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Thank you!

1) Yes it is a joint revocable living trust. It doesn't explicitly say the word "living" in the trust documentation.
2) No, it is not a community property state.

Thank you all for the responses!

What about mutual fund and stock positions that are currently at a LOSS? Since this is a revocable trust, would it make sense for me to harvest those losses to offset my parents' income stream (SS, RMDs from their IRAs, etc.)? I'm also assuming since it's a revocable trust any losses that exist upon their death would persist with the trust, and the trust would establish its own tax ID.

My parents have a revocable trust setup decades ago to protect some assets and use them in retirement. It’s now looking like those assets will not be touched at all, as my parents have plenty of savings from other sources. So now I am tasked with optimizing the portfolio in preparation that it gets inherited by myself and my siblings (outlined by the trust already). Since the trust is revocable, the taxes would flow through to my parents who have very little income, so it seems beneficial to skew the portfolio to bond funds with a bit of equity, and to keep the assets in my parents name to take advantage of their low tax rate. Am I missing anything? I know I’m not providing hard numbers here but generally speaking knowing that a) this revoc...

Am opening an irrevocable trust account and am considering different custodians. Curious what folks' experiences are with their trust account? The needs are different than traditional brokerage in that I need to pay bills/etc directly from the trust, so ideally I could have access to an account number / routing number, checkwriting, etc.

Thanks!

Does anyone have a spreadsheet/breakdown that clearly illustrates the point about a rolling ladder being a labor-intensive fund?

I understand it in principle, but would love to see the numbers comparing holding a ladder of short-term treasuries to maturity vs. VGSH .

In specific, I'd like to understand why, in an increasing interest rate environment, you'd end up even in the long term by keeping funds in VGSH vs. holding those individual treasuries. It's been explained to me but I feel like I need to see the numbers to fully understand.

Has anyone figured out how to get notifications when treasuries mature on Vanguard? Frustrating to manually keep track of all maturity dates in my own calendar.

I suppose the answer could be to buy a fund instead, but I’d like to just know when money is heading for the settlement fund regardless!

No, not really. With new money you could buy individual treasuries now or buy shares of a bond fund now while they're selling at a discount. The price discount makes up for the lower yield so you'll come out the same either way. Or you could sell shares of a bond fund and put the money into higher yielding treasuries, but the price of those shares is low right now. So you could buy individual treasuries now, but you'll pay par value for them. There is no advantage in trying to time or out maneuver the bond market in the way I think you're asking about. The bold part is where I'm trying to understand - how does that price difference reconcile to make up for that 2% difference? As new bonds are added to the fund portfolio, would that price e...

I'm having a mental block understanding the bond fund vs. individual bonds debate. I understand conceptually that a bond fund is generally the same as a self-managed rolling bond ladder. The part that's tripping me up is reconciling the difference in distribution yield vs. the individual bond yield. As an example, a 1 yr treasury right now is offering roughly 4.6% yield. By comparison, VGSH's latest distribution is $0.124700 per share, which *12 works out to roughly 2.6%. I understand that over time you'd expect the VGSH yield to "catch up", but in the meantime why wouldn't I buy individual treasuries since their yield is higher? Is the answer that we'd expect VGSH's existing bonds to steadily increase their value as we get closer...

Looking forward to 2023, I'm trying to find a way to project expected ordinary income / non-qualified dividends stemming from my Vanguard taxable account, for the purposes of calculating estimated taxes.

Looking at bond cash-flows doesn't seem to cut it, as Vanguard doesn't split out the expected income for zero-coupon treasuries (as far as I can tell).

Has anyone found a good solution for this?

Currently approaching 40 and FIRE - living off of taxable portfolio income for the most part.

Although I'm "retired" I'm curious, given the length of my investment horizon (40+ years) whether TIPS would make sense? I don't want to take undue risk by putting a higher allocation into stocks than necessary, but given my horizon should I just stick to stocks to beat inflation as opposed to long term TIPS? Especially since this is in a taxable account, it seems stocks would make more sense.

I'm in a bit of an "in-between state" as it relates to portfolio construction. Curious what folks think.

Thanks. My thinking around buying individual treasuries at the time was when comparing to distributions on bond funds, given that the notes/bills had a higher rate than what the funds were distributing at that time (for equal durations). My thinking is that while the distributions "catch up" I could purchase individual treasuries and avoid principal loss. But, this may also be unfounded. Curious to hear your thoughts. Distributions (on either individual bonds or bond funds) do not correspond to returns. Most bond funds are currently distributing less than their SEC yield, because they hold bonds at a discount. If a fund bought a bond for $1000 with a $20 annual coupon, and the bond is now worth $900 because of rising interest rat...

Thanks.

My thinking around buying individual treasuries at the time was when comparing to distributions on bond funds, given that the notes/bills had a higher rate than what the funds were distributing at that time (for equal durations). My thinking is that while the distributions "catch up" I could purchase individual treasuries and avoid principal loss.

But, this may also be unfounded. Curious to hear your thoughts.

I bought a handful of treasuries back in July/August, roughly 9mo-1yr duration. Since then, rates have gone up a bit.

Does it make sense for me to sell those older treasuries and buy new ones? Obviously the cost of the bond has gone down as rates have gone up, but there is also a gain from holding it as we get closer to maturity.

How do I do the math to figure that out? Or is it senseless and should I just let them mature and figure it out then?

Hi there, looking for a CPA that is well-versed in QSBS, and as a bonus is located in NY and/or has good experience with investment management from a tax perpective.

All recommendations welcome - thank you!

I am in a similar boat, but am turned off by the fact that distribution yields on these muni MM funds are still not near the SEC yield.

I'm watching VYFXX until the distribution yield is squarely above 3% for it to be worthwhile. Per the last month's distribution it's just under 3%.

Or am I thinking about this wrong?

I've held DGEIX in my taxable account for a decade now, and have noticed that it has been outputting a long term capital gain each year. When compared to other ETFs I own (namely the VTI/VXUS combo) I don't see that same LTCG.

This seems like it will be a long term tax drag if I hold it in my taxable account?

alex_686 wrote: ↑Thu Dec 15, 2022 8:01 pm Former fund accountant here who did taxes.

In theory the tax rates should be identical. There are some edge cases where the individual will come out ahead. Considering how much more efficient a fund is I can safely recommend the fund over individual holdings unless we are talking about a really big bond portfolio.

But, then what's the purpose of the LTCG moniker in the list of distributions? Isn't that distribution taxed at more favorable rates when compared to regular income, thus reducing overall taxable rate of all dividends (versus the individual bond example)?

Said differently, how can they be identical if the distributions are characterized as anything other than 100% ordinary income?

Hi! I'm getting caught up evaluating individual treasury bonds vs. just dumping money into treasury bond funds, and the part that's tripping me up is that the SEC yield and individual bond yield are pretty close, but the distribution yield on the fund is much lower. That got me trying to understand more deeply the tax implications of bond funds vs. individual bonds. Let's say you have two options: A 1 year, zero-coupon treasury bond yielding 4% at maturity, or a fund with an SEC yield of 4% and duration of 1 year but recent distributions of 2% annualized. Is it safe to say the latter is a better choice because of the possibility if realizing that full 4%% SEC yield by ways of LTCG (partly), thereby reducing your total tax burden? Meanwhile ...

Hi there! Is there software out there (or a Google Spreadsheet) that folks use to calculate the potential tax burden of their investments? Obviously hard to take into account your entire tax situation, but understanding things like:

* Total anticipated income (broken down by qualified/unqualified/etc, dividends, etc. - anything that factors into MAGI)
* Total cap gains for the year
* Bonus: something that can help you optimize how much to cap gain harvest/cap loss harvest to minimize burden.

Right now 100% of my investments (minus a small 401k) are in Vanguard, but their internal tooling doens't seem to offer this?

Thanks all!

I understand logically the difference between treasuries and TIPS. However, I'm not so clear on a TIPS' place in a portfolio. I've read the wiki page on Bogleheads and it's still not clear. I'm currently investing in treasuries as they offer a nice yield at very low risk. My understanding of TIPS is that they perform well in a situation where inflation is rising or unexpected. Now that inflation is as high as it is, and the Fed has a mandate to reduce it, couldn't the argument be made that this is a poor time to invest in TIPS in the way it would have been a poor time to invest in regular bonds at the end of 2021? Obviously this is with perfect hindsight, and this is a pure theoretical question vs. actual market timing. I'm really confused ...

Of course there is the relationship of yield and bond price being inversely related, but would demand for bonds themselves cause prices to increase too, without dropping yields?

The Fed has claimed that they will raise rates and keep them there for some time. Once we have hit the point at which they keep rates as is for a while, hypothetically, would it be safe to say bond prices and bond fund NAVs would increase on their own without yields going down?

I'm curious at a high level how demand could affect the actual pricing of bond funds.

I have my short term cash (not emergency) in VUSB. The fund has taken a small dive given interest rate increases. I have about a 3-4 year investment horizon with these assets.

Right now the 30 day yield is similar to what I would get from treasuries. But, I noticed that the actual distributions im getting are not quite at the SEC yield rate.

So I’m wondering if it makes sense to take my loss (1%) and put the money into a 1 year treasury, which would give me the higher yield immediately which would hopefully make up for my loss?

What would BH folks advise?

Thanks for the reply.

I guess my question is more theoretical, then - wouldn't corporates be highly succeptable to recession risks and defaults, whereas treasuries are basically immune? One would think that would create an interest rate premium for the corporates?

I'm currently holding a large chunk of VUSB, but given the lack of spread I am thinking of liquidating in favor of treasuries.

If I look at VUSB, which has roughly 1 year duration, it's yielding 3.2%. A 1 year treasury has a yield that is very close, with significantly higher credit quality.

Why is that? Wouldn't you expect a fund like VUSB to have higher yields?

Let's say I'm building a non-rolling ladder, or a ladder that has a fixed timeline.

In that case, in a world of rising interest rates, is it safe to say that the advantage of getting the full principal back outweighs any immediate higher interest rate I'd get with an ETF option?

Thanks for the response. The part I’m having a hard time understanding is why I would forego the ability to collect full principal by buying the ETF? You're not forgoing that, which is the point. The DIY rolling ladder and the mutual fund own (approximately) the same portfolio of bonds. There is no difference in your "ability to collect full principal" between the two, since the economic exposure is exactly the same. I understand the exposure is the same, but hypothetically if rates go up, one method allows me to collect the principal in full at maturity and the other forces me to work with the lower share price immediately (and a lower position overall). So I guess I’m not seeing how the ETF/fund approach would be better, except...

vineviz wrote: ↑Sat Aug 20, 2022 8:43 pm

ruud wrote: ↑Sat Aug 20, 2022 8:23 pm The ETF is no different than a rolling treasury ladder that maintains its duration, whereas bonds held to maturity are non-rolling so their duration will gradually shorten over time.

That's not strictly true.

The DIY ladder is only non-rolling IF the investor expects to spend the principal when the bond matures.

Perhaps the OP can clarify whether they intend their DIY ladder to rolling or non-rolling. I got the impression that they were intending to build a rolling ladder.

Thanks for the reply! Confirming I’m interested in a rolling ladder. Will update the original post.

Thanks for the response. The part I’m having a hard time understanding is why I would forego the ability to collect full principal by buying the ETF? Even if interest rates go up, and the market value of the individual bonds go down, wouldn’t I be coming out ahead by recollecting principal and reinvesting?

I understand the ETF would allow me to take advantage of the new higher interest rates immediately, but even with that wouldn’t I still come out ahead with individual treasuries?

Hey all, have tried to cruise multiple threads on this topic and still don’t fully understand the answer.

I’m trying to decide between investing a large sum in VGSH or just buying a handful of short term treasuries in Vanguard myself. Since I’m happy to hold to maturity, and since this is solely short term investments (1-3 year treasuries), wouldn’t I be better off just using a treasury rolling ladder so that I don’t have any principal risk?

Can you help me understand in what cases VGSH would perform better than individual treasuries? I’m not so concerned about maintenance, just want to optimize total return.

Thanks all - I updated the question, but posting here as well to clarify my question bit:

Here is a hypothetical scenario:

Brokerage Balance: $5mm
Trad IRA Balance: $500k
Roth IRA Balance: $500k
Non-investment Income: $0
Age: 30

In this case, would it make sense to have the IRAs be as aggressive as possible, thinking that you'd be withdrawing from the brokerage account for the first 30-40 years before tapping into the IRAs?

I know the thinking of keeping high-income assets like bonds in tax-advantaged accounts as much as possible. But, in a situation where your taxable account is very large and you're planning on retiring off of the assets solely in taxable accounts, wouldn't it make sense to make all IRAs/Roths as aggressive as possible since you would be touching those assets LAST (or perhaps not at all and gifting them to your estate/heirs)? EDIT: Here is a hypothetical scenario: Brokerage Balance: $5mm Trad IRA Balance: $500k Roth IRA Balance: $500k Non-investment Income: $0 Age: 30 In this case, would it make sense to have the IRAs be as aggressive as possible, thinking that you'd be withdrawing from the brokerage account for the first 30-40 years before ...

Is there software out there that can import my Vanguard positions and, using dividend yields and distributions, calculate what sort of annual income my investments would generate?

I’m moving into retirement and want to get ahead of capital gains planning, to minimize my tax burden. Thanks!

Think I found my answer here for anyone else looking:

viewtopic.php?p=6746815

Hi, I'm interested in purchasing some treasury notes for liability matching.

In Vanguard's interface I get the option of either buying a note at a discount from $100, OR closer to $100 but with a higher coupon rate.

Can anyone tell me what the pros/cons of each option would be? I'm in a high tax bracket and a high tax state, but anticipate my bracket to be lower in 1-2 years (looking at 2YR treasuries).

Thanks!

Thanks - this is definitely a "fuzzy need" without a specific goal in mind. I'd like to deploy this capital in a conservative way, since I have enough equity exposure.

Thanks for the reply. If I had to choose, I would say protecting principal for now.

I'l update the original post as well.

Hey all,

I'm a bit confused as to how to deploy a fairly large sum of money market capital I have in a taxable account.

I'm curious how I should compare/contrast the following options for assets I'd like to have available in the next 2-3 years:

* CDs
* Individual treasury bills, notes, and bonds
* Treasury bonds
* Ultra short term bond funds
* Individual bonds

I'm guessing the buying/selling of individual bonds/bills/etc is fairly onerous so I'd be better off just using bond ETFs? But even amongst those, how do I compare? Thanks!

I recently did the mutual fund to ETF conversion on all my accounts, and noticed my total bond fund holding wasn’t touched.

Is it worth manually making this conversion, or better to leave it be? I’m asking because since the conversion wasn’t automatic I’m guessing there are more considerations here.

Thanks!

I actually just did this with Google Sheets - if you go into the Transaction History page, make sure to copy starting with the header row (Settlement Date, etc.) all the way down to the bottom right of the last column of the last row.

Then simply paste into Google Sheets, and it will interpret the rows/columns properly giving you a fully formatted and easy to use data export. Just do this for all the pages. I did this for my entire history going back 15 years and it took maybe 10 minutes.

Hey all, considering a transfer of some positions from Vanguard to WellsTrade. Have gone through the forums to see mixed reviews on the transfer process, but some of those reviews are many years old.

I'm curious if anyone has recent experience doing an in-kind transfer from VG to WellsTrade, and if your cost-basis made its way correctly? I'm a little nervous since the holdings I'm thinking of transferring have both covered and non-covered shares, and span 10+ years of history (all at VG).

Oops! Typo. 250,000 a year! I’ll edit.

I'm confused at how high net worth people live off of their assets, especially once they hit levels beyond the exemptions. Say your yearly expenses are $250,000. If you were withdrawing at a rate of 2%/yr, that would be $12,500,000 required in total net worth. Let's say you also live in NY, where the exemption is $5,930,000. So, you might move the money beyond that amount to an irrevocable trust to take it out of your estate. But, 2% of that amount is only $118,600. So how would you be able to take advantage and live off of your total net worth that is beyond that $5.9mm amount? Do you just risk estate tax exposure to be able to use that money? Or is there something you can do with the irrevocable trust to be able to use it? There must be s...

Thanks all for the info!

Same question applies to VMFXX vs. VYFXX (NY muni money market). The latter has a 0.6% yield (tax-free) vs. 0.55% yield (taxable) which is perplexing. Since it's been 7 days I would think all the temporary stimulus is baked in now and the yields have adjusted.

Would we expect yields to stay like this (in which case I would move all my MM to the NY fund), or would the NY fund be expected to drop as well?

Curious why there would be such a big difference in yield between these two money market funds?

VMFXX showing at 0.62% 7 day yield
VMMXX: 0.97%

Sorry for the confusion - my question was that if by not reporting that taxes were paid in 2010 am I missing out on declaring a larger loss this year / reducing my tax burden, but it sounds like the answer is no? Basically that I should ignore the taxes paid in 2010?

Thank you!

Hi all, I was part of a startup back in 2010 and when leaving the company I exercised my options. There was a significant increase in the fair market value when I left the company, which forced me to pay (income?) taxes on the sale (the company was private). So, of the $10k total cost, roughly $8k was taxes and $2k was the cost to actually exercise the options. The company did not do well and a sale occurred this year (2016), which resulted in a minimal payout to shareholders. I received roughly $1500 back. I'm curious how I should be handling this: 1) Was I supposed to report those taxes in 2010? If I didn't, am I screwed out of not claiming those taxes paid? 2) Is this just recorded as a regular sale of stock in my tax return this year? I...

I have two CA tax-free muni funds, with the following gains. I'm moving in a month and I'm curious if it makes sense to switch these to general tax-free muni bond funds (intermediate/high yield). I'm in the 28% federal tax bracket. Not sure if the tax I'd have to pay would outweigh any savings going forward. Thanks!

VCAIX: Vanguard California Intermediate-Term Tax-Exempt Fund Investor Shares
$25,413
Short terM: $31.67
Long Term: $631.38
Total gains: $663.05

VCITX: Vanguard California Long-Term Tax-Exempt Fund Investor Shares
$7,916.66
Short term: $32.95
Long terM: $84.55
Total gains: $117.50

Hi all,

First of all thanks to all the awesome contributors to this forum! I'm very thankful for all the unbiased advice found here

I'm curious as to whether tax-managed funds have a place in my portfolio. I'm in the 25% tax bracket in CA. Currently my taxable account is as follows:

VTSMX 63%
VTIAX 18%
VSMAX 9%

I have pretty large gains in VTSMX and VSMAX (so the taxes due would be pretty large). However, I have a $2k tax loss in VTIAX, so I'm wondering if it's a good opportunity to invest in Tax-Advantaged Intl and add in Emerging Markets. I'm also going to be increasing my general allocation to international.

How do I properly research this and come to a decision?

Thanks all

I'd like to break out of my target retirement funds and manage a small portfolio of my own. Ideally I would replicate the entire portfolio across my SEP/Roth/Taxable, but I'll have to use Investor shares instead of Admiral in the Roth. My main questions are: - Vanguard Total Intl Stock vs. Vanguard FTSE ex-US vs. Vanguard Pac + Vanguard Euro? - Vanguard Total Stock vs. a mix of Large Cap/Small cap index funds? Age: Early 20s Emergency Funds: 20k Debt: 0 I'm going for something a bit more aggressive than the Total indexes. Here i what I am thinking so far: 55% Vanguard Total Stock Mkt Index 20% Vanguard Total Intl Stock 15% Vanguard Extended Markets 10% Vanguard Emerging Mkts Does this allocation make sense? Should I be looking at other fund...

First of all I love this site and I think the users are really knowledgable people. The advice given is very practical and it's great to keep up with the discussions. I'm in my early 20s and have roughly $220k invested, mostly split between DGEIX (DFA's World Stock fund) and VFIFX. I've maxed out most of my accounts (SEP, Roth, etc.), and for cash on hand I went with some of Vanguard's tax-free offerings in my Taxable account: Vanguard Limited-Term Tax-Exempt Fund: $15k Vanguard Intermediate-Term Tax-Exempt Fund: $13k Vanguard High-Yield Tax-Exempt Fund: $6k Vanguard New York Long-Term Tax-Exempt Fund: $9k I've been reading about significant risk in the future of muni funds over the next few years (but that data's factored into the price by...