Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 12-19-2012, 05:33 PM   #21
Thinks s/he gets paid by the post
steelyman's Avatar
 
Join Date: Feb 2011
Location: Triangle
Posts: 3,218
Quote:
Originally Posted by pb4uski View Post

You may still be able to do something about it. Let's say that you have $x international fund in your tax deferred account and at least $x of [whatever fund] in your taxable account and your tax deferred account has an investment choice that is substantially similar to [whatever fund]. Then in your tax deferred account you sell the $x of international fund and buy $x of [whatever fund]. In your taxable account you sell $x of [whatever fund] and buy $x of international fund.

The end result is your AA is not changed but your overall holdings are more tax efficient.

Just make sure of the tax implications of a sale of the shares in the taxable account before proceeding.
Thanks, man - I will look into this.
__________________

__________________

steelyman is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-19-2012, 05:36 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,501
Actually, it is preferable to have your fixed income investments in your tax deferred accounts since they generate the most taxable income and have your equities in taxable accounts. Also see Principles of Tax-Efficient Fund Placement - Bogleheads
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 12-20-2012, 08:40 AM   #23
Full time employment: Posting here.
 
Join Date: Mar 2010
Location: Chicago
Posts: 868
Quote:
Originally Posted by pb4uski View Post
I'm doing the same thing. Keep state tax in mind - mine will be 3% of gain even though federal will be 0%.
I don't think LTCG and dividends taxed at federal 0% becomes part of your AGI. So this shouldn't be taxed at the State level either. Can we have a discussion on that?
__________________
ripper1 is offline   Reply With Quote
Old 12-20-2012, 08:55 AM   #24
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,874
Quote:
Originally Posted by ripper1 View Post
I don't think LTCG and dividends taxed at federal 0% becomes part of your AGI. So this shouldn't be taxed at the State level either. Can we have a discussion on that?
LTCG and (Qualified) dividends are part of the AGI even if they end up getting taxed at 0%. It is the special worksheet which determines the tax rate of LTCG and QD, and you don't start that worksheet until you figure out your taxable income. Not sure if we can have a discussion about whether or not they should be taxed at the state level because you could have as many as 50 different discussions.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline   Reply With Quote
Old 12-20-2012, 09:14 AM   #25
Full time employment: Posting here.
 
Join Date: Jan 2008
Posts: 882
Quote:
Originally Posted by ripper1 View Post
I don't think LTCG and dividends taxed at federal 0% becomes part of your AGI. So this shouldn't be taxed at the State level either. Can we have a discussion on that?
In my state, which is a conforming state, AGI is carried over from the Federal return to the state. So divs and capital gains are included. Then they make adjustments for items that are not taxable by the state (like interest on US Treasury bonds).
__________________
jebmke is offline   Reply With Quote
Old 12-20-2012, 11:41 AM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,501
In my state, the first $5k of LTCG is exempt from tax and the remainder is taxed like ordinary income. That is why I have state tax even though it is 0% for federal.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 12-20-2012, 12:33 PM   #27
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,874
Quote:
Originally Posted by jebmke View Post
In my state, which is a conforming state, AGI is carried over from the Federal return to the state. So divs and capital gains are included. Then they make adjustments for items that are not taxable by the state (like interest on US Treasury bonds).
My state (New York) is like this, too. You copy the data as it appears on your federal return then perform adjustments, both upward and downward, to the federal AGI. Upward adjustments include adding back interest from muni bonds issued in other states (i.e. a national muni bond fund). Downward adjustments include subtracting state income/property tax refunds. (I have some of each of these which have roughly offset each other over the years.) Then you get your New York AGI and continue from there, with all dividends and cap gains taxed as ordinary income.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline   Reply With Quote
Old 12-21-2012, 10:48 PM   #28
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
If all your income comes from long term capital gain and dividends from your investments, and the total amounts to 20,000 a year, do you pay no income tax, or do you pay income tax on the $20000 a year?
__________________
bondi688 is offline   Reply With Quote
Old 12-21-2012, 10:51 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,501
0 tax if all $20k of income is LTCG and qualified dividends in 2012. See TurboTax® TaxCaster - Free Tax Calculator - Free Tax Estimator
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 12-21-2012, 11:01 PM   #30
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
pb4uski
Thanks for the answer. I looked at some articles just now: if there is no resolution of the fiscal cliff and the new tax rate kicks in in 2013, there is no 10% bracket, the lowest bracket is 15%, and it appears there is no 0% tax on LTCG and dividend anymore come 2013, there is a 10% tax rate on LGCG and dividend, even if your total income is inside the 15% bracket. Am I reading that correctly?
__________________
bondi688 is offline   Reply With Quote
Old 12-22-2012, 07:52 AM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,501
That sounds right but I haven't researched it. From what i have read/heard, I think it likely that the Bush-era tax cuts will be preserved for lower tax brackets. It is unclear if that will include 0% rate on qualified dividends and capital gain. If 0% is retained, then I have some additional gain harvesting to do in 2013, if not, then I'll focus on Roth conversions instead.
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 04:50 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.