_id
stringlengths 3
6
| text
stringlengths 0
10.5k
|
|---|---|
355871 | "I am strongly skeptical of this. In fact, after reading your question, I did the following: I wrote a little program in python that ""simulates"" a stock by flipping a coin. Each time the coin comes up heads, the stock's value grows by 1. Each time the coin comes up tails, the stock's value drops by 1. I then group, say, 50 of these steps into a ""day"", and for each day I look at opening, closing, maximum and minimum. This is then graphed in a candlestick chart. Funny enough, those things look exactly like the charts analysts look at. Here are a few examples: If you want to be a troll, show these to a technical analyst and ask them which of these stocks you should sell short and which of them you should buy. You can try this at home, I posted the code here and it only needs Python with a few extra packages (Numpy and Pylab, should both be in the SciPy package). In reply to a comment from JoeTaxpayer, let me add some more theory to this. My code actually performs a one-dimensional random walk. Now Joe in the comments says that an infinite number of flips should approach the zero line, but that is not exactly correct. In fact, there is a high chance to end up far from the zero line, because the expected distance from the start for a random walk with N steps is sqrt(N). What does indeed approach the zero line is if you took a bunch of these random walks and then performed the average over those. There is, however, one important aspect in which this random walk differs from the stock market: The random walk can go down as far as it likes, whereas a stock has a bottom below which it cannot fall. Reaching this bottom means the company is bankrupt and gets removed from the market. This means that the total stock market, which we might interpret as a sum of random walks, does indeed have a bias towards upwards movement, since I'm only averaging over those random walks that don't go below a certain threshold. But you can really only benefit from this effect by being broadly diversified." |
355972 | "Will the bank be taxed on the $x received through selling the collateral? Why do you care? They will, of course, although their basis will be different. It is of no concern for you. What is your concern is that the write-off of the loan is taxed as ordinary income (as opposed to capital gains when you sell the stocks) for you. So when the bank seizes the stocks, they will also report to the IRS that they gave you the amount of money that you owed them (which they will ""give you"" and then put it on the account of the loan). So you get taxed on that amount as income. In addition, you will be taxed on the gains on the stocks, as giving them to the bank is considered a sale. So you may actually find yourself in a situation where you'd be paying taxes twice, once capital gains, and once as ordinary income, on the same money. I would strongly advise against this. If it is a real situation and not a hypothetical question - get a professional tax advice. I'm not a professional, talk to a CPA/EA licensed in your state." |
356035 | Okay, I went through a similar situation when my mother died in March of this year. The estate still needs to go into probate. Especially if there was a will. And when you do this, your husband will be named as the executor. Then what he will need to do is produce both of their death certificates to the bank, have the account closed, and open an estate account with both of their names on it. Their debts & anything like this should be paid from this account as well. Then what you can do is endorse the check as the executor and deposit it into this account. After all debts are paid, the money can be disbursed to the beneficiaries (your husband). Basically, as long as they didn't have any huge debts to pay, he will see the money again. It just may be a couple of months. And you will have to pay some filing fees. |
356161 | "Oftentimes, the lender (the owner of the security) is not explicitly involved in the lending transaction. Let's say the broker is holding a long-term position of 1MM shares from Client A. It is common for Client A's agreement with Broker A to include a clause that allows the broker to lend out the 1MM shares for its own profit (""rehypothecation""). Client A may be compensated for this in some form (e.g. baked into their financing rates), but they do not receive any compensation that is directly tied to lending activities. You also have securities lending agents that lend securities for an explicit fee. For example, the borrower's broker may not have sufficient inventory, in which case they would need to find a third-party lending agent. This happens both on-demand as well as for a fixed-terms (typically a large basket of securities). SLB (securities lending and borrowing) is a business in its own right. I'm not sure I follow your follow-up question but oftentimes there is no restriction that prevents the broker from lending out shares ""for a very short time"". Unless there is a transaction-based fee though, the number of times you lend shares does not affect ""pocketing the interest"" since interest accrues as a function of time." |
356490 | If I sell a covered call, on stock I own 100%, there is no risk of a margin call. The stock goes to zero, I'm still not ask to send in more money. But, if bought on margin, margin rules apply. A naked put would require you to be able to buy the stock if put to you. As the price of the stock drops, you still need to be able to buy it at the put strike price. Mark to market is just an expression describing how your positions are considered each day. |
356535 | |
356595 | Whatever you do, don't take your retirement savings to Vegas. Second, you should also consider investment expenses. Your investments profit after the managers pay themselves. Get the lowest expense ratio mutual funds you can. Third, most active managers do not beat the market. Index funds are your friends. They also tend to have the lower expense ratios. |
356623 | I understand you're trying to ask a narrow question, but you're basically asking whether you should time the market. You can find tons of books saying you shouldn't try it, and tons more confirming that you can. Both will have data and anecdotes to back them up. So I'll give you my own opinion. Market timing, especially in a macro sense, is a zero-sum game. Your first thought should be: I'm smarter than the average person; the average person is an idiot. However, remember that a whole lot of the money in the market is not controlled by idiots. You really need to ask yourself if you can compete with people who get paid to spend 12 hours a day trying to beat the market. Stick with a mid-range strategy for now. Your convictions aren't and shouldn't be strong enough at the moment to do otherwise. But, if you can't resist, I say go ahead and do what you feel. Regardless of what you do, your returns over the next 3 years won't be life changing. In the meantime, learn as much as you can about investing, and keep a journal of your investment activity to keep yourself honest. |
356726 | You just disclosed that you are new investor to the stock market. I'd advise that you first understand investing a bit better, as most will advise that investors need to be above a certain level before picking individual stocks. That said, most stocks trade in high enough volume and have low enough short interest that they don't fall under the category you seek. You want to first ask your broker if they have such a process, not all do. If so, they would need to provide you with the stocks that fall into this odd situation, specifically, the shares that have traders seeking to short the stock, but the stock is unavailable. Even then, the broker may have requirements that you don't fall into, minimum history with broker, minimum size account, etc. Worse, they are not likely to offer this for 100 shares, but may have a 1000 or higher share requirement. Are you willing to buy some obscure $50/sh priced stock to lend out at 1%/mo? The guy trying to short it is far smarter than both you and I, at least regarding this particular stock. This strategy is more appropriate for the 7 figure net worth investor. If any reader has actual experience with this, I'm happy to hear it. This response is from my recollection of two articles I read about 3 years ago, coincidence they both were published within weeks of each other. |
357017 | "So basically, the bar has been lowered due to the fact that so many people don't qualify for credit. The medical debt issue is one thing, but the fact that only 28% of home purchases these days are first time home buyers instead of 40% says more about our unaffordable higher educational system, labor market and people's ability to earn decent income than it does about credit being ""too tight"". If anything this is a loosening of standards since the banks have no alternative in order to drum up new sales. They're 12% off the mark and they're finding ways to close the gap. Wages probably won't get better, so they're better off accepting lower quality customers and rolling the dice on their ability to pay off debts over the life of the loans they issue. Sounding familiar?" |
357037 | You should be careful about mingling your personal money and that of the business, even if it is a sole prop right now. It is a good habit to keep separate business and personal bank/credit accounts just so that when you change to an LLC, it is simpler for you to separate what belongs to the company and what is yours personally. What you're doing makes it more difficult (although only marginally so) to itemize business deductions that were paid with an ostensibly personal credit account. The better habit to get into now is keeping that distinct separation between personal and business. That being said, there's nothing illegal in what you're doing, but it would make an accountant cringe, that's for sure. (chuckle) Hope this helps. Good luck! |
357113 | Is your credit card spending on things outside the categories listed in your question? I generally don't put credit card expenditures in their own category of spending because I'm buying things like gas and groceries, etc. I track all spending whether from my checking account (bill autopay) or credit card account as spending in budget categories, and I just transfer money from my checking account to my credit card account to cover anything that was spent there during the previous month. |
357492 | No. But you are not splitting the 401(k), the judge is. There is no provision for an employee to simply request funds to give to the ex-spouse. But there is a QDRO, a qualified domestic relations order whereby a judge orders this to occur. The lawyers will be aware of the loans, as will the judge, and will take that into account when splitting the 401(k). Depending on what other money the Ex has, he make be required to pay the loans back, partially, or in full. No one can guess what will happen. The judge will take all aspects of your finances and current earnings into account. |
357520 | Yes, you are the proprietor of the business and your SSN is listed on Schedule C. The information on Schedule C is for your unincorporated business as a contractor; it is a sole proprietorship. You might choose to do this business under your own name e.g. Tim Taylor (getting paid with checks made out to Tim Taylor) or a modified name such as Tim the Tool Man Taylor (this is often referred to as DBA - Doing Business as), under a business name such as Tool Time etc. with business address being your home address or separate premises, and checking accounts to match etc. and all that is what the IRS wants to know about on Schedule C. Information about the company that paid you is not listed on Schedule C. |
357738 | No fees: Write a check. Deposit it into the other bank. |
357817 | I have no idea what you're talking about, but for context, Amazon employee badges are blue. The point is that as far as employment status is concerned they're more or less on par with corporate. (There are lots of caveats to the above statement but the general case holds.) |
357914 | "Tax cost basis is the amounts you've spent on developing the product which you hasn't deducted yet from previous income. From what you've described, it sounds like your cost basis is $0. Time you spent is not your cost, since time is not money. The fact that you might have earned something if working at that time but you didn't - is irrelevant, because potential income that you didn't get is not a loss that you took. Someone mentioned ""intangibles"" in the comments - that would be the line of thought of the buyer. However, since you didn't buy the product but rather developed it, you can only deduct the actual expenses you've incurred, that you haven't deducted so far." |
357979 | Wikipedia has a fairly detailed explanation of ETFs. http://en.wikipedia.org/wiki/Exchange-traded_fund |
358175 | There is no requirement to open a company. You can work as freelancer. You need to report income and file returns. If your income is more than exempt limit, pay taxes. Apply for a PAN number if you don't have one yet. |
358213 | |
358227 | "Check the transactions costs, ""Desk fees"" and the whole structure, sit down with them and list everything. Then make a spreadsheet and calculate all the stuff they hit you with and figure out how good you have to be in trading to make money, (in terms of accuracy and p/l)." |
358581 | The only thing the book advises to do is to start an LLC that invests in real estate, then deduct everything you do as a business expense related to investing in real estate. Going on a vacation to Hawaii? Deduct it, you were checking out real estate. And so on and so forth. |
358602 | The way the wash sale works is your loss is added to your cost basis of the buy. So suppose your original cost basis is $10,000. You then sell the stock for $9,000 which accounts for your $1,000 loss. You then buy the stock again, say for $8,500, and sell it for $9,000. Since your loss of $1,000 is added to your cost basis, you actually still have a net loss of $500. You then buy the stock again for say $10,500, then sell it for $9,500. Your $500 loss is added to your cost basis, and you have a net loss of $1,500. Since you never had a net gain, you will not owe any tax for these transactions. |
358729 | Many mortgages have a clause saying the bank will not sell the loan. You are acting like this is unheard of, but it is a standard checkbox on most bank's mortgages, where they either mark that they can sell it or they mark that they won't. So, it is common enough for it to be on their standard forms. (There are many sources of funding for banks for mortgages that explicitly prevent them from selling loans) |
358795 | "The loan-to-value ratio (LTV Ratio) is a lending risk assessment ratio that financial institutions and others lenders examine before approving a mortgage. It sounds like your lender has a 60% requirement. Remember the home is the collateral for the loan. If you stop making payments, they can take the house back from you. That number is less than 100% to accommodate changing market prices, the cost of foreclosure, repairing and reselling the home. They may be a safety factor built in depending on the home's location. If you want to buy a $1.8 million dollar home you will have to come up with 40% down payment. That down payment is what reduces the risk for the lender. So no, there is no way to cheat that. Think about the transaction from the view of the lender. Note: in some areas, you can still get a loan if you don't have the required down payment. You just have to pay a monthly mortgage insurance. It's expensive but that works for many home buyers. A separate insurance company offers a policy that helps protect the lender when there isn't enough deposit paid. Update: Er, no. Keep it simple. The bank will only loan you money if it has collateral for the loan. They've built in a hefty safety margin to protect them in case you quit paying them your monthly payments. If you want to spend the money on something else, that would work as long as you provide collateral to protect the lender. You mention borrowing money for some other purpose then buying a home. That would be fine, but you will have to come up with some collateral that protect the lender. If you wanted to buy a new business, the bank would first ask for an appraisal of the value of the assets of the business. That could be applied to the collateral safety net for the lender. If you wanted to buy a business that had little appraisal value, then the bank would require more collateral from you in other forms. Say you wanted to borrow the money for an expensive operation or cosmetic surgery. In that case there is no collateral value in the operation. You can't sell anything from the surgery to anybody to recover costs. The money is spent and gone. Before the bank would loan you any money for such a surgery, they would require you to provide upfront collateral. (in this case if you were to borrow $60,000 for surgery, the bank would require $100,000 worth of collateral to protect their interest in the loan.) You borrow money, then you pay it back at a regular interval at an agreed upon rate and schedule. Same thing for borrowing money for the stock market or a winning horse at the horse race. A lender will require a hard asset as collateral before making you a loan... Yes I know you have a good tip on a winning horse,and you are bound to double your money, but that's not the way it works from a lender's point of view. It sounds like you are trying to game the system by playing on words. I will say quit using the ""40% to 60%"" phrase. That is just confusing. The bank's loan to value is reported as a single number (in this case 60%) For every $6000 you want to borrow, you have to provide an asset worth $10,000 as a safety guarantee for the loan. If you want to borrow money for the purchase of a home, you will need to meet that 60% safety requirement. If you want to borrow $1,000,000 cash for something besides a home, then you will have to provide something with a retail value of $1,666,667 as equity. I think the best way for you to answer your own question is for you to pretend to be the banker, then examine the proposal from the banker's viewpoint. Will the banker alway have enough collateral for whatever it is you are asking to borrow? If you don't yet have that equity, and you need a loan for something besides a home, you can always save your money until you do have enough equity. Comment One. I thought that most lenders had a 75% or 80% loan to value ratio. The 60% number seems pretty low. That could indicate you may be a high risk borrower, or possibly that lender is not the best for you. Have you tried other lenders? It's definitely worth shopping around for different lenders. Comment Two. I will say, it almost sounds like you aren't being entirely honest with us here. No way someone with a monthly income who can afford a $1.8 Million home would be asking questions like this. I get that English probably isn't your first language, but still. The other thing is: If you are truly buying a $1.8 Million dollar home your real estate agent would be helping you find a lender that will work with you. They would be HIGHLY motivated to see this sale happen. All of your questions could be answered in ten minutes with a visit to your local bank (or any bank for that matter.) When you add up the costs and taxes and insurance on a 30 fixed loan, you'd have a monthly mortgage payment of nearly $10,500 a month or more. Can you really afford that on your monthly income?" |
358997 | What is your time horizon? Over long horizons, you absolutely want to minimise the expense ratio – a seemingly puny 2% fee p.a. can cost you a third of your savings over 35 years. Over short horizons, the cost of trading in and trading out might matter more. A mutual fund might be front-loaded, i.e. charge a fixed initial percentage when you first purchase it. ETFs, traded daily on an exchange just like a stock, don't have that. What you'll pay there is the broker commission, and the bid-ask spread (and possibly any premium/discount the ETF has vis-a-vis the underlying asset value). Another thing to keep in mind is tracking error: how closely does the fond mirror the underlying index it attempts to track? More often than not it works against you. However, not sure there is a systematic difference between ETFs and funds there. Size and age of a fund can matter, indeed - I've had new and smallish ETFs that didn't take off close down, so I had to sell and re-allocate the money. Two more minor aspects: Synthetic ETFs and lending to short sellers. 1) Some ETFs are synthetic, that is, they don't buy all the underlying shares replicating the index, actually owning the shares. Instead, they put the money in the bank and enter a swap with a counter-party, typically an investment bank, that promises to pay them the equivalent return of holding that share portfolio. In this case, you have (implicit) credit exposure to that counter-party - if the index performs well, and they don't pay up, well, tough luck. The ETF was relying on that swap, never really held the shares comprising the index, and won't necessarily cough up the difference. 2) In a similar vein, some (non-synthetic) ETFs hold the shares, but then lend them out to short sellers, earning extra money. This will increase the profit of the ETF provider, and potentially decrease your expense ratio (if they pass some of the profit on, or charge lower fees). So, that's a good thing. In case of an operational screw up, or if the short seller can't fulfil their obligations to return the shares, there is a risk of a loss. These two considerations are not really a factor in normal times (except in improving ETF expense ratios), but during the 2009 meltdown they were floated as things to consider. Mutual funds and ETFs re-invest or pay out dividends. For a given mutual fund, you might be able to choose, while ETFs typically are of one type or the other. Not sure how tax treatment differs there, though, sorry (not something I have to deal with in my jurisdiction). As a rule of thumb though, as alex vieux says, for a popular index, ETFs will be cheaper over the long term. Very low cost mutual funds, such as Vanguard, might be competitive though. |
359257 | A lender lends money to a person or institution. A creditor is owed money by the person or institution. Many times they are equal. But if you owe money to somebody they are a creditor. You could have paid with a check, but it bounced. Or you contracted them for a service, and then never paid for that service. Yes technically a creditor did offer a short term that was supposed to be paid within X days of being billed. Sometimes a creditor works the other way also. You gave a deposit to company X for them to remodel your kitchen. They never start the job. They now owe you a refund of your deposit. You are now a creditor. |
359442 | "Well, it's not even just about dealing with a half day. There is literally a message on every single data feed that states ""this is it for this trading session"". Why the hell would you consider any data after that as something you'd process?" |
359510 | "Congrats on saving the money but unfortunately, you're looking for a 24% annual rate of return and that's not ""reasonable"" to expect. $200 per month, is $2,400 per year. $2,400/$10,000 is 24%. In a 1% savings account with spending of $200 per month spending you'll have about $7,882 at the end of the year. You'll earn about $90 of interest over the course of the year. I'm sure other people will have more specific opinions about the best way to deploy that money. I'd open a brokerage account (not an IRA, just a regular plain vanilla brokerage account), break off $5,000 and put it in to a low fee no commission S&P index fund; which CAN lose value. Put the rest in a savings account/checking account and just spend wisely." |
359571 | Wow the collateral totally eliminates the purpose of the swap for B, to have a consistent steady cash flow and stable expenses. It probably wouldn't be worth a broker's time unless it was in the millions. They should invent interest rate swaps for the mass market. I'm patenting that! |
359713 | "Based on past case law, a check made payable to qualified charity and delivered (e.g., placed in the mail on 12/31 would count as delivered as it is out of the hands of the donor) would fall under the ""constructive receipt doctrine"". However, for non-charitable gifts (e.g., gifts to family members) it is the date the check is cashed (honored by the receiving bank). This is important as the annual gift exclusion is just that ""Annual"". Therefore, if I gift my child $14,000 by writing a check on 12/31/2014 but they deposit it on 1/3/2015 then I have used my annual gift exclusion for 2015 and not 2014. This means I could not gift them anything further in 2015. BTW the annual gift amount is for ALL gifts cash and non-cash. Most people don't seem to realize this. If I give $14,000 of cash to my child and then also give them Christmas gifts with a value of $1,000 I have exceeded my annual gift exclusion to that child. Usually there are ways around this issue as I can give $14,000 to each and every person I want and if married my spouse can do the same. This allows us to give $14,000 from each of us to each child plus $14,000 from each of us to their spouse if married and $14,000 from each of us to each of their children if they have any." |
359814 | Starting and running a business in the US is actually a lot less complicated than most people think. You mention incorporation, but a corporation (or even an S-Corp) isn't generally the best entity to start a business with . Most likely you are going to want to form an LLC instead this will provide you with liability protection while minimizing your paperwork and taxes. The cost for maintaining an LLC is relatively cheap $50-$1000 a year depending on your state and you can file the paperwork to form it yourself or pay an attorney to do it for you. Generally I would avoid the snake oil salesman that pitch specific out of state LLCs (Nevada, Delaware etc..) unless you have a specific reason or intend on doing business in the state. With the LLC or a Corporation you need to make sure you maintain separate finances. If you use the LLC funds to pay personal expenses you run the risk of loosing the liability protection afforded by the LLC (piercing the corporate veil). With a single member LLC you can file as a pass through entity and your LLC income would pass through to your federal return and taxes aren't any more complicated than putting your business income on your personal return like you do now. If you have employees things get more complex and it is really easiest to use a payroll service to process state and federal tax with holding. Once your business picks up you will want to file quarterly tax payments in order to avoid an under payment penalty. Generally, most taxpayers will avoid the under payment penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. Even if you get hit by the penalty it is only 10% of the amount of tax you didn't pay in time. If you are selling a service such writing one off projects you should be able to avoid having to collect and remit sales tax, but this is going to be very state specific. If you are selling software you will have to deal with sales tax assuming your state has a sales tax. One more thing to look at is some cities require a business license in order to operate a business within city limits so it would also be a good idea to check with your city to find out if you need a business license. |
359987 | Can't pretend to be an expert in construction or real estate but I'm pretty sure that you can approach the people you know and pay them on a per job basis. I'm pretty sure finding other workers on a per job basis will be easy. I wouldn't say its common but its not uncommon either. |
360048 | "In the end, all these fees hurt the average consumer, since the merchant ultimately passes cost to consumer. Savvy consumers can stay at par or get ahead, if they put in the effort. It's a pain, but I rotate between 4 cards depending on time of year and type of purchase, to optimize cash back. My cards are: 1. 5% rewards card on certain categories, rotates each quarter 2. 2% travel/dining card (fee card, but I travel a bunch so it's worth it, no foreign transaction fees) 3. 1.5% rewards card for everything else 4. Debit card (swiped as a CC) for small purchases (i.e. lunches) at credit union for ""enhanced"" high interest checking account, requiring certain # swipes/month. This alone returns to me ~$800/yr." |
360125 | |
360139 | "The mortgage broker makes money from the mortgage originator, and from closing fees. All the broker does is the grunt work, mostly paperwork and credit record evaluation. But there's a lot of it. They make their money by navigating the morass of regulations (federal, state, local) and finding you the best mortgage from the mortgage lender(s) they represent. They don't have any capital involved in the deal. Just sweat equity. Mortgage originator is the one who put up the capital for you to borrow. They're the ones who get most of the payments you send in. They sell the mortgage if they receive what they consider an equitable offer. Keep in mind that the mortgage, from the lender's point of view, is made up of three parts. The capital expenditure, the collateral, and the cashflow. The present value of the cashflow at the rate of the loan is greater than the capital expenditure. Any offer between those two numbers is 'in the money' for them, and the next owner, assuming no default. But the collateral makes up for the chance of default, to an extent. There's also a mortgage servicing company in many cases. This doesn't have to be the current holder of the loan. Study ""the time value of money"", and pay close attention to the parts about present value, future value, and cash flow and how to compare these." |
360193 | AS PER IRS PUBLICATION: Question: Is money received from the sale of inherited property considered taxable income? Answer: To determine if the sale of inherited property is taxable, you must first determine your basis in the property. The basis of property inherited from a decedent is generally one of the following: For information on the FMV of inherited property on the date of the decedent’s death, contact the executor of the decedent’s estate. Also, note that in 2015, Congress passed a new law that, under certain circumstances, requires an executor to provide a statement identifying the FMV of certain inherited property to the individual receiving that property. Check IRS.gov for updates on final rules being promulgated to implement the new law. If you or your spouse gave the property to the decedent within one year before the decedent's death, see Publication 551, Basis of Assets. Report the sale on Schedule D (Form 1040), Capital Gains and Losses, and on Form 8949, Sales and Other Dispositions of Capital Assets: Under the new law passed by Congress in 2015, an accuracy-related penalty may apply if an individual reporting the sale of certain inherited property uses a basis in excess of that property’s final value for federal estate tax purposes. Again, check IRS.gov for updates on final rules being promulgated to implement the new law. For estates of decedents who died in 2010, basis is generally determined as described above. However, the executor of a decedent who died in 2010 may elect out of the estate tax rules for 2010 and use the modified carryover of basis rules. Under this special election, the basis of property inherited from a decedent who died during 2010 is generally the lesser of: Under this special election for estates of decedents who died in 2010, the executor of the decedent’s estate may increase the basis of certain property that beneficiaries acquire from a decedent by up to $1.3 million (plus certain unused built-in losses and loss carryovers, if applicable), but the increased basis cannot exceed the FMV of the property at the date of the decedent’s death. The executor may also increase the basis of certain property that the surviving spouse acquires from a decedent by up to an additional $3 million, but the increased basis cannot exceed the FMV of the property at the date of the decedent’s death. The executor of the decedent’s estate is required to provide a statement to all heirs listing the decedent’s basis in the property, the FMV of the property on the date of the decedent’s death, and the additional basis allocated to the property. Contact the executor to determine what the basis of the asset is. Report the sale on Schedule D (Form 1040) and on Form 8949, as described above. Additional Information: |
360221 | So you have to be a science and math whiz to research the most important financial decisions of your life? Business and Comp. Sci. Did finance. Left to go into education and entrepreneurship. 10+ years working with high risk youth in higher education. Voted for Obama. But go ahead and be intellectually lazy and put everyone in a nice box. Makes thinking easy for you I suppose. Voted for Obama. |
360481 | "good vs ""bad"" debt in the context of that post. At least in the UK this can be a good tactic to reduce the cost of credit card debt. Some things to consider" |
360628 | Determining how much you should budget to spend on any area of your budget is one of those hard topics to find good information about. Part of the problem is that everyone has different priorities and needs, and incomes and expenses vary greatly depending upon where you live and your career choices. The best thing you can do is track your spending for 1-3 months (you can use the envelope system if you need to, to track and control how much you spend on miscellaneous things like lunches, coffee, etc). The precision is important, though you probably dont need to measure to the penny, however you should capture all the areas where you spend money (even if you later gather them into more broad areas). Split your spending into three broad areas, and try to limit the spending for each of those areas to the stated percentages (adjust for your preferences). You state net Income $2600, and you stated you have $1731 of known expenses, so you are spending another $870 on groceries, debt payments, restaurants, unplanned expenses, and emergencies. Essentials (50%,$1300) - rent, transportation, food, utilites Total $972+groceries (you probably spend $400-600 on groceries, so your essentials are higher by $100-300 than you can afford. You should try to cut your electricity usage ($30-50), and you may be able to find cheaper car insurance (save $20). Financial Priorities (30%,$780) - savings, debt payments Total $376, nearly 15% before you pay for credit cards and savings. Please focus on paying off your debts (credit cards, window loan, student loans). You are spending almost 10% of your income on student loans, and you cannot afford much other debt. Lifestyle (20%,$520) Total $279, over 10% of your income on communications! Please try to cut cellphone, and DirectTV costs, at least until you have reduced debt. Since you have internet, your wife could use a voip provider (vonage, ooma telo, etc) or get an ipod touch and use skype or similar, at least until you get out of debt. You might consider trying to find a way to earn extra money, until you have paid off either the loan for windows, your credit card debt, or one of your student loans. |
360716 | "What you seem to want is a dividend reinvestment plan (DRIP). That's typically offered by the broker, not by the ETF itself. Essentially this is a discounted purchase of new shares when you're dividend comes out. As noted in the answer by JoeTaxpayer, you'll still need to pay tax on the dividend, but that probably won't be a big problem unless you've got a lot of dividends. You'll pay that out of some other funds when it's due. All DRIPs (not just for ETFs) have potential to complicate computation of your tax basis for eventual sale, so be aware of that. It doesn't have to be a show-stopper for you, but it's something to consider before you start. It's probably less of a problem now than it used to be since brokers now have to report your basis on the 1099-B in the year of sale, reducing your administrative burden (if you trust them to get it right). Here's a list of brokerages that were offering this from a top-of-the-search-list article that I found online: Some brokerages, including TD Ameritrade, Vanguard, Scottrade, Schwab and, to a lesser extent, Etrade, offer ETF DRIPs—no-cost dividend reinvestment programs. This is very helpful for busy clients. Other brokerages, such as Fidelity, leave ETF dividend reinvestment to their clients. Source: http://www.etf.com/sections/blog/23595-your-etf-has-drip-drag.html?nopaging=1 Presumably the list is not constant. I almost didn't included but I thought the wide availability (at least as of the time of the article's posting) was more interesting than any specific broker on it. You'll want to do some research before you choose a broker to do this. Compare fees for sure, but also take into account other factors like how soon after the dividend they do the purchase (is it the ex-date, the pay date, or something else?). A quick search online should net you several decent articles with more information. I just searched on ""ETF DRIP"" to check it out." |
360773 | Though non-resident Indians (NRIs) earn their living abroad, their obligation to file tax returns in India doesn't end. With the July 31 deadline for filing returns barely a month away, NRIs need to gear up to file their return if they have income in India that exceeds the basic exemption limit. How to Determine tax residency status: An NRI first needs to determine his tax residency status, that is, whether he falls in the category of resident or non-resident Indian (NRI) for tax purposes. While there may be no ambiguity regarding the status of an NRI who has lived abroad for a long time, those who have moved abroad recently or have returned to India after a long stay abroad need to ascertain their residency status properly. |
360925 | With your income so high, your marginal tax rate should be pretty easy to determine. You are very likely in the 33% tax bracket (married filing jointly income range of $231,450 to $413,350), so your wife's additional income will effectively be taxed at 33% plus 15% for self-employment taxes. Rounding to 50% means you need to withhold $19,000 over the year (or slightly less depending on what business expenses you can deduct). You could use a similar calculation for CA state taxes. You can either just add this gross additional amount to your withholdings, or make an estimated tax payment every quarter. Any difference will be made up when you file your 2017 taxes. So long as you withhold 100% of your total tax liability from last year, you should not have any underpayment penalties. |
361013 | The net return reported to you (as a percentage) by a mutual fund is the gross return minus the expense ratio. So, if the gross return is X% and the expense ratio is Y%, your account will show a return of (X-Y)%. Be aware that X could be negative too. So, with Y = 1, If X = 10 (as you might get from a stock fund if you believe historical averages will continue), then the net return is 9% and you have lost (Y/X) times 100% = 10% of the gross return. If X = 8 (as you might get from a bond fund if you believe historical averages will continue), then the net return is 7% and you have lost (Y/X) times 100% = 12.5% of the gross return. and so on and so forth. The numbers used are merely examples of the returns that have been obtained historically, though it is worth emphasizing that 10% is an average return, averaged over many decades, from investments in stocks, and to believe that one will get a 10% return year after year is to mislead oneself very badly. I think the point of the illustrations is that expense ratios are important, and should matter a lot to you, but that their impact is proportionately somewhat less if the gross return is high, but very significant if the gross return is low, as in money-market funds. In fact, some money market funds which found that X < Y have even foregone charging the expense ratio fee so as to maintain a fixed $1 per share price. Personally, I would need a lot of persuading to invest in even a stock fund with 1% expense ratio. |
361163 | The sentiment is because between closing and opening a lot can happen, and between opening and the time your order actually goes through, even more can happen. An after-hours trade has an extra amount of short-term risk attached; the price of a stock at the opening bell is technically the same as its price as of the closing the previous trading day, but within a tenth of a second, which is forever in a computerized exchange, that price may move drastically one way or the other, based on news and on other markets. The sentiment, therefore, is simple; if you're trading after-hours, you're trading risky. You're not trading based on what the market's actually doing, you're trading based on what you think the market will do in the morning, and there's still more math going on every second in the privately-held supercomputers in rented cubes in the NYSE basement than you could do all night, digesting this news and projecting what it's going to do to the stocks. Now, if you've done your homework and the stock looks like a good long-term buy, with or without any after-hours news, then place the order at 3 in the morning; who cares what the stock's gonna do at the opening bell. You're gonna hold that stock for the next ten years, maybe; what it does in 5 seconds of opening turmoil is relatively minor compared to the monthly trends that you should be worrying about. |
361279 | France is one country where cheques are common. More an more people are using credit cards for typical store payments and wire transfers are slowly gaining traction. There are several cases where cheques come handy: Sure, all these cases could ultimately be resolved with a wire transfer. Sometimes it is just simpler/faster to mail a piece of paper. This said, I believe than in 1à years from now even France will go cheque-less. |
361329 | The Money Girl (Quick and Dirty Tips for a richer life) Podcast is a pretty good source for this type of information. Some Recent Topics: |
361345 | Short answer is to put the max 15% contribution into your ESPP. Long answer is that since you want to be saving as much as you can anyway, this is a great way to force you to do it, and pick up at least a 15% return every six months (or however often your plan makes a purchase). I say at least because sometimes an ESPP will give you the lower of the beginning or end period stock price, and then a 15% discount off of that (but check the details of your plan). If you feel like your company's stock is a good long term investment, then hold onto the shares when purchased. Otherwise sell as soon as you get them, and bank that 15% return. |
361482 | Stock awards by employers are treated and taxed as salary. I.e.: you pay ordinary rate income tax, FICA taxes, State taxes etc. The fact that you got your salary in shares and not cash is irrelevant for tax purposes. Once you got the shares and paid your taxes on them, the treatment is the same as if you got the salary and immediately bought the shares. Holding period for capital gains tax purposes starts at the time you paid your taxes on the award, which is the time at which you get full ownership (i.e.: vesting time, for the restricted stocks). When you sell these stocks - you treat the sale as any other stock sale: you check the holding period for capital gains tax rates, and you do not pay (or get refund) any FICA taxes on the sales transaction. So bottom line: You got $10K salary and you bought $10K worth of company stock, and you sold it at $8K half a year later. You have $10K wages income and $2K short term capital loss. |
361514 | Never borrow money to get a tax deduction. Even 18 months interest free is a stupid risk to save a few $ in taxes (we're talking $1K or less in tax savings from what I can tell in your questions). |
361623 | "The most important thing is not to tell yourself ""I'll save more later in my career when I have more disposable income,"" because of two factors. 1) You will get raises over your career, but unless you make it big, it will never really feel like you have extra money. You may double or triple your salary over a career, but it usually happens in small increments which your lifestyle tends to adjust upwards to meet even though it doesn't feel like it. 2) Later in your career you may have more money to save, but now the commodity you have is time. Your total savings at retirement are going to be influenced in a massive way by both of these factors. A good strategy is save SOMETHING early in your career even if it feels like an insignificant amount. Then save larger amounts later in your career when you are earning more, but have less time for your investments to grow and less tolerance for high risk/high growth investments." |
361639 | Nice idea. When I started my IRAs, I considered this as well, and the answer from the broker was that this was not permitted. And, aside from transfers from other IRAs or retirement accounts, you can't 'deposit' shares to the IRA, only cash. |
361717 | First off, this is a post for /r/personalfinance. Second off, if you want to think of this like an accountant/financier, those are the bank's 10233 dollars, not your's, and you are paying them 6% to keep that money. If you are confident that you are going to make more than 6% interest on any investments you make with that money, it makes sense to do so, although your return will be 6% less in reality. You also assume the risk of losing money on the investment and not having enough money to repay your loans. tl;dr Pay off the loan. |
361832 | I say again, more than a trillion dollars in student loan debt represents tremendous leverage if people in debt would form a consumer group and threaten to withhold payments until Congress retroactively gives them a much lower interest rate and brings back the ability to get out from under huge debt via bankruptcy, just like corporations do. |
362060 | I am not an accountant, but I have a light accounting background, despite being primarily an engineer. I also have a tiny schedule C business which has both better and worse years. I am also in the United States and pay US taxes. I assume you are referring to the US Form 1040 tax return, with the attached Schedule C. However little I know about US taxes, I know nothing about foreign taxes. You are a cash-basis taxpayer, so the transactions that happen in each tax year are based on the cash paid and cash received in that year. You were paid last year, you computed your schedule C based on last year's actual transactions, and you paid taxes on that income. You can not recompute last years schedule C based on the warranty claim. You might want to switch to an accrual accounting method, where you can book allowances for warranty claims. It is more complex, and if your business is spotty and low volume, it may be more trouble than it is worth. At this point, you have two months to look for ways to shift expenses into next year or being income into this year, both of which help offset this loss. Perhaps a really aggressive accountant would advise otherwise (and remember, I am not an accountant), but I would take the lumps and move on. This article on LegalZoom (link here) discusses how to apply a significant net operating loss (NOL) in this year to the previous two years, and potentially carry it forward to the next two years. This does involve filing amended returns for the prior two years, showing this year's NOL. For this to be relevant, your schedule C loss this year must exceed your other W2 and self-employment income this year, with other tests also applied. Perhaps a really aggressive accountant would advise otherwise (and remember, I am not an accountant), but I would take the lumps and move on. |
362468 | "I've never heard of a loan product like that. Yes, if they keep the funds in an account, it is no risk to the bank, but they would essentially need to go through the loan process twice for the same loan: when you pick a house, they need to reevaluate everything, along with appraising and approving the house. Even if you did find a bank that would do this for you, there are a few problems with this scheme. You would be paying interest before you have a need for this money, negating the savings you might achieve if the interest rates go up. In addition, your ""balance"" will go down as ""payments"" are deducted from your loan, and when you finally find a home to buy, you might not have enough for the house you want. You'll need to borrow more than you need, which will further negate any possible savings. It is impossible to know how fast rates will climb. If I were you, I would stick to saving for your down payment, and just get the best rate you can when you are ready to buy. Another potential idea for you is to lock an interest rate. When you apply for a mortgage, the interest rate is often locked for as much as 60 days, to protect the borrower in the event that the rates go up. You could ask the bank if you can pay a fee to lock the rate even longer. I don't know if that is possible or not. And, of course, the fee would eat into your potential savings." |
362532 | The catch is in the Premium amount you pay. In a pure term insurance, there is no survival benefit. You get paid only for the event, i.e. when you die during the policy term, the sum assured is paid to your nominee. The money back on the other hand, charges a huge premium, typically 5X more than the pure term, part of it is for the risk cover. The balance is then invested in safe instruments and at the end if you survive you would get that money. Typical calculations would show that if you had yourself invested the difference in premium even in CD's you would get much more money back. The reason this product is available in the market is more of people cannot part with money when they don't get anything back. To these vast majority, it looks like insurance company is taking all their money and doesn't give them back if they survive. Hence to make it seem better to these vast majority, there is money back. Hence people all over the world buy these policy much more than a pure term policy. |
362579 | Cost. If an investor wanted to diversify his portfolio by investing in the companies that make up the S&P 500, the per-share and commission costs to individually place trades for each and every one of those companies would be prohibitive. I can buy one share of an exchange-traded fund that tracks the S&P 500 for less than the purchase price of a single share in some of the companies that make up the index. |
362762 | For exchange contracts, yes. A trader can close a position by taking an offsetting position. CME's introduction to Futures explains it quite well (on page 22). Exiting the Market Jack entered the market on the buy side, speculating that the S&P 500 futures price would move higher. He has three choices for exiting the market: |
363024 | I'm not disagreeing with you about math. But what you keep focusing on is your assumption people *need* $100 more per month to spend on energy. Some people may, but can you see how your solution makes an assumption that most likely misses the point? |
363753 | Don't over think about your choices. The most important thing to start now and keep adjusting and tuning your portfolio as you move along in your life. Each individual's situation is unique. Start with something simple and straight forward, like 100 - your age, in Total Stock market Index fund and the remaining total bond market index fund. For your 401k, at least contribute so much as to get the maximum employer match. Its always good if you can contribute the yearly maximum in your 401k or IRA. Once you have built up a substantial amount of assets (~ $50k+) then its time to think more about asset allocation and start buying into more specific investments as needed. Remember to keep your investment expenses low by using index funds. Also remember to factor in tax implications on your investment decisions. eg. buying an REIT fund in a tax advantaged account like 40k is more tax efficient than buying it in a normal brokerage account. |
363798 | "I don't understand why he couldn't just log onto his account online, see the ""current balance"" and pay that? I've got 4-5 credit cards (2 of them are Chase) and they *ALL* have an online portal which will show you a daily-calculated ""current balance"" right on your screen... you can then enter in your checking account and transfer over that amount to pay the whole thing off virtually instantly. Does Chase continue to charge interest even after the balance goes to $0?" |
363817 | Interest rates can't remain this low. It's like having extremely low blood pressure. When you raise the rates, banks are incented to loan money and that movement of capital is good for the economy. It forces us to become savers instead of spenders, and our pensions, 401ks, social security are all getting killed by not being able to use debt to get safer stable returns. Interest rates have to come back up. |
363919 | I buy or sell a few shares whenever I have a small amount of money to transfer into out of my mutual funds. Since I'm not paying transaction fees, there is no reason not to, when that is what makes sense. If you are paying a fee for each transaction, of course it makes sense to try to wait until you have a larger amount to move so the overhead per share is lower. |
363960 | Most of the time, your tax only reduces by the current marginal rate - meaning you would only reduce your tax by 28% to 25% depending on which part of the bracket you're in. However, in the area around 100k, there are cases where reductions will have more of a marginal effect than that. You'll never reduce it more than 100%, but you can reduce it by 35-40% despite being in the 25% bracket. That is because of certain deductions and credits which phase out beginning around 80k-120k; things like the IRA deduction, the Child Tax Credit, Childcare Tax Credit, and similar. Since many of them phase out in this range, additional dollars cost you your marginal rate (25%) plus the percentage of the credits or deductions which phase out here, which might bring you up another 10% or so. |
364219 | You report each position separately. You do this on form 8949. 7 positions is nothing, it will take you 5 minutes. There's a tip on form 8949 that says this, though: For Part I (short term transactions): Note. You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 1a; you are not required to report these transactions on Form 8949 (see instructions). For Part II (long term transactions): Note. You may aggregate all long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 8a; you are not required to report these transactions on Form 8949 (see instructions). If the 1099B in your case shows basis for each transaction as reported to the IRS - you're in luck, and don't have to type them all in separately. |
364370 | >And how did this cause the MBS to get wiped out, was it a written clause or did they just collapse from the value dropping so hard? It was written into the debt instruments. MBS and CDOs are broken down into tranches with descending priority of claims to the collateral pool. When it comes time for payment, the top tranche gets paid out 100% before the one below it is entitled to a single cent, and so on and so forth. Here's an example of how one might be organized: Foo | Bar | text ---|---|---- Tranche | Size | Credit Rating Class A | 750MM | AAA Class B | 100MM | AA Class C | 60MM | A Class D | 50MM | BBB Class E | 40MM | Not Rated In this example, lets say that 5% of the loans defaulted, meaning that of the $1B, only $950MM was available to get paid out (assuming no over-collateralization, which most had, but that's besides the point here). The Class A would get the full 750 they're due, the Class B would get the full 100, and the Class C would get the full 60. At this point there is only 40MM left, so the Class D would get 40 of the 50 due (a 20% write-down), and Class E would get nothing, getting completely wiped out. >I dont know what subordination level means Subordination level basically just means how much debt it below it on the capital structure--how much needs to get completely wiped out before any particular tranche starts sharing in the losses. > Did defaults reaching 8% meaning that 8% of loan takers defaulted? Yeah more or less. Technically I think it's that 8% of the value of the mortgages defaulted, but I believe they were set up to be relatively the same size within each instrument, so there's not really much distinction between 8% of the loan takers and 8% of the aggregate value. |
364411 | Im not sure if its normal/sensical/healthy, and that is kind of opinion based. But there is a reason for it. Certain rules and regulations passed recently are causing companies or institutions to shift to bonds from cash. Fidelity, for example, is completely converting its $100 billion dollar cash fund to short term bills. Its estimated that over $2 trillion that is now in cash may be converted to bills, and that will obviously put upward preasure on the price of them. The treasury is trying to issue more short term debt to balance out the demand. read more here: http://www.wsj.com/articles/money-funds-clamor-for-short-term-treasurys-1445300813 |
364445 | I don't think that there is any good way a study can average this and bring a useful result: The core problem is that there are people that will spend more money than they should, if they become technically able to, and the credit card is just one of the tools they abuse for that (similar to re-financing with cash-outs, zero percent loans, etc.). On the other side, there are people who control and understand their spending, and again, the mechanism of payment is irrelevant for them. Studies measure some mix between the groups, and come up with irrelevant correlations that have no causality. If you think any tool or mechanics got you in financial trouble, think again: your spending habits and lack of understanding or care get you in financial trouble - nothing else. In a world where it is considered cool to 'don't understand math', it is no surprise that so many people can't control their finances. |
364543 | It depends on if it is a non-refundable deposit, retainer, etc. The remaining $1,500 is not included in that quarter's sales, because you have not yet received it and it is not guaranteed. The question is really if you should count the $500 toward the quarter where it is received, or during the quarter where you invoice. This deposit might be categorized as a liability until you invoice, and there is no sales tax to be calculated until the invoice for the total. I say 'might' because this can vary by state and the type of transaction or business. For example, if someone makes a cash down payment on a lease for a car, some states will require that sales tax be charged on this. |
364642 | In day trading, you're trying to predict the immediate fluctuations of an essentially random system. In long-term investing, you're trying to assess the strength of a company over a period of time. You also have frequent opportunities to assess your position and either add to it or get out. |
364666 | Fund your retirement accounts first. Even as an intern, it is still worthwhile to open a Roth IRA and start contributing to it. See my answer to a similar question: Best way to start investing, for a young person just starting their career? |
364802 | "In your shoes, I would pay off the mortgage with the after tax investments and be done. You have different goals than I do in that you want to keep the debt. So, I would start calling mortgage brokers and asking for someone who does ""manual underwriting"". Manual underwriting essentially means they use common sense and look at your situation for what it is instead of saying ""income=10K means disapprove mortgage"". It may be that your situation is different enough from mortgage guidelines that you can't now get a conforming mortgage (i.e. one that is readily re-sellable to another mortgage holder). If that is the case, you can look for a small bank or credit union that would be interested in adding your loan to their portfolio and not reselling it." |
365025 | "Finding statistics is exceedingly hard, because the majority of traders lose money. That is, not only they don't ""beat the markets"", not only they don't ""beat the benchmark"" (S&P 500 being used a lot as reference): they just lose money. Finding exact numbers, quality statistics and so on is very difficult. Finding recent ones, is almost impossible. With enormous effort I have found two references that might help make an idea. One is very recent, Forex ""centered"" and has been prepared by a large finance group for the the Europen Central Bank (ECB). It's available on their website, at an obscure download location. The document is stated to be confidential, but its download location has been disclosed to the public by CNBC. I can't post CNBC's link because I have just joined this Stack Exchange portal so I don't have enough reputation. You can find it by looking for their article about FXCM Forex broker debacle due to the Swiss Central Bank removing the EUR/CHF peg at 1.20. The second is a 2009-ish paper about Taiwanese retail traders profitability statistics published by Oxford University Press and talks about stocks. Both documents focus on retail traders. I strongly suggest you to immediately save those documents because they tend to disappear after a while. We had a fantastic and complete statistics report made by a group of German Banks in 2011... they pulled it off in 2012." |
365167 | "There are only two ways to increase your savings: You are young, and both of these are likely to spontaneously happen - you will be promoted and get raises, and your loans will be paid off, removing the loan payment. It would seem that you need only to wait a year or so, and there will a lot more than $87 left over each month, and your savings will grow almost without any action from you. But somehow, that is not what happens in real life. As people get older they ""need"" more than they did before (larger home, more expensive ""things"", etc) and they never manage to get around to saving. So it's great that you are wondering how to do it. But you are not truly making it a priority. You mention that you also pay/spend for friends, the internet, play & joy, cloth, gifts, book, etc. And this armwavy entirely optional spending is the difference between 72.85 (such precision!) and 90% of your salary. In other words it is 17-18% or more than your rent. Think about that for a moment. Every month you spend more than your rent on friends, play, joy, books and good old etc. If you were to cut that in half, you could save 8 or 9% of your salary. Maybe after your next raise you can get that up to 10%. How can you cut that optional ""fun"" stuff in half? Well, I don't know, because I don't know what it is, and I suspect you don't either. So track it, for a month or two. Are you getting takeout food or coffee every day? Are you always the one who pays when you go out with friends? Do you eat in restaurants a lot? Do you always wear the latest fashions, buy $500 shoes, pay people to do your nails or dye your hair, buy a new phone every year, have the top end phone plan, top end cable plan, ... You have to know where that rent's-worth of money goes every month. Then you can figure out how to send some of it to savings instead. In some ways you are in a hard generation. Your parents didn't need to save for their retirement because they had you, and they know you will send money home for them. But you probably don't expect the same from the children you don't have yet, so you have to save for yourself. This is a challenge. If you were saving the money you send your parents, you'd be fine. Yet you don't want to reduce what you send, they need it. Still, people have faced bigger challenges and overcome them. Start by understanding where your fun money is going, then look at how to send some (aim for half) of that to savings instead. You won't regret it." |
365298 | "Diversify into leveraged short/bear ETFs and then you can quit your job and yell at your boss ""F you I'm short your house!"" edit: this is a quote from Greg Lippmann and mentioned in the book ""The Big Short""" |
365410 | This article may be a good place to start [Introduction to Smart Pricing: How Google, Priceline, and Leading Businesses Use Pricing Innovation for Profitability](http://www.ftpress.com/articles/article.aspx?p=1569334) It gives a brief overview of three pricing strategies, cost plus, competition based pricing and consumer based pricing. **Edit** -This may also be helpful [Social Science Research Network](http://www.ssrn.com/en/) |
365456 | There are quite a few questions as to how you are recording your income and expenses. If you are running the bakery as a Sole Proprietor, with all the income and expense in a business account; then things are easy. You just have to pay tax on the profit [as per the standard tax bracket]. If you running it as individual, you are still only liable to pay tax on profit and not turnover, however you need to keep a proper book of accounts showing income and expense. Get a Accountant to do this for you there are some thing your can claim as expense, some you can't. |
365462 | It's not the legitimate checks or bounced checks that are the problem, it's phony checks issued against real accounts with actual money in them. All the security measures on the check don't amount to crap if someone can print up some legitimate looking checks with bogus amounts on them, or even just steal some printed checks and sign something resembling the authorized signature. |
365597 | "For person A to be protected (meaning able to recover some or all of the money should the other party try to welsh on the deal), the two of them must have entered into a valid, binding contract where both parties acknowledge and agree to the debt and the terms. Such a contract is subject to the Statute of Frauds, a collection of laws governing contracts which is mostly borrowed from English common law. The basics are that in all cases, a ""contract"" is only formed when both parties agree, technically when one party accepts an offer made by the other party. Both the offer and acceptance must be made sincerely. For a contract, once entered, to be enforceable, proof of the contract's existence and terms must itself exist. Certain types of transactions (real estate, large amounts of money) require contracts to be in written form, and witnessed by a trusted third party (in most cases this party is required to be a notary public). And contracts must have a certain amount of quid-pro-quo; contracts that provide a unilateral benefit can be thrown out on a case-by-case basis. A contract that simply states that Person B owes Person A money, without stating what benefit Person A had provided Person B in return for the money (in this case A gives B the money to begin with), is unenforceable. The benefits must of course be legal on both sides; a contract to deliver 5 tons of cocaine will not be upheld by any court in any free country, and neither will any contract attempting to enforce hush money, kickbacks, bribery etc (though some toe the line; one could argue that a signing bonus is tantamount to bribery). In some cases even seemingly benign clauses, like ""escape clauses"" allowing one party a ""free out"", can make the contract unenforceable as they could be abused to the severe detriment of one party. There are also jurisdiction-specific rules, such as limits on ""finance charges"" for debts not owed to a ""bank"" (a bar, for instance, cannot charge 10% on an outstanding tab in the United States). This is HUGE for your example, because if Person A had specified an interest rate in excess of the allowed rate for non-bank lenders, not only will the contract get thrown out even though Person B agreed to the terms, but Person A could find themselves on the hook for punitive damages payable to Person B, FAR in excess of the contracted amount. Given that the agreement meets all tests of validity for a contract, if either party fails to perform in accordance with the contract, causing a loss or ""tort"" for the other party, the injured party can sue. Generally the two options are ""strict performance"" (the injuring party is ordered by the court to comply exactly with the terms of the contract), or payment of net actual damages and dissolution of the contract. In your example, if Person A had lent Person B money, strict performance would mean payment of the debt in the installments agreed, at the rate agreed; actual damages would be payment of the outstanding balance plus current interest charges (without any further penalty). Notice that it's ""net"" damages; if Person A was to issue the loan in installments, and missed one, causing Person B to suffer damages from the loss of expected cash flow directly resulting in their failure to pay according to the terms, then Person B's proven damages are subtracted from A's; very often, the plaintiff in a suit to recover money can end up owing the defendant for a prior failure to perform. There are further laws governing bankruptcy; basically, if the other person cannot satisfy the contract and cannot pay damages, they will pay what they can, and the contract is terminated with prejudice (""no blood from a turnip"")." |
365603 | Completely different. Canadians can be deemed non-residents by severing their residential ties with Canada and emigrating to another country, and no longer required to file unless they have certain sources of Canadian income. *See* http://travel.gc.ca/travelling/living-abroad/taxation No such classifications exist with US citizenship. You file a return no matter what, even if you haven't stepped foot in the US in decades. |
365648 | "In addition to Alex B's excellent overview, I'd like to add a few more bits of advice. First of all, one term you should know is ""commercial real estate"" - which is precisely what this is. There is a business element, but it is strictly (and almost entirely) intertwined to the underlying real estate, which makes this a special category of business which is generally considered simply ""commercial real estate"" (just like office buildings, shopping malls, etc). All real estate and businesses value are based on alternatives - what other options are there? In appraisal, these are generally called ""comparables"". A professional appraiser is generally available for commercial real estate of this type. While a full, official commercial appraisal can run into the thousands, many/most (all?) appraisers are willing to sell you a simplified version of their service, which can be called a ""letter of opinion"" and can help you get an idea for the market price (what other similar commercial properties are running for). A loan company would strictly require this, but if you are thinking of an all cash or form of seller-financing this would technically be optional. Your best bet is to read about some of what is involved in commercial real estate appraisal and evaluation, and you may even want to speak with commercial loan officers - even if you don't know that you want to get a loan to acquire the property! It's their job to help inform you about what is required and what they look for, so they can be a potential resource beyond your own research as well. With this said, the only way to estimate value (and, conveniently, the best way) is to look at other properties! And by ""others"", I mean that you should really not consider buying absolutely anything until you've viewed at least 6-10 other options in some depth - and you probably want to double or triple that number if you are looking to make this the last big business transaction of your life. If you don't you'll be relying on little more than dumb luck to carry you through - which in this area of business, you don't want to do because the dollar amounts and liabilities involved can bankrupt you in no time flat. With that general advice out of the way, here's a tiny nutshell version of valuation of commercial real estate. There are a few key parts involved in commercial real estate: land, improvements (buildings, docks, stuff like that), income, and wages. Land: the value of the land is based upon what you could sell it for, as-is. That is to say - who else might want it? This alone has many important factors, such as zoning laws, the neighborhood (including your neighbors), water/utilities, pacts on the land (someone may have insisted the land not be paved into a parking lot, or really anything like that), alternative uses (could you put a golf course on it, or is the land suitable for a big building or farming?), etc. And is this in a growing area, where you might hope the value will increase over the next decade, or decrease, or basically stay flat (and possibly cause losses compared to inflation)? Improvements: anything on the land is both an asset and a liability. It's an asset because it could add to the value of the land, but it might also reduce the land value if it interferes with alternate land uses. It's a liability, both in the legal sense and in that it requires maintenance. If you want to rent them out, especially, that means concern about any foundations involved, termites, roofs, sewage/septic tanks, utilities that are your responsibility (pipes, poles, wires), as well as any sort of ac/heating you may have, docks, and so on. These things are rarely free and absolutely can eat you alive. Income: Ah, the best part, the constant influx of cash! But wait, is it a constant influx? Some businesses are purely seasonal (summer only, winter only), some are year-round but have peak times, and others don't really have a ""peak"" to speak of. If you are renting, are there issues collecting, or with people over-staying? How about damage, making a mess, getting rowdy and disturbing others? Regardless, there is obviously some income, and this is usually the most dangerous part of the equation. I say ""dangerous"", because people absolutely lie like dogs on this part, all the time. It's easy to cook the books, assuming they even attempt to keep proper books in the first place! Businesses of this form often have a lot of cash business that's easy to hide (from Uncle Sam, or sometimes even the owners themselves if there are employees involved) - and fake! And some people are just shoddy bookkeepers and the info is just wrong. But, there will clearly be some kind of yearly income involved. What does this matter? Well...how much is there? How much is tied to the owners (personal friends do business and they will leave if the ownership/management changes)? In commercial real estate the income will be calculated for a fiscal year, and then there is something called a ""multiple"", which is market dependent. Let's say the whole place takes in $100k in rent a year. As part of buying this business, you are buying not just assets, but expected future income. In some commercial areas the multiple is as little as .5 to 2 - which means that the going rate is about 6-24 months worth of income, as part of the purchase price. So with 100k rent a year, that means 50k-200k of the purchase price is attributable to the income of the business. And if business is half of what you thought it would be? That means the net value of the whole enterprise decreases by 25k-100k - on top of the reduced income every year you own it! Income provides cash flow, which should pay all the expenses (cleaning up from wind storms, replacing windows that are broken, hauling off trash, replacing a well that ran dry), and then the extra that remains is positive cash flow. If you take out a loan, then ideally the cash flow would also pay that completely so long as you don't have any big unexpected expenses in the year - and still have some left over for yourself. Wages: Well, that money doesn't collect itself! There's sales, keeping the books, collecting the rent, performing maintenance, customer service, cleaning, paying the bills, keeping the insurance people happy, handling emergencies, and everything else involved with running the business. Someone is going to do it, and the biggest error people make here is not to put any value on their time - and to make it so they can never afford to take a vacation again! Pay yourself, and give yourself the flexibility to pay others when you can't (or don't want) to do it all yourselves. So, what's the point of all this? How do you actually make any money? In two ways: 1) selling the whole thing later, and 2) cash flow. For 1, it's important that you not be in a situation where you are betting that in the future there will be a ""person richer, and dumber, than I am now"". If the current owner wanted 2 million, then 1 mil, then less, over multiple years...this suggests either he is delusional about the value of his place (and most property owners are), or that its actually hard to find a buyer for such a business. You are going to want to make sure you understand why that is, because most of the value of real estate is...well, in the real estate itself! For 2, you need cash coming in that's considerably more than the cost of running the place. Also, cash flow can strongly change the value of the business for resale (depending on the multiple, this can make a huge difference or prevent you from selling the thing at all). You mentioned you want to put in more cabins, more marketing/sales efforts, etc. That's great, but first, that would mean added investment beyond the purchase price. Is it legally and physically practical to add more cabins, and what is their current utilization rate? If they are only renting 10% of their current capacity, increasing capacity may be premature. This will also vary through the year, so you may find there is a problem with being sold out sometimes...but only for a small percentage of the time. Which means you'll be adding buildings only to have them used for a fraction of the year, which will be very hard to make a profit from. If cash flow is good, ideally even being enough to cover a loan payment to help cover the purchase price (and remember that commercial real estate loans are much smaller loan-to-value ratios than in residential real estate), there is one final barrier to making money: the damn non-regular maintenance! Roofs, wells, and wooden walls all have a sad tendency to cost you nothing right up until the point they cost you $30k+ on a single day. Is there enough cash flow to make these sort of certainties (and if you plan to be there for years, they are a certainty) not put you in the poor house? This was rather long, but I hope this overview helps you appreciate all that you'll need to look into and be cautious of during your future en-devour! Commercial real estate is generally costly and high-risk, but also can be high reward. You'll need to compare many opportunities before you can get a ""feel"" for what is a good deal and what is a terrible one. You'll need to consider many factors, such as resale value and cash flow/income (which they will have to tell you and you can assume is not true, due to ignorance or malice), as well as maintenance and liabilities, before you can begin to really estimate the value of an enterprise of this sort. There are people who can help you, like appraisers and commercial brokers, but ultimately you'll need to do a lot of research and comparisons yourself to help you make a good decision. Finally, there is no very simple method for evaluating commercial real estate value. You need a variety of information, and you must be skeptical of what you are told because of the very large sums of money involved. It is doable (lots of people do it), but you must take care and do your due diligence so you don't get bankrupted by a single bad purchase." |
365752 | Hope you figure it out. There wouldn't be a different RFR / discount rate because you're assuming a return on parked cash - that's what it's for. Since both situations would theoretically happen simultaneously you use the same rate unless you would do something different with cash in each instance. |
366146 | I would say yes, it makes sense to keep some money in taxable accounts. Retirement accounts are for retirement, and the various early withdrawal penalties are designed to enforce that. If you're anticipating using the money before retirement (e.g., for home purchase), it makes sense to keep it out of retirement accounts. On the other hand, be aware that, regardless of what kind of account it is in, you face the usual risk/return tradeoff. If you put your money in the S&P 500 and the S&P 500 tanks just before you were going to buy a house, your down payment evaporates and you will have to wait and buy a house later. You can manage this by shifting the allocation of this money and perhaps cashing it out if a certain amount is gained (i.e., it grows to the level of your target down payment) and you are close enough to the house purchase time that you don't want to risk it anymore. Basically, if you invest money for a pre-retirement use, you may want to keep it in a taxable account, but you also need to take account of when you'll need it and manage the risk accordingly. |
366309 | "I think this is a bit too simplistic, because you need to keep in mind that Buffet was managing the money as his career. Had he paid the 1% fee he could have ""made more money"" doing something else. People who hire money managers usually do so because it A. saves them time managing their own portfolios and B. because they don't believe they would do a better job managing it themselves." |
366327 | "I did sort of the same thing as you after a some time in consulting. The biggest annoyance for me was how poorly I thought the most basic, obvious bullshit through. Figure out how you'll bill for travel -- when do you fly vs. drive, what's your mileage rate, etc. Get your proposal template looking razor sharp, and have a standardized invoice ready (don't say ""net 30"" or 45 or whatever, some clients won't understand what you're talking about and there's no way to explain it without sounding like a douche). Be prepared to negotiate heavily at first. Until you start to get a steady client base, people are going to lowball you, perhaps rightfully so. Consider the consequences of establishing yourself at a low rate, or being considered unreasonable and inflexible. Also, since you're working with a partner, figure out how you're going to register your business by considering your financial situations or, preferably, hiring an accountant. I also *strongly* recommend working with your partner and an attorney to draft an operating agreement. I've seen so many horror stories with people who either didn't have one, made their own shitty one, or otherwise got screwed on technicalities." |
366560 | Your question is missing too much to be answered directly. Instead - here are some points to consider. Short term gains taxed at your marginal rates, whereas long term gains have preferable capital gains rates (up to 20% tax rate, instead of your marginal rate). So if you're selling at gain, you might want to consider to sell FIFO and pay lower capital gains tax rate instead of the short term marginal rate. If you're selling at loss and have other short term gains, you would probably be better selling LIFO, so that the loss could offset other short term gains that you might have. If you're selling at loss and don't have short term gains to offset, you can still offset your long term gains with short term losses, but the tax benefit will be lower. In this case - FIFO might be a better choice again. If you're selling at loss, beware of the wash sale rules, as you might not be able to deduct the loss if you buy/sell within too short a window. |
366583 | Can someone please explain the following in more detail please. I'm not exactly sure how and why synthetics work. > Instead of having credit default swap reference a single company like Exxon, J.P Morgan bundled together a large, diversified basket of credit derivatives that referenced hundreds of corporate credits... those who invested in J.P Morgan's invention didn't own a piece of the actual corporate loan. Instead, they owned credit default swaps - the performance of which was determined by the performance of the underlying corporate credits. This is from *All the Devils are Here* by Bethany Mclean and Joe Nocera |
366594 | "Other answers didn't seem to cover it, but most ""0%"" bank loans (often offered to credit card holders in the form of balance transfer checks), aside from less-obvious fees like already-mentioned late fees, also charge an actual loan fee, typically 2-3% (or a minimum floor amount) - that was the deal with every single transfer 0% offer I ever saw from a bank. So, effectively, even if you pay off the loan perfectly, on time, and within 0% period, you STILL got a 3% loan and not 0% (assuming 0% period lasts 12 months which is often the case)." |
366626 | For an investor , I understand its a higher return on investment; but I was wondering if an investor is actually investing in the minerals, or the means of delivery such as ports, rail, trucks, roads, etc; or is that abstracted away |
366753 | Suppose that the fixed overhead costs of delivering a service, not related to the actual volume of sales, are $50 million per year. Suppose the variable costs on top are $100 per customer per year. Suppose further that 1% of the population buys the service. In the US, 3.2 million people buy the service, and it costs $116 per person to deliver it ($100 plus $50 million divided by 3.2 million). In Australia, 230,000 people buy it, and it costs $317 per person per year to deliver it ($100 plus $50 million divided by 230,000). The larger your market, the cheaper everything is, and Australia is a very small market compared with the USA, the EU, China or India. |
367047 | I recently bought a stock - which was priced exactly as your question ponders, to the 1/100 cent. I happened to buy 2000 shares, but just a round lot of 100 would be enough to create no need for rounding. It's common for industry to price this way as well, where an electronic component purchased by the thousands, is priced to the tenth or hundredth of a cent. There's nothing magic about this, and you'll have more to ponder when your own lowest unit of currency is no longer minted. (I see you are in UK. Here, in the US, there's talk of dropping our cent. A 5 cent piece to be the smallest value coin. Yet, any non-cash transactions, such as checks, credit card purchases, etc, will still price to the penny.) To specifically answer the question - it's called decimal currency. 1/10, 1/100 of a cent. |
367137 | Imagine that the existing interest rate is 5%. So on a bond with face value of 100, you would be getting a $5 coupon implying a 5% yield. Now, if let's say the interest rates go up to 10%, then a new bond issued with a face value of 100 will give you a coupon of $10 implying a 10% yield. If someone in the bond market buys your bond after interest price adjustment, in order to make the 10% yield (which means that an investor typically targets at least the risk-free rate on his investments) he needs to buy your bond at $50 so that a $5 coupon can give a 10% yield. The reverse happens when interest rates go down. I hope this somewhat clears the picture. Yield = Coupon/Investment Amount Update: Since the interest rate of the bond does not change after its issuance, the arbitrage in the interest rate is reflected in the market price of the bond. This helps in bringing back the yields of old bonds in-line with the freshly issued bonds. |
367216 | It is, even when we were bidding major projects we could pretty much guess who was going to get the contract before hand. We only put bids in on the ones we might not win because often times the major project would get broken up into several smaller ones because one manufacturer couldn't produce fast enough, or didn't have enough stock for the client's entire job. Our major projects guys had inconsistently difficult jobs, one month they would be in the office until midnight. The next month they would be playing golf at 2pm on a Wednesday. |
367272 | One thing you didn't mention is whether the 401(k) offers a match. If it does, this is a slam-dunk. The $303 ($303, right?) is $3636/yr that will be doubled on deposit. It's typical for the first 5% of one's salary to capture the match, so this is right there. In 15 years, you'll still owe $76,519. But 15 * $7272 is $109,080 in your 401(k) even without taking any growth into account. The likely value of that 401(k) is closer to $210K, using 8% over that 15 years, (At 6%, it drops to 'only' $176K, but as I stated, the value of the match is so great that I'd jump right on that.) If you don't get a match of any kind, I need to edit / completely rip my answer. It morphs into whether you feel that 15 years (Really 30) the market will exceed the 4% cost of that money. Odds are, it will. The worst 15 year period this past century 2000-2014 still had a CAGR of 4.2%. |
367313 | You sell when you think the stock is over valued, or you need the money, or you are going to need the money in the next 5 years. I buy and hold a lot. I bought IBM in 8th grade 1980. I still own it. I bought 3 share it from $190 and its now worth $5,000 do to dividend reinvestment and splits. That stock did nothing for a thirteen years except pay a dividend but then it went up by 1800% the next 20 and paid dividends. So I agree with other posters the whole pigs get slaughtered thing is silly and just makes fund managers more money. Think if you bought aapl at $8 and sold at $12. The thing went to 600 and split 7-1 and is back to $120. My parents made a ton holding Grainger for years and I have had good success with MMM and MSFT owning those for decades. |
367556 | "There are two types of 401(k) contributions: ""elective contributions,"" which are the part put in by the employee and ""nonelective contributions,"" which are the part put in by the company. Elective contributions are summed across all the plans she is contributing to. So she can contribute $18,000 minus whatever she put in her 403(b). Additionally she can contribute 20% of the net profit of the company (before the elective contributions) as nonelective contributions (these contributions must be designated as such). You will notice that the IRS document says 25%, but that's what you can do if her business is incorporated. For a sole proprietorship, nonelective contributions ends up being limited at 20% of profit. Additionally, the sum of these two and her contribution to her 403(b) cannot exceed $53,000. Example: line 31 of her schedule C is $30,000 and she has contributed $10,000 to her 403(b). Maximum contribution to her solo 401(k) is ($18,000 - $10,000) + 0.2 * $30,000 = $14,000 Her total contributions for the year are $10,000 from her 403(b) plus $14,000 in her solo 401(k). This is less than $53,000 so this limit does not bind. If she made a ton of 1099 money, her contribution maximum would follow the above until it hit $53,000 and then it would stop there. The IRS describes this in detail in Publication 560, which also has a worksheet for figuring out your maximum explicitly. It's unpleasant reading and the worksheets are painful, but if you do it right, it will end up being as I just described it. Using the language of that publication, hers is a ""qualified plan"" of the ""defined contribution"" variety." |
367562 | I can only answer about the U.S. For question 2, I believe the answer is no. If you are a non-resident alien for tax purposes, then only income connected to the U.S. is reported as income on the tax return. Unless there were any non-deductible contributions to your pre-tax IRAs, when you convert to Roth IRA, the entire amount of the conversion is added to your income. So the tax consequence is the same as if you had that much additional U.S. income. If you are a non-resident alien with no other income in the U.S., then the income you have to report on your U.S. tax return will basically consist of the conversion. Non-resident aliens do not have a standard deduction. However, all people have a personal exemption. If we take 2013 as an example, the exemption is $3900 per person. We will assume that you will file as single or married filing separately (non-resident aliens cannot file as married filing jointly). The first $3900 of income is covered by the exemption, and is not counted in taxable income. For single and MFS, the next $8925 of income is taxed at 10%, then next $27325 of income is taxed at 15%, and so on. So if you convert less than the personal exemption amount every year ($3900 in 2013), then in theory you do not pay any taxes. If you convert a little bit more, then some of the conversion will be taxed at 10%, etc. |
367880 | My small business has developed a relationship with a larger branch of a regional bank. I generally work on site or at home, so when I need a space for interviews etc. I just call the bank and reserve the meeting room there. |
368010 | You're not missing any concepts! It sounds like you are contributing a piece of collateral to the business, and you want to know a fair way to value how much this contribution of collateral is worth. Technically the economic answer would be the difference in interest between a secured loan and an unsecured loan. So for example suppose that the business could get a loan at 17% without the collateral (maybe just on a credit card) but with the duplex as collateral it is able to get the loan at 10.5%. In principle, the value of this collateral is (17% - 10.5%) or 6.5%, because it has allowed the business to pay 6.5% less interest on its loan. |