Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 01-21-2014, 06:00 PM   #21
Recycles dryer sheets
 
Join Date: Jan 2007
Posts: 398
Quote:
Originally Posted by CoolChange View Post
It sounds like Fidelity Charitable is in my future; this is likely the year it will make sense.
I have a Donor Advised Fund (DAF) at Fidelity Charitable too. While it is a tad - and only a tad - more expensive than the Vanguard equivalent, Fidelity Charitable is more flexible in terms of its lower dollar requirements for fund contributions and charitable grants (just as 2B says).

I opened my account at Fidelity in 2011. With it I can "pre-fund" future charitable contributions but get the tax deduction now during my last few years of work when my income is higher. This is particularly useful since I am subject to AMT. I get a 42% tax deduction today (federal AMT plus state) instead of the lower expected tax deduction when I am retired (potentially as low as 0% if I no longer itemize).

And it gets better. It is fairly easy to contribute shares of stocks or mutual funds that have unrealized capital gains. This allows one to get the higher charitable deduction and avoid taxes on capital gains. Double win. Of course, one does not need a DAF to donate appreciated shares. But the DAF makes the process easier, since it is streamlined to do this. My recent contributions to Fidelity Charitable have been with appreciated Vanguard mutual fund shares. The process has taken only about a week to complete, probably because the two biggest fund companies are involved. The only real difficulty is the need to get a "Medallion Signature Guarantee" (I have obtained mine at a local Fidelity office, which then mails in my contribution forms for me).

I am very satisfied with the DAF concept. The investment options at Fidelity Charitable, while not extensive, are quite satisfactory (e.g., low-cost index funds are available). I have yet to make actual charitable grants using my DAF account (still writing/mailing checks from my credit union), but the process appears to be very user friendly. It could be a useful method to make charitable contributions even without the tax advantages.
__________________

__________________
Shawn 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 01-21-2014, 07:38 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,627
Quote:
Originally Posted by CoolChange View Post
On the purely financial side: Are there any considerations with locking in short-term capital losses by swapping sector ETF's after a large correction? My brief research on this makes me think that these losses can be used in much the same way as long-term losses, including carrying them forward for use in future years. But, I rarely hear anyone discuss locking in short-term capital losses; the discussion always seems to focus on harvesting the long-term losses.

Again, just trying to avoid anything obvious.
One should always realize losses before they go long-term, so I don't know where you got the idea that folks concentrate on long-term losses. Indeed, if one realizes losses that are short-term, one should almost never have any long-term losses to realize (in a taxable account).

I always look at any position that was bought 11.5 months ago. Also I look in November and December to see if I need to sell losers for tax-loss harvesting purposes. I will buy replacement shares in something not substantially identical.

The benefits are 2-fold:
1. One avoids the loss aversion trap and emotions and sentimentality.
2. One starts every year with all positions in the black and none in the red.

So once again: book the losses before they go long-term.
__________________

__________________
LOL! is offline   Reply With Quote
Tax and Other Planning for High 2014 Earnings
Old 01-21-2014, 08:02 PM   #23
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 1,672
Tax and Other Planning for High 2014 Earnings

If you haven't already, you'll want to consult with an estate planning attorney to set up a living trust and identify what beneficiaries you want should something happen to you. The last thing you want is for the state to decide where your money would go.
__________________
Dash man is offline   Reply With Quote
Old 01-24-2014, 12:02 PM   #24
Full time employment: Posting here.
 
Join Date: Apr 2006
Posts: 925
Quote:
Originally Posted by LOL! View Post
One should always realize losses before they go long-term, so I don't know where you got the idea that folks concentrate on long-term losses. Indeed, if one realizes losses that are short-term, one should almost never have any long-term losses to realize (in a taxable account).

I always look at any position that was bought 11.5 months ago. Also I look in November and December to see if I need to sell losers for tax-loss harvesting purposes. I will buy replacement shares in something not substantially identical.

The benefits are 2-fold:
1. One avoids the loss aversion trap and emotions and sentimentality.
2. One starts every year with all positions in the black and none in the red.

So once again: book the losses before they go long-term.
This is what my limited research seemed to indicate as well. But, most of what I was finding was only discussing long term gains and losses. I just had not read much to support my growing inclination that I would be better off harvesting my losses ASAP.

This is the kind of thing I was seeking when I started this thread: I have no doubt paid much more in taxes than I needed to had I followed this simple practice. But, for some reason, I had thought that use of long term losses was more restricted; I have no idea where I originally got that idea.

Now, I know more. Thank you.

Quote:
Originally Posted by Dash man View Post
If you haven't already, you'll want to consult with an estate planning attorney to set up a living trust and identify what beneficiaries you want should something happen to you. The last thing you want is for the state to decide where your money would go.
This is an area of my life that I definitely need to revisit. Thanks for the reminder.
__________________

__________________
If there's one thing in my life that's missing; It's the time I spend alone
Sailing on the cool and bright clear waters; There's lots of those friendly people
Showin me ways to go; And I never want to lose your inspiration
CoolChange 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


Similar Threads
Thread Thread Starter Forum Replies Last Post
2014 tax planning haha FIRE and Money 11 01-09-2014 11:16 AM
ACA tax credit -negative tax liability in 2014 question shotgunner FIRE and Money 9 12-14-2013 05:55 PM
% of Lifetime Earnings Saved based on SSA Medicare Earnings REattempt FIRE and Money 17 08-01-2013 07:51 PM
FI and planning to retire in 2014 butterfly Hi, I am... 13 06-09-2013 11:55 PM
IRS announces 2014 health savings account and high-deductible health plan limits SumDay Health and Early Retirement 3 05-03-2013 04:36 PM

 

 
All times are GMT -6. The time now is 09:23 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.