From: owner-persfin-digest@lists.xmission.com (persfin-digest) To: persfin-digest@lists.xmission.com Subject: persfin-digest V5 #116 Reply-To: persfin Sender: owner-persfin-digest@lists.xmission.com Errors-To: owner-persfin-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes persfin-digest Monday, December 27 1999 Volume 05 : Number 116 In this issue of the Personal Finance Digest: Re: HIDE CAPITAL GAINS RE: Fidelity U-Plan Take distributions from IRA or from taxable accounts at retirement? The messages posted to the Persfin-Digest are opinions and are not intended to substitute for qualified professional advice. Subscribers should seek the services of qualified professionals for such advice. The publisher, Internet provider, and Digest contributors cannot be held responsible for any loss incurred as a result of the application of any of the information provided here. 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Subscribe: e-mail majordomo@xmission.com, text: subscribe persfin-digest Unsubscribe: e-mail majordomo@xmission.com, text: unsubscribe persfin-digest ---------------------------------------------------------------------- Date: Sat, 25 Dec 1999 22:40:31 -0700 From: Jeff Salisbury Subject: Re: HIDE CAPITAL GAINS BOB FORD wrote: > > I am not a tax pro but I don't think it is > possible to hide any Capital Gains. > It is my understanding that if you sell > a capital asset at a profit, it must be > reported on your income tax and > there are no exceptions. You must > also report capital losses. > > Someone let me know if that is > incorrect. > > BOB FORD > BOB_FORD@COMPUSERVE.COM > Bob, You are correct in that you can't "hide" any capital gains other than the manner Rich explained. However, in my previous posting to your estate tax question, I talked about a private annuity. It turns out that this same private annuity can be used to defer (not avoid) capital gains taxes. The value of defering these taxes are that you can in effect hang on to the cash that you would otherwise be paying in taxes and benefit from the growth of this cash. If effect, you get to spread the payment of the taxes out over many years -- you are getting a zero interest loan from Uncle Sam. Combine this with the favorable estate planning characteristics of the Private Annuity and this can be a terrific planning tool under the proper circumstances. Jeff - - ------------------------------ Date: Sun, 26 Dec 1999 17:45:13 -0600 From: "Harold R. Justice" Subject: RE: Fidelity U-Plan Ira, I checked into this once and was told off-campus housing and off-campus meals are not valid expenses. This is a reimbursement account so you have to accumulate valid expenses, such as paid tuition, and then you ask for reimbursement. I concluded that the paper work involved was too much and the fact that most kids live off campus would greatly cut out valid expenses. Room, board, and clothes cost much more than tuition at most colleges. Harold > > > ------------------------------ > > Date: Sat, 25 Dec 1999 11:34:17 -0500 > From: Ira Krakow > Subject: Fidelity U-Plan, anyone? > > Anyone use the Fidelity U-plan for saving for college for kids. The = > plan appears to have attractive features. One of the features Fidelity = > is pushing is that you can put up to $50K in the plan and avoid gift tax = > (although it may be that you can't do any gifts for 5 years if you put = > in that much). Also, the proceeds when taken out are taxed at the = > child's rate. > > Any down sides (limits on investments, colleges that the kids may or may = > not attend, what happens if the kids decide to do something else - can = > they take the money and "run" away from college?). > > Happy holidays to all. > > Ira - - ------------------------------ Date: Mon, 27 Dec 1999 20:28:47 -0500 From: Ira Krakow Subject: Take distributions from IRA or from taxable accounts at retirement? I saw an interesting article in the Motley Fool retirement bulletin = board, at: http://www.fool.com/retirement/retireeport/1999/retireeport991227.htm The author suggests that when withdrawing funds where there is a mixture = of IRAs and taxable accounts, it might not be too bad an idea to = withdraw from the IRAs first. From the perspective of tax efficiency = for the *entire* family (including the heirs), the heirs owe taxes on = any part of an inherited IRA (at *their* marginal tax rate) on which = taxes haven't been paid, so drawing down the IRA will have a positive = benefit to heirs by reducing their tax burden. =20 On the other hand, the retiree owes more taxes by using this strategy, = since taxes have already been paid on the taxable accounts. The article = contains a number of scenarios and charts (variables such as the = marginal tax rate of the heirs, and percentage of assets to be withdrawn = among these accounts are taken into account). =20 Where's the balance between the retiree paying less tax and the heirs = paying less tax? What considerations should be given? Ira __________________________________________________ Do You Yahoo!? Talk to your friends online with Yahoo! 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