Search found 537 matches

by FactualFran
Thu Feb 22, 2018 3:27 pm
Forum: Investing - Help with Personal Investments
Topic: Understanding TIPS
Replies: 7
Views: 468

Re: Understanding TIPS

A simple outline in the Treasury Inflation-Protected Securities (TIPS) Treasury web page is Treasury Inflation-Protected Securities, or TIPS, provide protection against inflation. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index. ...
by FactualFran
Wed Feb 21, 2018 6:15 pm
Forum: Personal Finance (Not Investing)
Topic: Investopedia: Seniors Get a New Simplified Tax Form for 2019
Replies: 16
Views: 1283

Re: Investopedia: Seniors Get a New Simplified Tax Form for 2019

That said, the indication that it will handle Cap gains probably means cap gain distributions only, not Form 8949/Sch D. That means one sale and no SR. It should not be too much of a stretch for the IRS to allow 1040-SR to be used under the circumstances under which lines 1a and 8a of Schedule D ma...
by FactualFran
Wed Feb 21, 2018 4:38 pm
Forum: Personal Finance (Not Investing)
Topic: Need Help Understanding 2017 ACA Insurance Bill for $28,690 and tax liabilities? Confused? ** How to deduct in 2018??
Replies: 88
Views: 4378

Re: Need Help Understanding 2017 ACA Insurance Bill for $28,690 and tax liabilities? Confused? Help?

2. There is a huge difference between the monthly premium "subsidized" and "non" at that $60,000 break point. Please explain. Those with income between 300% and 400% of the Federal Poverty Level qualify for a premium subsidize that makes their premium payment, for the second highest premium Silver ...
by FactualFran
Thu Feb 15, 2018 3:10 pm
Forum: Personal Finance (Not Investing)
Topic: Nondividend distribution, cost basis and taxes
Replies: 3
Views: 301

Re: Nondividend distribution, cost basis and taxes

With covered shares, the broker is responsible for keeping track of the adjusted basis and reporting to the IRS the basis when a sale is made. With non-covered shares, you are responsible for keeping track of the adjusted basis and reporting the basis on your income tax return for the year when sale...
by FactualFran
Thu Feb 15, 2018 2:58 pm
Forum: Personal Finance (Not Investing)
Topic: Need help with Schedule D
Replies: 14
Views: 701

Re: Need help with Schedule D

Specifically, he sold 2 stocks in 2017, and it says to report some stuff on Form 8949 Part I box A, and some on Part II box D, and a tiny amount on Part II box E. My question is; do I put anything on Schedule D line 1a / 8a, or does it all go in the respective sections just below 1a and 8a (and the...
by FactualFran
Tue Feb 13, 2018 5:45 pm
Forum: Investing - Help with Personal Investments
Topic: Transfer in-kind between Roth Accounts @ vanguard?
Replies: 6
Views: 322

Re: Transfer in-kind between Roth Accounts @ vanguard?

Both accounts at Vanguard are the newer brokerage accounts. All the funds are Vanguard funds. (I find it hard to believe as well, which is why I asked ) I find it hard to believe, too. A few months ago, through the Vanguard web site, I did an in-kind transfer of investments from a Vanguard Brokerag...
by FactualFran
Tue Feb 13, 2018 3:38 pm
Forum: Personal Finance (Not Investing)
Topic: Schedule B Interest Question
Replies: 14
Views: 1041

Re: Schedule B Interest Question

According to the instructions for Schedule B: You can list more than one payer on each entry space for lines 1 and 5, but be sure to clearly show the amount paid next to each payer's name. Add the separate amounts paid by the payers listed on an entry space and enter the total in the “Amount” column...
by FactualFran
Mon Feb 12, 2018 6:43 pm
Forum: Investing - Help with Personal Investments
Topic: Average Cost to SpecID questions: Did Vanguard do this correctly?
Replies: 51
Views: 1657

Re: Average Cost to SpecID questions: Did Vanguard do this correctly?

Do I understand this correctly? At Vanguard you have to specify SpecID when you BUY the shares even though the method is irrelevant until you make the first sale? That simply makes no sense and is really, really not customer friendly if that is true. It is not a matter of not being customer friendl...
by FactualFran
Mon Feb 12, 2018 6:29 pm
Forum: Personal Finance (Not Investing)
Topic: Question on reporting stock/ETF/mutual fund dividends
Replies: 5
Views: 228

Re: Question on reporting stock/ETF/mutual fund dividends

According to the instructions for Schedule B: "Add the separate amounts paid by the payers listed on an entry space and enter the total in the “Amount” column." However, 1099 statements I have received for a Vanguard mutual funds account (not a Vanguard brokerage account) contains: "Please Note: Eac...
by FactualFran
Mon Feb 12, 2018 3:57 pm
Forum: Investing - Help with Personal Investments
Topic: Average Cost to SpecID questions: Did Vanguard do this correctly?
Replies: 51
Views: 1657

Re: Average Cost to SpecID questions: Did Vanguard do this correctly?

I thought that when you switched from Average Cost to SpecID, it would apply retroactively to your shares, as long as you hadn't made any sales. I guess I was wrong. The IRS regulations make a distinction between a change from Average Basis and a revocation of an election to use Average Basis. When...
by FactualFran
Fri Feb 09, 2018 3:23 pm
Forum: Investing - Help with Personal Investments
Topic: Still confused about wash sale. Please help with my example.
Replies: 9
Views: 560

Re: Still confused about wash sale. Please help with my example.

I posted this in the wrong place. Re-posting here... Hello BH fellows - I’ve been reading fairmark site and threads about wash sale but I am not sure I have a complete understanding of how to avoid it. Hope you can help with my specific situation below. All purchases are for the same fund. 10/31: P...
by FactualFran
Wed Feb 07, 2018 8:08 pm
Forum: Personal Finance (Not Investing)
Topic: 1040-ES estimated quarterly taxes vs. extra pension witholding
Replies: 9
Views: 705

Re: 1040-ES estimated quarterly taxes vs. extra pension witholding

ralph124cf wrote:
Wed Feb 07, 2018 12:57 pm
The only reason to file quarterly estimated tax forms is if you enjoy the added complexity and work of filing four extra IRS forms a year.
Another reason to make estimated tax payments is that one has income only from sources that do not withhold income taxes.
by FactualFran
Tue Feb 06, 2018 4:26 pm
Forum: Investing - Theory, News & General
Topic: Computing a Safe Withdrawal Rate (SWR) concisely
Replies: 17
Views: 2336

Re: Computing a Safe Withdrawal Rate (SWR) concisely

FiveK wrote:
Tue Feb 06, 2018 4:03 pm
Interesting that the sequence of returns is not relevant for this calculation.
The sequence of returns affects the Cumulative Growth values whose harmonic average is being calculated.
by FactualFran
Tue Feb 06, 2018 3:40 pm
Forum: Investing - Theory, News & General
Topic: Recharacterization/Conversion rules?
Replies: 4
Views: 301

Re: Recharacterization/Conversion rules?

Deleted upon reading "It would be more precise to call this a "$1,500 net reduction in AGI" instead of a "$1,500 deduction". But IMHO "$1,500 deduction" is close enough for most purposes."
by FactualFran
Tue Feb 06, 2018 3:27 pm
Forum: Investing - Theory, News & General
Topic: Vanguard High Yield Corporate - Another New Low in Dividend
Replies: 8
Views: 1912

Re: Vanguard High Yield Corporate - Another New Low in Dividend

The most recent dividend of $0.02224 per share represents a new low. The dividend appears to have been in a long term decline. The earliest dividend data I have shows the dividend at $0.084 in July 1989. The highest income distribution per share was $0.235 in Jan. 1983. It was the end of the fiscal...
by FactualFran
Tue Feb 06, 2018 3:14 pm
Forum: Investing - Theory, News & General
Topic: Recharacterization/Conversion rules?
Replies: 4
Views: 301

Re: Recharacterization/Conversion rules?

Are you sure about "doing this would result in a $1500 deduction". The rules about deduction for recognized losses with a traditional IRA have been If you have a loss on your traditional IRA investment, you can recognize (include) the loss on your income tax return, but only when all the amounts in ...
by FactualFran
Tue Feb 06, 2018 3:01 pm
Forum: Personal Consumer Issues
Topic: Cheap cell phone plans
Replies: 48
Views: 3339

Re: Cheap cell phone plans

A frequently mentioned low price cell phone plan provider is Page Plus. They have a pre-pay plan that charges $10 for up to 120 days of service. Domestic calls are $0.10 per minute, text is $0.05 per text, and data is $0.05/MB. The service is for 3G Verizon network phones that are not part of a cont...
by FactualFran
Tue Feb 06, 2018 2:48 pm
Forum: Investing - Theory, News & General
Topic: Computing a Safe Withdrawal Rate (SWR) concisely
Replies: 17
Views: 2336

Re: Computing a Safe Withdrawal Rate (SWR) concisely

Thank you for posting the information about using the harmonic average to calculate SWR and PWR. I will use a formula based on what you posted to have a spreadsheet calculate the SWR and PWR for each starting year. I had been manually running a macro that iterates over the starting years and uses th...
by FactualFran
Mon Feb 05, 2018 3:52 pm
Forum: Investing - Help with Personal Investments
Topic: switching cost basis methods at VG
Replies: 2
Views: 283

Re: switching cost basis methods at VG

Keep in mind that if 1) you elected to use Average Basis for an account or 2) the account used Average Basis by default and shares were sold, then after changing to specific share identification the share in the account at the time of the change to specific share identification retain the Average Ba...
by FactualFran
Sat Feb 03, 2018 2:40 pm
Forum: Personal Finance (Not Investing)
Topic: Tax question - Roth conversion and total basis question - did I get bad advice?
Replies: 6
Views: 361

Re: Tax question - Roth conversion and total basis question - did I get bad advice?

Whether you should do a Roth conversion of the entire balance, or slightly less than the entire balance, of the traditional IRA depends on which you dislike less: Opening a new traditional IRA each year. Reporting on your tax return taxable income due to a $0.01 increase in the value of the IRA when...
by FactualFran
Thu Feb 01, 2018 7:16 pm
Forum: Investing - Help with Personal Investments
Topic: Cost basis and long/short cap gains
Replies: 26
Views: 1136

Re: Cost basis and long/short cap gains

Question on the part I bolded: can you use average basis based on Vanguard's average basis calculation for non-covered shares and (in the same account) Spec-ID for covered shares? Yes, in concept. However, according to a previous post on another topic: "So far as I understand, Vanguard doesn't let ...
by FactualFran
Thu Feb 01, 2018 5:37 pm
Forum: Investing - Help with Personal Investments
Topic: Cost basis and long/short cap gains
Replies: 26
Views: 1136

Re: Cost basis and long/short cap gains

As far as I know Vanguard only uses average cost for cost basis determination ; the taxpayer of course can use any acceptable method - I use average cost to be in sync with Vanguard at year end .[/color] For covered shares, that it shares covered by IRS regulations that brokers report to the IRS th...
by FactualFran
Wed Jan 31, 2018 7:37 pm
Forum: Investing - Help with Personal Investments
Topic: How do I open a nondeductible IRA
Replies: 24
Views: 987

Re: How do I open a nondeductible IRA

Just so I'm clear on this, a Form 8606 needs to be filed with the return for years during which an IRA contribution was made--if you made no IRA contribution in 2017, then no 8606 gets filed with the 2017 return, correct? Correct in this context. Even if no non-deductible contribution was made to a...
by FactualFran
Tue Jan 30, 2018 4:53 pm
Forum: Investing - Help with Personal Investments
Topic: First year with AMT, 1040 Line 45 worksheet contradiction
Replies: 6
Views: 472

Re: First year with AMT, 1040 Line 45 worksheet contradiction

I don't know about wonky, and I have not updated the spreadsheet that I use with differences between the 2016 and 2017 versions of the tax forms and worksheets, but one difference between the Worksheet (To See If You Fill In Form 6251) and From 6251 is that the worksheet does not incorporate the val...
by FactualFran
Mon Jan 29, 2018 3:32 pm
Forum: Personal Finance (Not Investing)
Topic: Free File Fillable Forms w/ Individual Bonds
Replies: 2
Views: 247

Re: Free File Fillable Forms w/ Individual Bonds

I have individual fixed-income securities that were purchased at a premium. With the Federal income tax returns that I have filed using Free Fillable Forms I have filled out list of Payer and Amount on Line 1 of Schedule B in the following way Payer Amount Interest Payer 1 12,345. Interest Payer 2 9...
by FactualFran
Sat Jan 27, 2018 1:02 pm
Forum: Investing - Theory, News & General
Topic: Muni Money Market funds starting to look good!
Replies: 75
Views: 11737

Re: Muni Money Market funds starting to look good!

Here are end of week SEC yields obtained from the Vanguard web site over the past few weeks of the Vanguard Municipal Money Market fund and Vanguard Prime Money Market fund. Date Muni Prime Difference 2017-12-08 0.88% 1.22% -0.34% 2017-12-15 0.93% 1.27% -0.34% 2017-12-22 1.07% 1.34% -0.27% 2017-12-2...
by FactualFran
Fri Jan 26, 2018 4:31 pm
Forum: Investing - Theory, News & General
Topic: Question to Taylor and others regarding bucket approach in retirement
Replies: 53
Views: 3246

Re: Question to Taylor and others regarding bucket approach in retirement

It takes a lot of proving to show that these things actually combine to the overall advantage of the retiree. But that is why people write papers trying to find out. My assessment so far is that the issue is far from proven and that the differences may be very small one direction or the other. That...
by FactualFran
Fri Jan 26, 2018 4:15 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Underpayment Penalties for Mega Roth Conversion?
Replies: 26
Views: 1998

Re: IRS Underpayment Penalties for Mega Roth Conversion?

If the Roth Conversion occurs in the 4th quarter and the estimated taxes are paid then, then there should not be a problem, right? The 4% is ANNUALIZED right, it's not 4% per quarter, for a whopping 16% penalty for the whole year? Whether there is a problem depends on whether you consider gathering...
by FactualFran
Fri Jan 26, 2018 3:57 pm
Forum: Investing - Theory, News & General
Topic: Question to Taylor and others regarding bucket approach in retirement
Replies: 53
Views: 3246

Re: Question to Taylor and others regarding bucket approach in retirement

The bucket approach advocated by Christine Benz of Morningstar is too complex for me. I have not be able to reproduce the results that she has published for a bucket portfolio. There are likely unstated rules used by the bucket approach that I have been unable to determine or find too complex to use...
by FactualFran
Thu Jan 25, 2018 3:57 pm
Forum: Personal Finance (Not Investing)
Topic: IRS Underpayment Penalties for Mega Roth Conversion?
Replies: 26
Views: 1998

Re: IRS Underpayment Penalties for Mega Roth Conversion?

Thanks. I was planning to do that. My issue is that would there be an IRS penalty come tax time if I owe $10k in taxes due to Roth Conversion of pretax Traditional IRA? Paying estimated taxes for this seems like a pain. Whether someone who owes $10k in taxes with the tax return for a year will owe ...
by FactualFran
Thu Jan 25, 2018 3:42 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard lists my cost-basis (cost per share) the same for all lots
Replies: 13
Views: 926

Re: Vanguard lists my cost-basis (cost per share) the same for all lots

Thanks for this clarification. However, I'm not sure if this applies to me. I have sold shares in this fund, but the last sale was in 2011. So I haven't sold any covered shares, or had any covered shares factor into an average cost calculation. So I don't see why they would have to adjust the cost-...
by FactualFran
Thu Jan 25, 2018 3:20 pm
Forum: Investing - Theory, News & General
Topic: Kitces article: A cash bucket in retirement? Nope
Replies: 150
Views: 11895

Re: Kitces article: A cash bucket in retirement? Nope

Two important quotes from the finalytiq.co.uk web page are: So it makes sense to replace the bond allocation with a little bit of cash. In any case, replenishing the cash reserve through systematic rebalancing will likely result in poorer outcome than a fully invested portfolio. How much it has made...
by FactualFran
Wed Jan 24, 2018 4:19 pm
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion within the Standard Deduction
Replies: 10
Views: 470

Re: Roth Conversion within the Standard Deduction

I certainly don't understand it then, thank you for the clarification! So I guess I should just do conversions equal to the standard deduction for 2018, over 3 years. I believe that is the correct approach, please let me know if I'm wrong here. A more correct approach is to do conversions with a ta...
by FactualFran
Wed Jan 24, 2018 3:56 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard lists my cost-basis (cost per share) the same for all lots
Replies: 13
Views: 926

Re: Vanguard lists my cost-basis (cost per share) the same for all lots

When a change is made from Average Basis (for covered shares) the fact that the lots at the time of the change all retain the previously established average basis per share is part of the IRS regulations. Vanguard knows which lots were sold because with Average Basis: the shares disposed of are thos...
by FactualFran
Wed Jan 24, 2018 3:34 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement income / VWINX - Vanguard Wellesley Income Fund
Replies: 11
Views: 1542

Re: Retirement income / VWINX - Vanguard Wellesley Income Fund

Wellington and Wellesley stock profiles are very different*. Wellington and its global counterpart are very value focused and hold too much finance sector focus for my tastes. Wellesley is more dividend focused. Just look at the stock holdings. Some stocks are similar but they aren't even close to ...
by FactualFran
Tue Jan 23, 2018 6:31 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement income / VWINX - Vanguard Wellesley Income Fund
Replies: 11
Views: 1542

Re: Retirement income / VWINX - Vanguard Wellesley Income Fund

There appears to be conflicting objectives. "So, this retirement account is definitely going to be passed on to their heirs; growth of the fund should be an objective." "So, could anyone provide their feedback on which funds to use for retirement income, where the goal is preservation of capital and...
by FactualFran
Tue Jan 23, 2018 3:51 pm
Forum: Personal Finance (Not Investing)
Topic: Rule of 55 is it official?
Replies: 38
Views: 5267

Re: Rule of 55 is it official?

The Rule 55 and 72(t) are both great options that allow you to withdrawal from your 401(k) or tIRA without having to pay the 10% penalty. The 72(t) is best used prior to age 55; Rule 55 is best once you turn 55..... and you must be 55....not the year you turn 55 .....some adviser confuse this with ...
by FactualFran
Mon Jan 22, 2018 5:17 pm
Forum: Personal Finance (Not Investing)
Topic: Cost Basis for Roth IRA
Replies: 11
Views: 728

Re: Cost Basis for Roth IRA

What line of what specific tax form is asking for the basis? In general, the basis of a Roth IRA is the sum of contributions made to it minus the distributions taken that are treated as a return of the contributions. F8606 pt 4? asks for contribution basis and separately for conversion basis. If OP...
by FactualFran
Mon Jan 22, 2018 4:39 pm
Forum: Personal Finance (Not Investing)
Topic: Cost Basis for Roth IRA
Replies: 11
Views: 728

Re: Cost Basis for Roth IRA

I took a distribution on my Roth older than 5 years. Tax form is asking for basis . I made many conversions in prior years and would have to look thru many tax returns. Is there an easier way I hope What line of what specific tax form is asking for the basis? In general, the basis of a Roth IRA is ...
by FactualFran
Mon Jan 22, 2018 3:42 pm
Forum: Investing - Theory, News & General
Topic: Year 2000 retirees using the '4% rule' - Where are they now?
Replies: 354
Views: 35027

Re: Year 2000 retirees using the '4% rule' - Where are they now?

awhile back, i found an online article about retiree in 2000. one million invested from 2000-2010 with 4 percent withdrawal in vanguard 500. 100% stock portfolio would be broke. no bonds and no rebalancing That is not the result I calculate. Someone who 1) at the end of 1999 put a lump sum in the V...
by FactualFran
Mon Jan 22, 2018 3:24 pm
Forum: Personal Finance (Not Investing)
Topic: Question re 2018 tax rates
Replies: 13
Views: 1589

Re: Question re 2018 tax rates

What is your reference claiming an "adder" for over 65 standard deduction? My sources say there is none; are they incorrect? Your sources are based on the version of the Tax Cuts and Jobs Act that was initially passed by the House. The version produced by the conference committee that resolved the ...
by FactualFran
Sat Jan 20, 2018 1:28 pm
Forum: Investing - Theory, News & General
Topic: Year 2000 retirees using the '4% rule' - Where are they now?
Replies: 354
Views: 35027

Re: Year 2000 retirees using the '4% rule' - Where are they now?

Actually, there's another withdrawal rate that some are interested in: the perpetual withdrawal rate. While not strictly perpetual in the sense of being guaranteed to last to infinity, it is defined as the rate at which a portfolio would have the same inflation-adjusted value at the end of the reti...
by FactualFran
Thu Jan 18, 2018 5:18 pm
Forum: Investing - Help with Personal Investments
Topic: Dividends vs Capital Gains on Total Stock Market not reinvested
Replies: 4
Views: 452

Re: Dividends vs Capital Gains on Total Stock Market not reinvested

I would take what Vanguard states as being correct: the account is setup to send both income distributions (also called dividends) and capital gain distributions to a bank account. The fund has not made a capital gain distribution since 2000.
by FactualFran
Thu Jan 18, 2018 2:57 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Year for Return of Ineligible Roth Contribution Earnings?
Replies: 5
Views: 351

Re: Tax Year for Return of Ineligible Roth Contribution Earnings?

You need to report the income on your 2017 tax return. Here is an example from the Excess Contributions section of IRS Publication 590-A. Maria, age 35, made an excess contribution in 2016 of $1,000, which she withdrew by April 18, 2017, the due date of her return. At the same time, she also withdre...
by FactualFran
Wed Jan 17, 2018 5:49 pm
Forum: Investing - Help with Personal Investments
Topic: Form 8606 filed preemptively before funding IRA
Replies: 6
Views: 394

Re: Form 8606 filed preemptively before funding IRA

Thank you. This is perfect. I assume I would have to send the correction in before I make a non deductible contribution to her account for 2017 and report it. Is that correct? It should not be necessary to send the corrected Form 8606 for 2016 before making a non-deductible for 2017. It would be a ...
by FactualFran
Wed Jan 17, 2018 3:16 pm
Forum: Investing - Help with Personal Investments
Topic: Form 8606 filed preemptively before funding IRA
Replies: 6
Views: 394

Re: Form 8606 filed preemptively before funding IRA

Your wife should mail a corrected Form 8606 for 2016 to the IRS with a letter describing the correction, which apparently was reporting a non-deductible contribution for 2016 when one was not made. There should be no need to file an amended return because a non-deductible contribution affects only w...
by FactualFran
Tue Jan 16, 2018 1:09 pm
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth IRA shared account
Replies: 1
Views: 115

Re: Backdoor Roth IRA shared account

The "I" in "IRA" stands for INDIVIDUAL. Assets withdrawn from an IRA may be rolled over to an IRA with the same owner as the IRA from which the withdrawal was made. Of course, if the withdrawal from an IRA was made in cash, that cash could have put in a joint account from which cash is later taken t...
by FactualFran
Mon Jan 15, 2018 4:09 pm
Forum: Personal Finance (Not Investing)
Topic: Standard Deduction in 2018
Replies: 16
Views: 2737

Re: Standard Deduction in 2018

I read somewhere that the standard deduction for 2018, for tax returns filed in 2019, for individuals over 65 is actually $26,600 instead of $24,000. Does anyone know if this is true? For individuals who are at least 65 years old (and not blind) the standard deduction will be $13,600. For married c...
by FactualFran
Mon Jan 15, 2018 3:20 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated taxes
Replies: 25
Views: 2861

Re: Estimated taxes

I plan on making significantly less this year than last year so I will be paying 90% of taxes owed for 2018 to meet the safe harbor. Do I just estimate what I owe for each quarter, eg. income earned between Jan 1 - March 31 and make payments of four very different amounts? Since payments are unequa...
by FactualFran
Sat Jan 13, 2018 2:47 pm
Forum: Personal Finance (Not Investing)
Topic: Figuring needed value of lump sum to provide given withdrawal rate
Replies: 11
Views: 666

Re: Figuring needed value of lump sum to provide given withdrawal rate

Thanks for this and the other posts. I would not have known to do this. Can you explain the basis for using geometric difference? Using the geometric difference makes the initial account value returned by the previously mentioned spreadsheet functions the same as the value used when using a spreads...