Please share anything that you consider significant or helpful that you’ve learned on the BH forum, including a brief statement of why it’s important to you. Here’s my list, at least for now:
1.To minimize taxes, it’s better to keep excess cash or emergency funds in tax-deferred accounts. If I need that money, I can raise it and maintain my AA by simultaneously selling stock funds in taxable and purchasing them in tax-deferred accounts.
2.For tax loss harvesting purposes, it’s best to avoid also holding the TLH fund or ETF in tax-advantaged accounts as this could result in the migration of any realized loses into the tax-advantaged accounts where they’ll be forever lost as a deduction.
3.It’s safer to turn off reinvestments of dividends in a holding I’d use for TLH to avoid potential wash sales.
4.If using a “safe” drawdown guideline, such as William Bengen’s 4% rule, all investment fees and expenses count directly as part of the annual drawdown.
5.If I’m subject to RMDs, instead of making quarterly estimated tax payments I can avoid penalties by having sufficient taxes withheld from my RMDs even if I take them late in the year.
6.I’m not exposed to significant individual stock risk by owning a broad market index fund that is top heavy in a handful of mega-cap stocks. A very small number of changing stocks almost always comprise a large proportion of the overall market. If value flows from current to emerging leaders, it should make little to no difference if I hold a weighted piece of everything.
7.A higher dividend yield and greater proportion of nonqualified dividends could negate the foreign tax credit benefit of holding international funds, especially an emerging markets fund, in a taxable account.
8.Some assets can’t transfer in-kind, which could have adverse tax consequences if moving a taxable account from one broker to another.
9.For cost basis, I can use Specific ID even if I know only the average cost for my aggregate noncovered holdings in a fund or ETF. Specific ID lets me choose which lots of covered shares to sell but still allows me to use the average basis when selling noncovered shares.
10.Despite my prior confidence in what I’ve read and learned over the years, there’s still a lot I don’t know, including many things that I might not even know that I don’t know. The BH forum is a great place for discovery.
1.To minimize taxes, it’s better to keep excess cash or emergency funds in tax-deferred accounts. If I need that money, I can raise it and maintain my AA by simultaneously selling stock funds in taxable and purchasing them in tax-deferred accounts.
2.For tax loss harvesting purposes, it’s best to avoid also holding the TLH fund or ETF in tax-advantaged accounts as this could result in the migration of any realized loses into the tax-advantaged accounts where they’ll be forever lost as a deduction.
3.It’s safer to turn off reinvestments of dividends in a holding I’d use for TLH to avoid potential wash sales.
4.If using a “safe” drawdown guideline, such as William Bengen’s 4% rule, all investment fees and expenses count directly as part of the annual drawdown.
5.If I’m subject to RMDs, instead of making quarterly estimated tax payments I can avoid penalties by having sufficient taxes withheld from my RMDs even if I take them late in the year.
6.I’m not exposed to significant individual stock risk by owning a broad market index fund that is top heavy in a handful of mega-cap stocks. A very small number of changing stocks almost always comprise a large proportion of the overall market. If value flows from current to emerging leaders, it should make little to no difference if I hold a weighted piece of everything.
7.A higher dividend yield and greater proportion of nonqualified dividends could negate the foreign tax credit benefit of holding international funds, especially an emerging markets fund, in a taxable account.
8.Some assets can’t transfer in-kind, which could have adverse tax consequences if moving a taxable account from one broker to another.
9.For cost basis, I can use Specific ID even if I know only the average cost for my aggregate noncovered holdings in a fund or ETF. Specific ID lets me choose which lots of covered shares to sell but still allows me to use the average basis when selling noncovered shares.
10.Despite my prior confidence in what I’ve read and learned over the years, there’s still a lot I don’t know, including many things that I might not even know that I don’t know. The BH forum is a great place for discovery.
Statistics: Posted by Rocinante Rider — Thu May 09, 2024 4:17 pm — Replies 19 — Views 1079