Search found 29150 matches

by grabiner
Thu May 06, 2021 10:03 pm
Forum: Personal Finance (Not Investing)
Topic: Advice needed HDHP+HSA vs PPO
Replies: 6
Views: 476

Re: Advice needed HDHP+HSA vs PPO

So it looks like for only $700 less per year I bump up the deductible by $2300 and pay the full fees for even the primary care visits. Does this pricing seem reasonable? Yes, but if you are in a 22% tax bracket, the $7200 you contribute to the HSA saves you $1584 in taxes, so the net difference is ...
by grabiner
Thu May 06, 2021 9:51 pm
Forum: Personal Investments
Topic: Selling All Lots of Individual Stock In One Go - Tax?
Replies: 14
Views: 1065

Re: Selling All Lots of Individual Stock In One Go - Tax?

4/1/2021 - Buy 100 shares at $40 4/2/2021 - Buy 60 shares at $35 4/3/2021 - Buy 120 shares at $25 And then on 5/5/2021 I sold all 280 shares at once in one transaction at a share price of for example $37 for which there was a net profit, how are the short term capital gains and tax calculated? Is i...
by grabiner
Thu May 06, 2021 9:46 pm
Forum: Personal Investments
Topic: Can someone explain interest rates vs bonds price?
Replies: 3
Views: 438

Re: Can someone explain interest rates vs bonds price?

It's also important to understand that EVEN IF it were true that "interest rates have pretty much nowhere to go but up from here", it's quite unlikely that you or I would be the first person to figure that out. You can't beat the market by acting on information that everyone in market alr...
by grabiner
Thu May 06, 2021 6:15 pm
Forum: Personal Investments
Topic: target retirement fund in a taxable account
Replies: 60
Views: 3421

Re: target retirement fund in a taxable account

3. I saw several threads from people who sold their international mutual funds (e.g. Vanguard Total International Stock), purchased from US-based mutual fund companies, then got all tied up trying to report "foreign" capital gains or losses on Form 1116. (This was a misunderstanding on th...
by grabiner
Thu May 06, 2021 6:12 pm
Forum: Personal Investments
Topic: target retirement fund in a taxable account
Replies: 60
Views: 3421

Re: target retirement fund in a taxable account

Some perennial issues that might or might not have been more discussed this year: 4. Form 1116 has several levels of complexity. Its most complex form is when someone has more that $20,000 in foreign source qualified dividends (a pretty high hurdle) *or* you are in 32% tax bracket or above. Boglehe...
by grabiner
Wed May 05, 2021 10:25 pm
Forum: Personal Finance (Not Investing)
Topic: Tax advice for selling stock
Replies: 9
Views: 756

Re: Tax advice for selling stock

I would sell the tax lots with the least gain. Why realize more gain than necessary regardless of your projection of future tax law. Thanks, this always trips me up. Is there ever a time where it's wiser to sell shares with a larger gain before shares with less gain? What about if you knew the LT c...
by grabiner
Wed May 05, 2021 10:17 pm
Forum: Investing - Theory, News & General
Topic: The Eight Great Misconceptions About Bonds
Replies: 46
Views: 4485

Re: The Eight Great Misconceptions About Bonds

(bond yields rise halfway through the term; you can keep your old bond or sell for a new bond with the same maturity date) No, because the new bond would have higher coupon payments, making up for the loss. Larger interest rates will compensate the loss when it comes to the coupon payments you rece...
by grabiner
Wed May 05, 2021 10:02 pm
Forum: Investing - Theory, News & General
Topic: The Eight Great Misconceptions About Bonds
Replies: 46
Views: 4485

Re: The Eight Great Misconceptions About Bonds

They can continue to hold the bond to maturity, but this leaves them no better off than if they sold the bond for a capital loss and bought a new bond with the same maturity date and a 5% yield. I don't think this is correct. What they receive in interests would be the same, but if they realize the...
by grabiner
Wed May 05, 2021 9:34 pm
Forum: Investing - Theory, News & General
Topic: The Eight Great Misconceptions About Bonds
Replies: 46
Views: 4485

Re: The Eight Great Misconceptions About Bonds

However, If someone is holding an individual bond that was purchased at a 3% yield (by which I'm referring to YTM, or expected total return), the change in rates, or any reason that would cause a mark-to-market change, does not alter the fact that this person will still get a 3% return on their bon...
by grabiner
Wed May 05, 2021 9:23 pm
Forum: Personal Investments
Topic: Retirees: Distributions in down markets
Replies: 43
Views: 2996

Re: Retirees: Distributions in down markets

I'm on the cusp of retirement so I'm thinking ahead and would like to hear the experience of others. Personally, right now at least, the bulk of my retirement dough is in the Fed's TSP, and they have this crazy rule that requires distributions to be drawn proportionally from investments, so it's no...
by grabiner
Wed May 05, 2021 8:54 pm
Forum: Personal Investments
Topic: target retirement fund in a taxable account
Replies: 60
Views: 3421

Re: target retirement fund in a taxable account

When you hold foreign stocks, there is some amount of tax that the fund pays to the foreign countries. For your US taxes, you get "credit" for that foreign tax that was paid on your behalf. A little bit of foreign tax does not require this form people are talking about. But if the foreign...
by grabiner
Wed May 05, 2021 8:49 pm
Forum: Personal Investments
Topic: Sell AGG Bond Fund to TLH and Buy Short-Term Bond Fund at Fidelity
Replies: 5
Views: 486

Re: Sell AGG Bond Fund to TLH and Buy Short-Term Bond Fund at Fidelity

Thanks Livesoft. Do the corporate bonds provide more inflation protection than government bonds? The inflation risk of a bond depends on its duration, not on its issuer (unless the issuer is more likely to default in high or low inflation). If a bond will pay you $1000 in ten years, its current val...
by grabiner
Wed May 05, 2021 8:42 pm
Forum: Personal Finance (Not Investing)
Topic: Tax advice for selling stock
Replies: 9
Views: 756

Re: Tax advice for selling stock

You should sell the shares with the smallest capital gain, regardless of what is happening to your capital-gains tax rate. The reason is that, for a given amount of gain, you can sell more shares now, and thus reduce future gains. For example, suppose the stock is worth $100 and you bought 1000 shar...
by grabiner
Wed May 05, 2021 8:37 pm
Forum: Personal Investments
Topic: Self management of retirement funds
Replies: 30
Views: 2715

Re: Self management of retirement funds

Any advice on mixing multiple target funds in retirement IRA accounts. I plan on using target fund 2025 and target fund 2030. The idea is I wont need all the money right away. I also have other sources of income such as pension, and dividends from taxable accounts to live on. thank you This isn't n...
by grabiner
Wed May 05, 2021 5:20 pm
Forum: Personal Investments
Topic: Question on tax loss harvesting
Replies: 13
Views: 952

Re: Question on tax loss harvesting

I just had one more follow up to my post... Is there a problem if I make two transactions (one in Fidelity and one in Vanguard) to sell at a loss to avoid a wash sale? For example, I have a $10k loss of Stock X at Fidelity. I have a $12k loss of the same stock X at Vanguard. I'd like to sell both o...
by grabiner
Wed May 05, 2021 12:00 am
Forum: Personal Finance (Not Investing)
Topic: Doing tax returns for two states
Replies: 28
Views: 1794

Re: Doing tax returns for two states

Thanks for the help! State A is California. State B is New York. Both have rather aggressive tax policies, I have been told... NY sources work from home to your workplace, while CA sources it to your home and does not allow a credit for income with a source in CA. Thus, if you get the income as W-2...
by grabiner
Tue May 04, 2021 11:30 pm
Forum: Personal Finance (Not Investing)
Topic: Doing tax returns for two states
Replies: 28
Views: 1794

Re: Doing tax returns for two states

Thanks for the help! State A is California. State B is New York. Both have rather aggressive tax policies, I have been told... NY sources work from home to your workplace, while CA sources it to your home and does not allow a credit for income with a source in CA. Thus, if you get the income as W-2...
by grabiner
Tue May 04, 2021 11:04 pm
Forum: Investing - Theory, News & General
Topic: Comparing savings by taxability - any rules of thumb?
Replies: 4
Views: 511

Re: Comparing savings by taxability - any rules of thumb?

The adjustment I make is based on risk: if I lose $1000 in one of my accounts, what does that do to my future spending? If I lose it in my Roth IRA, I lose the tax-free growth on $1000. If I lose it in my employer plan, I lose the tax-free growth on $1000, reduced by my retirement tax bracket. If I ...
by grabiner
Tue May 04, 2021 10:54 pm
Forum: Investing - Theory, News & General
Topic: Vanguard ETFs are less tax efficient than others
Replies: 29
Views: 3302

Re: Vanguard ETFs are less tax efficient than others

I listened to the podcast below and these two points were mentioned that made no sense to me: 1. That Vanguard ETFs are not as tax efficient as other ETFs because Vanguard uses some process they patented that makes their ETFs more mutual-fund like. Now, I've heard of them having a patented process ...
by grabiner
Tue May 04, 2021 10:49 pm
Forum: Investing - Theory, News & General
Topic: Vanguard ETFs are less tax efficient than others
Replies: 29
Views: 3302

Re: Vanguard ETFs are less tax efficient than others

I keep reading that Vanguard's VTSAX is the most tax efficient of the Total US Stock Market mutual funds, but I also read that BlackRock's ITOT ETF is more tax efficient than VTI (the ETF share class of VTSAX). Looking at the tax cost ratio on Fidelity, VTI Tax cost ratio is .38% and ITOT tax cost ...
by grabiner
Tue May 04, 2021 10:41 pm
Forum: Personal Investments
Topic: Liquidation order for taxable account?
Replies: 16
Views: 1542

Re: Liquidation order for taxable account?

Something not mentioned above is that you never want to let short term losses become long term. Realize them before that happens. You can figure out why pretty easily. A long term loss is the same as a short term loss. Short-term losses have the minor advantage that they offset short-term gains fir...
by grabiner
Tue May 04, 2021 10:36 pm
Forum: Personal Investments
Topic: GMNA going forward
Replies: 4
Views: 695

Re: GMNA going forward

What is going on is that bond fund dividend payments lag interest rates. When a fund buys a bond at a premium or discount, the premium or discount is amortized, so the dividend payments are based on the yield to maturity at the time of purchase. Thus, if a fund bought a bond in 2016, the dividends w...
by grabiner
Tue May 04, 2021 10:25 pm
Forum: Personal Investments
Topic: Wash Sale Rule
Replies: 5
Views: 409

Re: Wash Sale Rule

A wash sale does not disallow the deduction for the loss permanently; the loss is added to the basis of the replacement shares. You have 100 shares bought at $40. On April 30, you sell these shares for $35, which is a $500 capital loss. On May 3, you buy back the stock for $36. This is a wash sale; ...
by grabiner
Tue May 04, 2021 10:16 pm
Forum: Personal Investments
Topic: Best tax strategy for when to sell equities
Replies: 24
Views: 1705

Re: Best tax strategy for when to sell equities

I am not worrying about a CG tax because I am not in the income bracket for that and neither are you. And when you get married, your bracket will go down, too. I suppose your worry is RMDs in the future. See Taxation of Social Security benefits on the wiki. Use the formulas there to see where you e...
by grabiner
Tue May 04, 2021 10:08 pm
Forum: Personal Investments
Topic: VFIRX Vanguard Short-Term Treasury questions
Replies: 3
Views: 479

Re: VFIRX Vanguard Short-Term Treasury questions

1. How come VFIRX gives dividends, shortterm gains, and long term gains? Is that how all bonds behaves? This link shows dividends, short term and long term: https://investor.vanguard.com/mutual-funds/profile/distributions/VFIRX Bonds pay out dividends; this is what a bond does. Bond funds buy and s...
by grabiner
Tue May 04, 2021 9:49 pm
Forum: Personal Finance (Not Investing)
Topic: Doing tax returns for two states
Replies: 28
Views: 1794

Re: Doing tax returns for two states

Imagine my normal job is in state A, and I have my primary residence there. However, I consult for another company in state B. I do this two different ways: — for 3/4 of the year, I stay at home in state A but consult part time. — for 1/4 of the year, I work full time for the company and reside in ...
by grabiner
Tue May 04, 2021 9:30 pm
Forum: Personal Investments
Topic: $275k in cash - increase house down payment or open taxable account?
Replies: 16
Views: 2413

Re: $275k in cash - increase house down payment or open taxable account?

One option is to make your down payment high enough (> 20%) such that the mortgage payment is affordable on one salary in the event of layoff, etc. This doesn't actually work. If you put an extra $50K down, you will have lower monthly payments, but you will also have $50k less in cash (which you ca...
by grabiner
Sun May 02, 2021 11:22 pm
Forum: Personal Investments
Topic: HSA and California move
Replies: 17
Views: 1427

Re: HSA and California move

If you don't have any carryover capital losses, you should harvest gains in the HSA before moving to CA. If you do have carryover capital losses, this won't help directly, because you will eat into your carryover; CA residents can carry over capital losses from before they became residents. For exa...
by grabiner
Sun May 02, 2021 3:51 pm
Forum: Personal Investments
Topic: Should I sell for a loss to offset gains?
Replies: 7
Views: 812

Re: Should I sell for a loss to offset gains?

At 50k income, your 3k of crypto long-term gains might be taxed at only 0% (if you file single, you are very close to the line; for MFJ you are definitely in the 0% range). So if you realized your losses they would be wasted - in the sense they would offset 3k of gains that would have had 0 tax any...
by grabiner
Sun May 02, 2021 3:48 pm
Forum: Personal Investments
Topic: preferred stocks
Replies: 5
Views: 686

Re: preferred stocks

From an asset location perspective is it advisable to put preferred stocks in a taxable account or tIRA? Depends on your household income and if the preferred is a qualified dividend to be taxed at the LTCG rate, or as ordinary income. Knowing all of that would help select location. Good article he...
by grabiner
Sun May 02, 2021 3:37 pm
Forum: Personal Investments
Topic: Puzzled about two Vanguard bond funds
Replies: 13
Views: 1161

Re: Puzzled about two Vanguard bond funds

A similar situation exists in the Schwab universe with SCHZ (US Aggregate Bond ETF, 6.27 year average duration; 0.04% ER) and SWNTX (Schwab Tax-Free Bond Fund, 5.75 year average duration; 0.49% ER). At Schwab, the expense difference would eat up the tax savings, so it doesn't make sense to hold the...
by grabiner
Sun May 02, 2021 3:35 pm
Forum: Personal Investments
Topic: HSA and California move
Replies: 17
Views: 1427

Re: HSA and California move

If you don't have any carryover capital losses, you should harvest gains in the HSA before moving to CA. If you do have carryover capital losses, this won't help directly, because you will eat into your carryover; CA residents can carry over capital losses from before they became residents. For exam...
by grabiner
Sun May 02, 2021 3:29 pm
Forum: Personal Investments
Topic: What percent of Roth IRA should be in bonds if I am 38
Replies: 29
Views: 2247

Re: What percent of Roth IRA should be in bonds if I am 38

Your risk tolerance determines what percentage of your portfolio should be in bonds. If your portfolio is 80% stock, you will lose 40% of the portfolio when the stock market loses half its value, whether the bonds are in an IRA, 401(k), or taxable account. Therefore, the right question to ask first ...
by grabiner
Sun May 02, 2021 3:23 pm
Forum: Personal Investments
Topic: $275k in cash - increase house down payment or open taxable account?
Replies: 16
Views: 2413

Re: $275k in cash - increase house down payment or open taxable account?

A lot depends on where you stand as far as investments and a bit on how much mortgage interest you can deduct. If your investments are pretty much on target as far as reaching your "number" then pay down your mortgage maybe to the level that allows max tax deduction??? and invest the rest...
by grabiner
Sat May 01, 2021 6:35 pm
Forum: Personal Finance (Not Investing)
Topic: spend year in 2 different states: which gets cap gains taxes?
Replies: 13
Views: 1131

Re: spend year in 2 different states: which gets cap gains taxes?

As noted, depends on the state. since you know what states A and B are you can easily do this. Let's say your income (with the cap gains) is $100K in State A. and your income the rest of the year is $50K Some states part year returns will let you clearly allocated the 100K to them, and the $50K to ...
by grabiner
Sat May 01, 2021 6:10 pm
Forum: Personal Finance (Not Investing)
Topic: does mortgage recast make sense in this situation?
Replies: 3
Views: 587

Re: does mortgage recast make sense in this situation?

Since your taxable account is twice the size of your mortgage, you don't have any liquidity issues. Therefore, it makes sense to get a risk-free benefit by selling cash or bonds to pay down the mortgage. How much is that risk-free benefit? If you are in a 32% tax bracket, and are deducting all the i...
by grabiner
Sat May 01, 2021 5:50 pm
Forum: Investing - Theory, News & General
Topic: Is the potential upside in munis worth the downside?
Replies: 67
Views: 6854

Re: Is the potential upside in munis worth the downside?

Disadvantages of munis that I don’t see often mentioned: -If your income and/or tax bracket drop in retirement and it makes sense to switch from muni bonds to total bond, except selling the muni bonds will trigger capital gains taxes. The capital gain or loss on switching bond funds is usually triv...
by grabiner
Sat May 01, 2021 5:47 pm
Forum: Investing - Theory, News & General
Topic: Taking on risk in tax deferred vs. taxable
Replies: 7
Views: 645

Re: Taking on risk in tax deferred vs. taxable

But what do you do if you don’t want too much of bonds in your portfolio - like if your allocation to them is lower than your tax deferred amount? Asset allocation is more important than asset location. You should first decide how much to hold in bonds, because that affects your overall portfolio r...
by grabiner
Sat May 01, 2021 5:05 pm
Forum: Personal Investments
Topic: Try to understand Vanguard VWEHX
Replies: 6
Views: 793

Re: Try to understand Vanguard VWEHX

Normally, when you buy a bond, you pay for it, receive regular coupon payments, and get back the principal at maturity. The bond price will go up and down before maturity as rates change, but it tends to be neutral in the long run. Thus most bond funds have relatively stable NAVs. Yields will change...
by grabiner
Sat May 01, 2021 4:52 pm
Forum: Personal Investments
Topic: Does getting a W2 each year allow me to delay RMDs from 401K?
Replies: 15
Views: 1797

Re: Does getting a W2 each year allow me to delay RMDs from 401K?

For those interested, it is often possible (advantageous?) to roll 401k money from previous employers into that of the current employer, permitting postponement of the RMDs on all 401k moneys for late retirees or "semi-retirees". The RMD exemption applies otherwise only to the 401k of the...
by grabiner
Sat May 01, 2021 4:38 pm
Forum: Personal Finance (Not Investing)
Topic: income taxes
Replies: 15
Views: 1925

Re: income taxes

I think that as of 2015, the supreme court ruled on a 5-4 unconventional split that double taxation is unconstitutional. https://www.ncsl.org/blog/2015/05/22/supreme-court-to-maryland-no-double-taxation.aspx This dealt with a separate issue. Maryland has separate state and county income taxes, alth...
by grabiner
Sat May 01, 2021 7:57 am
Forum: Investing - Theory, News & General
Topic: What Investing "Rules" Have Changed During the Tenure of This Forum?
Replies: 98
Views: 9445

Re: What Investing "Rules" Have Changed During the Tenure of This Forum?

Bonds should be held in a tax-deferred account and stock index funds in a taxable account. This rule made more sense when bond yields were higher. Now, I usually recommend that investors in high tax brackets, particularly those in high-tax states, prefer munis in taxable and stocks in tax-deferred....
by grabiner
Fri Apr 30, 2021 9:52 pm
Forum: Personal Investments
Topic: Question on tax loss harvesting
Replies: 13
Views: 952

Re: Question on tax loss harvesting

My last purchase of the stock was on April 19. Does that mean that I cannot do a TLH for 31 days (May 20)? Or… can I sell some stock now, take a loss, then wait 31 days to buy the stock back? Thank you! If you sell the shares you purchased in the last 30 days (whether they have a gain or a loss), a...
by grabiner
Fri Apr 30, 2021 6:58 pm
Forum: Personal Finance (Not Investing)
Topic: income taxes
Replies: 15
Views: 1925

Re: income taxes

If 90% of your NJ taxable income is taxed by NY, your credit is limited to 90% of your NY tax. I don't think this is correct. If 90% of their NJ taxable income is taxed by NY (assuming that 100% of their NY income is taxed by NJ), then their NJ credit is limited to 100% of their NY tax, or 90% of t...
by grabiner
Thu Apr 29, 2021 10:37 pm
Forum: Personal Finance (Not Investing)
Topic: income taxes
Replies: 15
Views: 1925

Re: income taxes

You will file NJ Schedule COJ with your NJ tax return to claim the credit against your NJ tax. The credit is the lesser of the tax paid to NY, or a prorated share of the NJ income tax. If 90% of your NJ taxable income is taxed by NY, your credit is limited to 90% of your NJ tax. Even though NJ tax r...
by grabiner
Thu Apr 29, 2021 10:27 pm
Forum: Investing - Theory, News & General
Topic: How risky are bond funds?
Replies: 17
Views: 1942

Re: How risky are bond funds?

Lining up duration with the timeframe when one will need the money is a useful rule of thumb. Seems like one could make a ladder of bond funds with various durations to take advantage of this concept? Or would it be better to just buy a Total Bond fund and reduce the complexity? Total Bond Market h...
by grabiner
Thu Apr 29, 2021 10:11 pm
Forum: Investing - Theory, News & General
Topic: index ETF vs Mutual Fund optimization for capital gain
Replies: 10
Views: 678

Re: index ETF vs Mutual Fund optimization for capital gain

Don't use Morningstar's data for tax costs; Morningstar doesn't always know about qualified dividends. In addition, even if you have data from the fund provider, remember that taxes are only part of the costs. Vanguard Tax-Managed Capital Appreciation has a lower tax cost than 500 Index, but it also...
by grabiner
Thu Apr 29, 2021 10:07 pm
Forum: Investing - Theory, News & General
Topic: Why do Bogleheads trust active traders to set prices of companies but not of ETFs?
Replies: 29
Views: 2071

Re: Why do Bogleheads trust active traders to set prices of companies but not of ETFs?

You're comparing two S&P 500 ETFs. One has an expense ratio of 0.05; the other has an expense ratio of 0.75. If Bogleheads trust the market to set prices of companies, why not trust the market to set prices of ETFs? Why should it matter which S&P 500 ETF you buy? Shouldn't those expense rat...
by grabiner
Thu Apr 29, 2021 10:03 pm
Forum: Investing - Theory, News & General
Topic: Are Actively Managed Bond Funds Worth a Look?
Replies: 81
Views: 6333

Re: Are Actively Managed Bond Funds Worth a Look?

No - The managers of bonds funds have no better record at beating the market... just the swings are usually less than their stock cousins. Are you sure about that statement? I studies show that an inordinate % of active bond funds beat there benchmark, and definitely more than active equity mutual ...
by grabiner
Thu Apr 29, 2021 9:58 pm
Forum: Investing - Theory, News & General
Topic: How risky are bond funds?
Replies: 17
Views: 1942

Re: How risky are bond funds?

It's directly correlated to the duration of your bonds. The longer the duration, the longer the recovery after a rise in rate. You will recover your principal drop from a rise in interest rates after holding to duration. Similar concept to buying a CD and getting your principal back after it mature...