Investment

» allancoleman - 2008 tax rates

In response to 2008 tax rates posted by jsavage:

Appreciate it , jsavage . I do my own taxes and have done my tax planning all calendar year . The Tax , Roth , IRA , HSA , and other discussion forum boards are full of questions from folks that are a " day late and a dollar short " and it's usually too late for the experts to fix those situations .

-- posted by allancoleman

» tjg911 - 15% tax bracket

In response to 15% tax bracket posted by jsavage:
REALLY!!!! yikes, that i did not know or even consider! thanks for the heads up jsavage, appreciate that.
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i still think it's possible to stay in the 15% bracket tho (editted to add for clarity - i'm just 4 years into a re-fi 30 yr mortgage so i have a lot of deductions for interest plus the taxes that really brings down the income... in retirement this will be much more significant than when making my regular salary and this is why i am so certain i can stay in the 15% bracket end of edit). based upon the appreciation (roughly) it's increased by about $10k, if the index went to say 1600 that might be say $12k.
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i am surprised when looking at my 2006 return that i was not too far into the 25% bracket. based upon the fact my pension is a faction of my salary, i can't imagine i could hit the 25% bracket in 2008 when all i have is the pension, some dividends from PMM and s&p 500 and possibly a job just to earn enough to contribute to my roth ira. as mentioned, i'd check with tax advisor before assuming anything.
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thanks for your comments allan. i agree, 2008 is a very important year to get it right!
tom

-- posted by tjg911

» allancoleman - 15% tax bracket

In response to 15% tax bracket posted by tjg911:

I can't wait , Tom , to sell my company ESOP shares that I converted to common shares when I retired in 2000 , paid taxes on back then , and still hold in my personal Schwab brokerage account in January of this next year . I don't have much capital gains there , but it'll make it worth selling for sure next year cause I certainly don't look for this tax loophole to stay after the next administration takes office in 2009 .

I'll then attempt to sell more real estate next summer and then cut my year off early next fall with a little Roth conversion , probably $1k to $5k , to fill out that 15% bracket . I'll use my 2007 TurboTax figures to guesstimate my 2008 income just before I do that Roth conversion late next year . I'll use the new 401(k) to Roth transfer process available next tax year for that conversion .

-- posted by allancoleman

» jsavage - capital gains

I too plan to do some selling next year to take advantage of the 0 capital gains. I have my GNMA's in a taxable account which I plan to sell and then put in tax deferred. Also, I will sell as much of my index 500 as I can to stay in the 15% bracket and put that into total stock.

-- posted by jsavage

» allancoleman - capital gains

In response to capital gains posted by jsavage:

It will be interesting to see if this zero percent capital gains tax code in the 15% or lower tax bracket survives through 2010 as it was originally intended . Or if it is changed in mid stream .

-- posted by allancoleman

» retiredinprescot - capital gains

In response to capital gains posted by allancoleman:

I've also been planning for zero percent capital gains tax rate in the 15% or lower tax bracket next year.
I've put enough in my bank and money market account to cover my living expenses for next year. I can then estimate all my dividends and cap gain distributions for 2008. For the remainder of the 15% bracket (maybe about $50K) I will sell my non-qualified account (personal account) mutual funds and ETFs to keep the gains in the zero percent bracket. I plan to sell and buy back on the same day (to keep my asset allocation constant) but this will raise my cost basis to current levels which will be great for expected higher taxes going forward if the Democrats get in.. I think this will be a one time shot to do this and I want to take advantage of it.

-- posted by retiredinprescot

» allancoleman - capital gains

In response to capital gains posted by retiredinprescot:

Seems like a lot of us are lining up , retiredinprescot , before the new administration takes over . I'll be getting out of my company stock the first week in January before they announce their fourth quarter . Rest of the year's income should take care of itself until I fill the remainder of my bracket with a Roth conversion at the end of next year .

After that it'll be learning to deal with the higher brackets in 2009 and beyond .

-- posted by allancoleman

» jsavage - capital gains

In response to capital gains posted by retiredinprescot:
retiredinprescot
"I plan to sell and buy back on the same day (to keep my asset allocation constant) but this will raise my cost basis to current levels"
Do you plan to sell and buy back the same fund or a similar fund? The IRS may question the transaction if it is the same fund on the same day. I myself plan to switch from index 500 to total stock, just to be safe.

-- posted by jsavage

» retiredinprescot - capital gains

In response to capital gains posted by jsavage:

jsavage said "The IRS may question the transaction if it is the same fund on the same day. I myself plan to switch from index 500 to total stock, just to be safe."
That is true if you are selling to book a LOSS. You would run afoul of the "wash sale" rule. However, if you are selling stocks, funds, ETFs at a PROFIT, you can buy back the same day; the IRS doesn't care because you will be taxed on the profit. It just turns out that next year that tax will be zero if you stay in the 15% bracket for your total income.

-- posted by retiredinprescot

» jsavage - capital gains

In response to capital gains posted by retiredinprescot:

Retiredinprescot
I wasn't referring to a wash sale. Just selling and buying back the same day. You are correct, I stand corrected. I thought about day traders for example, I am sure they do that on a regular basis. Thanks.

-- posted by jsavage