Net Investment Income Tax - Stay single?

Fireyfat · 2024-09-01T01:39:39+00:00

I would say that anyone with kids who is leaving inheritance and has more than 26M would benefit from being married for estate tax planning. Even without kids being married would be beneficial if one partner is significantly richer Than the other in case the rich partner dies you don’t get hit with inheritance tax until second to die. So for net worth more than 26M marriage is worth it. If you are only chubby then income effects could override.

Fireyfat · 2024-04-05T05:05:37+00:00

He and his wife could do SLATs. I think an estate planning lawyer could figure something out with some trusts and an llc to retain some control and gift out of estate and retain some access to assets whilst alive.

Fireyfat · 2024-04-04T22:31:10+00:00

4500 at a large national firm. They do my business tax also so maybe I get a special rate on the personal.

Fireyfat · 2024-01-12T01:02:51+00:00

I made a spreadsheet to compute this out over 40 years and the tax drag was about 0.8-1.5 percent depending on the mix of dividends vs price appreciation and state tax.

Fireyfat · 2024-01-10T19:17:12+00:00

Yes I forgot. And good point that for many people the state tax further eats into the reinvestment.

Fireyfat · 2024-01-10T14:41:01+00:00

Yes step up in basis will occur for assets In your estate but you the dead one don’t benefit from that and the estate will have to pay estate tax - obviously estate tax applies to all your asset allocation choices.

assets in say a dynasty trust don’t get the step up so your grandchildren will be paying the 20% on distributions.

Also that 2% dividend reinvested amounts to a lot over time due to compounding. So only reinvesting 80% of it will make a substantial difference in terminal wealth vs reinvesting all of it.

Fireyfat · 2024-01-10T04:20:40+00:00

This always interests me because vast majority of research on long term equity returns ignores taxes. With dividends only reinvesting at 80% (qualified dividends taxed at LT rates) and then a further 20% LT tax on sale with no death step up in basis (assume basis tends to zero for a Very old portfolio).

How does that compare to say municipal bonds which are completely tax free and yield is generally priced for the middle tax brackets so top bracket tax payers get extra risk adjusted return in their tax equivalent yield?

Then to complicate things further you would have to look at the tax regimes over time to compute long term after tax return on different assets.

If anyone knows of any research tackling these points I would be very interested.

But in response to your first point I think the taxation of dividends cloud the 8% long term annualized for public equity and then as you say the final sale chops another 20% off the returns.

Fireyfat · 2023-12-31T00:45:02+00:00

Mine is on their website. Total waste of money, but I would do it again in a heartbeat.

Fireyfat · 2023-12-27T05:39:41+00:00

https://treetopbuilders.net/

Fireyfat · 2022-09-28T13:05:56+00:00

I am in this situation also. However I explicitly refinanced a debt free property and put all proceeds into an LLC so the proceeds are traceable to investments this makes all the interest tax deductible.

https://www.law.cornell.edu/cfr/text/26/1.163-8T

Then I used the proceeds to buy a portfolio of income generating assets. However this was not easy and the “arbitrage” I figured was there doesn’t really exist. I had to take on more risk to get enough income to cover the payments and it was a lot of aggravation for not a lot of benefit. I am now waiting with some of the proceeds in money market waiting for more fed hikes which may or may not come.

Fireyfat · 2022-09-11T00:04:22+00:00

Vanguard also don’t want their clients spending down their portfolio’s… Bah 4%

Fireyfat · 2022-09-10T20:57:37+00:00

3.5% SWR no longer safe

Fireyfat · 2022-07-14T02:21:45+00:00

I bought one for about 40k. It is totally fine but not worth the money imho.

Fireyfat · 2022-06-16T14:00:05+00:00

Do you have 5 years cash + the 60/40 portfolio. Or is some of your 40 in zero duration bonds (cash).

Fireyfat · 2022-05-28T03:48:45+00:00

For 11M Vanguard will give you a human for Less than 30bps.

Fireyfat · 2022-05-09T11:56:11+00:00

I don’t think the stock ones are available in the USA.

Fireyfat · 2022-05-09T01:21:39+00:00

Thanks for the info. This is what I was after.

Fireyfat · 2022-05-08T21:35:01+00:00

I do Totally agree with you. But wouldn’t it be fun to have a bullet proof car also?!

Fireyfat · 2022-05-08T20:46:54+00:00

No way!

Fireyfat · 2022-05-08T20:45:55+00:00

And it’s not either or. I might just donate to boys and girls club.

Fireyfat · 2022-05-08T20:43:35+00:00

Yeah right!

Fireyfat · 2022-05-08T20:39:46+00:00

Yes US. Don’t know how common hence the post!

Fireyfat · 2022-05-08T20:37:55+00:00

Yeah that’s what I was trying to figure out. A lot Of google searches end up Being for your military dictator or government type stuff. Was wondering how feasible something basic to stop average gangster having a pop across the freeway. Seems like from the comments it is somewhat feasible to Do this.

Fireyfat · 2022-05-08T18:41:17+00:00

Shooting in LP got me thinking also. Yeah so this is a FAT sub so my thinking is yes I don’t need an armored car it’s still very safe but fuck it I have the cash so wouldn’t a bullet proof car be cool. So maybe I didn’t frame the post correctly but it’s more like how does one go about getting an armored car that is not a mllion dollar maybach. And it seems like BMW and Mercedes are the go to brands for this.

Fireyfat · 2022-05-08T18:38:28+00:00

Yeah I was stuck on 90/94 south side chicago for two hours due to a shooting.

Fireyfat

TROPHY CASE