Seeking some opinions

[Diggin4copper]

Just make sure he understands the importance of a good safe for his pms...(and get a bigger one than needed)

[Engineer]

One other thing to consider regarding how to avoid taxes is the provision for small businesses to send out 1099s to anybody they spent over $600 with during the year. Thankfully it was taken out of the Obamacare package, but if they did it once, there's a good chance they'll do it again. If your uncle buys PMs, it wouldn't hurt to load up on stuff that could double and still fall under the $600 limit they used last time.

[mflugher]

I don't know anything about trusts. He has been talking about this today some and I think he may be considering setting something up for his son and his two grandkids. Same issues though, it's still going to be on paper in some way shape or form! How much can you give to your kids and grandkids and if done correctly, can this result in capital gains tax savings? He said he would much rather set something up for them than to waste it away in a nursing home someday.

A question I would be asking the tax pros is if he pays the taxes on all of that now and he dies in 2 years, what kind of taxes will his son have to pay on the inheritance? If you inherit funds from a Roth IRA, is it available right away at no penalty or would the person receiving the money have to roll it into a similar Roth and wait until 59.5 to be able to withdraw without penalty?

If he really wants to help the kids and grankids...

1. he can gift up to $13k/person/year without paying gift tax.
2. he can set up education accounts for them.
3. he can quit being stubborn and buy some PMs at least...
4. he can stock up on non perishable food/items before inflation hits. if SHTF he is well stocked, if not he has bought items he would use anyway before his dollars get inflated away...
5. he can blow it on himself which seems the best idea to me

[SilverEye]

At that age, not a great plan to dump it all in the stock market. Also, perhaps not the best to dump it into metals, because that is really for long term wealth preservation. Over the short term, prices will be up and down, at that age who needs the heartache?

Real estate. That is plenty to buy a couple rental houses almost anywhere in the country. Get a rental management outfit to oversee the thing if being a landlord doesn't appeal to him. It will throw off income that keeps up with inflation, should there be any, and the principal will keep up also. And it can be unloaded easily in a month or two should it need to be liquidated. (Sorry to sound morbid, but in case of his passing or an uninsured medical emergency.)

[mflugher]

if you pay the taxes on it and then lose half of it, you would have paid taxes on a lot more of the sum than you needed. (I guess I can see that point of it.)

/facepalm...


wow I'm just flabberghasted.

[mflugher]

At that age, not a great plan to dump it all in the stock market. Also, perhaps not the best to dump it into metals, because that is really for long term wealth preservation. Over the short term, prices will be up and down, at that age who needs the heartache?

Real estate. That is plenty to buy a couple rental houses almost anywhere in the country. Get a rental management outfit to oversee the thing if being a landlord doesn't appeal to him. It will throw off income that keeps up with inflation, should there be any, and the principal will keep up also. And it can be unloaded easily in a month or two should it need to be liquidated. (Sorry to sound morbid, but in case of his passing or an uninsured medical emergency.)

Careful with Real estate, there is a reason I haven't moved into a bigger house with more land, I think theres an'other drop coming. Foreclosures aren't really slowing down other than places where govt interference are causing the downtrend, nevada specifically.

1. rental houses, based on my families experience, you will barely create enough cashflow to cover debt service and yearly maintnance, moveouts are very expensive, you can lose $2k for a 3bedroom on an average move, wash walls, paint, cleaning, basic repairs that come up every time. The payoff for Rental houses is when you sell them at appreciated value, which isn't happening right now.

2. management companies, for rental houses will usually eat up that last little bit of profit available to you.

3. if you really want to be in Real estate... Storeage sheds or a multi unit apartment complex. Personally I like storage units much better, no plumbing, no heating systems usually, no landlord tenant laws that make you string out an eviction 3 months rent unpaid. 1 roof per 20 units or more as opposed to 20 roofs on houses spread around towm. When people don't pay, you get people lining up to pay crazy money for the items sight unseen (thanks storage wars and History channel ) Apartment complexes also serve a lot fo the same functions, and managment companies start to make more sense (or private onsite management, husband/wife team wife manages, husband does handyman work, pay them total about$50k annually and give em a free apartment) I hope you aren't near me because I want to be the storage unit business in near term and don't need any more competition.



Bottom line, we live in very turbulant times, bonds are crazy, stocks are crazy, pms are crazy, real estate is crazy, nothing is obviously holding its value at this time on the short term. if you want a way for him to guaruntee he has enough value to make it thru the next 10 -20 years of his life put it 70% in pms, and buy enough food/water/toiletry essentials to last him the rest of his life and fill the basement up. then use his pension/ss benefit to fill in his college accounts. Keep in mind he should probably not own ANYTHING himself since he is unfortunately of prime age to have the need to go to a nursing home and those places pretty much confiscate your life savings upon admission. you need to remove all real estate from your posession 2 or 3 years before moving into the home or they can say you just sold it to get out of paying for nursing care, especially if you gift it to a family memeber/spouse.


btw its a very busy time of the year for me, working on 4 hours sleep till all the deadbeats get their $5k tax refunds back, I hate the fact they get up to 40% of their annual income from a tax "refund" when on average they deposit $200 in fed income tax, but I do charge them plenty for the assistance in getting "their" money back...
Anyway the point of above was please forgive my lack of eloquent syntax and if some of the thoughts are disjointed, thats the reason. If you have specific questions let me know and I'll give you what advise I have and point you to the right place to look up your answers...

[mbailey1234]

In one of the responses to me seeking advice on here about this topic someone had went out on a limb and made a comment about buying AGE's ASE's with their retirement account and rolling them to a ROTH at only face value, therefore drastically reducing the taxes owed on earnings. At first glance I suspect this would be impossible and the IRS would lock you up and throw away the key. I have since ran into three articles that kind of go down the same road to some extent. I am posting the link to the latest that I saw on coinflation today.

http://www.boston.com/news/local/articl ... employees/

The remarks at the end of the article particularly caught my attention.

The tax savings also would apply to the town, as it would only have to withhold taxes on the face value - not the higher market value - of the coins, he said.

“There is another side, and the other side is that the 4 to 5 percent [in purchasing power] that the employee and the town would save is coming from Uncle Sam,’’ Shapiro said. “And so the IRS is going to take the fall for it, and they’re not going to be happy.’’

Who cares if they aren't happy, if it's legal do it! I will be making some calls in regards to this as the concept is obviously getting banged around quite a bit out there.

[dannan14]

Who cares if they aren't happy, if it's legal do it! I will be making some calls in regards to this as the concept is obviously getting banged around quite a bit out there.

But, if they're not happy about it, how long will it remain legal? The window is likely very small, but i'd wait for the method to be tested in Tax Court before i'd try it. However, as someone who is thinking about rolling my 401(k) into a pm IRA, i just might roll it as a Traditional IRA and wait on the Roth conversion. Who knows, the Tax Court could allow it. That would leave a temporary window open until Congress got around to passing a new bill to shut it.

[Engineer]

Speaking of Congress, they recently slipped some retirement account legislation into the most recent transportation bill. I forget the specific details, but it basically forced either 401k or IRA accounts (or both) to convert into a Roth upon the death of the owner.

[mbailey1234]

Speaking of Congress, they recently slipped some retirement account legislation into the most recent transportation bill. I forget the specific details, but it basically forced either 401k or IRA accounts (or both) to convert into a Roth upon the death of the owner.

Haven't heard of this but do you know if it was possibly pertaining to a death that happened in 2011? If so, this could affect what my uncle can do with this situation.

I can only think of a couple of cases where this would be bad anyway. If future tax rates would drop (very unlikely) of if you lost the investment after the taxes were out then you have paid too much tax on the withdraw. (and hopefully that wouldn't ever happen.)

Unless there is some sort of "loop hole" to get it transferred at a reduced valuation, they are eventually going to get their cut.

[dannan14]

Haven't heard of this but do you know if it was possibly pertaining to a death that happened in 2011? If so, this could affect what my uncle can do with this situation.

I can only think of a couple of cases where this would be bad anyway. If future tax rates would drop (very unlikely) of if you lost the investment after the taxes were out then you have paid too much tax on the withdraw. (and hopefully that wouldn't ever happen.)

Unless there is some sort of "loop hole" to get it transferred at a reduced valuation, they are eventually going to get their cut.

This link gives some explanation, but not in plain English. http://ria.thomsonreuters.com/taxwatch/

[mbailey1234]

I started a new thread that kind of pertains to this threads discussions about why they put a dollar value on coins.

I really need to get off the internet for a while!

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