YE Tax Changes - NUA strategy ?

[mmgoebe]

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.

 

[marko]

Right after the election. Lame duck session. Will extend it.

 

[frayne]

Right after the election. Lame duck session. Will extend it.

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.

 

[ERD50]

Hi,
Anyone venture a "best guess" as to when we will know if the Busch Tax Cuts will be extended ? ...

Heck, if they are going to cut taxes on beer, couldn't they choose a better beer?

-ERD50

 

[73ss454]

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.

 

[teejayevans]

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

 

[RunningBum]

Please spell out what NUA is.

 

[GrayHare]

I think that can of Busch will be kicked down the road between Thanksgiving and Christmas.

 

[growing_older]

NUA = Net Unrealized Appreciation

It would be appreciated if people could be a little descriptive when posting somewhat obscure TLA (Three Letter Acronyms). Thanks.

 

[Animorph]

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.

 

[mmgoebe]

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.

 

[scrabbler1]

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.