Great video. Will watch again. Age 60 on Obamacare so the Taxable account is a HUGE asset. Invested in CDs and growth etfs. Pay interest on CDs but 0 tax on capital gains on etfs. Great tool
now I have a brokerage account in addition to my 401k, ROTH IRA and HSA. I consider that brokerage an emergency fund and if (God willing) I don't need it, I will use it as a bridge to another bridge (401k ) that then can push the taking of the Social security to 70. I specifically wanted that brokerage account to get as high as i could cover expenses for a limited amount of years (calculating those expenses, of course)
I have had a brokerage account for over 40 years and have never taken $1 of capital gains. I do have some taxable qualified dividends that I reinvest as well as I harvest $3k of losses per year. It’s the last money I will ever touch after SS, IRA, 401k, HSA, and cash value life insurance, thus the plan is to leave it to my heirs with a step up in basis.
Wait wait,,, at 12:59 you show that she took out $56,859 out of brokerage. After standard deduction of $14m600 you have a leftover of $42,259. WOULDN'T THAT be taxed ??? Because according to CHAT GPT you should incur a tax of $4,800 on that remaining $42,000 . Is chat GPT wrong???
Not an expert, but my understanding is: Money taken out of a "regular" brokerage account is not income. The original money (the basis) is yours, but you do have to pay tax on any capital gains at the appropriate capital gains rate. The rest (the basis) is money that was already yours and was taxed before it went into the brokerage (same as money taxed before it goes into a savings account or CD is not taxed when you take it out.)
yes, chat GPT is wrong. (And that is the general assumption you should make if you ask it for anything more than a general idea.) The 56,849 was long-term capital gain. There was no ordinary income. The 42,259 left after the std deduction is still lt cg. That amount falls entirely in the 0% tax bracket because it is lt cg and not ordinary income.
Yes, ChatGPT can be wrong. Here's a video on how ChatGPT performs with retirement planning questions: th-cam.com/video/2z8WX0Fg054/w-d-xo.html The (potentially) taxable event is the transaction to sell. But if you happen to qualify for 0% long-term capital gains (LTCG) rates, as is the case in the first example, there may not be any tax due. In that case, the sales proceeds are free and clear, but any subsequent earnings on that money could generate taxable income. Sylvan_dB covers the reasoning, and you can research tax gain harvesting for more details.
Great video. Will watch again. Age 60 on Obamacare so the Taxable account is a HUGE asset. Invested in CDs and growth etfs. Pay interest on CDs but 0 tax on capital gains on etfs. Great tool
Keep cds in 401k, shares and etfs in taxable
EVERYTHING you said is how I handle my Roth, rollover and taxable accounts. Thank you for accrediting my methods. Look forward to hearing more.
now I have a brokerage account in addition to my 401k, ROTH IRA and HSA. I consider that brokerage an emergency fund and if (God willing) I don't need it, I will use it as a bridge to another bridge (401k ) that then can push the taking of the Social security to 70. I specifically wanted that brokerage account to get as high as i could cover expenses for a limited amount of years (calculating those expenses, of course)
You provided answers to many of the questions I have unanswered about taxable brokerage account. Thank you.
Thank you for the informative video!
love love love your videos. REALLY!
Excellent explanation!
Good stuff, thank you!
I have had a brokerage account for over 40 years and have never taken $1 of capital gains. I do have some taxable qualified dividends that I reinvest as well as I harvest $3k of losses per year. It’s the last money I will ever touch after SS, IRA, 401k, HSA, and cash value life insurance, thus the plan is to leave it to my heirs with a step up in basis.
T bills are the best especially those in high tax states like California
Wait wait,,, at 12:59 you show that she took out $56,859 out of brokerage. After standard deduction of $14m600 you have a leftover of $42,259. WOULDN'T THAT be taxed ??? Because according to CHAT GPT you should incur a tax of $4,800 on that remaining $42,000 . Is chat GPT wrong???
Not an expert, but my understanding is: Money taken out of a "regular" brokerage account is not income. The original money (the basis) is yours, but you do have to pay tax on any capital gains at the appropriate capital gains rate. The rest (the basis) is money that was already yours and was taxed before it went into the brokerage (same as money taxed before it goes into a savings account or CD is not taxed when you take it out.)
yes, chat GPT is wrong. (And that is the general assumption you should make if you ask it for anything more than a general idea.)
The 56,849 was long-term capital gain. There was no ordinary income. The 42,259 left after the std deduction is still lt cg. That amount falls entirely in the 0% tax bracket because it is lt cg and not ordinary income.
Yes, ChatGPT can be wrong. Here's a video on how ChatGPT performs with retirement planning questions: th-cam.com/video/2z8WX0Fg054/w-d-xo.html
The (potentially) taxable event is the transaction to sell. But if you happen to qualify for 0% long-term capital gains (LTCG) rates, as is the case in the first example, there may not be any tax due. In that case, the sales proceeds are free and clear, but any subsequent earnings on that money could generate taxable income. Sylvan_dB covers the reasoning, and you can research tax gain harvesting for more details.
@@JustinOnRetirement you are the best
@@momhouser that is what I though....