Ask Ruth about Taxes and IRAs
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- KirkL
- Kirk
- Rande
- RuthM
- vh1
- RuthM
- vh1
- JenL_2
- JenL_2
- cocojambo
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» Kirk - Capital Gains Question
I have the option of taking more short term capital losses before the year ends. I am trying to decide if it makes sense.I would sell some BOWG shares I paid a very high figure for (1000 @$6.75). Since I bought more in taxable accounts at lower prices, I can sell more if it benefits me tax wise.
I have already double bought shares so I have plenty should it go to the moon in the next 2 months… But…. I have plans to buy back more at the end of the year when the procrastinators get around to some tax loss selling. In a few days, it will be 31 days since my last BOWG purchase (@$0.875) so I then plan to sell some shares to lock in a short term loss then buy back more in another 31 days unless it rockets to the moon.
Here are the questions.
Do short term losses offset any long term gains or just short term gains?
I believe it is just short term gains that you can write short term losses off against. Also, you get a max of $3000 to write off against long term gains and income. Anything in excess of $3000 has to be carried over to the next tax year. Is this correct?
Since I could be in a very low tax bracket in year 2000 (most income will be capital gains as my expenses for the home write off will probably exceed my consulting income), there really isn’t any benefit in carrying forward a loss. Correct?
Don’t mutual funds break out short and long term capital gains? I can add in the short term gains (with TurboTax I suppose) to get a bit more write off, correct? Maybe I should sell a bit more than I need so I can cover mutual fund gains too?
Thanks!
-- posted by Kirk
» RuthM - Short term losses
Short term losses offset short term gains and long term gains. The total capital losses that can offset regular income in one year is an extra $3,000 loss. the rest is carryforward.Mutual funds do break out long term capital gains/losses. It's hard to get accurate information from them in advance.
As always, make your decisions based on investment reasons, not tax reasons. However, it can be a good idea to "clean house" and sell stocks at a loss to minimize the tax on gains.
Kirk is right about waiting 30 days, otherwise it's called a "wash sale" and you can't deduct the loss.
-- posted by RuthM
» vh1 - terribly confounded...a novice at this
my co-applicant (spouse) is contributing to 403b. it is split 50:50 into a traveler's annuity: half into "fixed T-flex CT" (as in connecticut) and half into "variable fidelity's equity income portfolio"the institution contributes matching funds up to half.
other various options utilize other annutities
what should my co-applicant do and how? are there other options how would i find out, ie not happy that i have an annuity in a 403b
-- posted by vh1
» JenL_2 - Roth Question / Answer
Rande is quoted in the TSC Tax Forum by Tracy Byrnes in 11/20 TheStreet.com:Personal Finance : TSC Tax Forum
Roth Double Shot
Tony Chen asks, "If I convert this traditional IRA to a Roth IRA in 1999, can I still contribute $2,000 to a Roth IRA for 1999?"
Steve Chiang asks whether the after-tax IRA contributions he made in years past could be rolled over into a Roth.
Let's tackle both questions together to create one big Roth reminder.
Tony and Steve,
Total contributions to all your IRAs cannot exceed $2,000 annually. It does not matter how you split that amount up. So if you already made a $2,000 contribution to your traditional IRA for 1999, you can't put more money into a Roth.
But depending on the level of your adjusted gross income, you may be able to split your contribution between the two accounts, suggests Rande Spiegelman, a senior manager in KPMG's investment advisory services group in San Francisco.
For instance, if your adjusted gross income is around $35,500, only $1,000 will count as a deductible contribution to your traditional IRA because there is a phase-out of the $2,000 limit when your AGI is between $31,000 and $41,000 (assuming you are single and you are covered by a retirement plan at work). In that case, you can convert the IRA to a Roth and make another $1,000 contribution for 1999.
All your IRA contributions can be rolled into a Roth IRA. Whether they were deductible or nondeductible will determine how much tax you owe at the time of the conversion.
You will not owe tax on any after-tax (nondeductible) contributions -- otherwise you'd be paying tax twice on that money. Just report those nondeductible contributions on Line 1 of Form 8606 - Nondeductible IRAs to alert Uncle Sam.
Be sure to check out our big Roth IRA story from earlier in the year.
.....Jen
-- posted by JenL_2
» cocojambo - 403b plans
any of you invest in 403b retirement plans?it says here http://www.moneysavingfreetips.com/403b-...
"The 403b plan was launched in 1958 by the federal US government. The initial plan was to encourage government employees to start saving towards their retirement, via this 403b plan. Usually, this plan is available to doctors, nurses, university/college profs, librarians, ministers, school administrators and more."
how many people actually subscribe to plans like these?
-- posted by cocojambo
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