community property?
by yosemite_mountain
Fri Oct 13, 2023 2:44 pm
Forum: Personal Investments
Topic: Are earnings on stock obtained before the marriage separate property in a divorce?
Replies: 14
Views: 1585

Re: Are earnings on stock obtained before the marriage separate property in a divorce?

GuySmiley wrote: Fri Oct 13, 2023 2:37 pm I would think source of funds to pay taxes on the dividends may be a factor.
I did not think about this. So even funds to pay taxes on the dividends should come from the separate account?

How does one pay taxes on the dividends from a separate account? (The tax bill comes as a total tax bill without the taxes on dividends separated out)
by yosemite_mountain
Fri Oct 13, 2023 2:22 pm
Forum: Personal Investments
Topic: Are earnings on stock obtained before the marriage separate property in a divorce?
Replies: 14
Views: 1585

Re: Are earnings on stock obtained before the marriage separate property in a divorce?

Oakdale19 wrote: Fri Oct 13, 2023 4:15 am Not a family law/divorce attorney, but it'd probably be relevant if the $3 m gain is due to 1) stock appreciation or 2) dividends and reinvesting. If dividends, were the funds reinvested in the same separate account or was there any spending/co-mingling (any funds going into joint account)?
added to description: funds reinvested in the same separate account
by yosemite_mountain
Fri Oct 13, 2023 1:52 pm
Forum: Personal Investments
Topic: Are earnings on stock obtained before the marriage separate property in a divorce?
Replies: 14
Views: 1585

Re: Are earnings on stock obtained before the marriage separate property in a divorce?

Thesaints wrote: Fri Oct 13, 2023 9:30 am If you have a home worth 1M before marriage and at divorce time it is worth 1.5M does the other spouse have a claim on the 0.5M appreciation ?
There’s your answer.
That's the question. Does the spouse have a claim on the 0.5M appreciation or not?
by yosemite_mountain
Fri Oct 13, 2023 3:56 am
Forum: Personal Investments
Topic: Are earnings on stock obtained before the marriage separate property in a divorce?
Replies: 14
Views: 1585

Are earnings on stock obtained before the marriage separate property in a divorce?

Let’s say I bought $1m of stock before the marriage. During the marriage, I held the $1m in a separate account. During the marriage, the stock earned $3m.
The $3m gain was due to stock appreciation and dividends. The dividends were reinvested in the same separate account.
The couple lives in a community property state such as CA.

Question:

In case of a divorce, is the separate property = $1m and the marital property = $3m, such that the $3m is split between the couple.

OR

In case of a divorce, is the separate property = $4m and the marital property = $0
by yosemite_mountain
Sun May 07, 2023 5:21 pm
Forum: Personal Investments
Topic: Alternative investments: Is 5% of portfolio too much?
Replies: 27
Views: 2801

Re: Alternative investments: Is 5% of portfolio too much?

Exchme wrote: Sun May 07, 2023 5:10 pm
The logic still stands, if they could get 20%/year returns, they could borrow the money from the bank to buy the land. I suggest there is a partner marketing low value land to you at a high price.
In this market the financing is very expensive, lending rates from a bank are 16%.
by yosemite_mountain
Sun May 07, 2023 5:20 pm
Forum: Personal Investments
Topic: Alternative investments: Is 5% of portfolio too much?
Replies: 27
Views: 2801

Re: Alternative investments: Is 5% of portfolio too much?

Exchme wrote: Sun May 07, 2023 5:10 pm
Before I plunked down $50 grand, I would want to know basic answers:
Is it a well-known company? Did they give you any references that a skeptical person would believe? What is your recourse if they never show up or don't properly care for your trees? Do you know how to sell trees or know anything about the business you are about to get into?

Good luck, but be very skeptical.
All good points. Thanks for the feedback
by yosemite_mountain
Sun May 07, 2023 4:48 pm
Forum: Personal Investments
Topic: Alternative investments: Is 5% of portfolio too much?
Replies: 27
Views: 2801

Re: Alternative investments: Is 5% of portfolio too much?

Exchme wrote: Sun May 07, 2023 3:30 pm If they had 20% returns and a business plan that stood up to scrutiny, couldn't they get a loan instead of paying you 20%?
I acquire the land and sell the poles. The company does not pay me 20%. All the company does is plant the trees and go to the farm every 2 weeks for maintenance. Sort of like if you have a rental property and hire a property manger.
by yosemite_mountain
Sun May 07, 2023 11:45 am
Forum: Personal Investments
Topic: Alternative investments: Is 5% of portfolio too much?
Replies: 27
Views: 2801

Re: Alternative investments: Is 5% of portfolio too much?

Exchme wrote: Sun May 07, 2023 9:17 am
Even worse is OP's idea to rebalance up if the deal fails, that exposes the entire portfolio by replenishing the lost money after flushing the first batch away. Bogleheads have learned that getting rich slow almost always works, trying to get rich quick almost never does.
I'm leaning more towards option 2: Not count it as part of my asset allocation: Invest an initial maximum seed amount of $50k into the alternative investments and not add any new money beyond this initial $50k. Instead, profits from this initial $50k investments will be used to re-invest and buy more alternative investments
by yosemite_mountain
Sun May 07, 2023 10:55 am
Forum: Personal Investments
Topic: Alternative investments: Is 5% of portfolio too much?
Replies: 27
Views: 2801

Re: Alternative investments: Is 5% of portfolio too much?

EdNorton wrote: Sun May 07, 2023 8:57 am If you believe in this investment, why not go in for $350k instead of $35k?
:sharebeer
Because $35k of S&P500 over 30 years at 8% nominal return yields $352k. ($145k in 2023 dollars using 3% inflation)

On the other hand, $350k of S&P500 over 30 years at 8% nominal return yields $3.5m. ($1.45m in 2023 dollars using 3% inflation)

In other words, I’m more willing to lose $350k than lose $3.5m over 30 years.
by yosemite_mountain
Sat May 06, 2023 3:20 pm
Forum: Personal Investments
Topic: Alternative investments: Is 5% of portfolio too much?
Replies: 27
Views: 2801

Re: Alternative investments: Is 5% of portfolio too much?

KlangFool wrote: Sat May 06, 2023 1:58 pm I am looking for 20X to 40X return with my alternative investment. Or else, why should I bother? It does not move the needle.

KlangFool
Good point.... But what alternate investment is giving 20X to 40X return? :happy
by yosemite_mountain
Sat May 06, 2023 1:37 pm
Forum: Personal Investments
Topic: Alternative investments: Is 5% of portfolio too much?
Replies: 27
Views: 2801

Re: Alternative investments: Is 5% of portfolio too much?

Raspberry-503 wrote: Sat May 06, 2023 12:47 pm
Farm land is the one alternative I would consider, but is not worth the trouble/fees for me. Land is forever but single events (fire, flood, tornado...) can affect them for a couple of years, and things like climate or even water rights could make the investment a bad deal over the long time.
Maybe buy farmland in different areas then to reduce the location risk?
by yosemite_mountain
Sat May 06, 2023 11:59 am
Forum: Personal Investments
Topic: Alternative investments: Is 5% of portfolio too much?
Replies: 27
Views: 2801

Re: Alternative investments: Is 5% of portfolio too much?

jebmke wrote: Sat May 06, 2023 11:49 am For things like Small Cap Value tilting, my general threshold is ~20%.
By that do you mean your allocation to small value is 20% of the entire portfolio?
by yosemite_mountain
Sat May 06, 2023 11:36 am
Forum: Personal Investments
Topic: Alternative investments: Is 5% of portfolio too much?
Replies: 27
Views: 2801

Re: Alternative investments: Is 5% of portfolio too much?

Outer Marker wrote: Sat May 06, 2023 5:01 am It depends. I know people who have accummulated self-made, eight-figure net wealth and never owned a single share of common stock. All investments like this, closely held corporatoins where they controlled a majority intrest, and physical gold. Most of us don't have that kind of business acumen.
Nice. Also want to read "The Only Guide to Alternative Investments You'll Ever Need: The Good, the Flawed, the Bad, and the Ugly"
by yosemite_mountain
Fri May 05, 2023 11:52 pm
Forum: Personal Investments
Topic: Alternative investments: Is 5% of portfolio too much?
Replies: 27
Views: 2801

Alternative investments: Is 5% of portfolio too much?

I’m thinking of putting some money into alternative investments. The goal is to be able to own some hard assets overseas (I lived in this overseas country until late teens). -Plan is to buy land and use the land to grow timber : Buy 10 acres of land, plant trees and then sell the poles when they mature after 6 years, then re-plant the trees and sell poles after another 6 years. This land is located overseas (I lived in this overseas country until late teens). I have contacted two different companies that can plant seeds and manage the farm for a fee. Investment (land + planting + management fee): $31k Expected sale price of logs after 6 years: $95k Expected annualized return over 6 years: 20.7% Questions: 1.Should I allocate a fixed percent...
by yosemite_mountain
Sat Mar 18, 2023 12:24 am
Forum: Personal Investments
Topic: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)
Replies: 29
Views: 2206

Re: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)

Duckie wrote: Fri Mar 17, 2023 9:52 pm I use TurboTax Deluxe download version and am pleased with it. I'm sure it has some glitches but they haven't affected me and I'm used to the software. Since I have the download version I can use "Forms" mode to see what ends up on each line of the forms which is very valuable when I'm playing "what if". It's not cheap but I'm willing to pay for the convenience.
Cool....Note to self to try TurboTax download version next year :-)
by yosemite_mountain
Fri Mar 17, 2023 9:11 pm
Forum: Personal Finance (Not Investing)
Topic: Best tax software?
Replies: 35
Views: 4467

Re: Best tax software?

I just finished using H&R block (free for military) and I know that the 1099-R income is wrong but dont know where / how to fix it (it was almost all rollovers, but it's adding all of them to my income). It's also an utter mystery to me why some of the numbers are slightly off my estimates. It doesnt seem like their math adds up but the calculations are completely opaque so I cannot tell what they are doing wrong. They also tried to add my schedule C income to my net investment income... why???? Any recommendations on software? Any that will allow you to see the final return before paying? Bumping. I also had so many issues with HR block this year - especially with 1099R's! It kept giving me this error for a mega backdoor Roth:"Co...
by yosemite_mountain
Fri Mar 17, 2023 9:09 pm
Forum: Personal Investments
Topic: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)
Replies: 29
Views: 2206

Re: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)

Duckie wrote: Fri Mar 17, 2023 4:35 pm
But since your HRBlock software is having a fit and code G alone does not work and you are thinking of splitting the 1099-R into two parts anyway, the $96.29 is the taxable amount of the rollover/conversion and that should be coded 2 in this case. Code 2 does not mean non-taxable, it just means no penalty for early withdrawal.
I appreciate the help Duckie! Splitting into two 1099R's worked!

Any recommendations for tax software?

I will not be using HR block again. HR block online does not show the tax forms (1040) etc until after you pay, so its hard to know if you are filling out the forms correctly. HR block desktop version's user interface is hard to use.
by yosemite_mountain
Fri Mar 17, 2023 8:51 pm
Forum: Personal Investments
Topic: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)
Replies: 29
Views: 2206

Re: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)

***Resolved*** I was issued a single 1099-R. However, I resolved the HR online software flag by entering two separate 1099-Rs into the tax software, one for the after tax rollover ( $35,519.67, non-taxable) using code G and one for the taxable ($96.29, taxable) using code 2. 1099-R #1 Box 1 (gross distro.): $35,519.67 Box 2a (taxable amount): $0 Box 5 (employee contributions): $35,519.67 Box 7 (code): G - direct rollover of a distribution to a qualified plan Box 16 (state distribution): 0 Checked “I rolled this amount over to an IRA account”. “Did you roll this distribution into a Roth IRA account?" checked YES. 1099-R #2 Box 1 (gross distro.): $96.29 Box 2a (taxable amount): $96.29 Box 5 (employee contributions): $0 Box 7 (code): 2 B...
by yosemite_mountain
Fri Mar 17, 2023 2:14 pm
Forum: Personal Investments
Topic: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)
Replies: 29
Views: 2206

Re: Tax software flagging mega backdoor Roth form (Vanguard Roth IRA)

You converted $96.29. Over the last 10 years I have done all sorts of rollovers from my employer's 401k. Sometimes it came down to how I answered the questions, sometimes I needed to split out the 1099 into separate pieces, sometimes it seemed to handle it properly from the start. I put your numbers into a blank return for the H&R desktop version and it seemed to handle the numbers just fine. Anyway, good. luck. Thanks for the feedback. I am using HR block online; it seems the online version software is wrong. I was issued a single 1099-R. Should I try entering two separate 1099-Rs into the tax software, one for the after tax rollover ( $35,519.67, non-taxable) and one for the taxable ($96.29, taxable)? What would be the box 7 (code) f...
by yosemite_mountain
Fri Mar 17, 2023 1:58 pm
Forum: Personal Investments
Topic: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)
Replies: 29
Views: 2206

Re: Tax software flagging mega backdoor Roth form (Vanguard Roth IRA)

stvman2 wrote: Fri Mar 17, 2023 11:23 am I did a Roth conversion this year and was also a bit confused by the tax software. After a bit of research I found that I was confusing Conversion with Rollover! In the H&R Block software it asks "Did you, or will you, roll over this distribution?" Note that this page says in small print "A rollover occurs when...except a Roth IRA." I select NO. In my previous confusion I mistakenly chose yes. The very next question is now "Did you convert your distribution?" I select YES and I am good. :-)
I did not do a conversion though; I did a rollover from a after tax 401k to a Roth IRA
by yosemite_mountain
Fri Mar 17, 2023 1:57 pm
Forum: Personal Investments
Topic: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)
Replies: 29
Views: 2206

Re: Tax software flagging mega backdoor Roth form (Vanguard Roth IRA)

anon_investor wrote: Fri Mar 17, 2023 12:05 am
I think the software is wrong. I believe you can have a number in box 2a even with a direct transfer. It is likely earnings on the after-tax funds (e.g. interest), which are pre-tax and thus taxable. My MBD Roth 1099-R had a small amount of taxable earnings.
Yep, the software is wrong...It won't let me e-file without fixing the "error". I do no want to paper file though :-(
by yosemite_mountain
Thu Mar 16, 2023 10:44 pm
Forum: Personal Investments
Topic: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)
Replies: 29
Views: 2206

Re: Tax software flagging mega backdoor Roth

toddthebod wrote: Thu Mar 16, 2023 9:38 pm
I suspect this is also not going to be helpful, but consider calling them and requesting to switch versions from the online to the offline:
https://www.hrblock.com/tax-center/supp ... y-account/
Do I have to re-enter all my information when switching from the HR block online version to the desktop version?
by yosemite_mountain
Thu Mar 16, 2023 8:38 pm
Forum: Personal Investments
Topic: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)
Replies: 29
Views: 2206

Re: Tax software flagging mega backdoor Roth form (Vanguard Roth IRA)

an_asker wrote: Thu Mar 16, 2023 8:29 pm
I've never had the after-tax 401k option so cannot really answer the question, but my understanding was that this is a two step process. Step 1: convert the after-tax 401k to the Roth 401k, and Step 2: converting the Roth 401k to Roth IRA.

Have I misunderstood how the MBDR works?
I made non-Roth after-tax contributions to my company 401k plan and then had the plan roll over the money (with earnings) to a Roth IRA at Vanguard.
by yosemite_mountain
Thu Mar 16, 2023 8:19 pm
Forum: Personal Investments
Topic: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)
Replies: 29
Views: 2206

Re: Tax software flagging mega backdoor Roth

toddthebod wrote: Thu Mar 16, 2023 8:14 pm
I suspect this is not going to helpful, but it looks like it should just work:
https://thefinancebuff.com/mega-backdoo ... tware.html
I followed finacebuff.com instructions step by step and still get the error unfortunately.
by yosemite_mountain
Thu Mar 16, 2023 7:44 pm
Forum: Personal Investments
Topic: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)
Replies: 29
Views: 2206

Re: Tax software flagging mega backdoor Roth

Duckie wrote: Thu Mar 16, 2023 5:43 pm
I'm not sure that is going to work, but if this were a conversion from a non-deductible TIRA to a Roth IRA, box 7 would have code 2—Early distribution, exception applies (under age 59 1/2).
I see. No, this is a direct rollover from an employee sponsored plan to a Vanguard Roth IRA.
by yosemite_mountain
Thu Mar 16, 2023 12:40 pm
Forum: Personal Investments
Topic: HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)
Replies: 29
Views: 2206

HRblock flagging mega backdoor Roth form (Vanguard Roth IRA)

I made non-Roth after-tax contributions to my company 401k plan and then had the plan roll over the money (with earnings) to a Roth IRA at Vanguard. The 401k plan issued me a single 1099-R as shown below, and this is how I entered it into Hr block online. Single 1099-R issued: Box 1 (gross distro.): $35,615.96 Box 2a (taxable amount): $96.29 Box 5 (employee contributions): $35,519.67 Box 7 (code): G - direct rollover -I checked the box “I rolled this amount over to an IRA account” -“Did you roll this distribution into a Roth IRA account?" checked YES However, Hr block online gives me this error : "Code G indicates a direct transfer; therefore, box 2a should be zero. If there is an entry greater than zero in box 2a, contact your pl...
by yosemite_mountain
Thu Mar 16, 2023 3:48 am
Forum: Personal Finance (Not Investing)
Topic: How do I fill out backdoor Roth in HR block?
Replies: 2
Views: 444

Re: How do I fill out backdoor Roth in HR block?

I followed The Finance Buff instructions and still get the error.
by yosemite_mountain
Wed Mar 15, 2023 10:51 pm
Forum: Personal Finance (Not Investing)
Topic: How do I fill out backdoor Roth in HR block?
Replies: 2
Views: 444

How do I fill out backdoor Roth in HR block?

I entered a backdoor Roth and mega Backdoor Roth using HR block online version (using Finance Buff's instructions) and I get the error below:

Form 1099R - Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts

***Code G indicates a direct transfer; therefore, box 2a should be zero. If there is an entry greater than zero in box 2a, contact your plan administrator. Please verify the code entered.***

Has anyone seen this error?
by yosemite_mountain
Wed Mar 15, 2023 1:30 am
Forum: Personal Finance (Not Investing)
Topic: Oy vey…Form 1116?
Replies: 34
Views: 6030

Re: Oy vey…Form 1116?

To better understand 1116 you have to think in reverse of normal terms. The form is trying to make sure you don't get credited back more foreign tax than the US tax you paid on the same income. Did you mean "The form is trying to make sure you don't get credited back more foreign tax than the US tax you paid on the foreign income"? I am using HR block premium (online) and the tax software calculates a foreign tax credit of zero. I don't understand why my foreign tax credit is 0. For 2022 I held an international stock fund at Vanguard. The stocks in the international fund earned $5k in dividends, and foreign tax withheld was $400 of those dividends. My effective federal tax rate is 24% and my marginal federal tax rate is 35%.
by yosemite_mountain
Tue Mar 14, 2023 2:19 pm
Forum: Personal Investments
Topic: Vanguard 1099-DIV includes foreign tax paid in “ordinary dividends”.
Replies: 14
Views: 1549

Re: Vanguard 1099-DIV includes foreign tax paid in “ordinary dividends”.

livesoft wrote: Tue Mar 14, 2023 2:03 pm But in your OP you did not state what your tax bracket was. more likely that you didn't fill out your tax return correctly. Is that clear?
Here are my tax brackets:

Effective federal tax rate: 24%

Marginal federal tax rate: 35%
by yosemite_mountain
Tue Mar 14, 2023 1:52 pm
Forum: Personal Investments
Topic: Vanguard 1099-DIV includes foreign tax paid in “ordinary dividends”.
Replies: 14
Views: 1549

Re: Vanguard 1099-DIV includes foreign tax paid in “ordinary dividends”.

If you paid no US income tax, then how can you be double-taxed? 1099-DIV example: 1a- Total ordinary dividends (includes lines 1b, 5, 2e): 1,000 1b- Qualified dividends: 700 7. Foreign tax paid: 70 I hold an international stock fund at Vanguard. The stocks in the fund earn $1000 in dividends, but foreign countries withhold tax of $70 of those dividends. Therefore, the fund only pays me $930 in dividends; this is what I receive in 2022 in my Vanguard brokerage account. Say my tax bracket is 25%. When I file my taxes, I pay US tax on the full $1000 in dividends. 15% of the $700 qualified dividend and 25% of the $300 non-qualified dividend is $180. Without the foreign tax credit, this would result in a total tax impact of $250, including $180...
by yosemite_mountain
Mon Mar 13, 2023 9:48 pm
Forum: Personal Investments
Topic: Vanguard 1099-DIV includes foreign tax paid in “ordinary dividends”.
Replies: 14
Views: 1549

Re: Vanguard 1099-DIV includes foreign tax paid in “ordinary dividends”.

jebmke wrote: Mon Mar 13, 2023 6:48 am

They aren’t showing the foreign tax credit. They are showing the foreign tax you paid on the gross dividend. You may get the credit when you file taxes (no guarantee). The dividends that showed up in your account last year were the gross dividends, less the amount of foreign tax that was paid.
My foreign tax paid is $444. I've gone through the tax software but I have not gotten the credit. This seems unfair as its like I'm being double taxed!
by yosemite_mountain
Mon Mar 13, 2023 2:12 am
Forum: Personal Investments
Topic: Vanguard 1099-DIV includes foreign tax paid in “ordinary dividends”.
Replies: 14
Views: 1549

Vanguard 1099-DIV includes foreign tax paid in “ordinary dividends”.

1099-DIV example: 1a- Total ordinary dividends (includes lines 1b, 5, 2e): 1,000 1b- Qualified dividends: 700 7. Foreign tax paid: 70 I hold an international stock fund at Vanguard. The stocks in the fund earn $1000 in dividends, but foreign countries withhold tax of $70 of those dividends. Therefore, the fund only pays me $930 in dividends; this is what I receive in 2022 in my Vanguard brokerage account. Say my tax bracket is 25%. When I file my taxes, I pay US tax on the full $1000 in dividends. 15% of the $700 qualified dividend and 25% of the $300 non-qualified dividend is $180. Question: Without the foreign tax credit, this would result in a total tax impact of $250, including $180 for U.S. taxes and $70 in foreign withholding. That i...
by yosemite_mountain
Mon Mar 13, 2023 1:44 am
Forum: Personal Investments
Topic: HR block tax software won’t let me use carryover losses to offset my gains
Replies: 1
Views: 387

HR block tax software won’t let me use carryover losses to offset my gains

I have $45k in carryover losses from tax year 2021.

HR block tax software has beeb able to use carryover looses to deduct $3k from my 2022 taxable income.
However, the tax software wont let me use my carryover losses to offset $1k of 2022 capital gains.

Does anyone know how to offset capital gains using carryover losses in HR block tax software?
by yosemite_mountain
Sun Mar 12, 2023 7:13 pm
Forum: Personal Investments
Topic: Medicare tax: Is ESPP ordinary income not subject to medicare tax?
Replies: 1
Views: 405

Medicare tax: Is ESPP ordinary income not subject to medicare tax?

My tax software calculation shows that ESPP ordinary income is not subject to medicare tax. Is the software correct?

Questions:
1.Why is ESPP ordinary income not subject to medicare tax but ESPP ordinary income is subject to federal tax?
2.Why is my 401k contribution subject to medicare tax but the 401k contribution is not subject to federal tax?
by yosemite_mountain
Tue Jan 24, 2023 2:18 pm
Forum: Personal Finance (Not Investing)
Topic: Critique my expenses and help me save money.
Replies: 75
Views: 7012

Re: Critique my expenses and help me save money.

LittleMaggieMae wrote: Tue Jan 24, 2023 12:12 pm
(the listed "spending plan" has vacation - but it doesn't have holiday gifts, clothes, anything for car maintenance, stickers/tags/plates, Utilites, Cell phone/internet)

Good suggestion to add one offs such as holiday gifts, anything for car maintenance, stickers/tags/plates.. Utilities already included.
by yosemite_mountain
Sat Jan 21, 2023 8:44 pm
Forum: Personal Finance (Not Investing)
Topic: What’s Your 2023 Budget?
Replies: 201
Views: 26109

Re: What’s Your 2023 Budget?

legalwriter1 wrote: Sat Jan 21, 2023 10:05 am Family of 6 (married couple with 4 children ages 18, 16, 8, and 7). My wife is a stay at home mom with no income. I forecast low on my income for budget purposes. I have my own business along with W-2 income.

Actual 2022 income and expenses. Budget amount in parenthesis.


Food: 1,200


What kind of food do you eat / where do you buy groceries to be able to live on $1200 a month for a family of 6? I need some tips to reduce my food budget :happy
by yosemite_mountain
Sat Jan 21, 2023 7:20 pm
Forum: Personal Finance (Not Investing)
Topic: What’s Your 2023 Budget?
Replies: 201
Views: 26109

Re: What’s Your 2023 Budget?

Single, no kids

Rent: 2835
Food (groceries, restaurants): 880
Helping out parents: 600
Insurance (auto+umbrella +renters + long term disability): 492
Utilities (water, electricity, PG&e, internet): 456
Transportation (gas, car payment, uber): 387
Vacation fund: 280
Facial care (really bad acne): 215
Body care: 66
Cleaning supplies, household supplies: 62
Amazon prime, skype: 45
Haircare: 29

Total Monthly: $6347

Total annual: $76,000
by yosemite_mountain
Wed Jan 11, 2023 8:02 am
Forum: Personal Investments
Topic: Is 10% of assets in investment property too much?
Replies: 29
Views: 2445

Re: Is 10% of assets in investment property too much?

GibsonL6s wrote: Sun Jan 08, 2023 4:00 pm As someone in institutional real estate I am very curious as to where you are building 16 to 25 units for $300k.

Good luck!
This would be outside the US. I'm familiar with construction in said country; everyone buys land and constructs their own house; very few people purchase already built houses.