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My Brokerage statement shows “Adjusted due to previous wash sale disallowed loss” what does this mean? | Well it would appear that you had a wash sale that canceled out a loss position. Without seeing the entire report, I couldn't tell you exactly what was happening or how you triggered § 1091. But just from the excerpted images, it appears as though your purchase of stock was layered into multiple tranches - perhaps you acquired more of the stock in the 61-day period than you sold (possibly because of a prior holding). If in the 61-day period around the sale of stock (30 days before and 30 days after), you also acquire the same stock (including by contract or option), then it washes out your loss. If you held your stock for a while, then in a 61-day period bought more, and sold some, then any loss would be washed out by the acquisition. Of course it is also a wash sale if your purchase of the stock follows your sale, rather than precedes it. Your disallowed loss goes into the basis of your stock holding, so will be meaningful when you do have a true economic sale of that stock. From IRS Pub 550: A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. If you sell stock and your spouse or a corporation you control buys substantially identical stock, you also have a wash sale. Looking at your excerpted account images, we can see a number of positions sold at a loss (sale proceeds less than basis) but each one is adjusted to a zero loss. I suspect the fuller picture of your account history and portfolio will show a more complicated and longer history with this particular stock. That is likely the source of the wash sale disallowed loss notations. You might be able to confirm that all the added numbers are appearing in your current basis in this stock (or were reflected upon your final exit from the stock). |
What could be the harm in sharing my American Express statements online? | Call me overly paranoid, but letting unknown people know your charges and your personal information is asking for trouble. They know who you are and how to find you and how much money you typically make. If they are decent people - okay, but otherwise they have good ground for comitting a crime against you - blackmail you, con you, target thieves on you, steal your identity, anything else which you won't like if it happens. And it has noting to do with being from Philippines - disonest people are everywhere. Crimes happen all the time, just the less you expose yourself the less likely a crime will be committed against you. My suggestion would be to share as little financial and personal data as possible, especially to share as little actual money figures as possible. Also see this question. |
From Facebook's perspective, was the fall in price after IPO actually an indication that it went well? | @Joe.E, I disagree with your logic. The IPO clearly didn't go well--not relative to other IPOs. Were it not for the stocks underwriters stepping in late in the trading day, Facebook would likely have closed below their opening price. This story and others indicate that institution investors were given negative information by an analyst for the underwriters that other investors didn't have. This inside knowledge is certainly contributing to the drop in the stock. It's fair to argue that many individual investors were suckered into buying the stock at the IPO price because of this incomplete disclosure. It wouldn't surprise if what's happens has a negative impact on future trading volume, and creates reluctance to invest in the firm--which would certainly be an additional negative outcome beyond the dropping stock price. Edit: Dilip mentioned a lawsuit. Here's a link to an article about it. |
Is my stock gone forever from a reverse split / bought by another company? | GT BIOPHARMA, INC. ANNOUNCES REVERSE STOCK SPILT AS PART OF OXIS-GEORGETOWN PLANNED MERGER LOS ANGELES, CA / ACCESSWIRE / August 21, 2017 / GT Biopharma Inc. (formerly known as Oxis International, Inc.) announced today a 1-for-300 reverse stock split. Shareholders of GT Biopharma Inc. (OTCQB: OXIS and Euronext Paris: OXI.PA) will be issued 1 share of common stock for every 300 shares common stock that they owned. If you owned fewer than 300 shares, they cashed you out. |
Advantage of credit union or local community bank over larger nationwide banks such as BOA, Chase, etc.? | Banks, the big ones, have shareholders and the board to answer to. Credit Unions have members and the board to answer to. You become a member by joining a CU. Banks' prime objective is profit maximization, a credit union's prime objective is members' welfare. Personal experience: I didn't mind that the banks charge fees, what was frustrating was keeping up with the policy changes. Have X amount to avoid Y fees. Once you fulfill that, do something else to avoid some other fees. You miss one notice and you'll pay dearly! This constant jumping of hoops was enough to switch. Not saying CUs don't change rules, but in my opinion, not as frequently as big banks. On fee, for instance, my overdraft with my CU is $5. With BofA it was something like $35 before regulations put a cap on such ridiculous fees. |
Buy tires and keep car for 12-36 months, or replace car now? | If the car is in otherwise good shape, it's always less expensive to keep it longer. Think of it this way: you have to buy new tires no matter what. It's just a question of whether or not those new tires are attached to a new car or your current car. |
Why could rental costs for apartments/houses rise while buying prices can go up and down? | They are two different animals. When you rent you are purchasing a service. The landlord, as your service provider, has to make a profit, pay employees to do maintenance, and buy materials. The price of these things will increase with inflation, and that rolls into your rent price. Taxes also are passed to the tenant, and those tend to only go upward. Market forces of supply/demand will drive fluctuation of prices as well, as other posts have described. When you buy, you are purchasing just the asset - the home. This price will also be driven by supply/demand in the market, but don't try to compare it to buying a service. Cheers! |
Freehold and Leasehold for Pub/Bar? | You should be aware that many pubs in the London (indeed, the UK as a whole) are sold as a leasehold with a beer tie. This typically means you pay less rent for the building and premises, but must enter a contract with the Pub Company to buy their beer and day-to-day supplies. You have the legal option to instead pay market rent for some (but not all) Pub Cos, under certain conditions. If you go with leasehold, the landlord can usually close your pub at their will. This is becoming a quite common occurrence in the booming real estate market of London. While your interest will be in running a pub, the Pub Co's interest will be in getting change of use planning permission and selling it to a real estate developer. |
Buying my first car out of college | Read "Stop Acting Rich" by Dr Thomas Stanley. I'm concerned that even before you've earned your first paycheck you want a flashy car. $4800/yr on $63K/yr income is just about half what I'd recommend to someone who starts working. 10% is the minimum, if and only if, the employer matches 5, for a total 15% saved. Do it in a pretax account and when you go back to grad school convert to Roth. |
From Facebook's perspective, was the fall in price after IPO actually an indication that it went well? | You are right that Facebook really doesn't get impacted as they got their $38. However it would make it slightly more difficult for Facebook to raise more money in future as large investors would be more cautious. This can keep the price lowers than it actually needs to be. Quite a few companies try to list the IPO at lower price so that it keeps going up and have more positive effect overall there by making it easier for future borrowings. See related question Why would a company care about the price of its own shares in the stock market? |
How can I invest my $100? | What is your investing goal? And what do you mean by investing? Do you necessarily mean investing in the stock market or are you just looking to grow your money? Also, will you be able to add to that amount on a regular basis going forward? If you are just looking for a way to get $100 into the stock market, your best option may be DRIP investing. (DRIP stands for Dividend Re-Investment Plan.) The idea is that you buy shares in a company (typically directly from the company) and then the money from the dividends are automatically used to buy additional fractional shares. Most DRIP plans also allow you to invest additional on a monthly basis (even fractional shares). The advantages of this approach for you is that many DRIP plans have small upfront requirements. I just looked up Coca-cola's and they have a $500 minimum, but they will reduce the requirement to $50 if you continue investing $50/month. The fees for DRIP plans also generally fairly small which is going to be important to you as if you take a traditional broker approach too large a percentage of your money will be going to commissions. Other stock DRIP plans may have lower monthly requirements, but don't make your decision on which stock to buy based on who has the lowest minimum: you only want a stock that is going to grow in value. They primary disadvantages of this approach is that you will be investing in a only a single stock (I don't believe that can get started with a mutual fund or ETF with $100), you will be fairly committed to that stock, and you will be taking a long term investing approach. The Motley Fool investing website also has some information on DRIP plans : http://www.fool.com/DRIPPort/HowToInvestDRIPs.htm . It's a fairly old article, but I imagine that many of the links still work and the principles still apply If you are looking for a more medium term or balanced investment, I would advise just opening an online savings account. If you can grow that to $500 or $1,000 you will have more options available to you. Even though savings accounts don't pay significant interest right now, they can still help you grow your money by helping you segregate your money and make regular deposits into savings. |
mortgage vs car loan vs invest extra cash? | Without knowing actual numbers it's tough to say. Personally, I would pay off the car then, going forward, use the money that would have been paid on your car note toward your mortgage. I always think of things in the worst possible scenario. It's easier, and faster, to repossess a car than to foreclose on real estate. Also, in an emergency situation, depleting your fund for your car loan and your mortgage would be significantly more detrimental than only paying a mortgage with a car owned outright. Fewer obligations means fewer things to draw down your funds in an emergency. Whether the tax deductability of the mortgage interest outweighs the lower rate on your car loan will depend on a lot of factors that haven't been shared. I think it's safe to assume with only 1% of separation the real difference isn't significant. I think when determining which credit cards to pay off, choosing the one with the highest rate is smart. But that's not the situation you're in. If you don't have foreclosure concerns I'd still pay off the car then start investing. |
One of my stocks dropped 40% in 2 days, how should I mentally approach this? | You shouldn't be picking stocks in the first place. From New York Magazine, tweeted by Ezra Klein: New evidence for that reality comes from Goldman Sachs, via Bloomberg News. The investment bank analyzed the holdings of 854 funds with $2.1 trillion in equity positions. It found, first of all, that all those “sophisticated investors” would have been better off stashing their money in basic, hands-off index funds or mutual funds last year — both of them had higher average returns than hedge funds did. The average hedge fund returned 3 percent last year, versus 14 percent for the Standard & Poor’s 500. Mutual funds do worse than index funds. Tangentially-related to the question of whether Wall Street types deserve their compensation packages is the yearly phenomenon in which actively managed mutual funds underperform the market. Between 2004 and 2008, 66.21% of domestic funds did worse than the S&P Composite 1500. In 2008, 64.23% underperformed. In other words, if you had a fund manager and his employees bringing their skill and knowledge to bear on your portfolio, you probably lost money as compared to the market as a whole. That's not to say you lost money in all cases. Just in most. The math is really simple on this one. Stock picking is fun, but undiversified and brings you competing with Wall Streeters with math Ph.Ds. and twenty-thousand-dollars-a-year Bloomberg terminals. What do you know about Apple's new iPhone that they don't? You should compare your emotional reaction to losing 40% in two days to your reaction to gaining 40% in two days... then compare both of those to losing 6% and gaining 6%, respectively. Picking stocks is not financially wise. Period. |
First time home buyer. How to negotiate price? | As far as the specific price - it depends so much on the area and the house and other things. 70k could be a perfectly reasonable offer, or it could be an insulting lowball. If they just lowered it from 95 to 85 for example, 70 is pretty low to start off. But who knows. To answer the closing costs side of things, though, the reason those are sometimes paid by seller (rather than just dropping the sales price some) is that it makes it easier for the buyer if the buyer doesn't have much cash on hand. From the seller's point of view it's all the same money - giving you a discount on the sale price vs. covering closing costs - except for the small difference of the realtor's commission (which would be slightly lower in the lower-sales-price example, but usually that's not a significant factor in total cost). IE: vs How much having the 3k less on hand (and instead in your mortgage) is worth to you as a buyer is, of course, up to you. If you have plenty of cash on hand for the down payment and closing costs, then paying closing costs yourself is probably in your best interest as the seller typically assumes buyers value reduced/zero closing costs at more than 100% face value. |
How can I tell what is “real” Motley Fool advice? | These advertisements try to take advantage of the short term memory loss of older people. If you keep an old person watching long enough they will forget why they started watching in the first place. Yet they trust themselves and assume that it was for a good reason. So the long winded salespitch succeeds with older people who tend to have more money to invest anyway. Yes, I think that Motley Fool has jumped the shark. |
Is my financial plan for buying a house logically sound | As a rental, this is not an ideal set of numbers. You manage to show a $255 'gain' but $275 is from payment to principal. So, from the start, you're out $20/wk. This ignores the $170K down payment, which has an opportunity cost, however you calculate it. You can assign the same rate as the mortgage, and it's nearly $10K/yr. Or the rate you feel your choice of stock market or alternate investment would rise. Either way, you can't ignore this money. Your mortgage rate isn't fixed. A 1% rise and it would jump to $1663 ($842/week) Ideally, a rental property is cash positive without counting principal paydown or even the tax refund. It's a risky proposition to buy and count on everything going right. I didn't mean to scare you off with "1%" but you should research the costs of repair and maintenance. Last year my Heat/AC system needed replacement. US$10K. This year, it's time to paint, and replace rotting trim, $7000. In the US we have property tax that can range from 1-2% of the house value. If you don't have this tax, that's great, just please confirm this. |
When can you adjust for (and re-allow) a disallowed year-end (December) wash-sale loss? | Disallowed losses are created when you buy a stock */- 30 days of a sale at a loss. When you sell and have no shares left, the loss is taken. You can't have no shares and leftover disallowed loss. |
Must a company have a specific number of employees to do an IPO? | While there is no legal reason to have a minimum number of employees, there can be a practical reason. They want to look like a good solid investment so that investors will give them money, which is what an IPO is, really. Hiring lots of people is part of that. Once the investors are committed, they can cut expenses by firing people again. I have no idea how common this is, but it is a possibility. However, if it were really common, investors wouldn't be fooled anymore. Also, they risk being sued for fraud over this. Even if your friend's worry is probably unfounded, you should be aware that working for a startup is always risky. They very often go bankrupt even if they try their best. They can misjudge their intended market. They can get higher expenses than expected. There can be another company with same idea being launched at the same time. Other things can go wrong. Working for a startup is a risk, but it beats being unemployed, right? |
Will prices really be different for cash and cards? | There are many gas stations where I live that already have different prices if you pay for cash vs. credit. In addition, some small businesses are doing this as well. My wife bought a birthday cake from a bakery. If you paid with cash, you saved 5%. |
How to invest in stocks without using an intermediary like a broker? Can shares be bought direct? | In theory you can buy shares directly from someone else who owns them. In practise, if the stock is listed on an exchange, they are unlikely to own them directly, they are likely to own them through an intermediary. You will have to pay fees to that intermediary to transfer the shares to your name. There are thousands of small companies owned by the guy who started it and a few other investors. You can buy stock in that kind of company directly from the existing owners, as long as they are willing to sell you some. It's a super-high risk investment strategy, though. This is the kind of deal that happens on Dragons Den. |
If I invest in securities denominated in a foreign currency, should I hedge my currency risk? | So far we have a case for yes and no. I believe the correct answer is... maybe. You mention that most of your expenses are in dollars which is definitely correct, but there is an important complication that I will try to simplify greatly here. Many of the goods you buy are priced on the international market (a good example is oil) or are made from combinations of these goods. When the dollar is strong the price of oil is low but when the dollar is weak the price of oil is high. However, when you buy stuff like services (think a back massage) then you pay the person in dollars and the person you are paying just wants dollars so the strength of the dollar doesn't really matter. Most people's expenses are a mix of things that are priced internationally and locally with a bias toward local expenses. If they also have a mix of investments some of which are international and depend on the strength of the dollar and some are domestic and do not, then they don't have to worry much about the strength/weakness of the dollar later when they sell their investments and buy what they want. If the dollar is weak than the international goods will be more expensive, but at the same time international part of their portfolio will be worth more. If you plan on retiring in a different country or have 100% of your investments in emerging market stocks than it is worth thinking about either currency hedging or changing your investment mix. However, for many people a good mix of domestic and international investments covers much of the risk that their currency will weaken while offering the benefits of diversification. The best part is you don't need to guess if the dollar will get stronger or weaker. tl;dr: If you want your portfolio to not depend on currency moves then hedge. If you want your retirement to not depend on currency moves then have a good mix of local and unhedged international investments. |
To pay off a student loan, should I save up a lump sum payoff payment or pay extra each month? | If you pay extra now you will pay less in interest over the life of the loan. Unless your savings account has a higher interest rate than the loan's rate you are not saving anything. That being said, you may have a greater need for savings due to other things (e.g. you might need a emergency fund). But if you are only saving for the loan: compare the rates to see if it is worth it. |
Video recommendation for stock market education | In general I would recommend to stay away from any video from a successful trader, at least those that claim to share their secrets. If they were that successful, why would they want company? What they have most likely discovered is that they can make more money through videos and seminars than they can through trading. While not a video, GetSmarterAboutMoney has a good basic section on Stock markets without being purely Canada centric (as I see from your profile you are in NY). I know that also in our city, there are continuing education courses that often go over the basics like this, if you have a college nearby they might have something. Cheapest of all would be to hit your local library. The fundamentals don't change that quickly that you need the latest and greatest - those are much more likely to be get-poor-quick schemes. Good Luck |
Paypal website donations without being a charity | Yes, Paypal has such a button you can use, but to be clear, the money you receive is taxable income. Your website is providing 'value' to the readers, and while they may feel they are making a gift to you, it's earned income as far as the IRS is concerned. (This assumes you are in the US, you may wish to add a tag to indicate your country) |
How can I legally and efficiently help my girlfriend build equity by helping with a mortgage? | I'm looking for something simple, legal, reasonably formal, easy to setup and tax efficient. You just described marriage. Get married. |
Ask for credit decrease | $500 should not have a massive impact on your credit. Why not at the beginning of each month buy a $500 prepaid Visa instead of using your credit card? That way you set a hard limit, but you still have the option of using credit in an emergency. |
Can extra mortgage payments be made to lower the monthly payment amount? | Typically, this is not an option, as the monthly payments are fixed. It depends on the willingness of your financing bank for such a change. You probably will have to refinance (with them or another lender); which is not a bad thing, as you even can get a lower interest rate potentially (as of Jan 2017 - this will change). Consider too: It could be a better solution to instead invest the 25000, and use the investment returns to fill up the difference every month. Certainly more effort, but you probably come out ahead financially. |
Are non-residents or foreigners permitted to buy or own shares of UK companies? | Yes, However if you live in the USA a lot of companies will refuse to sent you any report and will not let you take part in “right issues” as they don’t wish to come under USA investment law. |
Can I use losses from sale of stock to offset capital gains from sale of property | Capital losses from the sale of stocks can be used to offset capital gains from the sale of a house, assuming that house was a rental property the whole time. If it was your principal residence, the capital gains are not taxed. If you used it as both a rental and a principal residence, then it gets more complicated: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/rsdnc/menu-eng.html |
Why are credit cards preferred in the US? | Your question is based on a false premise. Debit cards are more popular in the US than credit cards are. Indeed it seems to be the non-US part of the world that is big in credit cards. See here for example |
Is it safe to accept money in the mail? | Another option is to set up an accoutn with Western Union Bill Payment Solutions, where your customer could go to one of their locations and pay in cash and then the cash is transferred to your account. See "Walk in Cash Payments" on their site. |
Why is the breakdown of a loan repayment into principal and interest of any importance? | It's important because you may be able to reduce the total amount of interest paid (by paying the loan faster); but you can do nothing to reduce the total of your principal repayments. The distinction can also affect the amount of tax you have to pay. Some kinds of interest payments can be counted as business expenses, which means that they reduce the amount of income you have to pay tax on. But this is not generally the case for money used to repay the loan principal. |
A debt collector will not allow me to pay a debt, what steps should I take? | You say your primary goal is to clean up your credit report, and you're willing to spend some cash to do it. OK. But beware: the law in this area is a funhouse mirror, everything works upside down and backwards. To start, let's be clear: Credit reports are not extortion to force you into paying. They are a historical record of your creditworthiness, and almost impossible to fix without altering history. Paying on this debt will affirm the old data was correct, and glue it to your report. Here's how credit reporting works for R-9 (sent to collections) amounts. The data is on your credit report for 7 years. The danger is in this clock being restarted. What will not restart the clock? Ignoring the debt, talking casusally to collectors, and the debt being sold from one collector to another. What will restart the clock? Acknowledging the debt formally, court judgment, paying the debt, or paying on the debt (obviously, paying acknowledges the debt.) Crazy! You could have a debt that's over 7 years old, pay it because you're a decent person, and BOOM! Clock restarts and 7 more years of bad luck. Even worse-- if they write-off or forgive any part of the debt, that's income and you'll need to pay income tax on it. Ugh! Like I say, the only way to remove a bad mark is to alter history. Simple fact: The collector doesn't care about your bad credit mark; he wants money. And it costs a lot of money, time and/or stress for both of you to demand they research it, negotiate, play phone-tag, and ultimately go to court. So this works very well (this is just the guts, you have to add all the who, what, where, signature block, formalities etc.): 1 Company and Customer absolutely disagree as to whether Customer owes Company this debt: (explicitly named debt with numbers and amount) 2 But Company and Customer both eagerly agree that the expense, time, and stress of research, negotiation, and litigation is burdensome for both of us. We both strongly desire a quick, final and no-fault solution. Therefore: 3 Parties agree Customer shall pay Company (acceptable fraction here). Payment within 30 days. To be acknowledged in writing by Company. 4 This shall be absolute and final resolution. 5 NO-FAULT. Parties agree this settlement resolves the matter in good faith. Parties agree this settlement is done for practical reasons, this bill has not been established as a valid debt, and any difference between billed and settled amount is not a canceled nor forgiven debt. 6 Neither party nor its assigns will make any adverse statements to third parties relating to this bill or agreement. Parties agree they have a continuous duty to remove adverse statements, and agree to do so within seven days of request. 7 Parties specifically agree no adverse mark nor any mark of any kind shall be placed on Customer's credit report; and in the event such a mark appears, Parties will disavow it continuously. Parties agree that a good credit report has a monetary value and specific impacts on a customer's life. 8 Jurisdiction of law shall be where the effects are felt, and that shall be (place of service) regarding the amounts of the bill proper. Severable, inseparable, counterparts, witness, signature lines blah blah. A collector is gonna sign this because it's free money and it's not tricky. What does this do? 1, 2 and 5 alter history to make the debt never have existed in the first place. To do this, it must formally answer the question of why the heck would you pay a debt that isn't real and you don't owe: out of sheer practicality; it's cheaper than Rogaine. This is your "get out of jail free" card both with the credit bureaus and the IRS. Of course, 3 gives the creditor motivation to go along with it. 6 says they can't burn your credit. 7 says it again and they're agreeing you can sue for cash money. 8 lets you pick the court. The collector won't get hung up on any of these since he can easily remove the bad mark. (don't be mad that they won't do it "for free", that's what 3 is for.) The key to getting them to take a settlement is to be reasonable and fair. Make sure the agreement works for them too. 6 says you can't badmouth them on social media. 4 and 5 says it can't be used against them. 8 throws them a bone by letting them sue in their home court for the bill they just settled (a right they already had). If it's medical, add "HIPAA does not apply to this document" to save them a ton of paperwork. Make it easy for them. You want the collector to take it to his boss and say "this is pretty good. Do it." Don't send the money until their signed copy is in your hands. Then send promptly with an SASE for the receipt. Make it easy for them. This is on you. As far as "getting them to send you an offer", creditors are reluctant to mail things especially to people they don't think will pay, because it costs them money to write and send. So you may need to be proactive about running them down with your offer. Like I say, it's a funhouse mirror. |
Applying student loan proceeds toward tuition? | Your university should have a finance department which can help with payments. Speak with them and tell them you have interest in paying for at least part of your next semester in cash. From here they should be able to tell you the best method for this, though most likely cash/check will suffice. If there is no finance department, or you are still unsure, check with student services for more information. |
Do I have to explain the source of *all* income on my taxes? | You can report it as illegal income and you don't have to elaborate any further. For instance, spirit the cash off to a state where pot is legal and set up a dispensary. That is not legal at the Federal level, so it is in fact "illegal income" vis-a-vis your Form 1040 and that's all you say. Make sure you look, walk, and quack like a fairly successful pot distributor. That will most likely be the end of their inquiry, since they're not terribly driven to investigate the income you do report. Having to give 33% of it to the IRS is generally strong motivation for folks to not report fake income. You're not claiming the money is from pot, you're allowing them to infer it. |
ESPP cost basis and taxes | If the $882 is reported on W2 as your income then it is added to your taxable income on W2 and is taxed as salary. Your basis then becomes $5882. If it is not reported on your W2 - you need to add it yourself. Its salary income. If its not properly reported on W2 it may have some issues with FICA, so I suggest talking to your salary department to verify it is. In any case, this is not short term capital gain. Your broker may or may not be aware of the reporting on W2, and if they report the basis as $5000 on your 1099, when you fill your tax form you can add a statement that it is ESPP reported on W2 and change the basis to correct one. H&R Block and TurboTax both support that (you need to chose the correct type of investment there). |
Why does financial investor bother to buy derivatives and then hedge the position? | Sometimes hedging is used if you have a position and you feel the market is going against your position, so one would hedge that position in order to protect their capital and possible profits instead of closing the position and incurring capital gains tax. Personally if the market was going against a position I had open I would get out of that position and protect my capital/profits instead of using more capital to hedge against my position. I would rather take a profit and pay some capital gains tax than watch my profits turn into a loss or use up more capital to try and protect a bad position. Hedging can be useful in certain circumstances but I think if you feel the market is going against your position/s for the medium to long term you should just get out of your positions instead of hedging against them. |
Would it make sense to buy a rental property as an LLC and not in my own name? | Consider that there are some low-probability, high-impact risk factors involved with property management. For example, an old house has lead paint and may have illegal modifications, unknown to you, that pose some hazard. All of your "pros" are logical, and the cons are relatively minor. Just consult an attorney to look for potential landmines. |
Why are wire transfers and other financial services in Canada so much more expensive than in Europe? | I don't believe there is any particular structural or financial reason that outgoing wire transfers cost so much in Canada, their costs are no higher than other countries (and lower than many). Wires seem to be an area where the Canadian banks have decided people don't comparison shop, so it's not a competitive advantage to offer a better price. The rates you quoted are on the low side: $80 for a largish international wire is not unusual, and HSBC charges up to $150! There are several alternative ways to transfer money domestically in Canada. If the recipient banks at the same bank, it's possible to go into a branch and transfer money directly from your own account to their account (I've never been charged for this). The transfer is immediate. But it couldn't be done online, last time I checked. For transfers where you don't know the recipients bank account, you can pay online with Interac E-Transfers, offered by most Canadian banks. It's basically e-mailing money. It usually costs $1 to $1.50 per transfer, and has limits on how much you can send per day/week. Each of the banks also have a bill-pay service, but unlike similar services in the US (where they mail a paper check if the recipient isn't on their system), each Canadian bank has a limited number of possible payees (mostly utilities, governments, major stores). |
Can I take money from my employee stock and put it towards another stock? | Only if you sell the stock in question, and use the proceeds to buy other stock. (You should probably never feel bad about selling your company stock, even if it goes up a lot later, because from a risk-exposure basis you are already exposed to your company's performance through your career. Unless you have a lot of other savings, you should diversify.) |
Why does FlagStar Bank harass you about payments within grace period? | They call you because that is their business rules. They want their money, so their system calls you starting on the 5th. Now you have to decide what you should do to stop this. The most obvious is to move the payment date to before the 5th. Yes that does put you at risk if the tenant is late. But since it is only one of the 4 properties you own, it shouldn't be that big of a risk. |
Taxes due for hobbyist Group Buy | From the poster's description of this activity, it doesn't look like he is engaged in a business, so Schedule C would not be appropriate. The first paragraph of the IRS Instructions for Schedule C is as follows: Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity. For example, a sporadic activity or a hobby does not qualify as a business. To report income from a nonbusiness activity, see the instructions for Form 1040, line 21, or Form 1040NR, line 21. What the poster is doing is acting as a nominee or agent for his members. For instance, if I give you $3.00 and ask you to go into Starbucks and buy me a pumpkin-spice latte, you do not have income or receipts of $3.00, and you are not engaged in a business. The amounts that the poster's members are forwarding him are like this. Money that the poster receives for his trouble should be reported as nonbusiness income on Line 21 of Form 1040, in accordance with the instructions quoted above and the instructions for Form 1040. Finally, it should be noted that the poster cannot take deductions or losses relating to this activity. So he can't deduct any expenses of organizing the group buy on his tax return. Of course, this would not be the case if the group buy really is the poster's business and not just a "hobby." Of course, it goes without saying that the poster should document all of this activity with receipts, contemporaneous emails (and if available, contracts) - as well as anything else that could possibly be relevant to proving the nature of this activity in the event of an audit. |
How to find cheaper alternatives to a traditional home telephone line? | Cheapest is one thing. You can absolutely shop in the market and find the lowest possible price. I can think of three places to shop, each with an up and downside. I would think that what you really mean is the best price for the service. Just like shopping for a car you have to decide what you need vs what is nice to have. Decide what features you need. Do you need long distance? Do you need caller id? Do you need to call technophobic friends and family? Find out what you have available to you through associations. Often schools, work or a club you belong to have deals for service discounts. Look at your insurance plan or AAA membership for the crazy discounts. Decide what kinds of service will meet your needs. Buy the cheapest service. DO NOT ENTER A CONTRACT. Even if the price is slightly lower. At least not at first. If you try out your service and love it, enter the contract if and only if the total price measured over length of the contract is less. With cell phones especially, it is absolutely possible to save money buying month to month vs a 2 year contract. Even when you buy equipment for full price up front. Ask for the bare minimum service from your local phone company. Because phone companies are often regulated monopolies, they might have a bare minimum level of service they are required to offer by the municipality. They probably don't advertise it or push it, but it might exist if you call and ask. You basically get a dial tone. http://www.fcc.gov/guides/local-local-toll-and-long-distance-calling Price is dictated by a government board, so you don't have to worry about shopping for deals Not the cheapest possible solution This is popular plan the youth oriented market, but more and more people of all demographics are using their cellphones only. There are downsides (911, etc) and shopping for the best cell phone plan can be a full time job, but it does offer a way to save money by simply not having home phone service. Might be possible to score organizational discounts through work or groups you belong to Cellphones require batteries, and can go dead (not good for emergencies) Voice over Internet Protocol uses your existing Internet connection. You can buy a cheap regular phone and plug it into the VOIP box and use it like any other phone. VOIP can either be very inexpensive for all the features you get, or just plain inexpensive. There are providers who sell a monthly service, yearly service or no service plan at all. (You buy a device and get service as long as you own the device.) Taxes to the government are always due, so nothing is ever free. Sometimes the provider is just computer software, so a minimalist would like that. Emergency services are more reliable than cellular (if you follow extra steps to set them up) Can be confusing to buy. Some require contracts, some special devices, some require a bit of technical know how to setup. Be sure to evaluate the total cost of ownership when comparing prices |
What caused this drop? | I do not fully understand the transactions involved, but it appears that there was a reverse stock split (20:1) and some legal status change as well on June 29th. This seems to be the cause for the change in valuation of the stock as the dates match the drop. https://www.otcmarkets.com/stock/RMSLD/filings |
Buying a home with down payment from family as a “loan” | Say you're buying a 400K house. Your relative finances 120K (30%). Say I'm optimistic, but the real-estate market recovers, and your house is worth 600K in 5-6 years (can happen, with the inflation and all). The gain is 200K. Your relative gets 100K. You repay him 220K on 120K loan for 5 years. Roughly, 16% APR. Quite an expensive loan. I'm of course optimistic, it seems to me that so is your relative. The question is: if the house loses value in that term, does your relative take 50% of the losses? Make calculations based on several expected returns (optimistic, "realistic", loss case, etc), and for each calculate how much in fact will that loan cost. It will help you to decide if you want it. Otherwise your relationships with your relative might go very bad in a few years. BTW: Suggestion: it's a bad idea to mix business and friend/family you don't want to lose. |
Why is the price of my investment only updated once per day? | I strongly suggest you go to www.investor.gov as it has excellent information regarding these types of questions. A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates. When you buy shares of a mutual fund you're buying it at NAV, or net asset value. The NAV is the value of the fund’s assets minus its liabilities. SEC rules require funds to calculate the NAV at least once daily. Different funds may own thousands of different stocks. In order to calculate the NAV, the fund company must value every security it owns. Since each security's valuation is changing throughout the day it's difficult to determine the valuation of the mutual fund except for when the market is closed. Once the market has closed (4pm eastern) and securities are no longer trading, the company must get accurate valuations for every security and perform the valuation calculations and distribute the results to the pricing vendors. This has to be done by 6pm eastern. This is a difficult and, more importantly, a time consuming process to get it done right once per day. Having worked for several fund companies I can tell you there are many days where companies are getting this done at the very last minute. When you place a buy or sell order for a mutual fund it doesn't matter what time you placed it as long as you entered it before 4pm ET. Cutoff times may be earlier depending on who you're placing the order with. If companies had to price their funds more frequently, they would undoubtedly raise their fees. |
Does dollar cost averaging really work? | If you have a lump sum, you could put it into a low risk investment (which should also have low fluctuations) right away to avoid the risk of buying at a down point. Then move it into a higher risk investment over a period of time. That way you'll buy more units when the price is lower than when it's higher. Usually I hear dollar cost averaging applied to the practice of purchasing a fixed dollar amount of an investment every week or month right out of your salary. The effect is pretty minimal though, except on the highest growth portfolios, and is generally just used as a sales tool by investment councilors (in my opinion). |
Short Selling Specific to India | In India, as suggested above, short/long position can be taken either in F&O or Spot market. The F&O segment short/long can be kept open for appx. 3 months by taking position on the far contract. In intra-day/Spot market, usually the position has to be squared at the end of day or the broker will square it during expiry (forcibly). However, having said that, it is a broker specific feature, as per National Stock Exchange (NSE) or Bombay Stock Exchange (BSE) any transaction has to be settled at the end of T+2 days (T being the trade day). Some brokers allow intra-day positions to be open for T+1 or T+2 days as long as the margin is provided. This is a broker specific discretion as the actual settlement is on T+2 (or in some cases as the exchange specifies). So, in general, to short a stock for a longer time, F&O segment should be used. |
Should I set a stop loss for long term investments? | The emphasis of "stop loss" is "stop", not "loss". Stop and long term are contradictory. After you stop, what are you going to do with your cash? Since it's long term, you still have 5+ years to before you use the money, do you simply park everything in 0.5% savings account? On the other hand, if your investment holds N stocks and one has dropped a lot, you are free to switch to another one. This is just an investment strategy and you are still in the market. |
Where should my money go next: savings, investments, retirement, or my mortgage? | As the others said, you're doing everything right. So, at this it's not a matter of what you should do, it's a matter of what do you want to do? What would make you the happiest? So, what would you like to do most with that extra money? The point is, since you're already doing everything right with the rest of your money, there's really nothing you can do that's wrong with this money. Except using it on something that increases your monthly expenses, like a down payment on a car. In fact, there's no reason you have to do anything "sensible" with this money at all. You could blow it at nightclubs if you wanted to, and that would be perfectly ok. In fact, since you've got everything else covered, why not "invest" it in making some memories? How about vacations to exotic and rugged places, while you're still young enough to enjoy them? |
When to sell stock losers | If you have someplace to put the money which you think will yield significantly better returns, by all means sell and buy that. On the other hand, if you think this stock is likely to recover its value, you might want to hold it, or even buy more as a "contrarian" investment. Buy low, sell high, as much as possible. And diversify. You need to make a judgement call about the odds. We can point out the implications, but in the end whether to sell, buy, hold or hedge is your decision. (This also suggests you need to sit down and draw up a strategy. Agonizing over every decision is not productive. If you have a plan, you make this sort of decision before you ever put money into the stock in the first place.) |
Beginning investment | Your question is very broad. Whole books can and have been written on this topic. The right place to start is for you and your wife to sit down together and figure out your goals. Where do you want to be in 5 years, 25 years, 50 years? To quote Yogi Berra "If you don't know where you are going, you'll end up someplace else." Let's go backwards. 50 Years I'm guessing the answer is "retired, living comfortably and not having to worry about money". You say you work an unskilled government job. Does that job have a pension program? How about other retirement savings options? Will the pension be enough or do you need to start putting money into the other retirement savings options? Career wise, do you want to be working as in unskilled government jobs until you retire, or do you want to retire from something else? If so, how do you get there? Your goals here will affect both your 25 year plan and your 5 year plan. Finally, as you plan for death, which will happen eventually. What do you want to leave for your children? Likely the pension will not be transferred to your children, so if you want to leave them something, you need to start planning ahead. 25 Years At this stage in your life, you are likely talking, college for the children and possibly your wife back at work (could happen much earlier than this, e.g., when the kids are all in school). What do you want for your children in college? Do you want them to have the opportunity to go without having to take on debt? What savings options are there for your children's college? Also, likely with all your children out of the house at college, what do you and your wife want to do? Travel? Give to charity? Own your own home? 5 Years You mention having children and your wife staying at home with them. Can your family live on just your income? Can you do that and still achieve your 50 and 25 year goals? If not, further education or training on your part may be needed. Are you in debt? Would you like to be out of debt in the next 5-10 years? I know I've raised more questions than answers. This is due mostly to the nature of the question you've asked. It is very personal, and I don't know you. What I find most useful is to look at where I want to be in the near, mid and long term and then start to build a plan for how I get there. If you have older friends or family who are where you want to be when you reach their age, talk to them. Ask them how they got there. Also, there are tons of resources out there to help you. I won't suggest any specific books, but look around at the local library or look online. Read reviews of personal finance books. Read many and see how they can give you the advice you need to reach your specific goals. Good luck! |
Tax deductions on empty property | If the building has no income, it also probably has minimal expenses. The heat, water and electricity costs are nearly zero. They are letting the value depreciate, and taking it off the taxes. I also suspect the condition of the building is poor, so any effort to make the building productive would be very costly. Many cities combat this by setting the tax on empty buildings or empty lots at a much higher rate. Or they set the value of the property at a high valuation based on what it could generate. Sometimes this is only targeted at some sections of the city to encourage development. They also offer tax breaks when the owner of a house has the house as their principal residence. |
Who sets the price and provides the quoted price values for stocks? | The "price" is the price of the last transaction that actually took place. According to Motley Fool wiki: A stock price is determined by what was last paid for it. During market hours (usually weekdays from 9:30AM-4:00PM eastern), a heavily traded issue will see its price change several times per second. A stock's price is, for many purposes, considered unchanged outside of market hours. Roughly speaking, a transaction is executed when an offer to buy matches an offer to sell. These offers are listed in the Order Book for a stock (Example: GOOG at Yahoo Finance). This is actively updated during trading hours. This lists all the currently active buy ("bid") and sell ("ask") orders for a stock, and looks like this: You'll notice that the stock price (again, the last sale price) will (usually*) be between the highest bid and the lowest ask price. * Exception: When all the buy or sell prices have moved down or up, but no trades have executed yet. |
How should I value personal use television for donation? | I used TurboTax last year. It had a section for donations where it figured out the amounts of the IRS approved values for a donation. You would need to know the size of the television and the current condition it is in. He's a screenshot - though it's not from the TV section. https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/Video--How-to-Estimate-the-Value-of-Clothing-for-IRS-Deductions/INF13870.html+&cd=8&hl=en&ct=clnk&gl=us TurboTax offers a free online tool called ItsDeductible that does the same thing (though I haven't tried it). Unfortunately, I don't have the current one with TV's to give you the range of amounts that apply to yours. --I am not affiliated with TurboTax and did not receive it for free for a review. |
Understanding the phrase “afford to lose” better | Well.... If you have alllll your money invested, and then there's a financial crisis, and there's a personal crisis at the same time (e.g. you lose your job) then you're in big trouble. You might not have enough money to cover your bills while you find a new job. You could lose your house, ruin your credit, or something icky like that. Think 2008. Even if there's not a financial crisis, if the money is in a tax-sheltered retirement account then withdrawing it will incur ugly penalities. Now, after you've got an emergency fund established, things are different. If you could probably ride out six to twelve months with your general-purpose savings, then with the money you are investing for the long term (retirement) there's no reason you shouldn't invest 100% of the money in stocks. The difference is that you're not going to come back for that money in 6 months, you're going to come back for it in 40 years. As for retirement savings over the long term, though, I don't think it's a good idea to think of your money in those terms. If you ever lose 100% of your money on the stock market while you've invested in diversified instruments like S&P500 index funds, you're probably screwed one way or another because that represents the core industrial base of the US economy, and you'll have better things to worry about, like looking for a used shotgun. Myself, I prefer to give the suggestion "don't invest any money in stocks if you're going to need to take it out in the next 5 years or so" because you generally shouldn't be worried about a 100% loss of all the money in stocks your retirement accounts nearly so much as you should be worried about weathering large, medium-term setbacks, like the dot-com bubble crash and the 2008 financial crisis. I save the "don't invest money unless you can afford to lose it all" advice for highly speculative instruments like gold futures or social-media IPOs. Remember also that while you might lose a lot of your money on the stock market, your savings accounts and bonds will earn you pathetic amounts by comparison, which you will slowly lose to inflation. If you've had your money invested for decades then even during a crash you may still be coming out ahead relative to bonds. |
Are there any caveats to withdrawing funds from brokerage? | nan |
Why is it that stock prices for a company seem to go up after a layoff? | AMD is doing more than just laying off staff. Their earnings report also includes sales of real estate and other turn around strategies that could be reflected in the stock coming up on hope from investors. At the same time, consider how much of an up is a definite sign of positive news and how much may just be random noise as even a broken clock will be right twice a day. Often there will be more than just an announcement of x% of staff being laid off. There will be plans to improve future profits and this is what shareholders would want to know. What is the management doing to move the company forward to better profits down the road. |
Why don't some places require a credit card receipt signature, and some do? | This is basically done to reduce costs and overhead, with agreement of the credit card issuers. When the card is physically present and the charge is low, the burden of keeping the signed receipts and of additional delays at the cash register is not worth the potential risk of fraud. Depending on the location and the specific charge-back history of the business, the limit above which signature is required differs. In one supermarket in the area I live they require signatures only on charges above $50. In another, 10 miles away from the first one, they require signatures on charges above $25. |
Is my employee stock purchase plan a risk free investment? | It's a risk free investment only if you have 100% warranty that you will be able to sell these stocks for a better price than what you've paid. And that's virtually impossible. I don't think there is any "risk free investment" when stocks are involved. You can try to minimize the risks and consider them low, but IMO it's dangerous. |
If one owns 75% of company shares, does that mean that he would have to take upon himself 75% of the company's expenses? | You can look at the company separately from the ownership. The company needs money that it doesn't have, therefore it needs to borrow money from somewhere or go bankrupt. And if they can't get money from their bank, then they can of course ask people related to the company, like the two shareholders, for a loan. It's a loan, like every other loan, that needs to be repaid. How big the loan is doesn't depend on the ownership, but on how much money each one is willing and capable of giving. The loan doesn't give them any rights in the company, except the right to get their money back with interest in the future. Alternatively, such a company might have 200 shares, and might have given 75 to one owner and 25 to the other owner, keeping 100 shares back. In that case, the shareholders can decide to sell some of these 100 shares. I might buy 10 shares for $1,000 each, so the company has now $10,000 cash, and I have some ownership of the company (about 9.09%, and the 75% and 25% shares have gone down, because now they own 75 out of 110 or 25 out of 110 shares). I won't get the $10,000 back, ever; it's not a loan but the purchase of part of the company. |
How many days does Bank of America need to clear a bill pay check | This just happened to me with a Wells Fargo Bill Pay check. WF put a stop payment on the check. The money was taken out of my account immediately yet it is going to take 3-5 days to reappear in the account. I question these banking practices. Georgia Bank and Trust Company of GA does not do this. The Bill Pay check is processed just like a hand written check; when the check clears the bank your account is debited. If it is an Electronic Funds Transfer (EFT) then the money does come out of your account immediately, of course. These are acceptable banking practices to me. I will be closing the Wells Fargo account. |
Is this formula accurate for weighing the difference between an S-Corp and LLC? | It might be best to step back and look at the core information first. You're evaluating an LLC vs a Corporation (both corporate entities). Both have one or more members, and both are seen similarly (emphasis on SIMILAR here, they're not all the same) to the IRS. Specifically, LLC's can opt for a pass-through tax system, basically seen by the IRS the same way an S-Corp is. Put another way, you can be taxed as a corporate entity, or it's P/L statements can "flow through" to your personal taxes. When you opt for a flow-through, the business files and you get a separate schedule to tie into your taxes. You should also look at filing a business expense schedule (Schedule C) on your taxes to claim legitimate business expenses (good reference point here). While there are several differences (see this, and this, and this) between these entities, the best determination on which structure is best for you is usually if you have full time employ while you're running the business. S corps limit shares, shareholders and some deductions, but taxes are only paid by the shareholders. C corps have employees, no restrictions on types or number of stock, and no restrictions on the number of shareholders. However, this means you would become an employee of your business (you have to draw monies from somewhere) and would be subject to paying taxes on your income, both as an individual, and as a business (employment taxes such as Social Security, Medicare, etc). From the broad view of the IRS, in most cases an LLC and a Corp are the same type of entity (tax wise). In fact, most of the differences between LLCs and Corps occur in how Profits/losses are distributed between members (LLCs are arbitrary to a point, and Corps base this on shares). Back to your question IMHO, you should opt for an LLC. This allows you to work out a partnership with your co-worker, and allows you to disburse funds in a more flexible manner. From Wikipedia : A limited liability company with multiple members that elects to be taxed as partnership may specially allocate the members' distributive share of income, gain, loss, deduction, or credit via the company operating agreement on a basis other than the ownership percentage of each member so long as the rules contained in Treasury Regulation (26 CFR) 1.704-1 are met. S corporations may not specially allocate profits, losses and other tax items under US tax law. Hope this helps, please do let me know if you have further questions. As always, this is not legal or tax advice, just what I've learned in setting several LLCs and Corporate structures up over the years. EDIT: As far as your formulas go, the tax rate will be based upon your personal income, for any pass through entity. This means that the same monies earned from and LLC or an S-corp, with the same expenses and the same pass-through options will be taxed the same. More reading: LLC and the law (Google Group) |
Should I use a credit repair agency? | Repairing your credit takes time. Companies that offer to do it for you (for money) generally succeed mostly at getting money from you. Nonprofit agencies will help you with advice and encouragement and will not want money from you. They may be able to help you apply for a consolidation loan, but to be honest that is rarely the best first step. Over time, you need to The last step may happen months or years after the first two. |
Why aren't there solutions for electronic itemized receipt for retail in-store purchases? | In some stores that is done. When I shop at the Apple store or at the Farmers market the receipt is automatically sent to my email address. Why don't others do it? If the target of the itemized receipt is a credit card company they would be sending data that they spent collecting to another corporation. The grocery store is collecting your data so they can sell it to their vendors. They sell to vendors the info that Gen X shoppers that buy cat food are more likely to use brand X laundry detergent then Millennials. The credit card companies could gather even more Meta data that they could sell. Privacy. Some people don't join the reward program at the store because they don't want a company to know exactly what they buy. Even fewer would want the credit card company to have that information. The credit card companies would have to want this level of data that would have to be stored, maintained, and protected. |
Buying International Stock | For example, if the Dow, S&P 500, NASDAQ are all down does that necessarily mean the Canadian stock will get negatively impacted? Or is it primarily impacted by the Canadian market? The TWMJF stock makes up a very small part of the Canadian market so it affects the overall market, but this doesn't mean that the overall market affects this stock. So then the answer is: no, the TWMJF stock price will not necessarily follow either US or Canadian market indexes. However, there can be major events which can affect the markets, including the stocks which make up the markets. TWMJF will probably be more sensitive to Canadian events than US events. |
Why might it be advisable to keep student debt vs. paying it off quickly? | Two different questions: Is it better to be in debt or to pay off the debt? And: Is it better to have student debt than other debt? Any debt needs to be paid off eventually, and any debt makes you less flexible. So if you have the choice between spending/wasting your money and paying off debt, I would recommend paying off the debt. The other question is whether having student debt is better than having other debt. You need to look at the terms of your student debt. Pay off the debt with the worst conditions first. Loan sharks (in Britain: pay-day loans) must be paid first. Credit cards debt must go next. Then general loans. Depending on your situation, you may want some savings as well. In case you lose your job, for example. So if you have $8,000 saved and an $8,000 student loan, you might consider waiting a bit before you pay back the loan. No job + $8,000 student loan + $8,000 in the bank is better than no job + no debt + no money in the bank. |
Explain the HSI - why do markets sometimes appear in sync and other times not? | Contributing factors to the diversion were that: A) China's currency does not float like other major countries' currencies B) China's real estate market didn't have the same lending criteria leading to the level of speculation seen in USA, at the time. |
Section 179 vs depreciation of laptop | The CPA's mention of $2,500 is probably referring to the recently increased de minimis safe harbor under the final tangible property regulations (used to be $500) without an applicable financial statement. The IRS will not challenge your choice of expense or capitalization on amounts on or below $2500 if you elect the de minimis safe harbor election on your return. However, you must follow whatever you're doing for your books. (So if you are capitalizing your laptops for book purposes, you would also need to capitalize for tax purposes). Section 179 allows you to expense property that you would have otherwise have had to capitalize and depreciate. Section 179 can be annoying, especially if your LLC is treated as a passthrough, because there are recapture provisions when you dispose of the asset too early. For the tax return preparer, it makes the return preparation much more simple if there are no fixed assets to account for in the first place, which is quite possible if you are expensive all items/invoices less than $2,500. |
Under what circumstance will the IRS charge you a late-payment penalty for taxes? | The IRS provides a little more information on the subject on this FAQ: Will I be charged interest and penalties for filing and paying my taxes late?: If you did not pay your tax on time, you will generally have to pay a late-payment penalty, which is also called a failure to pay penalty. Some guidance on what constitutes "reasonable cause" is found on the IRS page Penalty Relief Due to Reasonable Cause: The IRS will consider any sound reason for failing to file a tax return, make a deposit, or pay tax when due. Sound reasons, if established, include: Note: A lack of funds, in and of itself, is not reasonable cause for failure to file or pay on time. However, the reasons for the lack of funds may meet reasonable cause criteria for the failure-to-pay penalty. In this article from U.S. News and World Report, it is suggested that the IRS will generally waive the penalty one time, if you have a clean tax history and ask for the penalty to be waived. It is definitely worth asking them to waive the penalty. |
Can I actually get a share of stock issued with a piece of paper anymore? | Yes, indeed. For example, Ford Motor Company's website has a bit about them. Is there any advantage to having an actual physical note instead of a website? You can safeguard them yourself. Which may or may not be a good thing. It certainly brings up a bit of hassle and extra costs if you want to sell them. Though you can have lost certificates replaced, so there is more to it than just having physical possession of the certificates. |
Calculating Pre-Money Valuation for Startup | Putting a dollar amount on the valuation of a start up business is an art form that often has very little at all to do with any real numbers and more to do with your "salesman" abilities when talking with the VC. That said, there are a few starting points: First is past sales, the cost of those sales and a (hopefully) realistic growth curve. However, you don't have that so this gets harder. Do you have any actual assets? Machinery, computers, desks, patents, etc. Things that you actually own. If so, then add those in. If this is a software start-up, "code" is an asset, but without sales it's incredibly hard to put a value on it. The best I've come up with is "How much would it cost for someone else to build it .. after they've seen yours". Yes, you may have spent 5,000 hours building something but could someone else duplicate it, or at least the major parts, in 200 hours after seeing a demo? Use the lower number. If I was you, I'd look hard at my business plan. Hopefully you were as honest as you can be when writing it (and that it is as researched as possible). What is it going to take to get that first sale? What do you actually need to get there? (hint: your logo on the side of a building is NOT a necessary expense. Nor is really nice office space.) Once you have that first sale, what is the second going to take? Can you extrapolate out to 3 years? How many key members are there? How much is their contribution worth? At what point will you be profitable? Next is to look at risks. You haven't done this before, that's huge - I'm assuming simply because you asked this question. Another is competitors - hopefully they already exist because opening a new market is incredibly hard and expensive; on the flip side, hopefully there aren't that many because entering a crowded market is equally hard and expensive. Note: each are possible, but take radically different approaches and sums of money - and $200k isn't going to cut it no matter what it is you are selling. That said, competition should be able to at least point you in the direction of a price point and estimate for how long sales take. If any are publicly traded then you have additional info to help you set a valuation. Are there any potential regulatory or legal issues? What happens if a key member leaves, dies or is otherwise no longer available? Insurance only helps so much if the one guy that knows everything literally gets run over. God help you if this person likes to go skydiving. I bring risks up because you will have to surmount them during this negotiation. For example, asking for $200k with zero hard assets, while trying to sell software to government agencies assuming a 3 week sales cycle will have you laughed at for naivety. Whereas asking for $10m in the same situation, with a team that has governmental sales experience would likely work. Another big question is exit strategy: do you intend to IPO or sell to a competitor or a business in a related category? If selling, do you have evidence that the target company actually buys others, and if so, how did those deals work out? What did they look for in order to buy? Exit strategy is HUGE to a VC and they will want to make several multiples of their money back in a relatively short amount of time. Can you realistically support that for how much you are asking for? If not then going through an Angel group would be better. They have similar questions, but very different expectations. The main thing is that no one knows what your business is worth because it is 100% unproven after 2 years and is therefore a huge financial risk. If the money you are asking for is to complete product development then that risk factor just went up radically as you aren't even talking about sales. If the money is purely for the sales channel, then it's likely not enough. However if you know what it's going to take to get that first sale and have at least an educated idea on how much it's going to cost to repeat that then you should have an idea for how much money you want. From there you need to decide how much of the business it is worth to you to give up in order to get that money and, voila, you have a "pre money valuation". The real trick will be to convince the VC that you are right (which takes research and a rock solid presentation) and negotiating from there. No matter what offer a small percentage of the business for the money you want and realize you'll likely give up much more than that. A few things you should know: usually by year 3 it's apparent if a start-up is going to work out or not. You're in year 2 with no sales. That doesn't look good unless you are building a physical product, have a competent team with hard experience doing this, have patents (at least filed), a proven test product, and (hopefully) have a few pre-orders and just need cash to deliver. Although in that situation, I'd probably tell you to ask your friends and family before talking to a VC. Even kickstarter.com would be better. $200k just isn't a lot of money and should be very easy to raise from Friends or Angels. If you can't then that speaks volumes to an institutional VC. A plus is having two or three people financially invested in the company; more than that is sometimes a problem while having only 1 is a red flag. If it's a web thing and you've been doing this for 2 years with zero sales and still need another $200k to complete it then I'd say you need to take a hard look at what you've built and take it to market right now. If you can't do that, then I'd say it might be time to abandon this idea and move on as you'll likely have to give up 80%+ to get that $200k and most VCs I've run into wouldn't bother at that level. Which begs the question: how did the conversation with the VC start? Did you approach them or did they approach you? If the latter, how did they even find out about you? Do they actually know anything about you or is this a fishing expedition? If the latter, then this is probably a complete waste of your time. The above is only a rough guide because at the end of the day something is only worth what someone else is willing to pay. $200k in cash is a tiny sum for most VCs, so without more information I have no clue why one would be interested in you. I put a number of hard questions and statements in here. I don't actually want you to answer me, those are for you to think about. Also, none of this shouldn't be taken as a discouragement, rather it should shock you into a realistic viewpoint and, hopefully, help you understand how others are going to see your baby. If the VC has done a bit of research and is actually interested in investing then they will bring up all the same things (and likely more) in order to convince you to give up a very large part of it. The question you have to ask yourself is: is it worth it? Sometimes it is, often it's not. |
Why should one only contribute up to the employer's match in a 401(k)? | In addition to George Marian's excellent advice, I'll add that if you're hitting the limits on IRA contributions, then you'd go back to your 401(k). So, put enough into your 401(k) to get the match, then max out IRA contributions to give you access to more and better investment options, then go back to your 401(k) until you top that out as well, assuming you have that much available to invest for retirement. |
How does the purchase of shares on the secondary market benefit the issuing company? | Stock trading (as opposed to IPO) doesn't directly benefit the company. But it affects their ability to raise additional funds; if they're valued higher, they don't need to sell as many shares to raise a given amount of money. And the stockholders are part owners of the company; their votes in annual corporate meetings and the like can add up to a substantial influence on the company's policies, so the company has an interest in keeping them (reasonably) happy. Dividends (distributing part of the company's profits to the stockholders) are one way of doing so. You're still investing in the company. The fact that you're buying someone else's share just means you're doing so indirectly, and they're dis-investing at the same time. |
Using property to achieve financial independence | Will buying a flat which generates $250 rent per month be a good decision? Whether investing in real estate is a good decision or not depends on many things, including the current and future supply/demand for rental units in your particular area. There are many questions on this site about this topic, and another answer to this question which already addresses many risks associated with owning property (though there are also benefits to consider). I just want to focus on this point you raised: I personally think yes, because rent adjusts with inflation and the rise in the price of the property is another benefit. Could this help me become financially independent in the long run since inflation is getting adjusted in it? In my opinion, the fact that rental income general adjusts with 'inflation' is a hedge against some types of economic risk, not an absolute increase in value. First, consider buying a house to live in, instead of to rent: If you pay off your mortgage before your retire, then you have reduced your cost of accommodations to only utilities, property taxes, and repairs. This gives you a (relatively) known, fixed requirement of cash outflows. If the value of property goes up by the time you retire - it doesn't cost you anything extra, because you already own your house. If the value of property goes down by the time you retire, then you don't save anything, because you already own your house. If you instead rent your whole life, and save money each month (instead of paying off a mortgage), then when you retire, you will have a larger amount of savings which you can use to pay your monthly rental costs each month. By the time you retire, your cost of accommodations will be the market price for rent at that time. If the value of property goes up by the time you retire - you will have to pay more on rent. If the value of property goes down by the time you retire, you will save money on rent. You will have larger savings, but your cash outflow will be a little bit less certain, because you don't know what the market price for rent will be. You can see that, because you need to put a roof over your own head, just by existing you bear risk of the cost of property rising. So, buying your own home can be a hedge against that risk. This is called a 'natural hedge', where two competing risks can mitigate each-other just by existing. This doesn't mean buying a house is always the right thing to do, it is just one piece of the puzzle to comparing the two alternatives [see many other threads on buying vs renting on this site, or on google]. Now, consider buying a house to rent out to other people: In the extreme scenario, assume that you do everything you can to buy as much property as possible. Maybe by the time you retire, you own a small apartment building with 11 units, where you live in one of them (as an example), and you have no other savings. Before, owning your own home was, among other pros and cons, a natural hedge against the risk of your own personal cost of accommodations going up. But now, the risk of your many rental units is far greater than the risk of your own personal accommodations. That is, if rent goes up by $100 after you retire, your rental income goes up by $1,000, and your personal cost of accommodations only goes up by $100. If rent goes down by $50 after you retire, your rental income goes down by $500, and your personal cost of accommodations only goes down by $50. You can see that only investing in rental properties puts you at great risk of fluctuations in the rental market. This risk is larger than if you simply bought your own home, because at least in that case, you are guaranteeing your cost of accommodations, which you know you will need to pay one way or another. This is why most investment advice suggests that you diversify your investment portfolio. That means buying some stocks, some bonds, etc.. If you invest to heavily in a single thing, then you bear huge risks for that particular market. In the case of property, each investment is so large that you are often 'undiversified' if you invest heavily in it (you can't just buy a house $100 at a time, like you could a stock or bond). Of course, my above examples are very simplified. I am only trying to suggest the underlying principle, not the full complexities of the real estate market. Note also that there are many types of investments which typically adjust with inflation / cost of living; real estate is only one of them. |
What are the advantages/disadvantages of a self-directed IRA? | This type of account will sell you just enough rope to hang yourself. Gold is at $1400 or so. Were you around when it first hit $800 in '79/'80? I was. No one was saying "sell" only forecasts of $2000. If you bought and held, you've still not broken even to inflation let alone simple market returns. |
Where does the stock go in a collapse? | If we can agree that 2010 was closer to the low of 2009 than 2007 then the rich did all the buying while the super-rich did all the selling. http://www2.ucsc.edu/whorulesamerica/power/wealth.html Looks like the rich cleaned up during the Tech Crash too, but it looks like the poor lost faith. That limited data makes it look like the best investors are the rich. Market makers are only required by the exchanges to provide liquidity, bids & asks. They aren't required to buy endlessly. In fact, market makers (at least the ones who survive the busts) try to never have a stake in direction. They do this by holding equal inventories of long and shorts. They are actually the only people legally allowed to naked short stock: sell without securing shares to borrow. All us peons must secure borrowed shares before selling short. Also, firms involved in the actual workings of the market like bookies but unlike us peons who make the bets play by different margin rules. They're allowed to lever through the roof because they take on low risk or near riskless trades and "positions" (your broker, clearing agent, etc actually directly "own" your financial assets and borrow & lend them like a bank). http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p004001.pdf This is why market makers can be assumed not to load up on shares during a decline; they simply drop the bids & asks as their bids are hit. |
Understanding taxes when buying goods at a store | States have made sales tax more confusing by expanding some categories and shrinking or eliminating other categories. In days of old there were taxes on items, and specific taxes on other small categories such as fuel and cigarets . In many states there were taxes implemented state wide, and in other cases they only applied to a specific city or region. As time went on taxes could be raised to bring in more money for the state or local government, but these tax increase were seen as unfair to the poor. So now the states are modifying and tweaking the tax rates. Some items are tax free, some have a low tax, and some are at the full tax rate. This can get confusing because the type of store can also play a factor. A bag a chips from a grocery store can be treated differently than a bag of chips from a hotdog stand. Some states have also added special taxes on snack foods. In general, purchases they want to encourage (staples from the grocery store) are tax free or low tax, items they don't want to encourage (snacks) are fully taxed. You can also be sure that they will treat luxury items as fully taxed. A new frontier of taxation are ones designed to tax people who don't live there. They have added taxes on restaurants and hotels. Since they are paid by tourists, the people most likely to pay them don't have a voice in setting the rate. States are now wanting to tax services as a way to make up shortfalls in taxing. Don't expect consistency from state to state, or year to year. Oh by the way that penny tax was for something that cost 17 cents or less, unless that item had a lower tax rate. The receipt should clearly identify the taxable items, and their tax level. |
If I were to get into a life situation where I would not be able to make regular payments, do lenders typically provide options other than default? | For insight on what will happen, I suggest looking at the situation from the lender's perspective: If your setbacks are temporary, and you are likely to get back on your feet again, they will protect their investment by making accommodations, and probably charging you extra fees along the way. If your financial hardship seems irredeemable, they probably try to squeeze you for as much as possible, and then eventually take your house, protecting their investment as best they can. If they are going to foreclose, they may be reluctant to do it quickly, as foreclosure is expensive, takes man power, and looks bad on their books. So it may get pushed off for a Quarter, or a fiscal year. But if you are asking if they'll help you out from the goodness of their heart, well, a bank has no heart, and creditors are interested in ROI. They'll take the easiest path to profit, or failing that, the path to minimum financial losses. The personal consequences to you are not their concern. Once you realize this, it may change your thinking about your own situation. If you think you have a path to financial recovery, then you need to make that clear to them, in writing, with details. Make a business case that working with you is in their own best interests. If you cannot make such a case, recognize that they'll likely squeeze you for as much as possible in penalties, fees, interest payments, etc, before eventually foreclosing on you anyway. Don't play that game. If your home is a lost cause financially, plan how to get out from it with the smallest losses possible. Don't pay more than you need to, and don't throw good money after bad. |
Can a US bank prevent you from making early payments to the principal on a home mortgage? | littleadv's first comment - check the note - is really the answer. But your issue is twofold - Every mortgage I've had (over 10 in my lifetime) allows early principal payments. The extra principal can only be applied at the same time as the regular payment. Think of it this way - only at that moment is there no interest owed. If a week later you try to pay toward only principal, the system will not handle it. Pretty simple - extra principal with the payment due. In fact, any mortgage I've had that offered a monthly bill or coupon book will have that very line "extra principal." By coincidence, I just did this for a mortgage on my rental. I make these payments through my bank's billpay service. I noted the extra principal in the 'notes' section of the virtual check. But again, the note will explicitly state if there's an issue with prepayments of principal. The larger issue is that your friend wishes to treat the mortgage like a bi-weekly. The bank expects the full amount as a payment and likely, has no obligation to accept anything less than the full amount. Given my first comment above here is the plan for your friend to do 99% of what she wishes: Tell her, there's nothing magic about bi-weekly, it's a budget-clever way to send the money, but over a year, it's simply paying 108% of the normal payment. If she wants to burn the mortgage faster, tell her to add what she wishes every month, even $10, it all adds up. Final note - There are two schools of thought to either extreme, (a) pay the mortgage off as fast as you can, no debt is the goal and (b) the mortgage is the lowest rate you'll ever have on borrowed money, pay it as slow as you can, and invest any extra money. I accept and respect both views. For your friend, and first group, I'm compelled to add - Be sure to deposit to your retirement account's matched funds to gain the entire match. $1 can pay toward your 6% mortgage or be doubled on deposit to $2 in your 401(k), if available. And pay off all high interest debt first. This should stand to reason, but I've seen people keep their 18% card debt while prepaying their mortgage. |
How to help a financially self destructive person? | Back in the day, they had a highly effective solution for this type of crap, but it is frowned upon in modern society. The second-best solution would be to get your lawyer to put together a case that she is unfit to be around the children and that visitation rights should be revoked. Unfortunately, this will most likely not solve her problems, and she will probably become far worse as she feels more alone, alienated, miserable, and embarrassed. |
Why invest in becoming a landlord? | Let me add a few thoughts that have not been mentioned so far in the other answers. Note that for the decision of buying vs. renting a home i.e. for personal use, not for renting out there's a rule of thumb that if the price for buying is more than 20 year's (cold) rents it is considered rather expensive. I don't know how localized this rule of thumb is, but I know it for Germany which is apparently the OP's country, too. There are obviously differences between buying a house/flat for yourself and in order to rent it out. As others have said, maintenance is a major factor for house owners - and here a lot depends on how much of that you do yourself (i.e. do you have the possibility to trade working hours for costs - which is closely related to financial risk exposure, e.g. increasing income by cutting costs as you do maintenance work yourself if you loose your day-time job?). This plays a crucial role for landlords I know (they're all small-scale landlords, and most of them do put in substantial work themselves): I know quite a number of people who rent out flats in the house where they actually live. Some of the houses were built with flats and the owner lives in one of the flats, another rather typical setup is that people built their house in the way that a smaller flat can easily be separated and let once the kids moved out (note also that the legal situation for the landlord is easier in that special case). I also know someone who owns a house several 100 km away from where they live and they say they intentionally ask a rent somewhat below the market price for that (nice) kind of flat so that they have lots of applicants at the same time and tenants don't move out as finding a new tenant is lots of work and costly because of the distance. My personal conclusion from those points is that as an investment (i.e. not for immediate or future personal use) I'd say that the exact circumstances are very important: if you are (stably) based in a region where the buying-to-rental-price ratio is favorable, you have the necessary time and are able to do maintenance work yourself and there is a chance to buy a suitable house closeby then why not. If this is not the case, some other form of investing in real estate may be better. On the other hand, investing in further real estate closeby where you live in your own house means increased lump risk - you miss diversification into regions where the value of real estate may develop very differently. There is one important psychological point that may play a role with the observed relation between being rich and being landlord. First of all, remember that the median wealth (without pensions) for Germany is about 51 k€, and someone owning a morgage-free 150 k€ flat and nothing else is somewhere in the 7th decile of wealth. To put it the other way round: the question whether to invest 150 k€ into becoming a landlord is of practical relevance only for rich (in terms of wealth) people. Also, asking this question is typically only relevant for people who already own the home they live in as buying for personal use will typically have a better return than buying in order to rent. But already people who buy for personal use are on average wealthier (or at least on the track to become more wealthy in case of fresh home owners) than people who rent. This is attributed to personal characteristics and the fact that the downpayment of the mortgage enforces saving behaviour (which is typically kept up once the house is paid, and is anyways found to be more pronounced than for non-house-owners). In contrast, many people who decide never to buy a home fall short of their initial savings/investment plans (e.g. putting the 150 k€ into an ETF for the next 21 years) and in the end spend considerably more money - and this group of people rarely invests into directly becoming a landlord. Assuming that you can read German, here's a relevant newspaper article and a related press release. |
Form as LLC or S Corp to reduce tax liability | This is actually quite a complicated issue. I suggest you talk to a properly licensed tax adviser (EA/CPA licensed in your State). Legal advice (from an attorney licensed in your State) is also highly recommended. There are many issues at hand here. Income - both types of entities are pass-through, so "earnings" are taxed the same. However, for S-Corp there's a "reasonable compensation" requirement, so while B and C don't do any "work" they may be required to draw salary as executives/directors (if they act as such). Equity - for S-Corp you cannot have different classes of shares, all are the same. So you cannot have 2 partners contribute money and third to contribute nothing (work is compensated, you'll be getting salary) and all three have the same stake in the company. You can have that with an LLC. Expansion - S-Corp is limited to X shareholders, all of which have to be Americans. Once you get a foreign partner, or more than 100 partners - you automatically become C-Corp whether you want it or not. Investors - it would be very hard for you to find external investors if you're a LLC. There are many more things to consider. Do not make this decision lightly. Fixing things is usually much more expensive than doing them right at the first place. |
Formation of S-Corp for Gambling Trade | In a sole proprietorship AND an LLC, the expenses can still be deducted against the profits or losses from the operations. The IRS does not even require that a profit seeking activity be incorporated under its own entity, hence why this is also applicable in a sole proprietorship. From what you've said, there is no reason to use a more complicated and costly corporate structure at all. In comparison, a sole proprietorship and single-member LLC will be completely pass through entities to the IRS and all of their earnings go to you. With the LLC you have the option of letting the LLC's earnings remain with the entity itself, or you can just treat it as your own and pay individual income taxes on it. This has nothing to do specifically with a gambling business and is largely a red herring to your profit seeking motives. Gambling in casino games and lotteries already enjoy favorable tax treatment in some regards. Gambling in capital markets also enjoy a myriad of favorable tax laws. A business entity related to this purpose should be able to deduct costs related to this trade (and pass an audit more convincingly than not having formed an LLC and business bank account) |
Does owning BP ADR from US stock market required to pay custody fees | Rules appear to be changing (21NOV2014) Aviva Plc. AV on NYSE pass thru fee is 0.02 cents per ADR but that equals 11% deduction from ADR dividend. For utility or insurance stock that is significant ongoing fee. Registrar in US is Citibank, could be specific to them. This is the first for me except some modest fees on indonesian ADR. Information very difficult to find. Buy and hold OZ investor. |
Why can't house prices be out of tune with salaries | Indefinitely is easy to answer. Assume that the average house currently costs four times the average salary, and that house prices rise 1% faster than salaries indefinitely. Then in only 1,000 years' time, the average house will cost around 84,000 times the average salary. In 10,000 years, it will be 6.5*10E43 times the average salary. That doesn't seem plausible to me. If you want arguments about "for the foreseeable future", instead of "indefinitely", then that's harder. |
How do historically low interest rates affect real estate prices? | Interest rates do generally affect house prices but other factors do too, especially the unemployment rate. However, everything else being equal, when interest rates drop, it makes the borrowing of money cheaper so tends to stimulate the economy and the housing market, increasing the demand for houses and generally causes house prices to increase (especially if the supply of new housing doesn't increase with the demand). When interest rates go up the opposite happens. Usually interest rates go down in order to stimulate a slowing economy and interest rates go up to slow down an overheated economy. Regarding your situation you are able to get a 30 year fixed rate at today’s interest rates (in Australia the longest fixed rate you can get is for 10 years and the rate is usually 1 or 2 percent higher than the standard variable rate. Most people here go for the variable rate or a fixed rate of between 1 to 3 years). This means that even if rates do go up in the future you won't be paying a higher rate, which is a positive for you. You are buying the house to live in so as long as you can keep making the repayments you should not be too worried if the price of the house drops sometime in the future, because if your house has dropped and you want to sell to buy another house to live in, then that house would have also dropped relative to yours (give or take). So your main worry is that rates will go up causing both house prices to fall and unemployment to rise, and you yourself losing your job and eventually your house. It is a risk, but what you need to consider is if you can manage that risk. Firstly, I believe rates won't be going up in the US for a number of years, and if and when they do start going up they will most probably start going up slowly. So you have some time on your side. Secondly, what can you do between now and when interest rates do start going up in a few years: Try to put more saving away to increase your safety net from 6 months to 12 months or more, or make extra repayments into your home loan so that you are ahead if things do go wrong. If you are worried that you could lose your job, what can you do to reduce your chances of losing your job or increasing your chances of getting a new job quickly if you do lose it? Improve your current skills, get new skills, become an invaluable employee, or look at possible opportunities to start your own business. Do your own research on the types of houses you are looking at buying, the more houses you look at the better prepared you will be when the right house at the right price comes along, and the less chance that you will be rushed into buying what might be an overpriced house. So to sum it up; do as much research as you can, have an understanding of what your risks are and how you are going to manage those risks. |
Where do large corporations store their massive amounts of cash? | Short term investments, treasuries, current accounts. |
Is the I.T. function in banking considered to be on the expense side, as opposed to revenue side? | Here is how your CEO has to see it. Of course, eventually most revenues are generated by IT systems but technically IT still is an expense only activity unless of course you are selling the software/services offered by it. According to the US GAAP, software development costs are capitalized when a firm develops a software for its own use (e.g., nice shiny UI show bank's VaR, algorithmic trading engines, internal security infrastructure etc.). When the software is developed for sale, all the costs are expensed as incurred until the technical feasibility is established after which the costs are capitalized. The income is realized when licenses to use the software or the services provided by it are sold. According to international standards, the treatment for both the use cases shown above is the same --all the costs are expensed as incurred until the technical feasibility is established after which the costs are capitalized. The income is realized when licenses to use the software or the services provided by it are sold. |
What is the PEG ratio? How is the PEG ratio calculated? How is the PEG ratio useful for stock investing? | PEG is Price to Earnings Growth. I've forgotten how it's calculated, I just remember that a PEG ratio of 1-2 is attractive by Graham & Dodd standards. |
Why don't banks give access to all your transaction activity? | A big issue for historical data in banking is that they don't/can't reside within a single system. Archives of typical bank will include dozen(s) of different archives made by different companies on different, incompatible systems. For example, see http://www.motherjones.com/files/images/big-bank-theory-chart-large.jpg as an illustration of bank mergers and acquisitions, and AFAIK that doesn't include many smaller deals. For any given account, it's 10-year history might be on some different system. Often, when integrating such systems, a compromise is made - if bank A acquires bank B that has earlier acquired bank C, then if the acquisition of C was a few years ago, then you can skip integrating the archives of C in your online systems, keep them separate, and use them only when/if needed (and minimize that need by hefty fees). Since the price list and services are supposed to be equal for everyone, then no matter how your accounts originated, if 10% of archives are an expensive enough problem to integrate, then it makes financial sense to restrict access to 100% of archives older than some arbitrary threshold. |
Best Time to buy a stock in a day | The best time to buy a stock is the time of day when the stock price is lowest! Obviously you learned nothing from that sentence, but unfortunately you won't get a much better answer than that. Here's a question that is very similar to yours: "Is it better to have a picnic for lunch or for dinner to minimize the chance of getting rained out?" Every day is different... |
In US, is it a good idea to hire a tax consultant for doing taxes? | Whether you do decide to go with a tax advisor or not, be sure to do some research on your own. When we moved to the US about 5 years ago, I did find the taxes here pretty complicated and confusing. I went ahead and read up all different tax documents and did some calculations of my own before hiring a CPA (at that point, I just wanted a second opinion to make sure I got the calculations right). However, when the office of the CPA was finished with my taxes, I found they had made a mistake! When I went back to their office to point it out, the lady just shrugged, corrected her numbers on the form and said "You seem to know a lot about this stuff already. Why are you here?" I swore to never use them again - not this particular CPA at least. Now, I am not saying all CPAs are the same - some of them are pretty darn good at their job and know what they are doing. All I am saying is it helps to be prepared and know some basic stuff. Just don't go in all blind. After all, they are also humans prone to mistakes and your taxes are your liability in the end. My suggestion is to start with a good tool that supports tax filing for non-residents. Most of them provide a step-by-step QA based tool. As you go through the steps, Google each question you don't understand. It may take more time than hiring a tax advisor directly but in the end it will all be worth it. |
Do I have to explain the source of *all* income on my taxes? | This is a case where you sit down with an advisor or two. There are legal, and tax issues. When you deposit the cash, or buy a car with it, the large cash transaction will trigger a notice to the US Government. So they will eventually find out. Before you get to that point you need to know what obligations and consequences you will be facing. Because you don't know if it was a gift, or found money, or if the owner will be back looking for you to return it; therefore you need expert advice. |
TOCOM oil in USD | TOCOM Crude is a cash-settled blend of Oman and Dubai crude oil, both quoted in USD. The daily settlement price is mark to market, but the final settlement price is based on reported prices from Dubai and Oman (or calculated in some cases with a known procedure), averaged and then converted to Yen using monthly average exchange rates as published by a reference bank (see Detailed Rules) You're trying to go all the way back and unfuddle quotes into a blend of USD-quoted oils. The correct procedure here would be to go with the Oman and Dubai prices in the first place (unless you're trying to arbitrage the TOCOM market). As to why they do it this way? It's a service. TOCOM takes on all the challenges to provide customers with a steady and consistent way of trading cash-oil. For physical oil, all you'd have to do is buy the blend on Dubai's and Oman's spot market. You trust TOCOM's price finding process, i.e. there will be no discrepancies between your TOCOM cash-oil and the Middle East physical oil. Edit: As to why Japan isn't buying WTI directly: There's a considerable cost of carry. WTI delivery location is Cushing, OK; there are pipelines but it's still a logistics act to get the oil to a port on the West Coast and then have it shipped to Japan. Dubai's delivery is at Jebel Ali (Persian Gulf), Omani crude can be shipped straight from Mina Al Fahal. Not only is it a shorter trip but also there are more shipping companies specialised in oil deliveries to the Asian hotspots. Why they pay in USD? Persian oil is highly sought after in nearly all of Asia's economies but there's little other exported goods from there. So naturally the market for currency crosses (AEDJPY, OMRJPY, AEDINR, OMRINR, etc.) is not that liquid. At least not as liquid as to make buying Persian oil a smooth deal. Anyway, both Dubai and Oman chose to follow Western practice to quote their contracts in USD and (maybe because of liquidity concerns) also to accept USD for payment only. |
I started some small businesses but need help figuring out taxes. Should I hire a CPA? | Certainly sounds worthwhile to get a CPA to help you with setting up the books properly and learning to maintain them, even if you do it yourself thereafter. What's your own time worth? |
Why is there so much variability on interest rate accounts | I spent some time comparing banks' interest rates until I realized that it didn't actually matter (to me). The only money I keep in checking and savings accounts is money that I'm going to spend shortly or is part of an emergency fund, and in both those cases convenience of liquidity is far more important than small differences in interest (I want to be able to go to a nearby branch, even if traveling, and pull out large sums of money). The majority of our money goes into investment accounts, where it's earning much more than even the best savings account. Most of your 100k would be much better served in a stock/bonds mix. Are standard taxable investment accounts one of those things you can't open? What about if you opened one in your home country? |
Should I deduct or capitalize the cost to replace a water heater in my rental property? (details Below) | Pub 527 my friend. It gets depreciated. Table 1-1 on page 5. |
Paying Tax on Stocks Trading | The answer to your question doesn't depend on who you trade with but what country you live in. If you live outside of the US, you will have to pay tax on dividends... sometimes. This depends on the tax treaty that your country has with the US. Canada, Australia, UK and a few other countries have favorable tax treaties with the US that allow you to not be double taxed. You must look into the tax treaty that your home country has with the US to answer the question. Each country is different. |
When to use a stop limit order over a stop order | I would be using stop limit orders for stocks that are not too volatile. If you look at the chart and there are not many gaps especially after peaks, then you have more chance of being filled at your specified stop loss level using a stop limit order. If the stock is very volatile and has a large or many gaps down after most peak, then I would consider using a stop market order to make sure you do get out even if it is somewhat past your desired stop level. One think to consider is to avoid trading very volatile stocks that gap often. This is what I do, and using stop limit orders my stop level is achieved more than 95% of the time. |
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