Search found 29171 matches

by grabiner
Mon May 10, 2021 9:10 pm
Forum: Personal Finance (Not Investing)
Topic: California state taxes: Do I deduct $3,000 capital loss from income
Replies: 13
Views: 773

Re: California sate taxes: Do I deduct $3,000 capital loss from income

CA follows the federal rules for capital losses (unless you have a different CA gain or loss for some reason, such as a capital gain in an HSA). Many other states do not; check with the state tax instructions for any state in which you file taxes. For example, AL allows all capital losses to be dedu...
by grabiner
Mon May 10, 2021 8:54 pm
Forum: Personal Investments
Topic: Accidentally made a deposit into traditional IRA instead of Roth. What can I do?
Replies: 13
Views: 884

Re: Accidentally made a deposit into traditional IRA instead of Roth. What can I do?

You can always just do a conversion to a Roth ira. But that is a 10% tax right? The 10% penalty doesn't apply to a conversion. If your traditional IRA contribution was deductible, you will pay tax on the conversion at your regular rate, but you deducted the contribution, so that cancels out (And th...
by grabiner
Mon May 10, 2021 8:51 pm
Forum: Personal Investments
Topic: Tax Loss Harvesting with Fund of Funds
Replies: 4
Views: 321

Re: Tax Loss Harvesting with Fund of Funds

An example of the same principle: if you sell a stock that is in the S&P 500 index, and buy an S&P 500 index fund (or vice versa), that is not a wash even though the fund holds some shares of the stock.
by grabiner
Mon May 10, 2021 8:47 pm
Forum: Personal Investments
Topic: Moving Vanguard Mutual Fund to Equivalent ETF - Confirming No Tax Consequence
Replies: 8
Views: 679

Re: Moving Vanguard Mutual Fund to Equivalent ETF - Confirming No Tax Consequence

Before requesting conversion, be sure to take a dump of cost basis for all your lots, and compare after conversion. I vaguely remember I had a problem with some lots and had to ask Vanguard to fix the cost basis. And if you have non-covered shares, you may be allowed to enter your own basis, althou...
by grabiner
Mon May 10, 2021 8:44 pm
Forum: Personal Investments
Topic: Backdoor Roth IRA for 2020
Replies: 6
Views: 406

Re: Backdoor Roth IRA for 2020

You can't do any kind of Roth conversion for 2020. You can contribute to a traditional IRA for 2020, but if you convert it, the conversion will be taxed in 2021. Fortunately, that's exactly what you want. If you haven't already made an IRA contribution for 2020, you have one week to make it; you can...
by grabiner
Sun May 09, 2021 10:21 am
Forum: Personal Finance (Not Investing)
Topic: Monthly bonus - taxed at 25%
Replies: 10
Views: 945

Re: Monthly bonus - taxed at 25%

Welcome to the forum! The purpose of withholding is to ensure that the correct amount of tax is paid. If you have a very simple situation (one income, no tax credits, nothing taxed or withheld at an unusual rate), and you fill out the form W-4 according to its basic instructions, the withholding wil...
by grabiner
Sat May 08, 2021 10:22 pm
Forum: Personal Investments
Topic: Willing to share your Taxable Portfolio?
Replies: 185
Views: 18293

Re: Willing to share your Taxable Portfolio?

Due mostly to tax-loss-harvesting issues, I have Total Stock Market, 500 Index, and Extended Market. At various times I've also used a couple of other funds like Tax Managed Cap App and Tax Managed Small Cap. Again the reason for the multiple funds is mostly a result of loss harvesting and then bei...
by grabiner
Sat May 08, 2021 2:12 pm
Forum: Personal Investments
Topic: Dividends on foreign funds, estimating current year
Replies: 8
Views: 690

Re: Dividends on foreign funds, estimating current year

I’m thinking specifically Vanguard’s Total International Stock Fund from a tax and impact on income standpoint. To ballpark it, go to the Distributions tab for the fund. Look at last year's distributions per quarter. Add up 2020's quarterly per share distributions. Find out how many shares you own....
by grabiner
Sat May 08, 2021 2:06 pm
Forum: Personal Investments
Topic: Filing Non-Resident State Taxes for MLP Energy Companies
Replies: 4
Views: 313

Re: Filing Non-Resident State Taxes for MLP Energy Companies

if the amounts reported in a state are $1 to $20, it is not likely you meet the non resident filing thresholds in those states. I have multiple MLP's but have not had to file non resident returns in the other states This varies by state. In many states, you must file a non-resident return if your t...
by grabiner
Sat May 08, 2021 9:57 am
Forum: Personal Investments
Topic: Selling All Lots of Individual Stock In One Go - Tax?
Replies: 23
Views: 2040

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

Thanks grabiner! Selling them all heals the wound. Will this complicate OP's 1099-B reporting, even if the end result is the same? The individual sales might be reported on a 1099-B, but as long as all the shares are covered and the total is correct, the overall totals can just be copied to Schedul...
by grabiner
Sat May 08, 2021 9:36 am
Forum: Personal Finance (Not Investing)
Topic: Acquiring Foreign Property — FX Question
Replies: 7
Views: 570

Re: Acquiring Foreign Property — FX Question

If you are definitely going to spend euros two years from now, the lowest-risk way to do that is to hedge now; this insulates you from any future exchange-rate risk. Assuming that the foreign exchange market is efficient, you might as well do that. Convert the dollars to euros now, and buy a euro bo...
by grabiner
Sat May 08, 2021 9:34 am
Forum: Personal Finance (Not Investing)
Topic: Federal Direct Unsubsidized Loan
Replies: 1
Views: 170

Re: Federal Direct Unsubsidized Loan

It's probably not worthwhile; see Paying down loans versus investing on the wiki. The key is that you are taking additional risk by borrowing money to invest. A less expensive way to take that risk would be to sell bonds in order to buy more stock, since your bonds are yielding less than the loan ra...
by grabiner
Sat May 08, 2021 9:28 am
Forum: Personal Finance (Not Investing)
Topic: What interest rate on loan would you sell shares of VTI to avoid?
Replies: 8
Views: 786

Re: What interest rate on loan would you sell shares of VTI to avoid?

See Paying down loans versus investing on the wiki. I would normally compare the loan rate to bond yields. By selling stock rather than bonds to avoid a loan, you reduce your expected return, but you get a risk reduction which compensates. (If you have bonds in your 401(k), you can move an equal amo...
by grabiner
Sat May 08, 2021 8:40 am
Forum: Personal Investments
Topic: Selling All Lots of Individual Stock In One Go - Tax?
Replies: 23
Views: 2040

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

OK, let's say you sold them on 04/29/21 for $37. Since you bought identical shares within the previous thirty days (4/2 an 4/3), your sale of the 4/1 lot was at a $3 per share loss, and is a wash sale. Here's where I throw up my hands and hope someone else can answer. Since you sold it all and don'...
by grabiner
Sat May 08, 2021 7:41 am
Forum: Investing - Theory, News & General
Topic: Tax loss harvesting - need to completely exit stock?
Replies: 6
Views: 744

Re: Tax loss harvesting - need to completely exit stock?

I thought I couldn’t buy anything 30 days prior to a sale, and thus can’t “sell anything purchased WITHIN the last 30 days. You have to understand how wash sales work. A wash sale doesn't nullify the loss; rather, the loss is added to the basis of the replacement shares. If there are no replacement...
by grabiner
Fri May 07, 2021 10:04 pm
Forum: Investing - Theory, News & General
Topic: Tax loss harvesting - need to completely exit stock?
Replies: 6
Views: 744

Re: Tax loss harvesting - need to completely exit stock?

The one thing you do need to do is sell all shares bought within the past 30 days, and not buy the stock back within the next 30 days. Otherwise, you will have a wash sale and not be allowed to deduct the loss. Selling just one of multiple lots for the tax loss is quite common. If you buy stock ever...
by grabiner
Fri May 07, 2021 10:01 pm
Forum: Investing - Theory, News & General
Topic: Vanguard PAS - Long Term Bonds?
Replies: 31
Views: 2321

Re: Vanguard PAS - Long Term Bonds?

I'm a bit confused as to why they'd recommend putting money into a long term bond fund since interest rates will only go up and isn't that more risky? i've never been very wise about bonds, so I just don't understand the reasoning. Long-term funds do have more risk, but bond traders know this, so t...
by grabiner
Fri May 07, 2021 9:56 pm
Forum: Investing - Theory, News & General
Topic: HSA withdrawal logistics
Replies: 18
Views: 3428

Re: HSA withdrawal logistics

2) Consider NOT using your HSA at all, and instead saving every receipt and determination of benefits for many years down the road. Let the HSA build and build and build tax free. This only makes sense if you are maxing out your retirement accounts. If not, then it's better to pay a $1000 medical b...
by grabiner
Fri May 07, 2021 7:16 pm
Forum: Investing - Theory, News & General
Topic: Why the disdain for managed funds like ARKK that destroy total market funds?
Replies: 925
Views: 77783

Re: Why the disdain for managed funds like ARKK that destroy total market funds?

The act says a "diversified" fund cannot have more than 5% of its holdings in a single stock. It can have more than that, but then it has to say in its literature, "the fund is not diversified." I don't think that's the way it works. A fund has to declare itself as "diversi...
by grabiner
Fri May 07, 2021 7:08 pm
Forum: Personal Investments
Topic: Question on tax loss harvesting
Replies: 15
Views: 1214

Re: Question on tax loss harvesting

To work around this I would recommend looking into call buying options (in the money) before selling the stock and selling the stock almost immediately. Example if the current stock price is $10, buy the calls with a $9 or $8 strike then sell the shares. That way you will avoid the wash sale and no...
by grabiner
Fri May 07, 2021 7:02 pm
Forum: Personal Finance (Not Investing)
Topic: Advice needed HDHP+HSA vs PPO
Replies: 33
Views: 1887

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 10:03 pm
Forum: Personal Finance (Not Investing)
Topic: Advice needed HDHP+HSA vs PPO
Replies: 33
Views: 1887

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: 23
Views: 2040

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: 534

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: 61
Views: 3810

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: 61
Views: 3810

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: 784

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: 55
Views: 5800

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: 55
Views: 5800

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: 55
Views: 5800

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: 3065

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: 61
Views: 3810

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: 501

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: 784

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: 2796

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: 15
Views: 1214

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: 1805

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: 1805

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: 516

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: 32
Views: 3808

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: 32
Views: 3808

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: 1569

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: 708

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: 419

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: 1731

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: 507

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: 1805

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: 2437

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: 1436

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: 824

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...