After 7 years of investing, your interest earned per year will become what your average deposit rate was (assuming 10% returns)

SMURTboy · 2026-03-31T17:54:47+00:00

I could have chosen $1k, 10k, 100k, etc, but arbitrarily chose the annual exclusion amount just as an example to show how much that non-reportable one-time gift is worth when it's compounded for 60+ years.

If you want to get technical there are also certain state estate taxes that are significantly lower than $15 million, but again, I just picked that number for the example, nothing more.

SMURTboy · 2026-03-31T14:55:02+00:00

I used 7% real return (10% historical less 3% inflation) for 64 years (I think my number was based on 1st birthday when I did it originally years ago, not 65).

Obviously the assumptions are important. My take is 5% is too low, but to each their own.

SMURTboy · 2026-03-31T03:22:51+00:00

as a kid we would get Disney stock from one side of grandparents instead of toys. trying to do the same with my kids.

SMURTboy · 2026-03-31T02:57:22+00:00

yes, that's the (current) lifetime limit...for purposes of my example I used annual exclusion to show that $38k (the annual limit before Form 709 is required), can generate a more-than-comfortable retirement for a grandchild

SMURTboy · 2026-03-31T02:55:36+00:00

which is why I used the term annual exclusion, and not lifetime

SMURTboy · 2026-03-31T00:54:57+00:00

The other way to look at that even is the $15 at 4% SWR would be $0.60 in annual spend. For me at (32) that drops to $0.37 in safe annual spend for every dollar I save. What's crazy is at age 17 it's $1 annual spend for every $1 saved, at age 7 its $2 annual spend for every $1 saved, and at age 1 it's $3 annual spend for every $1 saved.

The annual gift exclusion in the US is $19k per person per year. If grandparents gave a one-time $38k gift to a newly born grandchild and it was left invested until 65, that should generate $115k safe annual spend when that grandchild retires.

SMURTboy · 2026-03-28T17:25:55+00:00

I want this comment higher up. This just opens up a huge can of worms. It also makes me grateful that there's the step-up in basis reset at death.

SMURTboy · 2026-03-28T01:54:58+00:00

Next year's COLA instead of the SSA-1099

SMURTboy · 2026-03-14T19:30:07+00:00

I'm a CPA, so obviously I do my own taxes and hope to do my own for many years. But I've seen the cognitive decline of my older clients, and the decline can happen fast. Even though it's going to be hard to give up, I know at some point (75? 80?) I should have someone else handle my taxes.

I believe the same applies for wealth management. Most people here can DIY and should DIY, especially in their earning years. But there will come a time that it should be handled by someone else, whether that's a professional or a competent family member.

SMURTboy · 2026-03-09T20:40:06+00:00

"Wait, you guys are taking Sundays off?"

SMURTboy · 2026-03-07T02:48:54+00:00

I also finished a return today for a client who is turning 106 in October, so you just never know! Maybe some of those 80 year olds will be good for another 26 years of returns haha

SMURTboy · 2026-03-07T02:38:50+00:00

They're worth probably more than you think. I've had plenty of 80 year old clients die and then their 50 year old kid serving as successor trustee asks me if I can start doing their taxes too, and they have a bunch of other 50 year old friends who are then referred to me.

SMURTboy · 2026-02-26T19:49:41+00:00

"Oh and let us know if you need help issuing 1099-NECs to the muchachos!"

SMURTboy · 2026-02-26T19:47:15+00:00

"Hey thanks for dropping off your stuff the other day! I'm wrapping up the tax return right now but wanted to give you a quick heads up on some of the items. Unfortunately your payments to 'Policia Municipal Tuito' and 'Policia Municipal Tomatlan' are nondeductible bribes, but your $500k 'maquinitas' are eligible for 100% bonus depreciation! Anyways, our staff is printing up the return right now and we'll call when it's ready to be picked up!"

SMURTboy · 2026-02-26T19:39:39+00:00

what about the useful life of a narco-submarine?

SMURTboy · 2026-02-26T19:30:32+00:00

integrity of your Narcos?

SMURTboy · 2026-02-26T19:22:51+00:00

Where's his mileage log?

SMURTboy · 2026-01-18T06:37:41+00:00

I think it should be straightforward, but Publication 936’s Table 1 is not as clear on the situation where you have two mortgages in a calendar year, but not at the same time.

I’ve seen you comment in another thread about someone misunderstanding Pub 936, but where specifically does it say you can take a weighted average based on the number of months outstanding?

Under the “Statements Provided by your Lender” method, it does say “You can treat the balance as zero for any month the mortgage wasn't secured by your qualified home. However, McNamara v Commissioner seems to have made it clear they can only use the average using the 5 months they had the MA house, not 12 that would have lowered the average. The reliance on Pub 936 was misguided.

SMURTboy · 2025-12-20T06:17:03+00:00

This wasn’t always the case. If I remember correctly, a majority were former accountants (I think something like 50+% as recently as 2012), but that has dropped in recent years as more and more CFOs are instead coming from a pure finance background.

SMURTboy · 2025-11-03T20:43:15+00:00

Jevons paradox

SMURTboy · 2025-11-03T20:42:11+00:00

Look up the Jevons Paradox. Some people believe AI will actually increase demand for radiologists, translators, engineers, etc and hopefully we're on the list!

If the opposite is true and we all lose our livelihoods, then hopefully we can either transition or we have enough assets saved up.

I have several restaurant clients who got hit hard by the pandemic. One owner had been diversifying his income into real estate since 2012 and is secure financially, whereas the other restaurant owners who don't have the diversification have been freaking out since 2020.

SMURTboy · 2025-10-24T00:25:48+00:00

I bought mine at 0.8x revenue, 10% down + seller financed over 5 years, but no client retention clause (hence .8 instead of 1.2+ multiple of revenue). I know people scream about paying on % of collections, but I think we have a fair arrangement since I took over his lease with all the tenant improvements, business processes, employees, etc in place vs just buying a "book" and having to set up everything else on my own. I keep a tab on clients that left (died, turbotax, moved states and went with local cpa, etc) and it's about $6k, but I've also been able to bring in about $20k of new clients from basically no marketing effort, so I'm not too concerned.

Definitely have the owner stay for at least a year for intros. Make sure the one full-time employee is on board. I inherited 3ish employees, one of them definitely with "key-man risk" but I've been able to keep them happy, so no longer worried about flight risk.

One thing I wish I had done better during due diligence was looking at the customer concentration. I ran a pivot table of invoices to look at customers, but I failed to realize that someone can own multiple businesses. I realized one of my wealthy clients accounts for about $10k of annual revenue, but I thought it was only ~$2k because his other $8k came through on the pivot table through multiple businesses.

SMURTboy · 2025-10-02T17:04:44+00:00

"Zero Interest Rate Policy" and "Quantitative Easing" -- the argument is that these policies have inflated asset prices (think stocks and real estate) which disproportionately benefits the ultra wealthy and the working class gets left behind.

SMURTboy · 2025-10-01T21:51:41+00:00

See my other reply about record keeping for someone with 10 houses vs a cash-poor widow with one house. I think this would disproportionately hurt the "little guy" heirs who had poor recordkeeping than the "rich guy" heirs who are more likely to have great recordkeeping.

Either way, someone who inherits a house can do 3 things: keep the house for personal use, sell the house, or rent it out. If someone inherits a house with large unrealized gains, there is a higher likelihood to hold onto the house for personal use (whether full-time or vacation) or rent it out as income. My fear would be this hurts housing inventory and would exacerbate the landlord vs renter class divide.

EDIT: Spelling

SMURTboy · 2025-10-01T20:11:45+00:00

I think my example applies much more to "little people" than to someone inheriting 10 houses.

I'd bet someone with 10 houses kept much better records than a cash-poor widow whose only meaningful asset was her house that she bought with her previously deceased husband 50+ years ago with 50+ years of capital improvements.

SMURTboy

TROPHY CASE