Millionaires?

[free4now]

Sounds familiar... once I cashed out I imagined I was entirely "after tax" only to realize that I was holding on to some big cap gains, for which the tax man will come calling.

Even if you start out with a portfolio that has no tax liability, you will incur tax liability as your portfolio grows and is spent, so everyone living off portfolio growth will have to deal with taxes.

Cap gains rates are definitely better than paying ordinary income rates though.

One nice thing about renting is not having to worry about whether the home goes into the net worth

[NW-Bound]

Originally Posted by free4now

Sounds familiar... once I cashed out I imagined I was entirely "after tax" only to realize that I was holding on to some big cap gains, for which the tax man will come calling.

Even if you start out with a portfolio that has no tax liability, you will incur tax liability as your portfolio grows and is spent, so everyone living off portfolio growth will have to deal with taxes.

Cap gains rates are definitely better than paying ordinary income rates though.

One nice thing about renting is not having to worry about whether the home goes into the net worth

So, should we have two labels: "after-tax" and "before-tax" millionaires?

Our tax laws are so complicated that I wish for a simple flat-tax system. Our friend Trek said the Estonians seem to do fine with it.

Oops, should tax issues be in another forum?

[Notmuchlonger]

Originally Posted by NW-Bound

So, should we have two labels: "after-tax" and "before-tax" millionaires?

Our tax laws are so complicated that I wish for a simple flat-tax system. Our friend Trek said the Estonians seem to do fine with it.

Oops, should tax issues be in another forum?

Oh well then Estonia system must work well for a country the size of US