Death & Taxes

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    Posted: 20 February 2012 03:16 PM

    Death by taxes?

         
  • Posted: 20 February 2012 02:11 AM #1

    so many bearish people here.
    I guess i can sleep in a bit tommorow dont have to wake up before 630AM, i still hate it when the markets are closed.

    I think this week apple moves up and closes past 510 and continues to grind up slowly

    i have an off topic question.  Im working on my taxes. I had 150 dollars in margin costs last year. It looks like i cant claim that money if i use the standard deduction. Is that correct? If so that wouldnt really be fair since that money eats into my gains and the amount report isnt really my gain because of my interest charges.

    [ Edited: 20 February 2012 02:18 AM by nate010203 ]      
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    Posted: 20 February 2012 02:31 AM #2

    I’m not an accountant, nate, so I can’t offer any tax advice.

    But margin is the cost of investing IF you choose to use it.  It’s an entirely different matter than, say, short vs. long-term cap gains treatment.  If you use margin at all, use it wisely.  Know your costs.

    Also nate, remember, this is Intraday.  We can, and sometimes do, go from bearish to bullish and back (and forth! and vice versa!) in a matter of hours, or minutes.  That’s a function of intraday charts.

    Longer-term the majority of us are bulls, and with calculated, unbiased reasons for being so.

    nate, a quote from Steve Jobs from the “Antennagate” Q&A session in 2010 comes to mind.  I don’t remember it exactly but someone asked about shareholders.  He first thanked the longer-term shareholders for their investment, and then said something to the effect of, “and for those who bought AAPL the other day and lost five bucks, I have no apology.  It’s like [having] kids.”  Forest from the trees.

    [ Edited: 20 February 2012 02:37 AM by Mav ]

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    Posted: 20 February 2012 02:37 AM #3

    nate010203 - 20 February 2012 06:11 AM

    so many bearish people here.
    I guess i can sleep in a bit tommorow dont have to wake up before 630AM, i still hate it when the markets are closed.

    I think this week apple moves up and closes past 510 and continues to grind up slowly

    i have an off topic question.  Im working on my taxes. I had 150 dollars in margin costs last year. It looks like i cant claim that money if i use the standard deduction. Is that correct? If so that wouldnt really be fair since that money eats into my gains and the amount report isnt really my gain because of my interest charges.

    That is both correct and, in my opinion, not fair…  Even if you could itemize and deduct it on Schedule A it would not be a one-to-one dollar reduction so not nearly offset the interest’s cost to you in earning your profit…  I’ve read you can set up a trading entity… supposedly this will allow you to write off expenses related to trading.  I hear it’s kind of a grey area with the IRS and that you need to be able to prove that you trade professionally… then you would be able to write off office, equipment, education and other investment related expenses.

    On your other concern, Nate, I will go on the record as bullish for this week on an expectation of more good news…  perhaps this is the week we’ll get confirmation of iPhone becoming available to China Telecom’s 36 million (Verizon size) subscribers or get some insight into China’s holiday Apple buying numbers…  30 Million iPhones sold in the March quarter?

    It’s amazing to think that China Mobile has 650 million subscribers… But I think they are waiting for an LTE iPhone… so that will NOT be a catalyst this week. But, wow, the future is so bright we need to wear shades…

    Apple Hegemony. And China Telecom. Those are my Apple words for the week.

    (I still need to learn respect for the hedgies’ ability to keep a great stock down).

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  • Posted: 20 February 2012 02:43 AM #4

    i dont trade professionily so i guess it looks like i cant deduct my margin costs.. which i think is very unfair. Government always craps on the little guy while giving the rich people lots of breaks.

    Because if i had enough money in my account i wouldnt need to use margin but i use margin because i only have 9k in my account at this time and im not going to buy only 18 shares.

    made 1100 last year, margin cost 150, have to pay them 200.. figure it all out my 1100 gain turns to less then 800, not fair.  I think taxing me is one thing but not allowing me to offset my gains with the margin interest cost isnt fair at all.

    is there any broker that doesnt charge an arm and a leg for margin? scottrade charges 7 percent. I would need to have cheap commissions though no more then 7 a trade.

    [ Edited: 20 February 2012 02:47 AM by nate010203 ]      
  • Posted: 20 February 2012 04:54 AM #5

    nate010203 - 20 February 2012 06:11 AM

    so many bearish people here.
    I guess i can sleep in a bit tommorow dont have to wake up before 630AM, i still hate it when the markets are closed.

    I think this week apple moves up and closes past 510 and continues to grind up slowly

    i have an off topic question.  Im working on my taxes. I had 150 dollars in margin costs last year. It looks like i cant claim that money if i use the standard deduction. Is that correct? If so that wouldnt really be fair since that money eats into my gains and the amount report isnt really my gain because of my interest charges.

    Think Schedule “C”.

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    Posted: 20 February 2012 02:16 PM #6

    nate010203 - 20 February 2012 06:43 AM

    Government always craps on the little guy while giving the rich people lots of breaks.

    Actually, no, rich people pay the vast majority of income taxes in this country.

    Percentile/AGI/% of US taxes paid

    Top 1% $343,927 36.73%

    Top 5% $154,643 58.66%

    Top 10% $112,124 70.47%

    Top 25% $66,193 87.30%

    Top 50% $32,396 97.75%

    Bottom 50% <$32,396 2.25%

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  • Posted: 20 February 2012 02:47 PM #7

    JDSoCal - 20 February 2012 06:16 PM
    nate010203 - 20 February 2012 06:43 AM

    Government always craps on the little guy while giving the rich people lots of breaks.

    Actually, no, rich people pay the vast majority of income taxes in this country.

    Percentile/AGI/% of US taxes paid

    Top 1% $343,927 36.73%

    Top 5% $154,643 58.66%

    Top 10% $112,124 70.47%

    Top 25% $66,193 87.30%

    Top 50% $32,396 97.75%

    Bottom 50% <$32,396 2.25%

    Thank you JD. It sickens me every time I hear “fair share”.  It is the most egregious use of the the word “fair”, and is always used by those that pay little to nothing in taxes. If we all paid the same Rate (putting us all on the same side of the issue) the din about deficit spending (the real problem) would be deafening.

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    Posted: 20 February 2012 03:07 PM #8

    Gregg Thurman - 20 February 2012 06:47 PM
    JDSoCal - 20 February 2012 06:16 PM

    Actually, no, rich people pay the vast majority of income taxes in this country.

    Percentile/AGI/% of US taxes paid

    Top 1% $343,927 36.73%

    Top 5% $154,643 58.66%

    Top 10% $112,124 70.47%

    Top 25% $66,193 87.30%

    Top 50% $32,396 97.75%

    Bottom 50% <$32,396 2.25%

    Thank you JD. It sickens me every time I hear “fair share”.  It is the most egregious use of the the word “fair”, and is always used by those that pay little to nothing in taxes. If we all paid the same Rate (putting us all on the same side of the issue) the din about deficit spending (the real problem) would be deafening.

    I wonder, if it could be done, where you two would be on this list compared to someone like Mitt Romney, Warren Buffet, or even Steve Jobs, if he were alive.

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    Tightwad.

         
  • Posted: 20 February 2012 03:19 PM #9

    No taxes for me :D

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    Posted: 20 February 2012 03:22 PM #10

    JDSoCal - 20 February 2012 06:16 PM

    Bottom 50% <$32,396 2.25%

    Wonder how accurate is their computation.  As the nation with a large middle-income group, one would expect the big bulk of the tax to be paid by the median i.e. expect to see top 50% paid about 55%-60% and bottom 50% paid 40%-45%.  The statistics is more consistent with nations like China where most folks are still poor so bottom 50% won’t be taxed much.

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  • Posted: 20 February 2012 03:37 PM #11

    http://www.ctj.org/pdf/taxday2011.pdf

         
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    Posted: 20 February 2012 04:02 PM #12

    seba - 20 February 2012 07:37 PM

    http://www.ctj.org/pdf/taxday2011.pdf

    Any organization with the word “justice” in its name is immediately suspect, since “justice” typically is a euphemism for theft/redistribution. “Progressive” does not = fair. It = unfair.

    And this canard that since poor people pay FICA, that somehow evens things out. Nonsense! FICA is a 7.65% tax above and beyond income tax, typically, 34% for the highest earners. If I go to the grocery store, and only pay for 5 of my 15 items, and expect the guy behind me to pay for the other 10, I don’t get to say, “but but, I pay for my groceries!”

    Rich people pay FICA too, and it’s only the first $102K earned, because by design, The lefties who created didn’t want it to be considered yet another welfare program. But to listen to lefties whine about it now, I think that’s exactly what they want it to become - more redistribution.

    SS and Medicare aren’t even self-sustainable anymore - they now take money from the general funds. And this doesn’t even account for the redistribution of Welfare, Medicaid, food stamps, the Earned Income Tax Credit, pubic housing, and all the other government poverty subsidies. So be sure to subtract all of those checks that poor people get from any supposed net payments into the Treasury, K?

    And I live in CA, and one reason it is in disastrous financial shape is because of its “progressive” (i.e., thieving) tax rates. When the rich do poorly (or leave the state, as they have in droves), things collapse. 11% top tax rate in CA, and it applies to cap gains, the thieves.

    The only “fair” tax rate is every American has the exact same tax bill. Otherwise, give me more votes in the elections for the more taxes I pay.

    I would like to electrocute everyone who uses the word “fair” in connection with income tax policies.

    —William F. Buckley, Jr.

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    Posted: 20 February 2012 04:09 PM #13

    awcabot - 20 February 2012 07:07 PM

    I wonder, if it could be done, where you two would be on this list compared to someone like Mitt Romney, Warren Buffet, or even Steve Jobs, if he were alive.

    I guess that depends. Do you count Romney’s and Buffett’s income as triple taxation? First at the corporate level, then at the investor’s level, then at the fund manager’s fee level? Romney’s and Buffett’s supposed 15% tax rate has already been taxed twice, at least in their capacity as fund managers.

    As for Jobs, I think it’s fair to say with all the corporate taxes his shares in Disney and Apple paid, plus all the sales taxes, not to mention the economic benefits of all the Apple employees and their taxes, that he has paid his net debt to society, even before his wife and kids ultimately pay their AAPL and DIS cap gains and inheritance taxes.

    And again, these three guys get but one vote.

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    Posted: 20 February 2012 04:17 PM #14

    iPad’s terrible, wonderful mod powers at work!  Topic splitting!

    Last thought for nate’s original question before we continue the tax discussion:  Uh…you’re getting very good rates for a typical margin account, nate.  Ameritrade looks to be at about 9% (lowest margin balance).  Etrade is about 8.5%.  Schwab is at 8.5%.  Scottrade’s at 7.75%, quite a bit better in my quick informal comparison.

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    Posted: 20 February 2012 04:25 PM #15

    Mav - 20 February 2012 08:17 PM

    iPad’s terrible, wonderful mod powers at work!  Topic splitting!

    Last thought for nate’s original question before we continue the tax discussion:  Uh…you’re getting very good rates for a typical margin account, nate.  Ameritrade looks to be at about 9% (lowest margin balance).  Etrade is about 8.5%.  Schwab is at 8.5%.  Scottrade’s at 7.75%, quite a bit better in my quick informal comparison.

    For a balance of $0-$49,999, OptionsHouse has a rate of 4%, and TradeMonster has a rate of 3.5%.