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Old 03-17-2018, 04:28 PM   #21
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Then the SPDA may be a good choice depending on your time horizon. The premium will grow with interest tax-deferred.

If you can tolerate some income then you might consider a stock index fund... they typically generate taxable income of 1.5 to 2% towards ACA (so $2k on $100k invested) and at ACA levels the income would be tax-free.

Or a growth equity fund would pay even less in dividends and you could balance it off with a value fund in your tax-deferred accounts.
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Old 03-17-2018, 08:04 PM   #22
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Purchase a piece of capital equipment. For example, a backhoe. Rent it long-term to somebody that needs a backhoe. Depreciate the backhoe on a 7 year schedule. The depreciation should about cancel out the income.

After the 5 year period, sell the piece of equipment. Pay capital gains on any difference between sale value and depreciated value.

I would need to put a pencil to better numbers to see if the rent would be enough to make this worthwhile.
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Old 03-19-2018, 06:48 AM   #23
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Quote:
Originally Posted by OldShooter View Post
As I mentioned in Post #3 I am not familiar with the tax treatment of zeros and stripped bonds. So now I understand that interest on zeros is taxes basically on a accrual basis. How about strips? Also on an accrual basis or all at the end?
The same.

In both cases, you are issued a 1099-OID (Original Issue Discount) annually. I happen to know this because my grandmother bought one of my kids a zero and one a strips, with me or DW as custodian. Both types of bond involved getting the 1099-OID every year. I always put it as a nominee distribution, and they didn't need to file, so it turned out to be tax-free growth for them, but that wouldn't be the case, of course, for someone trying to limit AGI.
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