Search found 56 matches

by Ken Reckers
Sun Feb 05, 2023 10:02 pm
Forum: Personal Finance (Not Investing)
Topic: Did a 1099-MISC, now need help with schedule C? Please help!
Replies: 28
Views: 1827

Re: Did a 1099-MISC, now need help with schedule C? Please help!

In TT, when you do Box 3 of 1099-MISC, TT asks you questions. Depending how you answer them, it will generate Sch C.

https://ttlc.intuit.com/community/taxes ... 00/1330539
by Ken Reckers
Mon Nov 14, 2022 9:06 pm
Forum: Personal Finance (Not Investing)
Topic: “Transitioning” A Trust Account
Replies: 4
Views: 1146

Re: “Transitioning” A Trust Account

I know it's an old thread, but here's our story.

Spouse is trustee of a trust for Child 1 and of another trust for Child 2. The trusts are identical except for the different beneficiary.

Mid-September she began transition. As previous posters report, you have to submit forms via DocuSign.

Child 2 trust transitioned without incident in about 10 days.

Two months later, Child 1 trust still has not been transitioned. We have been on the phone with V twice over the last two months, over an hour each time, maybe two. We uploaded additional documentation. We wait. Nothing happens. We tried the process from the beginning again, as recommended by the reps each time we called. We just got a letter today, call us because more info needed.
by Ken Reckers
Tue May 17, 2022 10:45 am
Forum: Personal Finance (Not Investing)
Topic: Form 1041 for estate when all interest was already reported on decedent's final year Form 1040
Replies: 12
Views: 1116

Re: Form 1041 for estate when all interest was already reported on decedent's final year Form 1040

I would net it out on line 1 of 1041 with an attached statement showing the 1099-INT amount, the subtraction, and the net. Mimic the wording that would be used if it was 1040 Sch B, which has fairly clear instructions.

I experimented in Turbo Tax Business for 1041, and all they say is enter an additional 1099-INT with the adjustment amount as a negative. Then a zero shows up on line 1 of 1041, and no attachment is generated. I personally would add the attachment.

This thread doesn't apply to you but might help others. Poster near the end suggests including SSN of decedent who was a different person.
viewtopic.php?t=269462

That's just me, a rando on the internet.
by Ken Reckers
Sat Apr 16, 2022 10:09 am
Forum: Personal Finance (Not Investing)
Topic: Schedule M line 22 (IL state form)-Calculating tax exempt bond fund income for IL
Replies: 9
Views: 586

Re: Schedule M line 22 (IL state form)-Calculating tax exempt bond fund income for IL

Sounds right.

IL Pub 101 says bonds issued by govt of Guam or PR can be subtracted even if held in mutual funds. Not true for state and local obligations if held in mutual funds.

Your amounts which total $11 will save you either $0 or $1 of IL income tax, I would think, depending on rounding.
by Ken Reckers
Fri Apr 15, 2022 11:19 am
Forum: Personal Finance (Not Investing)
Topic: Schedule M line 22 (IL state form)-Calculating tax exempt bond fund income for IL
Replies: 9
Views: 586

Re: Schedule M line 22 (IL state form)-Calculating tax exempt bond fund income for IL

FoolishJumper is right that it goes on lines 35a and 35b, not line 22 as I incorrectly said.
by Ken Reckers
Fri Apr 15, 2022 11:00 am
Forum: Personal Finance (Not Investing)
Topic: Schedule M line 22 (IL state form)-Calculating tax exempt bond fund income for IL
Replies: 9
Views: 586

Re: Schedule M line 22 (IL state form)-Calculating tax exempt bond fund income for IL

1132 * 0.01 = $11

You're out of luck with the 7.32%

IL muni bond interest would have been Sch M line 34, but only if you had held individual bonds.

Per Sch M instructions (or Pub 101), income from these bonds is not exempt if the bonds are owned indirectly through owning shares in a mutual fund. Your Vanguard table probably has a footnote to the same effect.
by Ken Reckers
Thu Apr 14, 2022 11:02 pm
Forum: Personal Investments
Topic: Inherited IRA in trust
Replies: 19
Views: 1638

Re: Inherited IRA in trust

I think it works this way in IL if the trust is the beneficiary of the inherited IRA. It's something I am looking forward to myself so correct me if I'm wrong. The IL trust reports the IRA distribution as a subtraction on IL-1041 line 14 ("payments from certain retirement plans") and also on IL-K-1-T line 37. (The trust doesn't file IL-K-1-T, but keeps a copy and gives a copy to the individual beneficiary, who files it. Backwards from federal.) The individual IL beneficiary attaches IL-K-1-T to their IL-1040. The amount from IL-K-1-T line 37 is included in subtractions that are reported on beneficiary's IL Sch M line 14, which flows to beneficiary's IL-1040 line 7. Hopefully you can convince dad to make you individual beneficiarie...
by Ken Reckers
Wed Apr 13, 2022 1:13 pm
Forum: Personal Investments
Topic: Any “Gotchas” With Inherited/Beneficiary IRAs?
Replies: 20
Views: 1962

Re: Any “Gotchas” With Inherited/Beneficiary IRAs?

One thing you could check is whether grandma/grandpa made any non-deductible contributions to tIRA and filed 8606 to keep track of basis. Not a "gotcha," but rather a potential tax benefit for your wife.
by Ken Reckers
Fri Mar 04, 2022 11:11 pm
Forum: Personal Finance (Not Investing)
Topic: Inherited shares: 1099B says LT box D, tax software tags as ST box A.
Replies: 12
Views: 897

Re: Inherited shares: 1099B says LT box D, tax software tags as ST box A.

If they're Box D on 1099-B, can't you include those sales on Sch D Line 8a instead of 8949?
by Ken Reckers
Mon Feb 15, 2021 5:16 pm
Forum: Personal Investments
Topic: Are 529’s pulling a fast one on us?
Replies: 48
Views: 7388

Re: Are 529’s pulling a fast one on us?

Illinois https://brightstart.com There are age-based portfolios, target portfolios, or "individual portfolios." The "individual portfolios" are actually individual funds. Example: Vanguard Total Bond Market Index, fee 0.03 + 0.08 = 0.11% Vanguard Short Term Inflation Protected Index, exp ratio 0.04 + 0.08 = 0.12% Vanguard 500 Index, 0.02 + 0.08 = 0.10% Vanguard Total Stock Market Index, 0.02 + 0.08 = 0.10% The 0.08% is the program management fee. The state fee is zero on index portfolios and the Vanguard MM, otherwise 0.03%. I had to look under "portfolio performance" to find the 0.08 addition. Edited to add: One of the "target portfolios" is "Index Fixed Income" which is 50% Fed MM, 15% ST ...
by Ken Reckers
Tue Nov 19, 2019 4:31 pm
Forum: Personal Finance (Not Investing)
Topic: Just learned something about HSAs and independent children that I did not know
Replies: 42
Views: 5041

Re: Just learned something about HSAs and independent children that I did not know

1) I cannot use my HSA to pay for her medical bills even though my insurance is covering her because she is not a dependent anymore. I agree for your case. For reference, my slightly different situation is worth mentioning. My unemployed daughter who lives with me and turned 24 this summer is not my dependent. (Publications quoted are for 2018 return. We'll see if 2019 is different.) **** From Pub 17, The term "dependent" means: - A qualifying child, or - A qualifying relative. Five tests must be met for a child to be your qualifying child. The five tests are: 1. Relationship, 2. Age, 3. Residency, 4. Support, and 5. Joint return. **** My daughter is not my qualifying child because she fails the age test. Is she my qualifying rel...
by Ken Reckers
Wed Nov 06, 2019 10:46 pm
Forum: Personal Consumer Issues
Topic: Wife's car hit in a parking lot - how to deal with various issues?
Replies: 67
Views: 7246

Re: Wife's car hit in a parking lot - how to deal with various issues?

dm200 wrote: Mon Nov 04, 2019 2:02 pmThe girl was clearly 100% at fault
Your opinion. If they decide to file a claim but you don't report it to your insurance company, how will your liability coverage protect you from the damage that your wife caused to their property, or the bodily injury your wife caused. Your policy may require you to report it even without collision coverage.
by Ken Reckers
Tue Oct 22, 2019 11:07 pm
Forum: Personal Finance (Not Investing)
Topic: Sanity check on PPO vs HDHP
Replies: 32
Views: 4434

Re: Sanity check on PPO vs HDHP

Here's another comparison tool.

https://docs.google.com/spreadsheet/ccc ... nBUNnNUQWc

I downloaded it 4 years ago but don't remember how I found it. Maybe it was on this forum.

The sample data in the spreadsheet has a graph showing exactly what grabiner said about the worst case for HDHP. When I ran our numbers, the red graph (HDHP) was completely below the blue graph (LDHP).

We switched to HDHP and never looked back. Interestingly, after years of perfect health, my own health care has become extremely expensive. I now max out my HDHP deductible in January. Throw in an unusual year and we max out the family deductible in May. We just budget for max family and don't worry about it.
by Ken Reckers
Wed Oct 16, 2019 11:09 pm
Forum: Personal Investments
Topic: Withdrawing 529 $ without penalty [what counts as a "scholarship"]
Replies: 14
Views: 4548

Re: Withdrawing 529 $ without penalty [what counts as a "scholarship"]

I work at College X. My daughter goes to College Y and receives a Tuition Exchange scholarship. Every year, she receives a 1098-T from College Y. Box 5 "Scholarships or grants" includes the full amount of the Tuition Exchange scholarship.

Financial Aid Office will be of more help than HR, almost certainly.
by Ken Reckers
Mon May 13, 2013 11:58 pm
Forum: Personal Finance (Not Investing)
Topic: Help Understanding Cook County, IL Property Taxes
Replies: 13
Views: 1716

Re: Help Understanding Cook County, IL Property Taxes

Look up the property in the tax portal, by PIN or address. http://www.cookcountypropertyinfo.com/Pages/Tax-Rates.aspx Find the tax rate (2011), 7.696 for the address you gave. You can also find the tax rate history back to 2006. Note the tax code for 2012 is 17007. Look here: http://www.cookcountyclerk.com/tsd/DocumentLibrary/2011taxratereport.pdf See page 12 for a sample calculation. Samples are given for Chicago, North Suburban Cook, and South Suburban Cook. See page 29 of the above pdf for the tax rate breakdown for the address you gave. Confirm that for code 17007 the tax rate 2011 was 7.696. For more info, here is a Citizen's Guide. http://www.bridgetgainer.com/property-taxes-and-assessments/Citizens%27%20Guide%20to%20Property%20Taxes....
by Ken Reckers
Wed Jan 30, 2013 11:49 pm
Forum: Personal Investments
Topic: Specific shares sale of noncovered shares, my experience
Replies: 1
Views: 539

Specific shares sale of noncovered shares, my experience

Last week I sold over 40 small lots of noncovered Total Stock Market Admiral shares. Almost all of the lots were dividend reinvestments. I had not yet learned the trick of directing dividends to a MM fund. Over 30 of those lots were purchased as investor shares, later converted to admiral. I used Excel to create a table with the lots. I copied the table to Word, added some captions, and saved the document as an RTF file. I initiated the exchange online. I then sent a secure email stating that I initiated an exchange online and am identifying specific shares. I included all the items of information spelled out in the Wiki by grabiner. I attached the RTF file to the secure email. I could have sent an XLS file instead of RTF, but for whatever ...
by Ken Reckers
Wed Jan 30, 2013 11:19 pm
Forum: Personal Investments
Topic: I've got a question about income reported on 1099-R
Replies: 40
Views: 6433

Re: I've got a question about income reported on 1099-R

absolvo is first person present tense, so it goes with Ego. Te is accusative so it's the object. peccatis tuis is dative, the indirect object,
I disagree. Instead of dative, "a peccatis tuis" is the ablative of separation. You are being loosed or freed from your sins.

Relevance? Solvent = free from debts. Bogle states that Swensen "has an impeccable reputation for character and intellectual integrity."

And parsing Latin is similar to reading AZ residency requirements...
by Ken Reckers
Wed Jan 30, 2013 11:05 pm
Forum: Personal Consumer Issues
Topic: Why would anybody use Turbotax?
Replies: 111
Views: 17750

Re: Why would anybody use Turbotax?

With my small account at State Farm Bank, TurboTax Basic is a free download.

Deluxe download would be $20 and would include a state. Federal efile is included with either Basic or Deluxe.

I download fillable pdfs for state, inherited ira 8606's, and 1041's, and I do those by hand.

I use TurboTax because it's the devil I know. I've been using it since 1996. I always print the forms instead of efiling. In 1999, I used form 1040PC -- anyone remember that? :)
by Ken Reckers
Sun Jan 06, 2013 10:10 am
Forum: Personal Investments
Topic: backdoor roth question
Replies: 14
Views: 1463

Re: back-door roth question

RandyAdams1978 wrote:Thanks to Duckie for the step-by-step. I just opened a Trad IRA for 2012 at VG. But now I have a question on the conversion to Roth. What's the step-by-step for THAT? Do I click on the Roth IRA and buy, or do I click on the Trad and sell? Or is there some CONVERT button I haven't seen yet?

Or maybe I go into Trad and exchange?
Exchange.

From the ribbon at the top, you can select "Buy & Sell," then select "Exchange Vanguard Funds."

Alternatively, from "My Accounts," "Balances & holdings," find your Trad IRA account and select "Exch."
by Ken Reckers
Tue Dec 18, 2012 9:34 am
Forum: Personal Finance (Not Investing)
Topic: 2012 Turbotax now available at Vanguard Tax Center
Replies: 72
Views: 11540

Re: Turbo Tax 2012

FYI, if you have a bank account with state farm bank you get free/discounted TurboTax (basic and deluxe are free (federal file), deluxe with state is 20, premier federal is 20, premiere federal and state is 30, etc). The minimum balance in a state farm account is $25. Each year this is a treasure hunt to navigate to the free download. I had success with these steps. http://www.statefarm.com/tax Log in "Get Started" "Buy Download" Basic-Buy Download-Free Federal-"Buy Now" Download for Windows-"Add to Cart" "Checkout" I have downloaded but not installed yet. Last year, Turbo Tax installation included an update to Net Framework FX. This in turn (apparently) caused my windows updates to start m...
by Ken Reckers
Tue Dec 20, 2011 12:07 pm
Forum: Personal Finance (Not Investing)
Topic: Free Basic TurboTax through SFB again
Replies: 0
Views: 356

Free Basic TurboTax through SFB again

I just downloaded my annual free TurboTax basic. We're not Flagship, so I had to go through State Farm Bank. Like the Flagship stories, you have to do detective work. The ads don't seem to be up yet. Log in to your SFB online account. Look around for the TurboTax logo. It will look like you only can do the online version. Select "Get Started" anyway. This takes you to an Intuit web page. Again it looks like online options only. Select "Buy Download." Now you see the "pricing," including an option of free for basic, which is all I get. Deluxe is 20. Didn't pay attention to the state options or Premier, etc. This was the navigation route I took the second time. I forgot what I did the first time, but at some step...
by Ken Reckers
Tue Apr 19, 2011 11:14 pm
Forum: Personal Consumer Issues
Topic: suggested t-mobile prepaid phone?
Replies: 26
Views: 3827

I have that Motorola phone with TMobile To Go, well really the V195s. Pushing the buttons on the left side in a certain order is what causes mine to go into a different mode. In a pants pocket, this happened accidentally a lot. I now keep it in the shirt pocket. On the left side, the top two buttons (really just one rocking button) are "up" and "down." The bottom separate button is "bottom." Push "down" and the clock will disappear and the ring mode will display. Then push "bottom" repeatedly and the ring mode will cycle through the possibilities. This is how mine would go into silent mode. Push "down" again to return to the clock. Maybe you are accidentally doing this? Maybe not. ...
by Ken Reckers
Wed Mar 03, 2010 3:57 pm
Forum: Personal Investments
Topic: How much effort would you exert to avoid a wash sale
Replies: 8
Views: 1741

You could sell 114 shares from the lot in 2001 and 86 shares from the lot in 2007 for a net gain/loss of zero. No taxes and no wash sale to worry about. On your schedule D you show the date of purchase as "Various" and the cost basis as a total of $6000. Since it is a single sale and all shares are long term, I don't think you have to separately list part of the shares as a loss and part as a gain. You just show the combined basis which exactly equals the sales proceeds resulting in no gain or loss. Thanks for the idea, but according to page 57 of Publication 550, this is not allowed. I could not deduct the loss from any shares that were replaced within 30 days, nor could I use such a loss to reduce the gain, even with identical ...
by Ken Reckers
Wed Mar 03, 2010 12:00 am
Forum: Personal Investments
Topic: How much effort would you exert to avoid a wash sale
Replies: 8
Views: 1741

Thanks for your input, Ash. I did Option 2. It was very easy to change the reinvestment options and even open the necessary new accounts. The only snag was trying to direct dividends from Fund W into a closed account, so I opened a STAR fund to receive the dividends (this one was within a Roth). I spent more time writing the original post than in carrying it out!

However, the one big exception to simplicity was specifying the shares. The example in my post was oversimplified. I really sold from 30 different lots. Now I see why people use MM funds to collect distributions. Maybe I'd try that, if I sold shares more often than every seven years. :)

Thanks.
by Ken Reckers
Tue Mar 02, 2010 11:04 am
Forum: Personal Investments
Topic: How much effort would you exert to avoid a wash sale
Replies: 8
Views: 1741

How much effort would you exert to avoid a wash sale

I have a practical question about wash sales, concerning how much trouble would you actually go to, to save a little tax. I doubt anyone will read this whole posting, but thanks in advance to anyone who tries. I own 600 shares of Fund W in a taxable account. #sh price cost date 200 20.00 4000 1996 200 28.50 5700 2001 200 32.00 6400 2007 I want to sell 200 sh, now at 30.00/sh, with proceeds 6000. If I use FIFO, I have a 2000 gain. If I sell the shares purchased in 2001, I have a 300 gain. If I sell the shares purchased in 2007, I have a 400 loss. I anticipate a dividend later this month. I want to sell now, not wait until May. My immediate family also owns holdings of Fund W in four other accounts: Roth, TIRA, and 2 UTMA's. All are set up fo...
by Ken Reckers
Thu Jul 02, 2009 10:48 pm
Forum: Personal Finance (Not Investing)
Topic: Savings bonds historical values at Treasury Direct?
Replies: 1
Views: 1003

Savings bonds historical values at Treasury Direct?

For paper I and EE bonds, I use Savings Bond Wizard to compute current and historical bond values.

For Treasury Direct holdings, I can view the current value, but I can't find how to see what the value was on, say, 3/31/09 (or 4/1/09).

Can I do that at Treasury Direct, and if so, where is it? Or do I need to enter those holdings into a SBWizard file?

Thanks.
by Ken Reckers
Thu Mar 05, 2009 11:50 am
Forum: Investing - Theory, News & General
Topic: American Funds
Replies: 33
Views: 7349

Re: American Funds

daddydub wrote:I already have friends and even family invested with him and I'm trying to decide if I need to make some calls and recommendations to them, as a trusted confidant.
I wouldn’t recommend your old friend to anyone. At the same time, I would not “un-recommend” him to any friends or family who are using him. Let it be.
by Ken Reckers
Wed Mar 04, 2009 5:39 pm
Forum: Personal Investments
Topic: Investing for a Young Child
Replies: 31
Views: 5228

Re: mptfan

jps5976 wrote:any thoughts on the funds i mentioned in the original post
I have a taxable acct for daughter (actually in a trust) with small amount and am using STAR until we grow it to 3K, then I plan to change it to TSM, eating any tax bite I have to make. I don't mind Life Strategy Growth as much as other people, and you have the balance to open it. I would probably just use TSM alone with your amount, but STAR or LSG sound good to me.

You also could try Fidelity Four in One, if it's available and if it has the mix you like.
by Ken Reckers
Mon Mar 02, 2009 10:40 am
Forum: Personal Investments
Topic: oh, drat, screwed up - is there a quick fix?
Replies: 7
Views: 2349

The policy does not apply to the following:
• Transaction requests submitted by mail to Vanguard from shareholders who hold their accounts directly with Vanguard.
Within the 60 days, you still can buy by mail, just not the "cotton head" online way.

(Wash sale still applies w/in 30, though.)
by Ken Reckers
Sat Feb 28, 2009 10:26 pm
Forum: Personal Investments
Topic: Question about inheritance money
Replies: 6
Views: 1464

You could look for CD rates at bankrate.com. We use State Farm Bank, which gives higher rates than the local banks, but not the highest rates available. I just ladder them and forget about them, letting them renew automatically.
by Ken Reckers
Fri Feb 27, 2009 11:43 pm
Forum: Personal Investments
Topic: SRA
Replies: 5
Views: 1330

Vic,

Are you sure you can't rollover your SRA into an IRA if you are separated from service? I would call TIAA-CREF and ask. SRA's are more flexible than RA's. I bet you already checked, but I said it just in case.

I looked at my contracts (which of course may be different from yours) and I found at least one endorsement that seems to allow tax-free rollover to an IRA. The references to the Internal Revenue Code are too obscure for me to know for sure.

You also could keep it there if you wanted to invest in something you can't get elsewhere, like the TIAA real estate account.
by Ken Reckers
Mon Feb 23, 2009 10:53 am
Forum: Investing - Theory, News & General
Topic: Ed Slott's Retirement and Inheritence Advice?
Replies: 19
Views: 4962

If you don't put a valid beneficiary designation on your retirement accounts, then you will get screwed. "Screwed" as in delayed, hung up in probate. Or "screwed" as in pay more in tax. Or both? Both, I guess. And not just estate tax (which may not matter for some people), but ordinary income tax on the IRA distributions. "Screwed" as in distributions from your IRA might have to be made to your beneficiary using a shorter life expectancy than otherwise possible. Slott likes to use the word "stretch," as in stretch those IRA payments out over the longest possible life expectancy, to stretch out the tax deferral. "Really screwed" would mean your intended beneficiary unwittingly turns the IRA ...
by Ken Reckers
Sun Feb 22, 2009 10:10 pm
Forum: Personal Finance (Not Investing)
Topic: How long have you stuck with the same asset allocation?
Replies: 9
Views: 2332

Not in writing. Been at 80/20 for about 15 years, since I first read Bogle on Mutual Funds. Plan to be there for about 5 more years, then go 65/35.
by Ken Reckers
Thu Feb 19, 2009 5:32 pm
Forum: Personal Investments
Topic: No Courage to Rebalance...
Replies: 34
Views: 11079

Re: No Courage to Rebalance...

Ken, You are not correctly following the origin of the phrase "improper investing" that originated from (in) questions in the above quotes. Landy, OK, good, now your comments make sense. I should have known better... :) And I skipped all the details of OP's plans. I'm still not sure what sheople2 means. I would agree staying in CDs is better than trying to time the market, in the long haul. There is another valid option, which is realizing your AA numbers were wrong, so change them to where you should have been in the first place, and stick with that. I also say that it wouldn't be terrible to just say to oneself "I don't have the courage to readjust back to 65/35, so I'm just going to close my eyes, do nothing, and wait unt...
by Ken Reckers
Thu Feb 19, 2009 11:25 am
Forum: Personal Investments
Topic: No Courage to Rebalance...
Replies: 34
Views: 11079

Re: No Courage to Rebalance...

sheople2 wrote:
After all my reading and studying, I thought I had decided on an allocation I could live with of 65% stocks to 35% safe money (CD).
...
my AA is now about 50/50. I know I should rebalance back to 65/35, but I can't seem to work up the courage. Instead I haven't touched anything.
I don't think this is "improper investing" at all. You decided not to touch anything. That is much, much better than "rebalancing" to 0/100 now out of fear. You are showing much, much more discipline than many people.

I personally do it differently, and so do some other people here, but that doesn't mean you're "improper."

(Sorry I can't answer whether there are any studies.)
by Ken Reckers
Wed Feb 18, 2009 5:28 pm
Forum: Personal Finance (Not Investing)
Topic: RMD Calculations - re Pub 590
Replies: 7
Views: 2211

You probably know this, but just in case, I have had good luck asking trust and RMD questions on fairmark.com (suggested to me from here).
by Ken Reckers
Sat Jan 17, 2009 11:46 pm
Forum: Investing - Theory, News & General
Topic: Wellington and Wellesley Income
Replies: 24
Views: 9240

I have long thought that 50/50 Wellington/Wellesley would be my model allocation for the early retirement years, until around age 75. I have felt this way since around 1994 when I read a book by a "financial guru" who proposed an allocation for that stage of life, at 25/25/20/20/10 with value stocks, equity income stocks, long term bonds, intermediate term bonds, and short term bonds, respectively. It has seemed to me that the 50/50 Well/Well portfolio would approximate this allocation with two funds instead of five, although more so with the stocks than with the duration of the bonds. I sometimes wonder if anyone proposing such an allocation now on this board would be ridiculed. This "guru" gave a speech in 2001 in whic...
by Ken Reckers
Fri Jan 16, 2009 12:27 am
Forum: Personal Finance (Not Investing)
Topic: So Who's Buying?
Replies: 72
Views: 13812

I rebalanced from 73/27 stock/bond back to our target 80/20 after checking our year end totals. For me it was exciting, being the first time I've rebalanced since April 2003.

I'll look again after March 31.
by Ken Reckers
Thu Jun 26, 2008 10:02 am
Forum: Personal Investments
Topic: Procedure for loss harvesting from UTMA to UTMA 529
Replies: 4
Views: 1753

LynnSwann wrote:Have you considered "spending" this money on the child's behalf and then putting the same amount of money into a 529 plan that you own? I ask because this is preferable in many instances.
I did consider it. Although I probably won't do it that way, I'll re-check my thinking before going forward. Thanks for the idea.

Thanks for the checking account answer. It's funny how I gladly send my money to Vanguard without giving much thought to how I'll get it out. Not necessarily a bad system, though. :)
by Ken Reckers
Wed Jun 25, 2008 2:04 pm
Forum: Personal Investments
Topic: Procedure for loss harvesting from UTMA to UTMA 529
Replies: 4
Views: 1753

Procedure for loss harvesting from UTMA to UTMA 529

I want to take harvest some losses held in a UTMA (Wellington) by liquidating some (not all) and investing in a UTMA 529 (different funds, but changing the overall asset allocation as little as possible). The UTMA 529 is Illinois. I want to specify shares. My basic question is, what is the procedure regarding using a checking account as a "stepping stone" to get from one to the other? For example, I have the following sorts of questions, but not all of them may need to be answered, depending. How do a request the check to be payable? Daddy Reckers Cust FBO Kid Reckers? Kid Reckers? Or can I simply request the check payable to the owner of record, and let Vanguard decide? Do I deposit that check in my own acct, then write a new che...
by Ken Reckers
Mon Aug 13, 2007 10:43 pm
Forum: Personal Investments
Topic: Form 1041 Grantor Trust, Optional Method 1
Replies: 19
Views: 9273

You are right. When I read more carefully, there is language about education, health, support. Also, C1's best interests. Provisions in case of disability. I am somewhat embarrassed about my imprecision.

Thank you for your generosity in terms of time and expertise in responding to my naive questions.

"Ken"
by Ken Reckers
Mon Aug 13, 2007 1:24 pm
Forum: Personal Investments
Topic: Form 1041 Grantor Trust, Optional Method 1
Replies: 19
Views: 9273

Oh. I'm the one who's not understanding the facts. Glad to hear it is a grantor trust. But I incorrectly assumed that protection from creditors was the reason it was set up.

I'm satisfied now from a practical point of view. But from the theoretical viewpoint, I'm still puzzled. Why give the assets to T1 fbo C1 with C1 as trustee, instead of simply C1?

"Ken"
by Ken Reckers
Mon Aug 13, 2007 12:24 am
Forum: Personal Investments
Topic: Form 1041 Grantor Trust, Optional Method 1
Replies: 19
Views: 9273

These are very helpful and clarifying responses, even if some of the (controversial) examples are different from my concern. Thank you very kindly.

But they do raise a new question of my own:

Parent P has children C1 and C2.

My concern is not P's trust T.

P has died already. Pursuant to T, trusts T1 and T2 are created for benefit of C1 and C2, respectively.

C1 is the trustee of T1 and has sole and complete power to withdraw the entire amount for himself. Ditto for C2.

(Apparently, the reason is not for tax purposes, but to protect the amounts from creditors, spouses, etc.)

Can't T1 be a grantor type trust?

"Ken"
by Ken Reckers
Sun Aug 12, 2007 2:14 am
Forum: Personal Investments
Topic: Form 1041 Grantor Trust, Optional Method 1
Replies: 19
Views: 9273

Thanks for the fairmark tip. Glenn, Thanks for explaining the "regular way." This clarifies the 1041 instructions, and it now looks much more painless than I imagined. I see your advantage in obtaining the EIN in advance. Here is my paraphrase of what a "grantor type trust" is. A "grantor type trust" is a trust that is a *legal* entity, but *not* a separate taxable entity. This can be the case when the owner is the also the trustee, and has complete control over it, to withdraw the entire amount at any time for any reason, for his own benefit. This means the trust income is taxed at the owner's rates, not trust rates, right? Because it's not a separate taxable entity, there is a "regular" way to file,...
by Ken Reckers
Sat Aug 11, 2007 8:26 am
Forum: Personal Investments
Topic: Form 1041 Grantor Trust, Optional Method 1
Replies: 19
Views: 9273

Form 1041 Grantor Trust, Optional Method 1

Does anyone have any experience in using "Optional Method 1" instead of filing Form 1041 for a Grantor Type Trust? (Legal advice has determined that the trust in question is a grantor trust.) As I understand it, with Optional Method 1, you include the trust income on your own 1040 and use your own SS#.

I don't see any advantage in choosing "Optional Method 2," which to me looks the same as 1, except with 2 you would use the trust tax ID# instead of your own, and then complete extra paperwork (1099's). Am I right that Optional Method 1 makes more sense than 2?

Thanks.

"Ken"
by Ken Reckers
Tue Jun 19, 2007 4:01 pm
Forum: Investing - Theory, News & General
Topic: Question about dead primary beneficiary using "per stir
Replies: 24
Views: 7118

AlwaysaQ,

OK.

Since you refer to the "stretch," I am assuming you have read Ed Slott's books. (Required reading if you haven't.) Doesn't he have some sample beneficiary designations in the back of one of them, and do any of them apply? I would think you would not want the estate to be the beneficiary, because if you die before reaching RMD, the stretch will be longer if each beneficiary can use his/her own life expectancy.

"Ken"
by Ken Reckers
Tue Jun 19, 2007 3:52 pm
Forum: Personal Investments
Topic: Where is "pay tax to convert to Roth" in investing
Replies: 12
Views: 4133

grabiner, yes I admit I probably plagiarized the idea of my "investing partner" Uncle Sam from posts you made elsewhere about adjusting AA for expected tax bracket. I have appreciated your (and alvinsch's) analysis on that topic. That's probably what got me thinking about my question in the first place. It's difficult to bring oneself to make the conversion at all unless you look at it as having an investing partner. (The thing I don't like about my investing partner is that he might completely change the rules concerning what his share is, without consulting me.) xerty, the $25K and $100K are approximately correct, so I like your analysis and advice about considering how far into the future can I make the prediction. 5 years is h...
by Ken Reckers
Tue Jun 19, 2007 3:02 pm
Forum: Investing - Theory, News & General
Topic: Question about dead primary beneficiary using "per stir
Replies: 24
Views: 7118

AlwaysaQ,

Are you talking about an IRA you inherited? Or are you talking about your own IRA that you started? (It wasn't clear to me, because you mentioned inheriting from your great uncle.)

"Ken"
by Ken Reckers
Mon Jun 18, 2007 11:03 am
Forum: Personal Investments
Topic: Where is "pay tax to convert to Roth" in investing
Replies: 12
Views: 4133

Thank you all for your well-reasoned replies. Each is very logical to me, although your conclusions vary. I appreciate both the numerical examples as well as the alternative ways to conceptualize the problem. I will tell you that I had thought, for my own case, that "pay tax to convert to Roth" should be #1.5 in the list. Almost no one seems to agree, but I am not convinced that I am wrong, either. Let's say I have $100,000 in the traditional IRA. (Some of it has always been trad IRA; most of it is 401k conversion from wife's former job.) I am in the 15% marginal bracket. I therefore call $85,000 my (our) own. I regard $15,000 of it as belonging to my investment partner, Uncle Sam. Mine Sam's Trad IRA 85,000 15,000 Roth IRA 0 Tota...
by Ken Reckers
Thu Jun 14, 2007 11:14 am
Forum: Personal Investments
Topic: Where is "pay tax to convert to Roth" in investing
Replies: 12
Views: 4133

Where is "pay tax to convert to Roth" in investing

For the general rule of thumb for investing priority, these four make sense to me: 1. 403b up to the match 2. Max out Roth 3. Max out 403b 4. Taxable investing Where in the priority order would this be: "use investment dollars to pay for converting traditional IRA to Roth IRA"? Assumptions for my case: marginal federal tax rate is 15%, and taxable income is about $25K less than the cutoff into the next higher bracket. Suppose I assume my marginal tax rate will never be lower than it is now, and I do want to convert. Also suppose that in the (near?) future I am not going to save enough to come anywhere even close to maxing out Roth *and* maxing out 403b *and* paying tax to convert all of the traditional IRA. (Employer contribution ...