Tax Planning

1. Questioner: Pablo

   Question: Dear Mr. Reyes, I invested in Vanguard Windsor a few years ago. Is it persmissible for me to sell my shares, take the cap loss and then turn around and the next day (not even waiting 31 days) invest proceeds in another fund (Vanguard Windsor II) with similar objectives? And another question for you Sir if I may. My Traditional IRA funds took a terrible beating of about 50% loss. I'd like to convert what is still remaining into my Roth IRA. (I am 58 and currently in the 25% tax bracket). Due to drastic reduction in value of my funds, I just think this is prime time to do the conversion because of potential tax savings even if I will be (which is not certain) in a lower tax bracket when my wife and I retire. What do you think? Thank you very much in advance! View Answer

2. Questioner: Steve

   Question: Hi, My wife is over 70 1/2 and has a Fidelity IRA. She must make an annual withdrawal and some percentage (I think 20%) is withheld for federal tax. My wife wants MORE money witheld so that she doesn't have to send a check for IRA tax at tax time. She believes--correctly?--that Fidelity can not withhold more than the percentage it now withholds. Is this correct? Many thanks, Steve View Answer

3. Questioner: Jay

   Question: Recently retired took lump sum and got taxed on that, Now when filing my taxes (gov't/ state) trying to tax me a again, in same year! Can they do that, tax me twice? View Answer

4. Questioner: Mary

   Question: My husband is 69 and we are now dealing with the prospect of paying tax on his 401-K. The 401-K is composed of company (from which he retired) stock and 3 stock funds. We have never withdrawn or borrowed money from the 401-K. We understand there is the possibility of selling (part of all) of the stocks and paying capital gain tax as opposed to paying income tax over a ten-year period. Am I correct that these are our two options? On what basis can we determine which is more beneficial? Thank you. View Answer

5. Questioner: Sam

   Question: I am 84 years old, and still actively employed, and contribute to my company's 401K. I was told that as long as I am still working, even at my age, I don't have to take minimum distribution. Is that correct? View Answer

6. Questioner: Vee

   Question: Is there any instance where withdrawing an IRA before age 59-1/2 is either not penalized by 10%, nontaxable or taxed at a low rate to help the long-time unemployed person so that there is income to pay bills? Can either the Federal taxes or State taxes be waived or lowered for the unemployed people who are suffering? View Answer

7. Questioner: longin

   Question: I bought IRAs with after-tax dollars. How do I report taxes and on what form. Do I declare only interest that I made on the IRA and pay tax on that? View Answer
   

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