Stock Market is the bottom in?

[Telemark]

Once my mom decides she is ready to move out of my place in Commerce, I will sell it, then either pay off the remainder of my primary residence (owe around $60K now), or sell it and move to the farm for a few years. Then sell the farm and retire. Will most likely wind up in the mountains or somewhere closer to the salt water and reinvest the remainder to live off of.

If you have some big land transactions coming up, I really recommend looking into the tax implications. Our laws are pretty good about providing loopholes.

 

[Telemark]

Gonna drop this here. 5 or 6 years ago.....we moved our residence to AZ.....which has community property laws. <-- THIS is a BIG DEAL. There are 9 such states....and this could be important to you, or your loved ones. We have been retired for over 20 years when my wife passed in Dec. A sad event for certain.

We had sold our home in MN this year....and MN is taxing me on the gain of some pretty big money as that home had appreciated in value big time.. I think it will cost me $500 k +/- in capitol gains tax. It's gonna bite....but we knew that and decided to do so anyway.

We also had accumulated over 4 million in capitol gains on our stock holdings over that time. Our planner was having allot of difficulty not incurring taxes on our trades these days as we also needed some income. Because we now live in a community property state.....those gains will go un-taxed to me and my basis will be "stepped up" to current values as of the date of my wife's death in December. Her gains....AND MINE!. So I just avoided over a million dollars in capital gains tax....by living in AZ instead of MN. Like a fresh start on our stock investments. Poof....all gains are erased....tax free. Legal....legit.....gone.

Not saying this to flaunt or brag....just wanting to let you know there are often better tax situations available, if you look for them. I wonder how much tax I have already paid to get to the values we attained in our holdings?.....LOTS! ...I expect. Anyway.......

If I owned allot of land in MN with a large amount of capitol gains.....I may consider selling my MN land.....and investing those dollars via a 1031 exchange......to a state with community property laws. Thus at the passing of one of the owners....the stepped up basis would be attained on that land. No capitol gains taxes....you or your spouce could sell the land without incurring that tax after the death of your partner. (same as for stocks or other investments).

Of course....you need to LIVE there for six months of each year. Not hard to do if you chose a good destination. We like AZ.

I do not think many people are aware of this....and the potential huge implications to you....or your spouce. Think of all those family farms that have been held for 50 years or more.....with a basis of pennies on the dollar! Many do not sell because of taxes that would be incurred. While nobody wants to die to save taxes....the community property law allows a means to avoid allot of tax on property or stocks that have appreciated in value. Easy changes to make.....just by living in another state.

I just saved my family over 1 million + + in taxes when I pass along.....as well as further savings at my demise. Seems kinda cold to write this....but it is what it is....and I only hope my experience can help someone else. Death and taxes are quite real. Some states are superior to others. Minnesota ain't one of 'em. Minnesota and some other states like California would like to charge you an "exit tax"....which is illegal....or they would do it.) Just saying. (kinda hate writing this...I just want to help others find some light at the end of the tunnel.)

You make some really good points. And if you move to avoid a million bucks in taxes, you're not stuck at your new residence. You can still move around freely, and you can move somewhere else once you've fulfilled your legal residence obligation.

And no one goes back and judges your motives. The law is the law, and that is one thing I love about America.

 

[Tangler]

Instead of looking for the needles in the haystack, just buy the haystack. Buy VTI (VTSAX) Vanguard total stock market index & VXUS (VG total international stock market index) and you don’t need to find winning stocks or outsmart the professionals.
VTI beats 90% of actively managed funds, especially after considering fees and taxes.
Just my advice. Work, save, invest each month in VTI & VXUS.
Don’t try to predict (time) the market & don’t try to pick individual stocks.
Book: A Simple Path to Wealth, by JL Collins

 

[Telemark]

Instead of looking for the needles in the haystack, just buy the haystack.

Unless you have a metal detector.

 

[bigboreblr]

Instead of looking for the needles in the haystack, just buy the haystack. Buy VTI (VTSAX) Vanguard total stock market index & VXUS (VG total international stock market index) and you don’t need to find winning stocks or outsmart the professionals.
VTI beats 90% of actively managed funds, especially after considering fees and taxes.
Just my advice. Work, save, invest each month in VTI & VXUS.
Don’t try to predict (time) the market & don’t try to pick individual stocks.
Book: A Simple Path to Wealth, by JL Collins

Kind of liking the ETF's. You don't make as much, but way more likely not to loose as much either. Also, its one less thing to be starring at our phones at every 5 minutes.

Anything you might consider a solid rock like coca-cola or Disney is going up. Haven't peeked at other oil stocks but Chevron is up.

Got to think what AI / internet rocks might be worth sitting on for awhile. Microsoft might be one.

 

[bigboreblr]

Foggy,

I'm no tax guru at all. I thought capital gains on your primary residence isn't counted. Though, do you have to be homeless until your house sells to qualify............

 

[Foggy47]

Foggy,

I'm no tax guru at all. I thought capital gains on your primary residence isn't counted. Though, do you have to be homeless until your house sells to qualify............

We are resents of AZ.....and the lake home sale was in MN, not our primary residence. Therefore the home sale in MN was taxable.

 

[hunts_with_stick]

You make some really good points. And if you move to avoid a million bucks in taxes, you're not stuck at your new residence. You can still move around freely, and you can move somewhere else once you've fulfilled your legal residence obligation.

And no one goes back and judges your motives. The law is the law, and that is one thing I love about America.

So let me ask this, if I live in a community property state, but also have a home (and then later decide to sell, say after 6 mos of living in the community property state)in a state that is not a community property state, I don’t have to pay taxes on the gains of that house when I sell?

 

[Telemark]

So let me ask this, if I live in a community property state, but also have a home (and then later decide to sell, say after 6 mos of living in the community property state)in a state that is not a community property state, I don’t have to pay taxes on the gains of that house when I sell?

I'm not sure what you mean by this.

 

[Bill]

So let me ask this, if I live in a community property state, but also have a home (and then later decide to sell, say after 6 mos of living in the community property state)in a state that is not a community property state, I don’t have to pay taxes on the gains of that house when I sell?

No you would have to pay taxes on the sale to the state the house was sold in as it’s not your primary residence. But I’m not an accountant.

 

[Bill]

Gonna drop this here. 5 or 6 years ago.....we moved our residence to AZ.....which has community property laws. <-- THIS is a BIG DEAL. There are 9 such states....and this could be important to you, or your loved ones. We have been retired for over 20 years when my wife passed in Dec. A sad event for certain.

We had sold our home in MN this year....and MN is taxing me on the gain of some pretty big money as that home had appreciated in value big time.. I think it will cost me $500 k +/- in capitol gains tax. It's gonna bite....but we knew that and decided to do so anyway.

We also had accumulated over 4 million in capitol gains on our stock holdings over that time. Our planner was having allot of difficulty not incurring taxes on our trades these days as we also needed some income. Because we now live in a community property state.....those gains will go un-taxed to me and my basis will be "stepped up" to current values as of the date of my wife's death in December. Her gains....AND MINE!. So I just avoided over a million dollars in capital gains tax....by living in AZ instead of MN. Like a fresh start on our stock investments. Poof....all gains are erased....tax free. Legal....legit.....gone.

Not saying this to flaunt or brag....just wanting to let you know there are often better tax situations available, if you look for them. I wonder how much tax I have already paid to get to the values we attained in our holdings?.....LOTS! ...I expect. Anyway.......

If I owned allot of land in MN with a large amount of capitol gains.....I may consider selling my MN land.....and investing those dollars via a 1031 exchange......to a state with community property laws. Thus at the passing of one of the owners....the stepped up basis would be attained on that land. No capitol gains taxes....you or your spouce could sell the land without incurring that tax after the death of your partner. (same as for stocks or other investments).

Of course....you need to LIVE there for six months of each year. Not hard to do if you chose a good destination. We like AZ.

I do not think many people are aware of this....and the potential huge implications to you....or your spouce. Think of all those family farms that have been held for 50 years or more.....with a basis of pennies on the dollar! Many do not sell because of taxes that would be incurred. While nobody wants to die to save taxes....the community property law allows a means to avoid allot of tax on property or stocks that have appreciated in value. Easy changes to make.....just by living in another state.

I just saved my family over 1 million + + in taxes when I pass along.....as well as further savings at my demise. Seems kinda cold to write this....but it is what it is....and I only hope my experience can help someone else. Death and taxes are quite real. Some states are superior to others. Minnesota ain't one of 'em. Minnesota and some other states like California would like to charge you an "exit tax"....which is illegal....or they would do it.) Just saying. (kinda hate writing this...I just want to help others find some light at the end of the tunnel.)

Good info. I wonder if you put a grandchild’s or child’s name on the investment account if the same would hold true upon your death.

I need to look into this community property thing.

 

[Foggy47]

A primer:

AI Overview



In community property states, when one spouse passes away, the entire jointly owned property receives a full "stepped-up" basis to its fair market value, rather than just the deceased spouse's half
. This eliminates capital gains tax on the appreciation of both halves, allowing the surviving spouse to sell inherited assets with minimal tax liability.
Key Aspects of Community Property and Stepped-Up Basis

• The Double Step-Up: In nine community property states (AZ, CA, ID, LA, NV, NM, TX, WA, WI), both halves of community property receive a new, higher basis (stepped-up) to the fair market value at the date of the first spouse's death.
• Tax Savings Example: If a couple bought a house for $100,000 and it is worth $500,000
  at the time of the first death, the new cost basis becomes $500,000. If the survivor sells for $500,000, there is no capital gain tax, saving tax on the $400,000 appreciation.
• Compared to Non-Community Property States: In common law states, typically only the deceased spouse's half of jointly held property receives a step-up in basis.
• Applicable Assets: This rule applies to most property acquired during the marriage, including real estate, stocks, and business interests.
• Community Property with Right of Survivorship (CPWROS): This specific designation allows property to pass directly to the surviving spouse without probate while retaining the full, double step-up in basis.

This legal arrangement is a significant estate planning tool for maximizing tax advantages on appreciated assets for couples in community property states.

 

[Foggy47]

I'd like Bwoods to address this:

If you had a farm in MN (owned jointly with your spouce) with a cost basis of $200 / acre.....and the land was now worth $12,000 / acre......and you sold it and did a 1031 exchange......for good land in potato country in Idaho. No tax right? (Assuming Idaho was now your home state).

Now upon the death of a spouce that property would transfer to the survivor at the new basis of $xxxxxx (let's use $10,000 / acre. Now you sell half and live off that sale.

then at some point the survivor passes on....and it transfers to his heirs at the new stepped up basis. No tax incurred.......right?

It would seem to me that there should be a mass-exodus from common law states to community property states.....if you own land that has been held for a long time. Or....am I way off base here?

 

[bwoods11]

I'd like Bwoods to address this:

If you had a farm in MN (owned jointly with your spouce) with a cost basis of $200 / acre.....and the land was now worth $12,000 / acre......and you sold it and did a 1031 exchange......for good land in potato country in Idaho. No tax right? (Assuming Idaho was now your home state).

Now upon the death of a spouce that property would transfer to the survivor at the new basis of $xxxxxx (let's use $10,000 / acre. Now you sell half and live off that sale.

then at some point the survivor passes on....and it transfers to his heirs at the new stepped up basis. No tax incurred.......right?

It would seem to me that there should be a mass-exodus from common law states to community property states.....if you own land that has been held for a long time. Or....am I way off base here?

That’s above my head a bit… seems like an interesting scenario. The 1031 exchange I get, the community property state , not as familiar with ?

 

[ruskbucks]

Interesting. I wonder if I could pay for an Asia trip with a pocket full of silver and a stopover in Shanghai. That's my old

Hey, man. What are your thoughts on silver? I'm really considering buying some AGQ before the market closes today, but I don't understand the silver market right now. Why are you still bullish? Do you think it will climb back to its previous highs?

Mining companies haven't been able to meet the demand for silver once in the last five years. Silver is the best conductor of electricity. All these data centers are using alot of silver. Im currently working on the biggest AI center in the world. They just got approved to go with 15 more in my area. Rumor has it Samsung just developed a car battery that can charge in 9 minutes go 800 miles, each of these are using 2lbs of silver. Throughout history silver has been valued at about 10 to 1 to gold. It's way off undervalued right now if you ask me. My dad was a coin collector and bought quite a bit of silver. I found it interesting and have kept adding to his collection. Im going to hold on mine, I think this is the pullback everyone was talking about. I think it will start climbing up again. I think this is the dip. I could be wrong, who knows. I just bought some more silver eagles at $100 and ounce a few weeks before it crashed into the low $80s.

 

[Bill]

That’s above my head a bit… seems like an interesting scenario. The 1031 exchange I get, the community property state , not as familiar with ?

If it’s farm land isn’t it already stepped up to market value upon death? Thought that was the governments way of not letting the kids loose the family farm.

Probably doesn’t count on state taxes.

 

[Foggy47]

If it’s farm land isn’t it already stepped up to market value upon death? Thought that was the governments way of not letting the kids loose the family farm.

Probably doesn’t count on state taxes.

yes.....but the owner cannot access the funds without taxes. In the community property state.....the surviving spouce could sell some and avoid taxes. Maybe buy something else, etc. Liquidity.

 

[hunts_with_stick]

Mining companies haven't been able to meet the demand for silver once in the last five years. Silver is the best conductor of electricity. All these data centers are using alot of silver. Im currently working on the biggest AI center in the world. They just got approved to go with 15 more in my area. Rumor has it Samsung just developed a car battery that can charge in 9 minutes go 800 miles, each of these are using 2lbs of silver. Throughout history silver has been valued at about 10 to 1 to gold. It's way off undervalued right now if you ask me. My dad was a coin collector and bought quite a bit of silver. I found it interesting and have kept adding to his collection. Im going to hold on mine, I think this is the pullback everyone was talking about. I think it will start climbing up again. I think this is the dip. I could be wrong, who knows. I just bought some more silver eagles at $100 and ounce a few weeks before it crashed into the low $80s.

Very interesting. Ty

 

[hunts_with_stick]

When is the best time to get/ hire someone to help figure out this tax stuff as well as inheritance thing? My parents have been slowing passing on money as Xmas gifts to each of the kids. My in-laws however might die with a lot of money to their name. How do you talk to parents/ in-laws about that sort of thing

 

[Telemark]

Mining companies haven't been able to meet the demand for silver once in the last five

Do you suspect they are hoarding some as prices go up? I get the feeling they're not being totally honest. If I owned a silver mining company, and prices were skyrocketing, I'd be tempted to warehouse some of it and sell it off slowly when prices plateau.