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Hello, My HnR Block Tax prep person told me that majority of California (including San Diego where I live) is declared disaster areas and IRS extended the deadline to file and pay tax-dues until October 15, 2023. One of my friend told me that even Federal tax penalty is also waived but I cant find the reference. How does IRS knows and tracks that my return is indeed in the disaster zone and thus will not pose penalty if I pay my tax-due before Oct 15 ? Does anyone knows if IRS is also waiving the Federal tax penalty ? Thanks in advance. https://www.irs.gov/newsroom/irs-announces-tax-relief-for-victims-of-severe-winter-storms-flooding-and-mudslides-in-california Following the disaster declaration issued by the Federal Emergency Management A...

placeholder wrote: ↑Sun Mar 26, 2023 4:31 pm

enad wrote: ↑Sun Mar 26, 2023 3:42 pm Here's an article from the Motley Fool that can help you:

Removing the excess is the less favorable approach and the op should not do that until recharacterization has been explored.

I disagree. If he has had a loss in the account, it is preferable to remove the excess and make a brand new contribution.

I've long used various companies' and websites' graphs and charts to compare various funds of particular styles. Recently there was a comment on a marketwatch article where someone said, essentially, "sure it eeks out a small advantage over [say, VT] but once you figure in fees, it is probably behind." My question is, when I look at nice graphs from reputable companies that compare, say, four etf's and mutual funds, over 1, 3, 5 and 10 years, am I seeing how they have performed accounting for their annual fees (which decrease the compounding), or am I looking at notional outcomes? In other words, if VT brought 5, 15 and 50% over 1, 3 and 5 years while IMGN [fictional, I think] brought 6, 16, and 55 according to the comparison gra...

Last year (2022), I completed a roth conversion for my entire traditional (mixed nondeductible and deductible) ira balance into my roth ira. At the end of 2022, I had no traditional/sep/simple ira balance. I’d appreciate any guidance on how to properly report this on form 8606. My 1099-R appears as follows: 1 Gross distribution $88,000 2a Taxable amount $88,000 2b Taxable amount not determined (X) Total distribution (X) 7 Distribution code 2 IRA/SEP/SIMPLE (X) 16 State distribution $88,000 In my IRA account, I had $36,000 of nondeductible contributions + $6000 (nondeductible ira contribution for 2022) = $42,000 (cost basis) of nondeductible contributions with the rest being gains. Is form 8606 supposed to look like this? 1) 6000 2) 36000 3...

This is a theory question that has been bugging me and I'd love to get this community's take on it. The bogleheads wiki indicates that risk tolerance is the primary factor in determining equity allocation, stating: How much in bonds? That's the basic question of asset allocation. Before you decide, you first need to balance your ability, willingness, and need to take risk. The more risk you can handle, the less bonds you need. I'm wondering whether the risk-free rate plays any role in determining your equity allocation, especially relevant as the 30y TIPS yield has recently swung from negative territory to exceeding 1.5%. If real yields went to say 3% on the 30y TIPS, my lizard brain would feel tempted to buy some in lieu of equities. Here...

elchris wrote: ↑Tue Mar 28, 2023 9:13 pm Thank you for the reply. So just to clarify, the taxable amount in the 1099 will/should be just the gains, not the entire distribution?

Correct. The excess deferrals are added back into your 2022 income, while the earnings will be taxable in 2023, assuming your deferrals and earnings were distributed between January 1 and April 15 this year.

It looks like I'll be moving soon. I plan to buy a new house before I close on my current house and I'm trying to work out the best way to pay for it. Some pertinent data: - I own current house free and clear and will receive ~$475K at closing - New house will cost ~$260K - I expect to buy the new house roughly 2 months before I close on my current house - I do not have a HELOC set up - I have an IRBK lite margin account with ~$1.3M all in VTI - I have various IRA/401k/HSA accounts with bonds to keep my AA at 70/30 - I don't want to mortgage the new house - I'm retired now so don't know if that would be even possible?[/list] 1. I was initially thinking of selling ~$275K of VTI in the IRBK account to pay for the house (and associated costs ...

If I sell shares on a given day for a capital loss, I need to avoid repurchasing shares of the same funds for 30 days. I hope I have that right. In addition, my concern relates to the fact that my dividends are reinvested. [...] If I understand correctly, If I make the sale tomorrow (3/29/23) I should I should be well within the time frame free from getting a wash sale from dividend reinvestment. DO i have this right? No. It's not "avoid repurchasing for 30 days"; it's "avoid repurchasing within 30 days." If you don't want to have a wash sale, you have to wait until late April, because you purchased (through reinvestment) a week or two ago. (Wash sales are not against the law, however.) Yep. And just to be even more exp...

elchris wrote: ↑Tue Mar 28, 2023 2:21 pm Please help me understand if this is correct. I overcontributed to my 401k for 2022, then corrected the overcontribution with funds being returned to me this year. As I understand it, I am being taxed on the overcontribution as income this year but then also being taxed on the funds next year when I get the 1099-R? So I am being double taxed,, to "penalize" people for overcontributing? I understand taxing the gains but taxing the amount again as a distribution this year doesn't make a lot of sense. If I had known, I would have just let the amount stay in the account.

No, that is not correct. If you had the excess deferrals returned by April 15, you will not be taxed again.

Scenario: - July 2021, I contributed $6000 to Roth IRA for myself. - March/April 2022 preparing for tax return for 2021, finding out my total income went over MAGI line - April 18, 2022 I work with Charles Schwab. They removed excess and put back $5740 stocks (some loss from $6000) to my brokerage account. - April 2022, I filed 2021 tax return WITHOUT reporting 2021 ROTH IRA $6000 contribution (in my mind it was removed so no need to report) - Jan 2023, I have 1099-R (2022) now, code PJ in box 7 - Tax software says I need to amend 2021 tax return Question: 1. Do I really need to amend 2021 and report $6000 contribution? If so, I will also add it was removed at loss of $5740? 2. My understanding is that I still need to include 1099R for 202...

The next level of this line of inquiry now presents itself. As I mentioned above, this is my first time selling any substantial shares of anything. I can now see the lots of share displayed at Vanguard. I can see the lots that will be a loss when sold. That amount will be a small portion of what I need to sell. The question, how do I determine what the best lots are to sell assuming the next lots all show a gain. Is it just as simple as selling the lots that show the least % gain? My understanding is that long term capital gain is taxed at a lower rate than short term. 1. Sell everything that has lost value. 2. Do not sell anything you've held for less than a year. 3. Sell shares that you have held at least a year in order from lowest gain...

retiredjg wrote: ↑Tue Mar 28, 2023 10:15 am Looks like it is doing one person's conversion right and one wrong. I can't think of any other reason that only part of the $12k is being shown as taxable. Look again to be sure that each person's 8606 is correct?

But it is a little odd that it is not $6k instead of the odd number.

Ooh, maybe it thinks the entire conversion is for the same person?

retiredjg wrote: ↑Tue Mar 28, 2023 10:15 am Looks like it is doing one person's conversion right and one wrong. I can't think of any other reason that only part of the $12k is being shown as taxable. Look again to be sure that each person's 8606 is correct?

But it is a little odd that it is not $6k instead of the odd number.

Ooh, maybe it thinks the entire conversion is for the same person? That would give him the results he is seeing.

exodusNH wrote: ↑Tue Mar 28, 2023 10:24 am

toddthebod wrote: ↑Tue Mar 28, 2023 10:06 am

exodusNH wrote: ↑Tue Mar 28, 2023 9:52 am They are tracked separately

This is the part where I am confused how OP can't find the $1,400. Can he not see the balances of the two accounts?

With my 401k, the page that shows employer vs employee contributions don't show individual investment balances. If you're not sure what you're looking for, it can be hard to find.

I don't have a breakdown of Fidelity 500: $x.yz employee / $a.bc employer.

But do you have a breakdown of Roth versus pre-tax?

exodusNH wrote: ↑Tue Mar 28, 2023 9:52 am They are tracked separately

This is the part where I am confused how OP can't find the $1,400. Can he not see the balances of the two accounts?

It’s not been mentioned (possibly because I’m wrong) but my biggest frustration with Schwab is the inability to have specific ID and DIY lot selection for mutual fund transactions. At least I have been unable to do this. I believe a call is required. Vanguard makes it super easy. I have no experience with Fidelity in this regard since our only accounts are tax-deferred/free. You can do it by filling out and uploading this form: https://client.schwab.com/secure/file/P-4705302/APP105445-02-01-fill.pdf But a phone call might be faster. The control of the lots to sell at Schwab is 100% immediately and directly available online. When you click on "Sell Lots" you get an option to indicate which lots to sell, with all the options listed...

Hi I am trying to fast track the last of the major 'underwear drawer' work on the house (waterproofing, front porch rebuild, lot leveling, roof) and am considering a HELOC or 2nd mortgage. I have the cash, but it would significantly draw down my 6 month cushion, don't really want to do that. In a rising interest rate environment, which is better, HELOC or 2nd mortgage? I'm assuming the latter, but wanted to confirm. The info: Amount $30k-$50k House value: Approx $400k Equity in House: Approx $150k Current Loan Amount: $1650 per month (excludes tax, insurance) Loan term: 3 or 5 years (want to pay off quickly, likely want the flexibility of 5, but will pay in 3) Third Federal HELOC and Fixed are w/in a half point (6.49/6.99). Their bridge lo...

I don’t know where the cash is in the account, but I was looking through the contributions. On 3/6 and 3/10 of this year their are 2 contributions. The totals are $1480.72 & $1480.71 These 2 together equal $2961.43 which is exactly 4% of my total gross earnings of $74,035.86 Maybe the cash just goes into the Vanguard S&P 500 fund that I have chosen for my investment here. I’m not certain. I don't see how that's possible: Yes, your employer can make matching contributions on your designated Roth contributions. However, your employer can only allocate your designated Roth contributions to your designated Roth account. Your employer must allocate any contributions to match designated Roth contributions into a pre-tax account , just li...

Naris wrote: ↑Mon Mar 27, 2023 8:28 pm
Yes, thanks. I had already tried that and it didn't work. For good measure, I just went back, deleted all the 1099-R forms, and then manually re-entered them without success. It still thinks I owe $5,168 on $12,000 of IRA distributions when I preview the draft 1040 form.

I agree with HomeStretch. The problem is not with your 1099-R. The problem seems to be that you haven't properly told TurboTax that your contributions were non-deductible.

I'm getting questions from the new tax guy we are using about our backdoor conversions. The wife got a new job at the beginning of 2022. A very nice raise came along with it. So nice, that we weren't sure that we would be under the income threshold for Roth contributions. It went down to the wire for us because we were also working quite a few OT hours during the holidays. Turns out we ended up over the income limit. She had a rollover IRA from another previous job. So she had a balance in a traditional IRA on 12/31/2022. She rolled that over to her 401k in early January 2023. The rollover funds settled in the 401k in late January 2023, which resulted in a zero balance in the traditional IRA. She then made a $6,000 contribution to the trad...

Helping my adult daughter on her taxes - she has prepared her own taxes in the past, but is in the first year of a PhD program, so things look different. Her program is fully funded and covers all of the usual tuition, fees, health insurance, etc. Her 1098-T shows an amount in Box 1 (Qualified educational expenses) - $13K, Box 5 (Scholarships and stipends) ~$60K The actual graduate student fees as listed on the Registrars webpage are $18K. The difference ($5K) is the health insurance that is provided by the University. The University requires health insurance, but does not require a student to purchase the insurance through the University. In the event that the student does not purchase insurance through the university, the health care pre...

I cleaned up my original post to clarify that its all for my wife. Apologies for the mix up of i and we. It's all the same in my head, but I recognize the confusion. Cleaned up. As for filing. both 2021 and 2022 have been filed at this point. So per reitredjg, I'll wait for 2022 1040 to be accepted, then we'll file the 8606 for both 2021 and 2022. We have an accountant as we have our own business and it necessitates it. We'll bring this to hit attention. Thanks everyone. You need to file an amended 1040 because you owe 2021 taxes on the pro-rated portion of the pre-tax IRA that was converted. You also owe additional taxes for 2022, so if you don't want to owe penalties and interest, you should figure out what you owe and pay it, even if yo...

3rdcoaster wrote: ↑Mon Mar 27, 2023 6:03 pm A simpler example, homeowners contract to build a new garage/studio/workshop for $25k cash. Their CB goes up $25K. If they pay $10K cash and finance 15K with HELOC, what is the CB increase?

$25k.

My employer is supposed to do a 4% match @ 100% in the 401k. For the whole year I contributed $16,390.97. Gross earnings are $74,035.86. The company contributed $1445.19 How did they come up with the $1445? I thought they would put in 4% of my annual income? I am paid a combination of hourly, commission, and tips (If that matters) Hourly = 15,075.18 Overtime = 651.40 Commission = 27,568.52 Tips = 28,602.47 PTO = 213.84 Where are you seeing the $1,445.67 figure? Do you have multiple 401(k) accounts when you look at the website? Does your plan have different matching rates for pre-tax and Roth deferrals? Pretax and Roth both get the same 4% @100%. I can see what was put into the 401k. They only do it once a year and it goes in as company sto...

passive101 wrote: ↑Sun Mar 26, 2023 12:09 am My employer is supposed to do a 4% match @ 100% in the 401k. For the whole year I contributed $16,390.97. Gross earnings are $74,035.86. The company contributed $1445.19

How did they come up with the $1445? I thought they would put in 4% of my annual income?



I am paid a combination of hourly, commission, and tips (If that matters)

Hourly = 15,075.18
Overtime = 651.40
Commission = 27,568.52
Tips = 28,602.47
PTO = 213.84

Where are you seeing the $1,445.67 figure? Do you have multiple 401(k) accounts when you look at the website? Does your plan have different matching rates for pre-tax and Roth deferrals?

Basel Hodge wrote: ↑Mon Mar 27, 2023 1:26 pm The more I did into this the more questions arise.
1. Once I select a cost basis on a specific account do I need to sell future funds in that account with that same cost basis?

In reality there's only two choices that matter: average cost or specific lots. All the others (e.g. FIFO) are just specific lots where they pick which lots to sell for you. You can switch between all the different forms except for average cost at will. You can also switch back to average cost in the future. However, once you sell something using average cost, all existing lots of that stock or fund in that account are locked into average cost. Any future lots you purchase can still be switched back to specific lots.

My mother (widowed for 30 Years) lives in her home for the last 60 years Home bought in early 1960's for ~$15,000. Today's value is about ~$450,000 Improvements (addition to house) were done in the 80's. Probably no receipts from this exist. Just doing some math...If your mother was widowed 30 years ago and lived in/owned the house with your father, then her basis was probably at least half stepped-up when your father died (100% step up in a community property state). So the capital gains would be $450,000 minus the stepped up basis...and a lot less than everyone's thinking. You'll also be able to subtract any expenses of the sale itself from the capital gains. Thanks for all of you responses. I suppose, as mentioned, a real estate agent m...

My mother (widowed for 30 Years) lives in her home for the last 60 years Home bought in early 1960's for ~$15,000. Today's value is about ~$450,000 Improvements (addition to house) were done in the 80's. Probably no receipts from this exist. Just doing some math...If your mother was widowed 30 years ago and lived in/owned the house with your father, then her basis was probably at least half stepped-up when your father died (100% step up in a community property state). So the capital gains would be $450,000 minus the stepped up basis...and a lot less than everyone's thinking. You'll also be able to subtract any expenses of the sale itself from the capital gains. Thanks for all of you responses. I suppose, as mentioned, a real estate agent m...

HerkyJerky69 wrote: ↑Mon Mar 27, 2023 10:44 am Into their new IRA products. April 18 is the deadline. They have conflicting information as to whether this is by when you need to initiate or by when the rollover must be completed.

If I'm late 40s, what is my downside? There's a five year lockup effectively, but who cares at my age? I can buy VTI there just as well as my current shop.

This is $1,000 per $100k rolled. It's not unreasonable for folks to be in line for a five-figure bonus. That has to be a record, right?

Do you have a link to the rollover match? I could only find a contribution match, which is worth all of $65 this year.
https://robinhood.com/us/en/support/art ... match-faq/

Hi Sir/Madam, I have an llc taxed as an SCORP. I want to elect for PTE tax payment of 9.3% . After I add the election in my Californnia 100S, Can you please tell me how to make federal 1040 adjustment decrease . Where on 1040, can you ennter the PTE tax paymennt and get deduction. Do you also have to add in California Personal .. Could you please give me the linne items where I can enter in 1040 Federal and Personal California tax return.. Or can I adjust federal deduction in the 1120s itself, if so which line item on 1120s, can I deduct the PTE Tax Thank you so much for the all the help .. The credit should be included first on your Schedule K-1, line 15. Federally it gets reported on form 3800. From there it flows to Schedule 3, and from...

Basel Hodge wrote: ↑Mon Mar 27, 2023 9:24 am First thank you all for your thoughts and guidance.

Is my understanding correct that funds held in tIRA or Roth IRA is not subject to the same sets of cost basis choice upon selling as those held outside tax advantaged accounts? (I guess I should stipulate the question assumes the tIRA has only had 'deductible' contributions.)

There are never capital gains taxes on funds held in those accounts, so there's no basis. It doesn't matter if the contributions are non-deductible either. Whenever the IRS cares about gains and losses in a traditional IRA with basis, the calculations are based on changes in the value of the entire account, not any specific investment.

I am buying a second home and need to sell some stock to cover payment. I've been a good saver over the years but have seldom sold any stocks or mutual funds. I'm looking for suggestions on any tax related issues I should consider such as cost basis. The account I'll be selling from is a non taxed advantaged brokerage account at Vanguard and has about 87% VTSAX, and 13% VTIAX. I have little in the way of choice regarding what to sell. I guess I will just keep the same ratio of each fund. Candidly, the information I'm about to share, I do not fully understand. Looking at Accounts/Cost basis/ Unrealized gains or losses I note cost basis listed as "Average Cost" for both funds. I also note under details that both funds are "cov...

financeperchance wrote: ↑Sat Mar 25, 2023 9:23 pm

LadyGeek wrote: ↑Sat Mar 25, 2023 8:58 pm Was this written by Chat GPT? Please state your source for the tax rate.

Seeing a comment like this is not good for my stress levels on a Saturday night when I can't call the IRS until Monday morning. So, the 940 form itself is here: https://www.irs.gov/pub/irs-pdf/f940.pdf When you have just one employee (i.e., myself), what goes in line 7 is $7,000.

In line 8 it says to do 7,000 x .006, which equals $42.

What did you put on lines 9-11?

Also, did you pay your state unemployment tax by January 31st?

muel87 wrote: ↑Sun Mar 26, 2023 7:09 am There are a lot of tax calculators out there. Does anyone have an excel formula I could use for federal income tax, given total tax? Dont need all the additional taxes (capital gains, net investment, medicare, etc).

Thank you!

I don't understand what you are asking for. Can you give an example of what the inputs and outputs would be?

Also would withdrawing excess make sense or better to be double taxed? My new employer has one of the best 401k matching programs (they match 50% up to the IRS limit) and so I don't want to lose out on that match money. From what I understand, I can also do nothing? But will be double taxed (not sure why I would be double taxed if you don't pay taxes on 401k until you take out the money). Or do you get taxed on the excess and does turbo tax automatically handle excess 401k for you? You have to pay taxes on that $2,000 this year (2022 tax return). Then if you do not get the money returned by April 15th, it becomes a regular part of your 401(k) subject to the same distribution and taxation rules as the rest of the money in that account. No n...

I think you would have to set up a 501(c)3 for this to work as you wish. Something like a Friends of the Hospital organization. That would make this even worse. "If you donate to the hospital, I'll let you park here for free" might be defensible as a deductible contribution (but very questionable). "If you donate to me, I'll let you park here" would never pass muster. No , the 501(c)3 runs the RV lot as a fundraiser. The renters make a donation to the 501(c)3, which turns the money over to the hospital. The renters can only deduct any amount paid in excess of the value of the parking spot, but since their intent is only to gain a parking spot, not a charitable deduction, they shouldn’t care. The 501(c)3 passes the money...

littlebird wrote: ↑Sat Mar 25, 2023 7:21 pm I think you would have to set up a 501(c)3 for this to work as you wish. Something like a Friends of the Hospital organization.

That would make this even worse. "If you donate to the hospital, I'll let you park here for free" might be defensible as a deductible contribution (but very questionable). "If you donate to me, I'll let you park here" would never pass muster.

Yes, you're understanding it correctly! If your daycare costs are $8,400 per year and you use the full $5,000 available in your Dependent Care FSA, you can claim the remaining $3,400 as eligible expenses for the Child and Dependent Care Tax Credit. However, the maximum expenses that can be considered for the tax credit are $3,000 for one child (or $6,000 for two or more children). Since your eligible expenses are $3,400, you can only claim the tax credit based on the $3,000 limit. If you qualify for the 20% credit rate based on your income, then you would receive a $600 tax credit (20% of $3,000). So, your understanding is accurate! I’ve worked at lot with OpenAI’s conversation bot and this totally sounds like it was written by ChatGPT, an...

I would report the income on Schedule E and make the charitable deduction myself after subtracting our whatever additional insurance you need to get to protect yourself in case someone damages one of the RVs or someone gets hurt on your property.in conjunction with this plan.

The RV owners would not be able to deduct the income as they received something for the money.

Also would withdrawing excess make sense or better to be double taxed? My new employer has one of the best 401k matching programs (they match 50% up to the IRS limit) and so I don't want to lose out on that match money. From what I understand, I can also do nothing? But will be double taxed (not sure why I would be double taxed if you don't pay taxes on 401k until you take out the money). Or do you get taxed on the excess and does turbo tax automatically handle excess 401k for you? You have to pay taxes on that $2,000 this year (2022 tax return). Then if you do not get the money returned by April 15th, it becomes a regular part of your 401(k) subject to the same distribution and taxation rules as the rest of the money in that account. No n...

blaire951 wrote: ↑Sat Mar 25, 2023 6:12 am Also would withdrawing excess make sense or better to be double taxed? My new employer has one of the best 401k matching programs (they match 50% up to the IRS limit) and so I don't want to lose out on that match money.

From what I understand, I can also do nothing? But will be double taxed (not sure why I would be double taxed if you don't pay taxes on 401k until you take out the money). Or do you get taxed on the excess and does turbo tax automatically handle excess 401k for you?

You have to pay taxes on that $2,000 this year (2022 tax return). Then if you do not get the money returned by April 15th, it becomes a regular part of your 401(k) subject to the same distribution and taxation rules as the rest of the money in that account.

sam_urai wrote: ↑Fri Mar 24, 2023 10:17 pm thanks and how would I figure out the CA tax? is that based on my CA tax I pay when I do my taxes each year?

You will include the non-qualified distributions on Schedule CA, line 8z, column C. This will flow through to line 16 on your form 540. You will also file form 3805p (part 2) to figure the additional 2.5% tax.

https://www.ftb.ca.gov/forms/2022/2022-3805p.pdf

What is your health insurance coverage between now and Medicare?

If you are married you can easily get $1 million at a single bank, no?

About the only thing I know for certain is that capital gains are taxed at a lower rate than income ( as in bond interest payments ). ... Bracket 24% In the 24% Federal marginal income tax bracket, your capital gains could be taxed at 23.8% if Net Investment Income Tax is included. If you were in the 10% or 12% income tax bracket, your capital gains could be taxed at 0%, 15%, 20%, or even 23.8% if the Net Investment Income Tax is included. But in general, ETFs are more tax efficient than Mutual Funds, and passive index funds are more tax efficient than active mutual funds. Your capital gains tax rate can never be higher than your ordinary income rate. The last line of the qualified dividends and capital gains worksheet has you check what y...

About the only thing I know for certain is that capital gains are taxed at a lower rate than income ( as in bond interest payments ). ... Bracket 24% In the 24% Federal marginal income tax bracket, your capital gains could be taxed at 23.8% if Net Investment Income Tax is included. If you were in the 10% or 12% income tax bracket, your capital gains could be taxed at 0%, 15%, 20%, or even 23.8% if the Net Investment Income Tax is included. But in general, ETFs are more tax efficient than Mutual Funds, and passive index funds are more tax efficient than active mutual funds. Your capital gains tax rate can never be higher than your ordinary income rate. The last line of the qualified dividends and capital gains worksheet has you check what y...

“Buy when others are fearful”. Does it make sense to back up the truck to sector funds such as financials? Seems like a good time to get a huge discount. You might have to sit on it until it rebounds but you would do that with any holding. What would having 10-15% of portfolio in this matter as far as the downside. Could go down more. If it does just DCA into it. Is this any worse or riskier than holding something such as a REIT fund at these percentages? Imagine, it's March of 2000. You have all your equities in VTSMX, Vanguard's Total Market index fund. The NASDAQ peaks at just a hair over 5,000, then *pop*, tech stocks start to crater. Being the exceptional market timer, you wait until May 24, 2000, when the NASDAQ falls to 3,100 (down ...

retiredjg wrote: ↑Fri Mar 26, 2021 4:37 pm Seems to me if the $1k in growth is not taxed, it does not matter where the growth happened. Maybe I'm missing something.

There's no reason to let it grow in the Traditional IRA before converting. You're just throwing away the basis.

Scenario 1: deposit $6,000 in traditional IRA. Wait until it's worth $7,000, the convert. You have $7,000 in your Roth, no taxes owed, and no basis in your traditional.

Scenario 2: deposit $6,000 in traditional IRA. Convert immediately. Wait until it's worth $7,000. You have $7,000 in your Roth, no taxes owed, and $1,000 basis in your traditional.

Why would you ever choose 1 over 2?

There's a theory that everyone gets denied the first time. If you Google that, you'll see a bunch of sites that claim that's a myth, but guess who publishes those sites? Disability lawyers looking for clients. So it's up to you obviously if you want to appeal first without hiring a lawyer. Something to consider.

I would also make sure your documentation meets the very specific requirements outlined here: https://www.ssa.gov/OP_Home/rulings/di/ ... di-01.html

“Buy when others are fearful”. Does it make sense to back up the truck to sector funds such as financials? Seems like a good time to get a huge discount. You might have to sit on it until it rebounds but you would do that with any holding. What would having 10-15% of portfolio in this matter as far as the downside. Could go down more. If it does just DCA into it. Is this any worse or riskier than holding something such as a REIT fund at these percentages? Imagine, it's March of 2000. You have all your equities in VTSMX, Vanguard's Total Market index fund. The NASDAQ peaks at just a hair over 5,000, then *pop*, tech stocks start to crater. Being the exceptional market timer, you wait until May 24, 2000, when the NASDAQ falls to 3,100 (down ...