Biggest crash in stock market history?

Dave Taylor

Rex kwan Do
the situation dictates monetary policy, not the other way around.

unpaid rent will become a deduction going forward making future income untaxed
people that own apartment buildings are not living paycheck-to-paycheck. they'll weather the storm just fine.

commercial real estate may be screwed as the remote workforce is getting productivity dialed-in.
So are you saying all apartment building owners own them outright with no loans needing to be paid back?
 

Patrick

Overthinking the draft from the basement already
Staff member
So are you saying all apartment building owners own them outright with no loans needing to be paid back?

no - i'm saying they can weather a short term reduction in income -

consider an owner that specializes in section 8 housing - the checks come in, without concern for the climate.
or maybe some hybrid. their income didn't go to zero.
 

rick81721

Lothar
of course it will -

it is 10% above 1 year ago
it is >50% above its 1 year low

by 2027 it is on fire again because all college debt will be forgiven.
and the law suit that claimed there was no warning label not to spend more than you can afford will be settled.
advertising will be outlawed. we will all be issued uniforms.
the currency of the day will be hard to find sneakers (air jordans being the preferred base of trade)
everyone will drive a grey tesla.

i moved 10% of taxable funds into tax free - pulling the dividend each month while in a higher tax bracket.
pay for new bike. which i will pay taWalmart.
Eh we aren't changing anything. Will continue to follow our CFP's advice and keep our IRAs in a mix of stocks and bonds. Did just fine during the covid "crash".
 

Dave Taylor

Rex kwan Do
What's the catalyst that drives the market down in April/May? Serious question. The market has continuously been shrugging off bad news and climbing higher, what is expected to happen in the spring to put a stop to that?
I think bonds collapsing may lead the way. I also think that the current market wants to get the bad out of the way faster than it ever has and we are going to end up paying back debt swiftly. I think many will be caught off guard. I am still a believer in “if it sounds too good to be true then it probably is”.
 

Dave Taylor

Rex kwan Do
Eh we aren't changing anything. Will continue to follow our CFP's advice and keep our IRAs in a mix of stocks and bonds. Did just fine during the covid "crash".
Right, only because of government bailouts. Stimulus is what stopped the covid crash. My gut says that at one point the stimulus will stop working.
 

djm

Active Member
After my financial planner failed to make any money for me I fired him and now I've gotten more involved in managing my portfolio. I need to take advantage of my new roth IRA but I have a question about cost basis of stock in my existing non-roth account.

Lets say I bought 100 shares of stock X at $1/share and now it's at $4/share so that's $400 in my non-roth account. $300 profit. I realize now that I want to hold this longer but ideally in my Roth for tax purposes on future gains. So I sell all 100 shares. Now in my ROTH account I take $400 and purchase 100 shares of stock X but at $4/share.

what is the downside of doing this? I'm not taking my profit which some might say is kinda dumb.
 

Bike N Gear

Shop: Bike N Gear
Shop Keep
After my financial planner failed to make any money for me I fired him and now I've gotten more involved in managing my portfolio. I need to take advantage of my new roth IRA but I have a question about cost basis of stock in my existing non-roth account.

Lets say I bought 100 shares of stock X at $1/share and now it's at $4/share so that's $400 in my non-roth account. $300 profit. I realize now that I want to hold this longer but ideally in my Roth for tax purposes on future gains. So I sell all 100 shares. Now in my ROTH account I take $400 and purchase 100 shares of stock X but at $4/share.

what is the downside of doing this? I'm not taking my profit which some might say is kinda dumb.
You’ll owe taxes on the profit when you make that sale. Now you can take what’s left and deposit in Roth but you now have a new higher basis and the government just took a third of your profit.
 

djm

Active Member
You’ll owe taxes on the profit when you make that sale. Now you can take what’s left and deposit in Roth but you now have a new higher basis and the government just took a third of your profit.
Not really withdrawing any profit though. I'm just closing one position in acct A and opening similar position in acct B. Both accounts have their own funds.
 

JerseyPete

Well-Known Member
You’ll owe taxes on the profit when you make that sale. Now you can take what’s left and deposit in Roth but you now have a new higher basis and the government just took a third of your profit.
Are you saying that trades in an IRA rollover are taxable, even though no funds were withdrawn?
 

djm

Active Member
Hmm I suck at this.. I'm not really taking the money anywhere I'm just trying to duplicate my non-roth position in my roth account. Maybe I can simplify it by asking how disadvantageous it would be to have just one account (roth or plain IRA doesn't matter) and close a position at a profit only to come back and open the same position with the exact amount of cash but at a much higher entry share price.
 

rick81721

Lothar
Right, only because of government bailouts. Stimulus is what stopped the covid crash. My gut says that at one point the stimulus will stop working.

So what? The covid financial crisis will be over in months, not years. millions more will be back to full-time employment. I agree with Pat, there is a huge pent up demand to spend and especially to travel. I hope travel as I have been throwing fun money into airline and cruise line stocks - hoping to have enough in 3 years to buy a GT4 RS!

Sure there will be a recession, sooner rather than later with Biden's puppeteers in charge, but that too shall pass.
 

clarkenstein

JORBA Money Launderer
JORBA.ORG
Hmm I suck at this.. I'm not really taking the money anywhere I'm just trying to duplicate my non-roth position in my roth account. Maybe I can simplify it by asking how disadvantageous it would be to have just one account (roth or plain IRA doesn't matter) and close a position at a profit only to come back and open the same position with the exact amount of cash but at a much higher entry share price.
PM’ing you my number. This can be tricky territory.

*edit - what I think the best plan for this is a backdoor Roth. Totally legal and a great loophole to take advantage of. But everyone’s situation is unique in pulling one off.
 

Patrick

Overthinking the draft from the basement already
Staff member
Hmm I suck at this.. I'm not really taking the money anywhere I'm just trying to duplicate my non-roth position in my roth account. Maybe I can simplify it by asking how disadvantageous it would be to have just one account (roth or plain IRA doesn't matter) and close a position at a profit only to come back and open the same position with the exact amount of cash but at a much higher entry share price.

tell me about your non-roth account. is it a regular brokerage account?

this could also be called a wash trade, depending on timing and accounts.
 

clarkenstein

JORBA Money Launderer
JORBA.ORG
tell me about your non-roth account. is it a regular brokerage account?

this could also be called a wash trade, depending on timing and accounts.
Not in the tax world from trad to Roth. This really calls for that backdoor from trad to Roth. Most financial advisors don’t offer it up as an option because they usually don’t make a dime off of it, but I think it’s a good thing to do.

I know this thread is doom and gloom but I honestly think that at some point the Fed govt is going to look at 401ks as a cookie jar for tax revenue needs once most boomers have cashed in. That worries me for long-term 401k prospects.
 

Patrick

Overthinking the draft from the basement already
Staff member
Not in the tax world from trad to Roth. This really calls for that backdoor from trad to Roth. Most financial advisors don’t offer it up as an option because they usually don’t make a dime off of it, but I think it’s a good thing to do.

I know this thread is doom and gloom but I honestly think that at some point the Fed govt is going to look at 401ks as a cookie jar for tax revenue needs once most boomers have cashed in. That worries me for long-term 401k prospects.

i was assuming that the stock was in a regular brokerage account -
which is where i was thinking a wash might be applied.
otherwise a backdoor IRA is required to avoid the penalty (i think?).....

---

I'm not sure - IRAs/401ks are a staple of wealthy america - and the people that make the rules.
They usually don't stab themselves. Consider the ROTH IRA, it favors the wealthy, as they can afford the tax
on the initial earn, and max the contribution, creating a tax free stream in the future.
Sure everyone gets to participate, and should, but it is a lot easier for higher earners.
Consider the company match on regular 401k, it usually specifies something like 50% of the first 6% of salary.
well, what if 6% of salary is above the max contribution? max contrib is $20k, company match is $10k,
if you were doing well, making $100k per year, then 6% is $6k, and the match would be $3k. Even if you were a monster saver
and put away the same $20k as the executive.

They've made a couple moves this year on the honeypot front - a schedule to push the RMD out a couple years.
Sure, some people are working later, esp white collar, where the physical tolls aren't that great, and the life expectancy
is longer. But it does delay the tax revenue.

Also, the 5 year inheritors limit - this is a good thing. The taxes are due, the person that left the surplus would have rather used it.
It should have its own schedule tho, rather than the bracket of the inheritor. some people might pay 10% while others 33% on
found money.

I also think they should do away with deferred compensation plans. but that's just me.
 
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