Search found 2074 matches

by Chip
Tue Jul 22, 2008 5:53 am
Forum: Investing - Help with Personal Investments
Topic: New York: I.A.T.S.E Local 600 Pension Disqualifies IRA?!?
Replies: 8
Views: 2185

can he contribute to a traditional IRA and just not get any deductions?
Correct. Perhaps the tax person was just talking about deductibility.
by Chip
Sun Jul 13, 2008 5:35 am
Forum: Investing - Theory, News & General
Topic: Tax-exempt MMF Yield Dropping
Replies: 29
Views: 6375

mithrandir wrote:"Applying" comes in the form of filing a 2008 federal tax return. The IRS will automatically mail out another check next year if you are eligible for the remainder payment...at least that's what I was told.
I guess that won't be a problem since I'm the person that does her taxes :) . Thanks.
by Chip
Sat Jul 12, 2008 2:15 pm
Forum: Investing - Theory, News & General
Topic: Roth conversion in down market=lemonade
Replies: 18
Views: 3894

It's good you brought this up. I did my annual conversion last Monday. I now wish the post office hadn't been so efficient with delivering my instructions -- Friday would have been better.
by Chip
Wed Jul 09, 2008 1:21 pm
Forum: Investing - Theory, News & General
Topic: Tax-exempt MMF Yield Dropping
Replies: 29
Views: 6375

mithrandir wrote:thereby receive in 2009 the remainder payment I "should" have received this year.


My mother is in a similar situation. Do you have any info on the mechanics of applying for the "remainder payment"? TIA
by Chip
Thu Jul 03, 2008 5:01 am
Forum: Investing - Help with Personal Investments
Topic: Need help putting together my portfolio
Replies: 25
Views: 4008

Is my understanding correct that a 0.30% quarterly fee is, in effect, a 1.2% annual fee? I don't think it is in your case. I think what you have is a .30% annual fee that is paid on a quarterly basis (or, about .075% per quarter). The reason I think this is the following quote from your plan that y...
by Chip
Mon Jun 30, 2008 2:41 pm
Forum: Investing - Help with Personal Investments
Topic: TIPS vs IBonds in taxable account
Replies: 11
Views: 3439

The inflation correction aspect of TIPS is a capital gain, so that makes them better for a tax-deferred account. I'm pretty sure the first part of this is incorrect. The inflation adjustment for individual TIPS is reported each year on a 1099-OID, and is taxed as interest. This OID adds to cost bas...
by Chip
Mon Jun 30, 2008 6:30 am
Forum: Investing - Help with Personal Investments
Topic: Can put more into taxable accounts. unsure how to balance
Replies: 7
Views: 3082

My apologies, Laura. I was skimming and missed that line in the OP.
by Chip
Mon Jun 30, 2008 5:22 am
Forum: Investing - Help with Personal Investments
Topic: Preretiree Portfolio -- Comments?
Replies: 2
Views: 1257

1. Equity allocation is very personal, so you have to make the choice. But if you can stick with 55% through a down market, it's not at all unreasonable at your age. Do you plan to reduce it in future years? 2. 36% (of equities) in international is well within the range usually recommended here. Stu...
by Chip
Mon Jun 30, 2008 4:49 am
Forum: Investing - Help with Personal Investments
Topic: Can put more into taxable accounts. unsure how to balance
Replies: 7
Views: 3082

Laura wrote:Finally, if you are contributing to a 401k you cannot also deduct money in an IRA.
Hi Laura,

I think this is correct only if one is over the MAGI phase-out limits. I believe for 2008 those limits are 53-63K for a single/HOH filer, 85-105K for joint filers, and 10K for MFS.
by Chip
Thu Jun 19, 2008 3:55 pm
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion: Tax Questions
Replies: 14
Views: 3060

To show you guys how bizarre tax management can become... Bizarre indeed, but it seems to me that you have a better handle on the issues than the vast majority of people. Good luck getting by on $38.62 a week. Are those soft pretzels from the carts still cheap? :D I haven't run the numbers, but am ...
by Chip
Thu Jun 19, 2008 7:34 am
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion: Tax Questions
Replies: 14
Views: 3060

seugene, Tough question on how much to convert unless you know what your tax bracket will be when you start taking RMDs. If you do know, I will pay a hefty amount to rent your crystal ball. FWIW, I've been converting to the top of the 15% for the last few years, and am considering moving into the 25...
by Chip
Thu Jun 19, 2008 6:32 am
Forum: Investing - Theory, News & General
Topic: Is anyone overweighting the financial sector?
Replies: 142
Views: 31134

I'm overweight financials since that's what popped out of the O'Shaughnessy value screen I ran in March. It's not working too well so far, but I guess that's why they're called risky value stocks :shock: . In a 50 stock portfolio I have positions in Barclays, Citigroup, Credit Suisse, Fairfax Financ...
by Chip
Mon Jun 16, 2008 7:32 am
Forum: Investing - Help with Personal Investments
Topic: Company Stocks in 401K... rollover question.
Replies: 7
Views: 1418

JJ, The distribution doesn't have to be all taxable or all IRA rollover. She could direct part/most to an IRA and take the rest as a taxable distribution (with the favorable NUA treatment). Plus, since she's under 59.5, she can take partial rollovers now and later (post age 59.5) take a full distrib...
by Chip
Wed May 21, 2008 5:58 am
Forum: Investing - Help with Personal Investments
Topic: tax harvesting
Replies: 23
Views: 3899

Plainsman wrote:.. except LT losses can not be used to offset ST gains
Doesn't this only apply to ST gains that a fund declares, since they are lumped in with dividends? Otherwise, I'm pretty sure that LT losses DO offset ST gains.
by Chip
Sun May 18, 2008 4:55 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio Help for New Member
Replies: 12
Views: 2206

I'm sure others will have more detailed comments, but here are a couple of things that jump out at me: Rather than buying muni bonds in taxable, you should buy taxable bond funds in your IRAs. Maybe half total bond and half VAIPX. Replace the muni bonds in taxable with tax-efficient funds like VTSAX...
by Chip
Sat May 17, 2008 3:56 am
Forum: Investing - Help with Personal Investments
Topic: payoff a mortgage early?
Replies: 52
Views: 10655

I would pay it off, subject to the conditions that mhalley listed. Your tax situation is also a consideration. If your marginal bracket is low, and/or all of the interest isn't deductible (i.e. if the sum of your non-mortgage deductions doesn't exceed the standard deduction), you should almost certa...
by Chip
Fri May 16, 2008 4:17 pm
Forum: Investing - Help with Personal Investments
Topic: Making Lemonade Out of Lemons?
Replies: 2
Views: 1074

I agree it's a difficult calculation due to the many assumptions you have to make. Personally I am taking the cap gains this year and substantially reducing my normal Roth conversion. But I had some individual stock positions with substantial gains that I wanted to sell. I'm in the camp that this mi...
by Chip
Thu May 15, 2008 8:37 am
Forum: Investing - Help with Personal Investments
Topic: Question about buying individual stocks
Replies: 6
Views: 1996

My limited experience is that an order that's 10% of average daily volume will almost certainly have an impact. I try to break my orders up (as hollowcave suggested) so that no order is more than 5% of average daily volume. There can still be issues at that level, though. You also have to be careful...
by Chip
Fri May 09, 2008 6:08 am
Forum: Investing - Theory, News & General
Topic: Foreign tax credit ever cause you to hit AMT?
Replies: 11
Views: 2601

I am under the impression you have the option of either taking foreign taxes as a credit (at the end of the 1040) or as a deduction (on Schedule A) You're absolutely correct. The deduction aspect had slipped my mind, since I never use it either. It's difficult to imagine the situation where the ded...
by Chip
Fri May 09, 2008 5:36 am
Forum: Investing - Theory, News & General
Topic: Foreign tax credit ever cause you to hit AMT?
Replies: 11
Views: 2601

The FTC doesn't have anything to do with itemizing. It's claimed in the tax credits section of Form 1040, whether or not you itemize.

I can't think of a way it would affect AMT. But the AMT gets triggered in some pretty bizarre ways, so I won't say I'm certain about it.
by Chip
Mon May 05, 2008 5:12 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio Advice needed with inheritance
Replies: 15
Views: 3426

It was mentioned earlier in the thread, but didn't get any traction.

Why not pay down the mortgage with the extra cash? It's costing nearly 5% after tax, assuming that all the interest is deductible.
by Chip
Mon May 05, 2008 4:34 am
Forum: Investing - Theory, News & General
Topic: Net Unrealized Appreciation (NUA)
Replies: 8
Views: 2056

A minor correction: the cost basis is taxed as ordinary income when withdrawn from the account. The rest of the appreciation gets CG treatment.
by Chip
Sun May 04, 2008 6:12 am
Forum: Investing - Theory, News & General
Topic: Net Unrealized Appreciation (NUA)
Replies: 8
Views: 2056

I think the requirement is that one must take a lump sum distribution to get NUA treatment. But multiple distributions in one calendar year are considered a lump sum if they completely deplete the account. On the CG issue -- I think you're correct about the NUA portion -- it immediately qualifies fo...
by Chip
Sat May 03, 2008 5:43 am
Forum: Investing - Help with Personal Investments
Topic: feasability of early retirement and portfolio help
Replies: 9
Views: 2516

How much do you plan to spend each year? $4M is probably plenty if you're spending 100K a year, but likely not enough to support 200K.
by Chip
Mon Apr 07, 2008 8:08 am
Forum: Investing - Help with Personal Investments
Topic: Tax Question: re. cashless for cash gain on exercised NQSO
Replies: 23
Views: 4913

- Box 12 on my W2 should report my stock option gain (#options*[exercise price - strike price]); and - Box 1 should include the amount in Box 12 as part of my wages, but not reduced by the (federal + social security + medicare) taxes due on that gain. Exactly! AFTER: To me now, though re-reading yo...
by Chip
Mon Apr 07, 2008 7:09 am
Forum: Investing - Help with Personal Investments
Topic: Rationale behind TIPS?
Replies: 39
Views: 7344

Even the credit union manager said they were based on inflation, until we looked at the fine print and found the "rate of change" reference, which is what Treasury Direct told me. How exactly do you think those two bases are different, in terms of how they apply to the inflation-adjusted portion of...
by Chip
Sat Apr 05, 2008 8:45 am
Forum: Investing - Help with Personal Investments
Topic: Federal Withholding (avoiding underpayment penalty)
Replies: 5
Views: 1512

If I owe less than $1,000 in taxes for 2008 does it matter how much was withheld this year? No. Less than $1000 owed with your return is a safe harbor. If my employer withholds at least 90% of my 2007 total tax, am I in the clear? No. You must withhold (or pay additional estimated taxes) 100% of 20...
by Chip
Sat Apr 05, 2008 5:43 am
Forum: Investing - Help with Personal Investments
Topic: Tax Question: re. cashless for cash gain on exercised NQSO
Replies: 23
Views: 4913

Your description of your W-2 confuses me. It sounds more like a pay stub than a W-2. I've never seen "year to date earnings" or "year to date deductions" on a W-2. I'm looking right now at a W-2 that has nothing on it but stock option income (I'm retired). Box 1 (Wages, tips, other compensation) is ...
by Chip
Fri Apr 04, 2008 4:08 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Question: re. cashless for cash gain on exercised NQSO
Replies: 23
Views: 4913

I'm not sure why your wages shown on the W-2 were reduced by the taxes. W-2s for NQSO exercises that I've seen show the total option gain (calculated as #options*[exercise price-strike price]) as wages. On Schedule D you show a stock transaction. The cost basis is the #options*exercise price (+ brok...
by Chip
Fri Apr 04, 2008 12:37 pm
Forum: Investing - Help with Personal Investments
Topic: understanding ETFs
Replies: 4
Views: 1545

You can't compare the index fund NAV and the ETF share price on an absolute basis. They represent different sized slices of identical pies. So, as an example: Pie A (open end fund) = $100,000 of various stocks, split into 10,000 mutual fund shares. Price = 100,000/10,000 = $10 Pie B (ETF) = $100,000...
by Chip
Fri Apr 04, 2008 4:34 am
Forum: Investing - Theory, News & General
Topic: Penny stocks
Replies: 20
Views: 5179

Never bought one, but I used to spend a bit of time researching names on another board. It never ceased to amaze me how awful almost all of these "companies" were. A couple of examples: A "company" whose only asset was a certificate of deposit, its only revenue the interest from the CD, with no plan...
by Chip
Thu Apr 03, 2008 5:18 am
Forum: Investing - Help with Personal Investments
Topic: Please help me fix my 401k mess!
Replies: 7
Views: 2666

About converting the IRAs to Roths: Were those deductible contributions that you made to the IRA you're moving to Zecco? If so, make sure you understand the rules about allocating cost basis when you do a Roth conversion. You lump all of your traditional IRAs together when figuring how much of a con...
by Chip
Thu Apr 03, 2008 5:09 am
Forum: Investing - Help with Personal Investments
Topic: Please help me fix my 401k mess!
Replies: 7
Views: 2666

Okay, so you have roughly 30% in taxable, 50% in the 401k, and 20% in IRAs. You'll be contributing roughly 16K per year to the 401k, 10K per year each to the IRAs and to taxable. Sound about right? While you have a desired AA, you're likely going to have to compromise based on what's available in th...
by Chip
Wed Apr 02, 2008 7:57 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio advice for newbie
Replies: 13
Views: 3502

Dave, Not to beat a dead horse, but have you looked carefully at all the assumptions you're making when saying that you expect to be in a higher tax bracket when you retire? The reason I ask is that the first dollar sent now to a regular 401k saves you tax at your marginal rate of 40%. The first dol...
by Chip
Wed Apr 02, 2008 4:23 am
Forum: Investing - Help with Personal Investments
Topic: Please help me fix my 401k mess!
Replies: 7
Views: 2666

With those tax rates it will really pay to be tax efficient. I think that probably means having VEU (your entire 20%) and VTI (whatever is left)as your only taxable investments. I wouldn't put the international small cap in taxable. The FT credit won't make up for the built in tax inefficiencies in ...
by Chip
Mon Mar 31, 2008 4:51 am
Forum: Investing - Help with Personal Investments
Topic: Complicated Roth Recharacterization
Replies: 3
Views: 2276

Greg, You can read about the IRS calculation method here . You or Wells will need to know: -The value of the entire Roth on 5/21/07 (the day before the conversion). I suggest using the April statement to find the share amounts of your holdings, then look up 5/21 prices on Yahoo or elsewhere. Also ch...
by Chip
Mon Mar 31, 2008 4:03 am
Forum: Investing - Help with Personal Investments
Topic: one quick question and one lengthy one
Replies: 18
Views: 3361

Before you sell AT&T, is the gain all long-term? You didn't say when your grandmother passed, but I assume that's a while ago given your age. It's always good to think about this, but with inherited assets it doesn't matter. They are all automatically long term gains unless the asset was purchased ...
by Chip
Thu Mar 27, 2008 7:56 am
Forum: Investing - Help with Personal Investments
Topic: Admiral shares - only through Vanguard?
Replies: 6
Views: 2051

You can't buy them through Fidelity. I've talked to a couple of reps at length about this (WRT 2 specific muni funds). They claim that it is a Vanguard decision that Fido is unable to offer them, though the Morningstar list that Ken posted makes me pretty skeptical of the Fido line. You can ACAT tra...
by Chip
Thu Mar 27, 2008 7:48 am
Forum: Investing - Help with Personal Investments
Topic: What to do about my muni funds?
Replies: 18
Views: 4233

You reinvest in non-Vanguard because of restrictions on reinvesting in those funds after selling them? Or some other reason? Because of the wash sale rule. She wouldn't have been able to claim the loss if I'd bought back into Vanguard within 31 days. In more "normal" times for munis, I might have j...
by Chip
Wed Mar 26, 2008 12:13 pm
Forum: Investing - Help with Personal Investments
Topic: What to do about my muni funds?
Replies: 18
Views: 4233

OK, the responses I'm getting make me think I am misunderstanding some important fundamentals. My concern comes from looking at my total return (I think) where I see that my muni funds are now worth less than I paid for them. This is not the case for the other funds. Yes, the muni funds are worth l...
by Chip
Wed Mar 26, 2008 8:56 am
Forum: Investing - Help with Personal Investments
Topic: OT: MO / Kraft split = taxes?
Replies: 27
Views: 7339

jenny, You're welcome! The .687 KFT is a sale, not a dividend. You should see it on your 2007 Form 1099-B, which is the form your broker sends you to show sale transactions. Your total proceeds reported on Schedule D should match exactly what your broker is reporting to the IRS. Did you (or the brok...
by Chip
Wed Mar 26, 2008 5:50 am
Forum: Investing - Help with Personal Investments
Topic: OT: MO / Kraft split = taxes?
Replies: 27
Views: 7339

what do I put on my tax return? is KFT consider short term gain? Do I put down purchase date of KFT 4/2/2007? Jenny, Here is how I would work it out: 1. You received 200 shares of Kraft, plus cash-in-lieu for .687 shares. If I'm reading the document correctly, you should have received $21.47 cash-i...
by Chip
Wed Mar 26, 2008 5:19 am
Forum: Investing - Help with Personal Investments
Topic: OT: MO / Kraft split = taxes?
Replies: 27
Views: 7339

livesoft wrote:Homework problem:
It's either FIFO or zero basis.
by Chip
Wed Mar 26, 2008 4:18 am
Forum: Investing - Theory, News & General
Topic: Do you regret saving too much when you were younger?
Replies: 70
Views: 18172

If we hadn't had the good fortune of experiencing the market returns of the 80s and 90s we'd probably be wishing we'd saved a whole lot more than we did. As it is, we had some really good experiences and were still able to retire in our 40s.
by Chip
Wed Mar 26, 2008 3:53 am
Forum: Investing - Theory, News & General
Topic: Average Return these last 10 years
Replies: 24
Views: 5148

9.1% geometric mean return from 12/31/97 through 12/31/07, with a std dev (of the annual returns) of 13.0%. I have Vanguard TSM at 6.0%/16.2% over the same period. My equity allocation started at 95% and dropped to 71% over that time period. I'm pretty sure those numbers are accurate, but it took a ...
by Chip
Sun Mar 23, 2008 6:20 am
Forum: Investing - Help with Personal Investments
Topic: AA and Tax Planning???
Replies: 6
Views: 1363

Grange? Wow. Never had one, but sure know the story. I think I would manufacture a special occasion just so I could drink it. :P I've had a few of the Elyse zins, but never the PS. Thanks for the recommendation -- I'm a big fan of PS, at least those aren't terribly tannic. I get out to Napa a couple...
by Chip
Sun Mar 23, 2008 4:53 am
Forum: Investing - Help with Personal Investments
Topic: AA and Tax Planning???
Replies: 6
Views: 1363

Looks good to me, too. I guess if you drank a full dose of the Kool-Aid it would cause you to dump VGENX, but I don't have much room to talk since I have a bunch of individual stocks :D . I'm your age, retired, and have the same stock/bond split. I wouldn't say I sleep well, but the reason isn't the...
by Chip
Wed Mar 19, 2008 3:18 pm
Forum: Investing - Help with Personal Investments
Topic: How to effectively/practically invest in munis? Book rec?
Replies: 13
Views: 3048

Why not buy a muni ETF? Some of them are subject to AMT, but beyond that it seems that is a reasonable option. Seems like many of them are very low volume with very few issues owned vs. the open end funds. I was thinking about CXA the other day but the volume was so low I would have had to split up...
by Chip
Mon Mar 17, 2008 6:33 am
Forum: Investing - Help with Personal Investments
Topic: Property Tax Question
Replies: 9
Views: 2653

You're getting different answers, which often happens on forums like this. My JK Lasser tax book says that "allocation of taxes between the buyer and seller is mandatory...". So you deduct only the net tax paid, i.e. your deduction is the amount you paid by check less the tax amount allocated to the...
by Chip
Wed Mar 12, 2008 2:01 pm
Forum: Investing - Help with Personal Investments
Topic: "Best" withdrawal decisions
Replies: 8
Views: 2638

I'm also executing your scenario 2. I thought I did a good deal of analysis, but I think you've covered the angles in much more detail than I did.

I'm beginning to question whether the top of the 15% bracket is going to be enough to control the RMDs, given that I expect tax rates to rise.