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YE Tax Changes - NUA strategy ?
08-10-2012, 10:17 PM
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#1
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Dryer sheet wannabe
Join Date: Jul 2011
Posts: 17
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YE Tax Changes - NUA strategy ?
Hi,
Anyone venture a "best guess" as to when we will know if the Busch Tax Cuts will be extended ? (Dividends and Capital Gains)
Weighs heavily into a 401k Rollover - NUA strategy if looking to retire in the next 5-8 months. Any thoughts on strategy with this uncertainty ?
-Mike G.
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08-11-2012, 04:46 AM
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#2
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2011
Posts: 8,420
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Right after the election. Lame duck session. Will extend it.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
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08-11-2012, 05:50 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,895
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 Quote:
Originally Posted by marko
Right after the election. Lame duck session. Will extend it.
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Actually I believe it is contingent on raising the debt ceiling but I could be wrong.
And if the debt ceiling is not raised a bunch of other budget cuts kick in, which in and of itself is not a bad thing IMHO.
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Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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08-11-2012, 08:09 AM
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#4
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,896
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Quote:
Originally Posted by mmgoebe
Hi,
Anyone venture a "best guess" as to when we will know if the Busch Tax Cuts will be extended ? ...
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Heck, if they are going to cut taxes on beer, couldn't they choose a better beer?
-ERD50
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08-11-2012, 08:30 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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I've been reading that it will be extended but there is an earmark attached. Something about raising the amount of money needed to study the drinking habits of Chinese Prostitutes. 
__________________
Work is something you do to get enough $ so you don't have to....Me.
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08-11-2012, 12:03 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,691
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If Washington worked they would have compromise by now, such as: making Bush tax cuts permanent and added capital gains and dividends to AMT calculation.
I suspect, nothing happens until after election, possibly even having to make changes in 2013 retroactive to 2012. If you make >250K, chances are 50/50, if less, then I think you can count on them being extended.
TJ
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08-11-2012, 01:40 PM
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#7
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jun 2007
Posts: 13,228
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Please spell out what NUA is.
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08-11-2012, 01:45 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Nov 2011
Posts: 3,906
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I think that can of Busch will be kicked down the road between Thanksgiving and Christmas.
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08-11-2012, 02:09 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Jun 2007
Posts: 2,657
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NUA = Net Unrealized Appreciation
It would be appreciated if people could be a little descriptive when posting somewhat obscure TLA (Three Letter Acronyms). Thanks.
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08-11-2012, 02:22 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
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I'll be surprised if anything is firm before the end of the year. It sounds like there are very firm positions regarding the >$250k taxes that will hold everything up. I bet there'll be a lot of retroactive and short-term changes once again.
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08-12-2012, 04:58 PM
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#11
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Dryer sheet wannabe
Join Date: Jul 2011
Posts: 17
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Thanks all. Looks like anyone with income over $250k and long term capital gains needs to cash in and capture the 15% rate before year end - to much uncertainty going forward. Could be a lot of selling at year end. Also, anyone with a large NUA option in their untampered 401K needs to take a hard look at a prompt rollover, selling, and capturing the 15% tax rate.....all before year end. 
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08-12-2012, 06:37 PM
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#12
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Nov 2009
Posts: 6,698
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Mmgoebe, I was a bit cocerned about the preferred tax treatment of NUA when I cashed out my company stock at the end of 2008. I had nearly $300k of NUA. One thing to beware of - even though the NUA itself is taxed at 15%, it may cause the rest of your income to be taxed at a higher rate. That NUA put me into the AMT for the rest of my small wage income which would have been taxed at only 15%. And don't forget about state income taxes.
__________________
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!"
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