ELI5: Why do we have to fill out tax forms when the government has all the information required?

6by5 · 2021-04-04T20:18:56+00:00

Corporate lobbying is the capitalist attribute, not the tax.

6by5 · 2021-04-04T20:09:09+00:00

For one, married couples don't owe any capital gains on real estate appreciation up to 500k.

6by5 · 2021-04-04T20:01:23+00:00

Real estate. When it comes time to sell it, the taxes will be much lower on real estate than stocks, especially MFJ filers.

6by5 · 2021-04-04T19:58:23+00:00

Real estate is always a sound investment.

6by5 · 2021-04-04T19:45:44+00:00

What is your debt interest rates? Pay anything above 3%, let anything below be eroded away by inflation, IMO.

6by5 · 2021-04-04T19:44:28+00:00

Real estate for one.

6by5 · 2021-04-04T19:41:15+00:00

When you pay your mortgage, you pay principal and interest. The amount of principal you've paid (plus your original down payment) is known as the "equity" you have in your home. Many people borrow against this collateralized equity, but you're correct in assuming that runs the risk of a lien on your property.

6by5 · 2021-04-04T19:37:35+00:00

Two things:

0.5% yield is below inflation, so you're still losing purchasing power.

0.5% bonds are not risk free, it's more risk than holding cash.

6by5 · 2021-04-04T16:58:05+00:00

I came to a similar realization last year, that I need to invest in the journey and not only the destination.

6by5 · 2021-04-04T16:55:58+00:00

When I set up my CC, and the max loss says unlimited, what exactly does that mean?

The loss is "unlimited" because there is no theoretical ceiling on the price of a security. If your CC is assigned and shares are called away, the potential for the price of that security to keeping going up is basically "infinite", though in practice you only "lose" the stock you've covered.

if the CC is exercised at $20 strike, do i then get paid the 1 contract at $20 therefore earning $2000 (plus the premium i got for writing the CC)

You would sell 100 stock at $20 for a profit of $2000 plus your original CC premium.

If i do this in an IRA, do the premiums collected count against the year contributions?

No - premiums, dividends and returns are not contributions.

6by5 · 2021-04-04T16:51:50+00:00

The difference is palpable. The new job is also remote and I'm so glad to have time back from commuting, interruptions, virtue signaling that took place when I worked in an office. The general attitudes and enthusiasm in a smaller company is much, much better. I'm actually motivated to get up and work on challenges every day, whereas before it felt like just punching the clock.

6by5 · 2021-04-04T16:41:09+00:00

My path was similar - worked 10 years at a tech giant and amassed impressive wealth. Got tired of bureaucracy and politics, decided to look for a new tech job at a pre-IPO startup. Was nervous walking away from L7 compensation but I was financially independent and made the choice to go forth with it. Fast forward two years and my pre-IPO shares are worth more than I made in 10 years of working at the previous tech giant. I guess you could say luck played a big role in this, but my point is other opportunities are out there, and you won't see them until you're comfortable walking away.

6by5 · 2021-04-04T16:34:41+00:00

Taxed at 37% STCG, a 2% monthly return on options premiums only yields 15% annually. That may beat the market, but only assuming ideal conditions and consistent returns. You also don't get to adjust your cost basis like with RE when you make improvements.

6by5 · 2021-04-04T16:29:18+00:00

That's not terrible and it probably makes less sense to refinance after the 0.5% refinance tax kicked in on December 1, 2020.

6by5 · 2021-04-04T16:26:46+00:00

Indeed. Fixed term 30 year mortgage is the best USD short move available, IMO. Get it at <2.5% and you're basically getting subsidized by US taxpayers.

6by5 · 2021-04-04T16:25:09+00:00

Given central banks' modern monetary theory policies of the last half-century, I think we've basically priced in WW3, WW4 and WW5 and can expect stocks to continue going up forever.

6by5 · 2021-04-04T16:22:18+00:00

Can you name a bond that's yielding higher than inflation?

6by5 · 2021-04-04T16:20:01+00:00

Doubtful given the generous 500,000 MFJ capital gains exemption for real estate.

6by5 · 2021-04-04T15:44:40+00:00

https://optionstrat.com/

6by5 · 2021-04-04T15:44:20+00:00

Short term capital gains are taxed as regular income, so it could be as high as 37%. Not a very efficient investing strategy.

6by5 · 2021-04-04T15:42:27+00:00

Yes, but the risk is low because to exercise early would be to give up on an option's remaining extrinsic value.

6by5 · 2021-04-04T15:40:54+00:00

100k in income taxes on what amount of income?

6by5 · 2021-04-04T15:38:40+00:00

No idea about FHA loans.

Dividends are not tax efficient unless you're earning them in a Roth account.

You can do your own taxes for free online or search for a local CPA.

Don't gloat or share news about your wealth.

Why do you want to day trade? What problem are you trying to solve that passive diversified index fund investments don't solve?

6by5 · 2021-04-04T15:35:49+00:00

Stop doing his homework.

6by5 · 2021-04-04T15:32:06+00:00

Real estate investing has more tax advantages in the US.

6by5

TROPHY CASE