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I bit the bullet and sold about 340K worth of long term capital gains. Based on my calcs that should get me right up to the top of the 15% threshold. I do have one question though. I saw that one of my uncle’s stocks had 30K worth of capital gain distribution. It was for Vanguard Global Equity Fund (VHGEX) - why does that have capital distributions? I thought it was just an index fund…? Is there anyway to avoid those distributions in that fund for FY22? It's not clear from your post whether VHGEX was one of the funds you sold in 2022. If it distributed $30k cap gains last year, that's almost half of the $69k of cap gains listed in your OP, so a prime candidate for divestment. How did you decide which funds to sell? I hope you selected MFs ...

OP here. So quick update, I incurred about $354K of capital gains when selling the stocks and have a tax bill for my uncle of about $68K. He has a traditional Rota IRA and the consensus on here is that he should see 100%, which would net him 10K that he can use to pay for taxes. That leaves about $58K remaining for taxes. Should I just continue the sell off for him and incur another $350K of capital gains in 2023 and use money from selling the funds to pay off the tax? Two years ago, you wrote that you were a 28-year old CPA "seriously considering selling all of (your) $550k in Vangaurd Total Stock Market (taxable account) to buy Bitcoin." https://www.bogleheads.org/forum/viewtopic.php?t=344152 That is an unusually high-risk appr...

OP here. So quick update, I incurred about $354K of capital gains when selling the stocks and have a tax bill for my uncle of about $68K. He has a traditional Rota IRA and the consensus on here is that he should see 100%, which would net him 10K that he can use to pay for taxes. That leaves about $58K remaining for taxes. Should I just continue the sell off for him and incur another $350K of capital gains in 2023 and use money from selling the funds to pay off the tax? I have never heard of a "traditional Rota IRA", and have no idea how *any* IRA can reduce your tax bill in any way, unless by contributing. After realizing so much in capital gains, your uncle is way past the income threshold to qualify for any deduction into a tra...

FiveK wrote: ↑Mon Feb 27, 2023 9:42 pm

bigguy8437 wrote: ↑Sun Feb 26, 2023 9:22 pm Hey so last year I had about a 3500 tax return combined for federal and state. I earned about 30K more this year, a jump from 75K to 105K. Only difference besides increase in income is I had about 2500 in capital gains.

bigguy8437 wrote: ↑Mon Feb 27, 2023 9:24 pm Ok so it is $17,701 tax liability for this year. Does that seem right or is something off?

$17,701 is what a single filer under age 65 with $2500 Long Term Capital Gain (LTCG) and $110,800 in W-2 box 1 (or any combination of ordinary income that totals $110,800), with no other income or deductions, would owe.

Does that match your situation?

Yes you almost nailed it exactly

OP here. So quick update, I incurred about $354K of capital gains when selling the stocks and have a tax bill for my uncle of about $68K. He has a traditional IRA worth only about $10k, so I’m thinking about selling that to use to pay for some taxes. That leaves about $58K remaining for taxes. Should I just continue the sell off for him and incur another $350K of capital gains in 2023 and use money from selling the funds to pay off the tax?

delamer wrote: ↑Mon Feb 27, 2023 9:34 am

bigguy8437 wrote: ↑Mon Feb 27, 2023 12:27 am Hmm my line16 tax in 2020 was 9.5k, last year it was 11.5k. I’m not sure how to find 2022 yet

If you are using TurboTax, you can display your return in “form” mode and find your 2022 number on the 1040.

Ok so it is $17,701 tax liability for this year. Does that seem right or is something off?

Hmm my line16 tax in 2020 was 9.5k, last year it was 11.5k. I’m not sure how to find 2022 yet

Hey so last year I had about a 3500 tax return combined for federal and state. I earned about 30K more this year, a jump from 75K to 105K. I am still a resident of the same state (NY) and work for the same exact company. It seems like my refund is only about $500 this year. Only difference besides increase in income is I had about 2500 in capital gains. What could be causing this? Last year I paid an expert on TurboTax to do my return for me, and this year I just did it myself (haven’t filed the return yet though). Should I consider having an expert file my taxes for me again on TurboTax in case I am missing something? Something just seems off for my refund to decrease by that much

Thanks for everyone’s replies. It sounds like a conversion does not make any sense. And yes in her estate return she has elected portability. Her estate is also being transferred into a revocable trust at death to her three children which will also help to avoid estate tax. She can't have already elected portability on her estate tax return if she's still living. Estate tax returns are filed after a person dies. The executors elect portability. Revocable trusts don't save or cost estate taxes. They could provide for their children in separate trusts rather than outright, to keep the children's inheritances out of their estates for estate tax purposes (and to protect their inheritances from their creditors and spouses). There are several re...

Thanks for everyone’s replies. It sounds like a conversion does not make any sense. And yes in her estate return she has elected portability. Her estate is also being transferred into a revocable trust at death to her three children which will also help to avoid estate tax.

My grandmother has about a $1.8M Traditional IRA where she is required to take RMD’s annually. She is 91 years old, has no debt and also has an estate valued at around $18M or so. This past year she took out the required amount which was approximately $200K. Would there be any benefit to her to convert this into a Roth or do any type of back door..? She has such a large RMD for her age so I just want to make sure she’s not missing out on any benefit or anything. Similar question to my uncle who has a traditional IRA but its only 9k or so. I have no idea how he has it. It’s such a small amount, should he convert that to anything either? He has a $5M nest egg, has no debt and is retired recently as a of a few years ago. He has a brokerage and...

I am a CPA and am a Big 4 company working in audit. I have realized audit isn’t for me long term and am looking at potentially my next step. One thing I have genuinely enjoyed doing is reading posts in this site and helping all my family members with personal finance stuff. I’m talking about investing in 401ks, Roth IRA’s, teaching them the three fund method, and I’ve even gotten more into learning about estates and trusts the past year. Is there anything in the real world where I could make what I’m doing for my family my real job? Would that be private wealth management? I guess my dream/long term goal would be to have my own family office but I feel like I can’t start there from scratch

I bit the bullet and sold about 340K worth of long term capital gains. Based on my calcs that should get me right up to the top of the 15% threshold. I do have one question though. I saw that one of my uncle’s stocks had 30K worth of capital gain distribution. It was for Vanguard Global Equity Fund (VHGEX) - why does that have capital distributions? I thought it was just an index fund…? Is there anyway to avoid those distributions in that fund for FY22?

I’m helping my grandmother who wants to donate to charity as part of her minimum required distribution this year. One question i saw was to select the federal withholding for the transaction. Should i select do not withhold? Or should i withhold an amount?

OP here. So i think i am going to pull the trigger and incur the entire capital gain tax this year. I agree with others that it is a terrible idea to push your Uncle into the 20% capital gains tax rate +3.8% NIIT. As others have suggested, sell to the top of the 15% capital gains tax bracket. Also, would it be recommended to pay estimated taxes or just pay the entire thing in April of 2023? I recommend withholding on the sale. If not, then estimated taxes. How can i make sure i sell to the top of the 15% bracket this year? What is the dollar amount of the capital gains i would have to sell? I’m assuming it’s the 459,750 threshold? Dividends 55,230 (mostly from vanguard index funds, want to hold these for a while though so cant sell/avoid) ...

OP here. So i think i am going to pull the trigger and incur the entire capital gain tax this year. I just want to confirm if anyone know’s what the capital gains tax would be in 2022 if the taxable income listed below is accurate and its a single filer in the state of Florida? I just want to know how much of it we should hold back in cash in order to pay taxes. Also, would it be recommended to pay estimated taxes or just pay the entire thing in April of 2023? Dividends 55,230 (mostly from vanguard index funds, want to hold these for a while though so cant sell/avoid) Pensions 48,652 (he worked for the navy so has a pension) Interest 234 Total 105,116 Std Deduct 12,550 - the accountants just put in these deduction to show he arrives at $160...

Awesome thank you!

I’m just curious, i know that Schwab is required to report to the IRS that a minimum distribution is required for the account. If the account is now with Vanguard, do we just withdraw the money from the vanguard account, since it technically has $0 with schwab now? I just wanted to double check that we wouldnt get in trouble or anything if we withdrew the money from vanguard and not schwab since we transferred it after year end out of schwab

Long story short, I’m trying to help my grandmother figure out what her RMD is with Schwab for her traditional IRA. She held the account with Schwab at 12/31/21, and then two weeks later did an in-kind transfer to Vanguard. She needs to figure out with Schwab what her RMD is and not vanguard right (since she held it with Schwab at year-end)? Where on the Schwab website can i figure out what her RMD is? Someone told me to look on the 12/31 statements but i couldnt find it there. Also, do i have to set up a direct deposit for her to take the RMD?

OK, I think i have a pretty good idea that theres really no way to avoid these. So now my question is if i sell today, is it more advantageous for me to:

a) pay off the long term capital gains tax by using dividend income (i.e. changing from auto investment of dividends to pocketing them) or
b) after selling the stocks just maintaining some cash from the sell to pay off the long term capital gains tax?

Or is there no difference/advantage? Would it also help by selling about 1/3 this year, 1/3 next and so on? Or no

Hello i am trying to help out my uncle. He is single and retired with a pension. He has about $1.1M in long term capital gains that he wants to sell since they are old underperforming funds. His income breakdown is below (still has income even though retired). Is there any way for him to avoid long term capital gains or even get into the 0% federal tax bracket? He’s a resident of Florida so no state long term capital gains tax. Dividends 55230 (mostly from vanguard index funds, want to hold these for a while though so cant sell/avoid) Pensions 48652 (he worked for the navy so has a pension) Capital Gains 69,361 (these aren’t from selling capital gains, so not sure what these are from/if avoidable?) Interest 234 Total 173477 Std Deduct 12550...

Long story short, I’m helping out my family transfer in-kind a lot of their investments to Vanguard due to their low cost fees. They are transferring brokerage/taxable accounts and IRA’s (traditional and Roth). I am doing my own due diligence to verify that the cost basis on the taxable accounts is all accurate. Do I need to do the same with the IRA’s? I assume definitely not the Roth since that is post tax already, but what about the Traditional IRA’s? Is it important to verify the cost basis on those is accurate for tax purposes whenever we want to withdraw from it? Also, I’m just curious, do people have experience with verifying cost basis before and have a recommended approach on how to do it? I’m assuming I shouldn’t just outright trus...

23: $235K
24: $290K
25: :$388K
26: $424K
27: $569K
28: $725K
29: $951K

Have been 100% VTSAX

I finally convinced my family to stop using the advisor and go with a DIY profile. They are asking me how they are supposed to stop this advisor relationship. I recommended they either call or email their advisor and let them know they want to take back control of the funds and go with a DIY portfolio. Is there anything you recommend saying specifically or just something along those lines? Also I am assuming a call is best correct?

secondcor521 wrote: ↑Wed Jan 05, 2022 11:38 pm You will probably have to pay several hundred dollars (or more) to a CPA to have the estate tax return prepared and filed, but that cost probably pales in comparison to the estate tax savings.

**editing this out as I misread to be hundreds of thousands of dollars instead of hundreds, sorry

So from my understanding, the Portability election is made on a timely filed federal estate tax return (IRS Form 706). So my grandmother would have to make this election on her federal estate tax return for 2021 (since my grandfather passed away in October 2021)?

Hey I am trying to help my grandmother (90 years old, living in Florida) minimize her federal estate tax. Her spouse recently passed away this fall and she has this entire estate to herself. It is my understanding that the federal estate tax threshold is $11,700,000. What can she do to minimize her estate? I believe she has been trying to gift up to $15K a year to her three kids and also her two grandchildren. I also know she has a trust in which her children are the receiving of the trust. Does the trust protect her from estate tax at all? I'm just trying to figure out the best way to get below that $11.7M threshold. Brokerage - $8.3M Traditional IRA - $2.1M Roth IRA - $8.1M House - $1.7M Savings Account - $500K Total Estate - Approximatel...

The whole point is I’m trying to explain to them that this fee is not worth it and you can DIY. I’m trying to find the most simple way to explain to them as they don’t fully understand finance and that you can make it a two or three fund portfolio and be done.

goingup wrote: ↑Thu Dec 30, 2021 9:20 am

bigguy8437 wrote: ↑Thu Dec 30, 2021 1:12 am My family is using Schwab as an investment advisor and the advisor stated that they get paid 50 basis points or about .5%. My family has an $8M Roth IRA that’s sitting with him and is invested in about 15 different funds. I Am trying to explain to them how Schwab is getting paid and how this guy is essentially stealing their money. Ideally I’d want all the money switched over into index funds, ideally a two fund portfolio. Does anyone know how or when Schwab would get paid in this situation?

I want to say that if this advisor helped get $8m into a Roth account, he or she is likely worth the fee!

This is not the case. It was inherited and passed down

My family is using Schwab as an investment advisor and the advisor stated that they get paid 50 basis points or about .5%. My family has an $8M Roth IRA that’s sitting with him and is invested in about 15 different funds. I Am trying to explain to them how Schwab is getting paid and how this guy is essentially stealing their money. Ideally I’d want all the money switched over into index funds, ideally a two fund portfolio. Does anyone know how or when Schwab would get paid in this situation?

Ok now it appears that a medallion signature guarantee is not required

I’m helping my grandma get her items settled after my grandfathers death. If I need to change the account holder from joint to her name, and also want to do an in-kind transfer, does it matter which of those I do first?

Also, if I need a medallion signature, can I only do that at a bank that she’s a member at? Or can I do it anywhere?

I think vanguard disabled their account once my grandfather passed away and there’s a bunch of steps we have to do

I’m trying to help my family members understand what their net worth is and have a better overall outlook or view of their money. Does anyone have a good net worth calculator spreadsheet?

See fund options below:

Vanguard Equity Income Fund Admiral Shares
Vanguard Extended Market Index Fund Institutional Shares
Vanguard Inflation-Protected Securities Fund Institutional Shares
Vanguard Institutional Index Fund Institutional Plus Shares
Vanguard PRIMECAP Fund Admiral Shares
Vanguard Retirement Savings Trust II
Vanguard Total Bond Market Index Fund Institutional Plus Shares
Vanguard Total International Stock Index Fund Institutional Shares
Vanguard Wellington Fund Admiral Shares

So long story short is my grandfather has about a $20M estate and is planning to set up trusts for each of his three children. The children are each 60+ years old and don’t really need the money. I think the grandfather is worried about the children using the money recklessly. It appears that the trustee of the trusts won’t be someone in the family which is causing big concern. We don’t want to have to deal with a trustee who isn’t in the family controlling all the money. At least one of the children has been capable of managing the money and we think they should be the trustee. Is this a reasonable concern and should we try and get the trustee changed to someone in the family? I also am a CPA myself and am capable of handling the money (I...

I just finished reading OP's earlier thread on this situation and it reveals that his grandmother is still living also. Her interests in this haven't even been mentioned in this thread and can't be ignored. Gill I’m going off just based on the limited financial information that’s been told to me. Both grandparents are 90+ years old and I haven’t been told much of what would be left to her. That’s why I haven’t mentioned anything. Bsteiner recommended that we have the Roth IRA be left to her as a beneficiary, since the 10 year distribution rule wouldnt begin until the last surviving spouse passes away. The grandfather had mentioned giving the Roth IRA to the children, but I’m considering recommending giving it to the spouse first and then g...

The terms of the trust are below: A legal trust will be opened in the name of a person,i.e. either of you & your siblings, to protect money you will inherit. If you inherit $100,000, this will be invested to give you money in your retirement. Gain on this money will be about 6% per year. This money will be protected legally and it will not be possible to withdraw it unless the trustee agrees. The trustee is a person named in the trust. Dividends from the investment will be determined quarterly and should be re-in vested to increase the value of the trust. The principal ,i.e. the money originally placed in the trust, should only be used for health, maintenance and support. It is necessary to make a will naming beneficiaries. Is this the...

Having a trustee who is not a family member might be a good design not just to prevent the reckless use of the money, but also to eliminate or minimize any potential fighting between family members. They all are getting an equal share of the $20M, and all are financially independent anyways without the trust. We are just trying to see how we can avoid having a trustee who is outside of the family and if this makes sense. If all the trust beneficiaries were say 18 years old with no money, I can see the risk of having them burn through the money. Is it possible to make any of the children the trustee if they are also a beneficiary? Would it be okay if they made one of the grandchildren the trustee? I'm still cooling down from the shock of re...

The terms of the trust are below: A legal trust will be opened in the name of a person,i.e. either of you & your siblings, to protect money you will inherit. If you inherit $100,000, this will be invested to give you money in your retirement. Gain on this money will be about 6% per year. This money will be protected legally and it will not be possible to withdraw it unless the trustee agrees. The trustee is a person named in the trust. Dividends from the investment will be determined quarterly and should be re-in vested to increase the value of the trust. The principal ,i.e. the money originally placed in the trust, should only be used for health, maintenance and support. It is necessary to make a will naming beneficiaries. Is this the...

eggraid101 wrote: ↑Thu Aug 12, 2021 1:19 pm Having a trustee who is not a family member might be a good design not just to prevent the reckless use of the money, but also to eliminate or minimize any potential fighting between family members.

They all are getting an equal share of the $20M, and all are financially independent anyways without the trust. We are just trying to see how we can avoid having a trustee who is outside of the family and if this makes sense. If all the trust beneficiaries were say 18 years old with no money, I can see the risk of having them burn through the money. Is it possible to make any of the children the trustee if they are also a beneficiary? Would it be okay if they made one of the grandchildren the trustee?

So long story short is my grandfather has about a $20M estate and is planning to set up trusts for each of his three children. The children are each 60+ years old and don’t really need the money. I think the grandfather is worried about the children using the money recklessly. It appears that the trustee of the trusts won’t be someone in the family which is causing big concern. We don’t want to have to deal with a trustee who isn’t in the family controlling all the money. At least one of the children has been capable of managing the money and we think they should be the trustee. Is this a reasonable concern and should we try and get the trustee changed to someone in the family? I also am a CPA myself and am capable of handling the money (I...

So long story short is my grandfather has about a $20M estate and is planning to set up trusts for each of his three children. The children are each 60+ years old and don’t really need the money. I think the grandfather is worried about the children using the money recklessly. It appears that the trustee of the trusts won’t be someone in the family which is causing big concern. We don’t want to have to deal with a trustee who isn’t in the family controlling all the money. At least one of the children has been capable of managing the money and we think they should be the trustee. Is this a reasonable concern and should we try and get the trustee changed to someone in the family? I also am a CPA myself and am capable of handling the money (I’...

Another update! (Sorry I’m slowly getting more info as we go along). His total estate is $20 million. His Roth IRA is approximately $5 million. He told me that he wants to give the Roth IRA to his three children and have them live off of that and let their investments grow without touching them (as they can use the Roth IRA).

I want to advise him that this is not recommended because he should instead leave the Roth IRA to his spouse, and then once she passes give it to the children. This is because it would delay the 10 year clock by giving it to his spouse and would allow it to continue to grow tax free. Is this sound advice?

I have a bit more info. The pension is worth approximately $1M and so is his $401K. The CPA is advising that he lives off of the 401k money now since he just recently retired about three months ago. Is this sound advice to live off the $401k money?

Luckywon wrote: ↑Mon Aug 02, 2021 10:55 am

bigguy8437 wrote: ↑Mon Aug 02, 2021 10:32 am Sorry I didn’t mean to leave out the grandmother from the equation. She is of similar age (91 years old) but all I’ve heard of is that the money would be passed to the kids. I’m assuming it will be passed to her first if she is still the surviving spouse

Have they been asking for advice, or has it become evident they do not already have an estate plan? For all we know, they may be clients of Mr. Steiner already.

He’s been asking for a little advice but is also working with a CPA and attorneys now

a current spouse who appears not to be the mother of his children The current spouse is the mother of his children. Why would you think otherwise? Multiple marriages are very common these days. Your post has a lot more information about passing money to kids not making sure your grandmother is taken care of which I would think would be a primary concern of the family. You refer to his house as if he owns it by himself not their house. You state the will leaves money to his kids not their kids. Sorry I didn’t mean to leave out the grandmother from the equation. She is of similar age (91 years old) but all I’ve heard of is that the money would be passed to the kids. I’m assuming it will be passed to her first if she is still the surviving sp...

stan1 wrote: ↑Sun Aug 01, 2021 8:49 pm a current spouse who appears not to be the mother of his children

The current spouse is the mother of his children. Why would you think otherwise?

I forgot to mention that he is a resident of Florida

So unfortunately my grandfather has gotten sick and wants some help setting up his finances/estate. He is a very high net worth individual, I’m assuming with somewhere between 15-30 million in total assets. His Roth IRA is about 4.5 million, he is currently required with withdraw about $200k/year in his pension, and he also a large sum of investments/brokerage accounts that are mostly invested in vanguard funds and two other mutual funds. His house is worth $1.5 million and is fully paid off. He has his will set up to allocate his funds to his three kids once he passes away. Questions: 1. Since he is passing his money down to his kids, should each of them get a trust in which he can place the money in once he passes? He also mentioned he is...

Has anyone had any success this year getting an offer for the annual fee? Last year they offered me points or a $300 statement credit. Not sure who to call or if I can do the same this year

Sorry I just made a last second edit or add on to my post, see above haha