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02-10-2019, 05:27 PM
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#21
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by CaliKid
Curious what the 1% are doing to avoid taxes. You make it sound easy. Maybe the 1% club didn't send me this month's newsletter. What tactics are they using exactly?
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If I’m not mistaken, if you own multiple millions of dollars of real estate, you can depreciate it every year and deduct that from your income, even if the real estate is actually appreciating and if the real estate is highly leveraged, I.e. the bank really owns it. When you die, the kids get it at a stepped up value.
You can also use a dummy company to provide all the real estate maintenance at hugely inflated prices to generate losses, except you secretly own the dummy company. Or so I’ve heard.
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02-10-2019, 05:35 PM
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#22
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2016
Location: Colorado
Posts: 8,971
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Quote:
Originally Posted by travelover
If I’m not mistaken, if you own multiple millions of dollars of real estate, you can depreciate it every year and deduct that from your income, even if the real estate is actually appreciating and if the real estate is highly leveraged, I.e. the bank really owns it. When you die, the kids get it at a stepped up value.
You can also use a dummy company to provide all the real estate maintenance at hugely inflated prices to generate losses, except you secretly own the dummy company. Or so I’ve heard.
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I own commercial RE. There is so much wrong with this.
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02-10-2019, 05:51 PM
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#23
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Thinks s/he gets paid by the post
Join Date: Dec 2014
Location: St. Charles
Posts: 3,919
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Sooooo... Before Porky arrives, can we go back to the original topic, and OP's question?
To OP: as you have probably figured out, there is a wide variety of opinions on this forum, which is a good thing. We also can have threads high-jacked diverted by different topics. Don't get discouraged. There is a lot of collective wisdom here.
I can tell you that lurking here was the eye opener that I needed to FIRE. So, good luck, and keep reading and posting here.
And in case you don't know about Porky. He shows up when things go off the rails and says "Thaaaat's aaaalll Folks!", ending the thread.
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
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02-10-2019, 07:16 PM
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#24
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Thinks s/he gets paid by the post
Join Date: Apr 2016
Location: Ex-Cali
Posts: 1,245
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Quote:
Originally Posted by COcheesehead
I own commercial RE. There is so much wrong with this.
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Yup. +1
__________________
______________________
The plan was September 1, 2022 and I am 95% there. Still working a few hours a week at the real job.
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02-11-2019, 09:52 PM
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#25
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Recycles dryer sheets
Join Date: Sep 2018
Posts: 72
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OP here....Thanks for all the feedback guys...I guess time to start adding to my taxable investment accounts...I guess it makes sense to build up my taxable investment accounts as kinda a bridge until I can withdraw from my tax deferred retirement accounts..
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02-13-2019, 03:25 PM
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#26
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Confused about dryer sheets
Join Date: Feb 2019
Posts: 1
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Quote:
Originally Posted by 38Chevy454
This is what I was going to suggest. Your time frame is up to 12 years of growth tax free.
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I would like to 3rd this. People that do not know about this trick do not realize how amazing it is. In addition to the $19k 401k Roth or traditional contribution, you can put thousands of additional dollars into an after tax non-deductible 401k then move that to a Roth IRA, while still employed at that company! (This does not impact your ability to contribute to an ira). You can literally go broke saving money! The amount you can contribute depends on a lot of factors, all specific to your income and company, you need to carefully read the plan and talk to your 401k provider...and sadly some companies don’t allow this
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05-11-2019, 10:06 AM
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#27
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Recycles dryer sheets
Join Date: May 2019
Posts: 367
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Quote:
Originally Posted by jollystomper
Correction, he said she pays a higher tax rate than he does. Primarily due to the difference between taxes on income and taxes on capital gains.
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Warren Buffett specifically structures his personal wealth and his company to minimize the tax burden. Berkshire Hathaway does not pay a dividend for this reason.
My guess is that Buffett highlights this difference in tax rates with his secretary to appease the overly biased media so he’s not considered a ruthless shark when he makes one of his infamous deals like the one he made with Bank of America a few years ago.
Anyone that actually thinks they are paying too little in taxes is not prevented from sending more money to the federal government. The fact that the greatest allocator of capital of our lifetime (and perhaps ever) purposefully minimizes how much money he and his company sends to the federal government should tell you much more that any quip about the relative tax rate between himself and his secretary.
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05-13-2019, 09:06 AM
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#28
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Posts: 1,049
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Quote:
Originally Posted by Mikers
I would like to 3rd this. People that do not know about this trick do not realize how amazing it is. In addition to the $19k 401k Roth or traditional contribution, you can put thousands of additional dollars into an after tax non-deductible 401k then move that to a Roth IRA, while still employed at that company! (This does not impact your ability to contribute to an ira). You can literally go broke saving money! The amount you can contribute depends on a lot of factors, all specific to your income and company, you need to carefully read the plan and talk to your 401k provider...and sadly some companies don’t allow this
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Quote:
Originally Posted by travelover
At Mega I was able to put away additional money in my 401(k) that was post tax. I believe the max was over $40k. I later rolled it into a Roth.
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Quote:
Originally Posted by 38Chevy454
This is what I was going to suggest. Your time frame is up to 12 years of growth tax free.
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+4
I contribute about $13k per year (my plan max allowable) into an after-tax 401(k) and roll it over into a Roth IRA on every pay day (eliminates taxes and makes the accounting clean). These contributions can be pulled out penalty free after five years to do as you wish with. Earnings need to be kept until 59.5. Even better than a regular brokerage account.
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05-13-2019, 09:14 AM
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#29
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gone traveling
Join Date: Dec 2018
Posts: 1,196
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Maxing your 401k is good. Been there done that however it's the mindset and willpower to live below your means, get out of debt and buying monthly into the stock market regardless of market conditions. It's a marathon, many people give up but stick with it and finish strong. Invested for 30 years , I retired last year at 51. I actually enjoyed working at Megacorp but I did the numbers and left on my terms.
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05-13-2019, 10:06 AM
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#30
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Thinks s/he gets paid by the post
Join Date: Aug 2005
Location: Crownsville
Posts: 3,746
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Quote:
Originally Posted by jollystomper
Correction, he said she pays a higher tax rate than he does. Primarily due to the difference between taxes on income and taxes on capital gains.
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Not just that, but Buffett's secretary isn't just a "secretary" in the classic sense. She's not your stereotypical Jane Hathaway or Carol Kester from classic TV Land barely making ends meet. She's more of an office manager, and I've seen estimates that she could be making $200K or more per year in AGI.
While this is still nowhere in the same league as what Buffett makes, it's still a far cry from what we think of when we hear the word "secretary". I think people just like to throw that word around just so they can cry about income inequality.
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05-13-2019, 12:47 PM
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#31
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,351
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Remember this: Do not let the tax tail wag the investment dog. The goal is to maximize the money in your pocket at the end of the day, the goal is not to minimize taxes.
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