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Messages - gocurrycracker

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16
General Discussion / Re: Beneficiary or Living Trust
« on: March 25, 2022, 11:14:57 AM »
I would discuss this with the person that helped you create the living trust.

Trusts add a layer. More layers = more complexity. I don't know or understand all the details of trusts. Worst case, trusts have more aggressive RMD rules than an inherited IRA (5 years vs 10.)

If your estate is worth ~$22 million+ (married couple) then the estate will pay some taxes (maybe state level estate tax on smaller amounts.) Else there are no taxes on an inherited Roth - the taxes have already been paid by definition of a Roth-type account (assuming meets 5-year rule.)

Yes, same 10 years to distribute funds from an inherited IRA, both Roth and Traditional. With traditional, the beneficiary will pay taxes at their rate. With Roth, no taxes (taxes paid previously at  legator's rate.)

17
General Discussion / Re: Roth or Taxable Account
« on: March 25, 2022, 10:19:14 AM »
Maybe. This is the general idea behind these posts:
https://www.gocurrycracker.com/roth-sucks/
https://www.gocurrycracker.com/roth-hypocrisy/

Something to consider:
IRA contribution limits are ~$6k/person/year. If you are aiming for investments worth $1 million+, where you put $6k at the end probably doesn't matter that much

18
Taxes / Re: ACA income verification for an early retiree
« on: March 17, 2022, 03:38:00 PM »
You can provide an affidavit of income

"I, bw1123, declare that I expect to make $x in 2022."

You can include a 1099 from 2021 and state that things will be different in 2022 because you don't expect to realize capital gains or expect to realize fewer capital gains.


19
I was under the impression that a refi would be duductable as long as it was a mortgage and not a HELOC ?

https://www.irs.gov/publications/p936#en_US_2021_publink1000229992

20
Borrowing isn't crazy. I'm doing it too.
https://www.gocurrycracker.com/sweet-sweet-debt/

3.5% interest may work out to be less than the 10% penalty you would pay on early IRA withdrawals without the SEPP

You can't deduct the interest on a cash-out refinance unless the funds are used to make capital improvements to the property. Maybe if you borrow on one of your rentals...

If you are staying in California you might be able to keep your current low tax base on a new property if you wait a couple years
https://www.boe.ca.gov/proptaxes/prop60-90_55over.htm

Another option - get a new CPA


21
General Discussion / Re: Stock Market Recovery
« on: March 12, 2022, 09:03:16 AM »
I'm not sure either  :)

Here is an article that might be what you are looking for - if you missed the 10 best days over a 20 year period, your annual return dropped from ~5.6% to ~2%
https://www.fool.com/investing/2019/04/11/what-happens-when-you-miss-the-best-days-in-the-st.aspx

22
Glad you posted this. I just signed up for this forum because I wanted 72T info and boom the first topic I see when I log on is regarding 72T.

 I'm 53 house rich and cash poor with some retal income.  With 6.5 years until I can access a roll over IRA without penalty. This might be a decent choice to put me in a "work optional" situation.

Yes, this is pretty much the ideal situation for signing up for the SEPP - ~5 years to age 59.5, most funds in IRA

23
Taxes / Re: 529 withdrawal without taxes ?
« on: March 05, 2022, 03:26:58 PM »
Earned income is required for Roth contributions. If he has at least $6k of earned income in 2021 and the same in 2022, then he can contribute to Roth IRAs for both years.

Any withdrawals from a 529 won't qualify as earned income for Roth contributions. But it can be a source of cash.

To get $12k in cash from the 529:
Withdraw: $12,500
Basis: $8,065 ($20k/$31k*$12.5k)
Earnings: $4,435 (withdrawal - basis, 12.5k - $8,065 = $4435)
Penalty: $443.50 (10% of earnings)
Actual cash from withdrawal: $12,056

Income tax will also be due. That $4,435 could be taxed with an additional 10%, 12%, 22%+ (or it could be 0% - all depends on income.)
State income tax (and penalty) could also be due.

529 funds can also be used to pay student loans, transferred to another person in the family, or used for K-12 expenses on future kids (less than 20 years from now.)

24
Taxes / Re: 529 withdrawal without taxes ?
« on: March 05, 2022, 10:26:33 AM »
529 withdrawals are pro rata - some will be earnings, some will be basis. There is no way to do a basis only (contribution only) withdrawal.

Any non-qualified earnings withdrawal will be taxed and penalized (10%)

25
Expat life / Re: long them USA phone number in Taiwan
« on: March 03, 2022, 10:34:11 PM »
It worked for 2-factor for me for everything I ever tried

The only thing it didn't work for was verifying identify if I called Chase bank to work through an issue. They would try to send a text, it would fail, and then we would verify identity in another way. For everything else... no issues.

26
Expat life / Re: long them USA phone number in Taiwan
« on: March 03, 2022, 01:31:32 PM »
I used google voice either on my laptop or iphone app

This is $0

Phone service with a local number in Taiwan is fairly inexpensive

27
Expat life / Re: credit card hack
« on: February 26, 2022, 09:27:07 PM »
Keep a US address

People often use a friend or relative's address.

For awhile we "lived" in a friend's basement. Then I started using Traveling Mailbox
https://www.gocurrycracker.com/snail-mail-paper-checks-21st-century/

28
Taxes / Re: IRS and investment documentation
« on: February 22, 2022, 09:53:55 PM »
Form 8949, Sales and Other Dispositions of Capital Assets

This can be messy and I certainly don't grok all the nuance.

If you were an inactive owner of a rental property, determining your basis might involve some work and you may need to recapture some depreciation (even if you never deducted it.)

If you gave your uncle a loan with no interest and no payments... then you report the loss on the same form 8949
Technically you were supposed to charge interest and what "should have" been paid is taxable to you since 2006.

29
Yeah, 5% now, which can allow for larger withdrawals.

There is no limit whatsoever on Roth conversions. You can make those as big as you want.
The downside is you have to wait 4 years and a day before you can use the Roth conversion for regular spending without penalty.

If you don't have the funds to get you to the point where the first Roth conversion has seasoned (from taxable account, Roth contributions, cash), then the SEPP wins by default. No choice, you need money.
If you do, then Roth conversions will be more flexible AND you get some additional benefit from the conversion growth being tax free.

re: flexibility
Once you establish an SEPP, you have to make those annual withdrawals for 5 years or until you reach age 59.5, whichever is LONGER.

If you are age 54.5 maybe that is fine. You can predict with some confidence what your other income will look like for a short time like 5 years.

If you are age 34.5, 25 years is a long time to commit to annual taxable withdrawals. Will you want to get another job after awhile? Will a hobby start making income? Will you inherit an IRA with their mandatory distributions?



In short - age is a factor, access to other funds is a factor, Roth conversion will generally be most flexible.

30
Travel hacking / Re: Credit card tracker
« on: January 29, 2022, 09:49:33 PM »
I'd work until I got the pension

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