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Electron

July 1989 was 31.something years ago along this overall centuries long downward trend in bond yields. Treasury funds have had one advantage in periods of declining interest rates. The portfolios generally hold non-callable Treasury securities. That results in a more durable income stream for the in...

Electron

Here is a thread and chart that may be of interest. https://www.bogleheads.org/forum/viewtopic.php?f=10&t=240620 The monthly dividend in dollars per share has continued to drop and make new lows. The most recent dividend was $0.02083. The dividend in July 1989 was $0.08400 https://investor.vangu...

Electron

Vanguard Treasury Money Market fund was the last of the Vanguard Money Market funds to drop to an SEC yield of 0.01%. That was on March 1 after paying 0.02% for a period of time. Maintaining a positive yield does not appear to be a problem at present. Vanguard is currently showing eight different Tr...

Electron

Thanks HueyLD, abuss368, and Livesoft for the replies. I think I'll be able to add gross income to my spreadsheet without too much difficulty. In regards to reducing my International holdings, I agree that realizing capital gains would be a penalty. I would likely only sell if some cost basis lots d...

Electron

I don’t know if you are aware but if your credit for Foreign taxes is $600 (Married Filing Jointly) or less, you can avoid filing Form 1116. Unfortunately, I am over the limit. I've actually thought about reducing my foreign holdings so I qualify for the simplified reporting. That can be a major re...

Electron

HueyLD wrote: ↑Mon Mar 08, 2021 2:17 pm If you use TurboTax and can get to the form mode, you can right click on line 3e and TT will show you which amounts are included in line 3e.

That sounds like a very nice feature.

I have my tax returns in a spreadsheet so will have to add the calculation for gross income.

Electron

I could use some clarification on Form 1116, Gross income from all sources, Line 3e. The instructions state that gross foreign source income (line 3d) and gross income from all sources (line 3e) include gross receipts, total capital and ordinary gains (before subtracting losses), and all other incom...

Electron

Looking at the Free Fillable Forms instructions, it indicates that "this program does not support attaching any supplemental statements. If you are instructed to attach a statement to clarify an entry, you will not be able to E-file your return using this program. Print and mail in the return....

Electron

Has anyone seen information on expected IRS processing delays this year for our 2020 tax returns? I am wondering if the delays might be similar to last year or whether they could be even longer. I plan to mail in my Federal tax return and am expecting a relatively small refund. The refund on my 2019...

Electron

I e-file the Federal income tax return using Free File Fillable Forms. I mail a paper State income tax return using fill-in PDF files from the State's income tax web site. I am hoping to do the same thing for my 2020 tax returns. However, I may have a problem with IRS Form 1116. Free Fillable Forms...

Electron

Thanks for the links. Very useful information. It looks like it would be advisable to buy such a fund when it is at a discount to NAV and not a premium, correct? It is advantageous if you can buy at a discount when possible. The net result is that your distribution rate would be greater than if you...

Electron

Upthread in this same giant thread: https://bogleheads.org/forum/viewtopic.php?p=5767791#p5767791 That is a great help. Thank you. I don't recall seeing this issue before. I just added a column to my tax spreadsheet to handle interest income on refunds of foreign withholding taxes! Thanks also to R...

Electron

I finally received the updated Vanguard 1099-DIV and the information for VFWAX is now provided. However, I noticed a new problem where the sum of the dividends paid for the year plus the Foreign Tax Credit does not match the ordinary dividend amount reported in Box 1a on the 1099-DIV. The amounts ar...

Electron

This site has a very informative application note that may help.

https://palomar-engineers.com/tech-supp ... u-tutorial

Look for the link to "Curing Consumer Electronics RFI".

Electron

In what I call my pseudo-MM funds, (they all can lose money under certain circumstances), VBIRX and VSGDX are dissimilar enough to provide some safety. Maybe now nisiprius will come up with some graphs to show this to be incorrect. :happy The Rolling Returns provided by Morningstar can be a very us...

Electron

Brokered CDs are available through Vanguard Brokerage.

That might be another option to explore.

Electron

Here is another view showing what can happen to bond funds in times of crisis. Note that different sectors within the bond market may react differently. The first chart shows the Net Asset Value of VFSTX from 2007 through 2020. The second chart shows the Growth of $10K over the same time period. htt...

Electron

Qualified Dividends appear to be a higher percentage in 2020 compared with 2019.

I think this suggests that the Section 199A dividend percentage will be less this year. If anyone has additional information please pass it along.

Electron

Are there any investment services that don't have this restriction, and allow automatic RMDs from any investment? Note that mutual funds are priced at the end of the trading day so it is easy to withdraw an exact dollar amount. The number of shares withdrawn would reflect the desired dollar amount....

Electron

Here is some additional information on the estimated distributions. https://advisors.vanguard.com/insights/article/estimatedyearenddistributions "Dividend amounts are estimated through December 31, 2020, and may change based on the net income a fund actually earns in the month of December. All ...

Electron

Skipping the 2020 RMD may simplify 2021 estimated tax payments. If 2021 income is expected to be higher than 2020, one could pay the safe harbor amount based on their 2020 tax. This could lower estimated tax payments quite a bit depending on the size of the RMD. Any additional tax due would be defer...

Electron

Lower risk alternatives could include Vanguard Limited Term Tax-Exempt and Vanguard Short Term Tax-Exempt. Portfolio Visualizer is a good tool for these comparisons. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2020&l...

Electron

Thanks sc9182 for the comments. It certainly is important to remember the taxes that will eventually have to be paid on taxable retirement accounts. In fact, looking at the RMD increases with an annual return of 4% and higher prompted me to reconsider Roth Conversions. Most of us don't complain abou...

Electron

Thanks prd1982 and David Jay for the comments. Easy enough to calculate because the percentages are published. Here are the approximate values at peak (subject to my interpolation of the graph): 0% - $1,000,000 (Age 70) 2% - ~$795,000 (Age 85) 4% - ~$650,000 (Age 93) 6% - ~$890,000 (Age 96) The acco...

Electron

Here is a chart that may be of interest to current and future retirees. The chart shows how RMDs vary over time based on both age and return. RMDs are calculated using the Uniform Lifetime Table in IRS Publication 590-B and are taken at the end of each year. Data is provided for annual returns of 0%...

Electron

Morningstar has an interesting article on estimated capital gains distributions from all the major fund families including Vanguard.

https://www.morningstar.com/articles/10 ... -this-year

Electron

The posted document is showing 8.52% of NAV for PRIMECAP Fund as the initial estimate.

I believe that figure is higher than last year. The December distribution may be higher if the fund realizes any additional gains.

Electron

Interesting article from RIAintel from June 10, 2020 It's amazing to me that they have $4B in assets under management. I have not heard their radio program here recently which used to be broadcast on two different stations. Their website currently shows only Austin, Dallas/Fort Worth, Houston, and ...

Electron

I have two pocket knives with blades from Solingen Germany that continue to amaze me. They both hold a very fine edge that lasts a long time. I sharpen them with a standard Arkansas stone and then finish with a Surgical Black Hard Arkansas. The type of steel used in making blades makes a big differe...

Electron

Thanks mhalley and CABob for the replies. The Kiplinger article is very well written and an excellent reminder on the RMD withholding option. I was aware of that possibility and should give it some additional thought. RMDs have had a major impact on my taxable income. Right now it looks like my esti...

Electron

Am I correct that skipping my RMD in 2020 can simplify my estimated tax payments in 2021? It would appear that I could pay safe harbor based on my lower 2020 taxes. The 2021 RMD would increase income relative to 2020 and result in additional taxes due without penalty on April 15, 2022. That could be...

Electron

I use a landline rather than SMS and believe it is safer.

The system has worked very well and the return call is almost instantaneous.

Electron

CEF Connect is a good site to research these kinds of funds. https://www.cefconnect.com/fund/NXQ It doesn't appear that NXQ has returned capital recently. Municipal CEFs typically declare a fixed dividend and initially pay out a little less than earnings. They accumulate Undistributed Net Investment...

Electron

The fund lost half its value in 2008-2009 and didn't recover. The large drop in NAV in 2008 was at least in part the result of deleveraging. A number of leveraged closed-end funds were forced to sell portfolio holdings at fire sale prices to repurchase some of the securities that provided leverage....

Electron

Here is a very interesting chart showing the market price of PCK going back to 2002. Note the large price drop in 2008 which was never recovered. You will see in the last link that the fund had a large short position in long Treasury bonds. In addition, the fund was forced to deleverage and dividend...

Electron

The cost of leverage is one of the risks. These funds often cut their distributions when short term interest rates rise. Also be aware that many of these funds declare a fixed monthly distribution which may not represent all of the portfolio income. The funds will provide the amount of any undistrib...

Electron

I held the fund in 2009-2010 and was surprised that a percentage of income was taxable as ordinary income. The fund also distributed Return of Capital (ROC). PCK has often traded at a significant premium to NAV. In general I do not like leveraged closed end funds and prefer open ended funds such as ...

Electron

1) Given our modest taxable Bond investing if we shouldn't max out EE Bonds and reduce the amount we put in VCITX annually since a) we don't truly need the money b) the 3.5% for EE bonds is a very good rate currently. 2) If we should set a "reconsider date" 5 years into the future and if ...

Electron

Wouldn't whatever decisions are made about "reasonably may be expected to be called" be applicable in the same way to YTW and SEC yield? That's certainly possible if the flexibility with bond calls is actually utilized. However, we've only seen the "reasonably may be expected to be c...

Electron

I don't know what the possible explanations can be when SEC yield is greater than the YTM. Here is a 2016 forum thread indicating that the Yield-to-Maturity figure reported by Vanguard is actually Yield-to-Worst. https://www.bogleheads.org/forum/viewtopic.php?t=198346 In regards to the SEC yield, V...

Electron

I've been investing in this fund since 1994 and hold it for tax-exempt income without reinvesting distributions. You can track SEC Yield using the Vanguard Price History Search Tool. https://personal.vanguard.com/us/funds/tools/pricehistorysearch?radio=1&results=get&FundType=VanguardFunds&am...

Electron

jeffyscott wrote: ↑Sat Oct 17, 2020 2:12 pm I don't know what the explanation is for this divergence between YTM and SEC yield.

I've noticed that it can vary quite a bit depending on the fund.

Vanguard High Yield Corporate had a YTM of 4.6% and an SEC yield of 3.92% on 9-30-20.

As of 10-16-20, the SEC yield was 3.86%.

Electron

Vanguard also provides the Yield to Maturity for bond funds. In the case of VUBFX, it is currently 0.6% versus 0.68% for the SEC yield. Unfortunately, I don't believe the Yield to Maturity reflects expenses and historical data may not be available. Vanguard has an interesting news item online entitl...

Electron

I've done quite a bit of analysis on VUBFX (ultra-short) SEC yield, distribution yield, subsequent 1m, 3m and 1y returns, and price vs. SEC yield. I hope to share some of this if it would be of interest. One thing I would say is that neither SEC yield nor distribution yield is a very good estimate ...

Electron

Comparing Short Term Federal's (VSGDX) numbers to the other two funds, VBIRX and VUBFX, the VSGDX drop in 2020 was less that the other two in percent terms and the VSGDX SEC remains currently higher than their's are. Does this imply that VSGDX has a brighter short-term future? I can't add much to g...

Electron

Thanks Kevin and David for the corrections and analysis. On predicting future returns in short term bond funds, I first thought of John Bogle's model for long term government bonds. Initial yield could be used to estimate the return for the decade ahead. The model is described in Chapter 2 of Common...

Electron

That's the kind of thing I was trying to get out with the Vanguard Ultra Short fund. But it's only been around for five years. DFA has an ultra-short fund with a history going back to 1983. The symbol is DFIHX. Maybe this fund will provide some clues. Here is a Morningstar chart showing DFIHX and V...

Electron

And it's the going forward from today's artificially low rates that I'm concerned with. A Fed rate hike at some point would definitely have an impact on these funds and the bond market may discount a higher Fed funds rate in advance. One thing we can do is look at past tightening cycles that follow...

Electron

Here is a comparison using Portfolio Visualizer. The funds are Vanguard Short-Term Investment Grade Admiral (VFSUX), Vanguard Ultra-Short-Term Bond Admiral (VUSFX), and CASHX representing Money Market returns. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=...

Electron

Thanks Doc and Northern Flicker for your replies. I've held VFSTX or VFSUX in several different IRA accounts over the years and tend to watch it carefully. I did hold the fund in 2008-09 and early 2020 and fortunately held on for the recoveries. In fact, I think I made a few purchases in 2008-09 tha...

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