Otsog

That is really shitty that there aren't better options for early death withdrawals/transfers. Definitely a consideration to take into account. You simply haven't been taxed in the first place in your ROTH IRA gains. I've explained the tax paid at conversion was recapture on a deduction you already took. The risk of death or divorce is a huge issue to take into consideration that should be discussed but we are mainly talking about your mis-understanding of the structure of the ROTH IRA. I guess you are conceding by changing the subject?

You claimed it was a 100% tax credit as if they were 100% a result of the account and that tax credits were solely due to the account as if not partially available otherwise -- such as the 100% step-up in basis. I pointed out that you can get a full tax credit on unrealized gains when you die. You could also have been paying just 15% capital gains tax and 15% dividends tax over the past 10 years. Vs the IRA which gets no such tax relieve -- it's all taxed in the end at the regular income tax rate. Which may be 35% in the future or it may very well be 70%. So by no way is the IRA the 100% free-ride that you describe. If the future income tax rate is indeed 70%, then the IRA account holders might just be losing big time when instead they could be paying just 15% or 20% tax on capital gains and dividends. And paying full income tax on unrealized capital gains when you die, versus getting the automatic step-up in basis. You totally exaggerated the impact of these accounts. They may or may not be better, depending on future circumstances of unrealized gains when you die, dividend and capital gains taxes along the way, and the eventual income tax rate when the funds are eventually taxed. My claim was VERY SPECIFIC to SouthernYankee's post. Which was about ROTH IRA's. I stated: This is a fact. I did not state anything about unrealized gains. What you are doing is a) pointing out the obvious b) straw manning me. Stop it. I fully aware of the effect marginal tax rates play on deductible and non-deductible savings account. It can work in your favour or against it. You very conveniently keep glossing over the point though that in either case you are still better off than having neither option available to you if you have investment income.

No, do the math. It all depends on marginal tax rates (as long as there are no penalties). If the rate is the same at deposit and withdrawal, non-deductible and deductible savings structures are the same. If the rate at deposit is higher than withdrawal, deductible savings structures are superior. If the rate at deposit is lower than withdrawal, non-deductible savings structures are superior.

I see what you are saying, however you are making yet another mistake that makes you nothing close to 100% correct. You are assuming there was income or realized gains. There may not be either. Thus you can't claim 100% of anything. A person gets tax-deferral for holding Berkshire Hathaway stock and the tax is never due upon death. Not one penny of tax due. No dividends taxed, no capital gains tax. Nothing! That is not a contradiction of what I said at all. I'm not assuming there was income or realized gains. I'm saying what happens to it if there is. I put it in very simple terms. At this point you are being intentionally obtuse. IRA's, whether traditional or ROTH offer huge tax breaks on investment income. That is what I stated, neither you or SouthernYankee have provided a shred of evidence to counter that. Which you really can't because it is a factual point. Holding BRK for 40 years is an absolutely spectacular way to accumulate wealth while having 0 investment income. If you prefer to wait for only companies that resemble the exact characteristics of BRK where you have complete and unwavering faith in the management then yes, IRA's are unnecessary. Best of luck in that endeavor.

The ROTH IRA doesn't care what your money went through before it ended up in it. The second a dollar is inside the ROTH IRA all income earned on that dollar is 100% tax free as long as you follow the rules. That is exactly what I said and it is 100% correct. Your situation is a conversion from deductible IRA to a non-deductible IRA. So the 35% is a recapture on a deduction you already took. You are acting like that $100,000 is all yours free and clear except that it has major strings attached from that massive tax deduction you already took.

I'm only 40 -- you can't withdraw until 59 1/2 or you get hit with penalties. They penalize me for taking money out of the tax shelter. I mean, talk about stupidity. If I'm really costing the taxpayers money then let me pull it all out penalty free instead of trying to encourage me not to. Ah yes. The Canadian version doesn't have the age restrictions on withdrawals so that wouldn't be an option for you. Still, there is no way people in excess of $3mill and under 59 1/2 wouldn't be accounted for in the transition. There would be a grace period for withdrawals (or if the lobbyists are good enough a grandfathering of accounts already in excess that only stops future contributions and allows the current funds to stay). I think there is greater risk of Obama trying to overturn the 22nd Amendment than trying to pull the rug out from under you (while he is already stealing your lollipop).

The US government taxes incomes. The ROTH IRA provides a 100% tax credit to all income earned within the account if withdrawn after a certain age. It is a MASSIVE tax break. If there is no tax break why are you using a ROTH IRA in the first place?

It would be absolutely ludicrous if they tried to tax the draws made to come inline if this became policy. Even if they were dumb enough to try for a grab like that why couldn't you just make the draws before it went into effect? There is no way they wouldn't allow a grace period to come inline with new rules.

See, there is where you made your mistake ;)

Yes you are. The part where you get tax breaks for setting it aside in a certain fund approved by the government.

I understand your point. It is a faulty analogy. You have provided no argument as to why the entitlement from a partnership dissolution between private citizens should apply to a publicly funded handout. The '$200k argument' isn't an argument. It is a flat out statement by the government saying the IRA programs intention is to provide pension funding assistance to those who need it, not to everyone with a pulse. [jk] Is it OWS round 2 in this thread? Why are all you hippies feeling so entitled to a free ride from the government? [/jk]

The argument is usually that the wife deserves to be able to maintain her standard of living "to which she has become accustomed". Well, billionaires and millionaires -- aren't they entitled to retirement spending "to which they have become accustomed"? Hence, the $200k argument is suspect. No, they aren't entitled to anything. Divorce is the dissolution of a partnership agreement between two private individuals. IRAs are a government handout with public money. Divorce settlement analogy just doesn't apply at all. It was sloppy policy in the first place to leave IRAs uncapped. That is so obvious, this really can't be a shock to anyone. Capping was an inevitability. Note to Canadians: TFSA's and RRSP's will 100% guaranteed have caps in the future.

If you cap divorce settlements at $3m where does any money exceeding $6m go? The government?

So, nothing... other than platitudes ::) Kind of funny seeing a huge government hand-out program getting curtailed being attacked for being 'socialist'.

Does anyone have any actual merit based objections? This seems like completely reasonable policy. I'd like to see something like this done on TFSA's and RRSP's in Canada. When TFSA's were announced I instantly thought of how ridiculously expensive they will be in 20 years.

I think the more complex the investment, the smarter you have to be. In my case if it's not simple it likely is a bad investment. In the case of Michael Burry he took a simple thesis (housing collapse) and used his first rate mind to delve into the complexity of ABS prospectuses and convincing the IBs to create CDS's just for him. I am tentative to say this on a value board but I think there are ways that algorithmic technical trading can work. It's just that the complexity of it is so immense that I wouldn't dream of attempting it without something like an applied mathematics PhD from MIT.

Who do they have DJing?

I had thought I read somewhere that urban agriculture saved Cuba after the Soviet collapse. http://en.wikipedia.org/wiki/Organop%C3%B3nicos Reading that however it seems that urban agriculture was more of a last resort measure because Cuba couldn't get the proper oil, fertilizers and pesticides to do enough large scale farming. In the case of the OP unfortunately it does seem to be a mis-allocation of capital as well looking solely at the resources required for the production. However, that talk was inspiring as hell and that guy is a total badass. The positive externalities of building community, volunteering, neigbourhood beautification and giving kids in a socio-economic hellhole something positive to do I think more than makes up for the inefficiencies of the farming.

If you are in Victoria you can borrow my copy. Other than that I think you'd just have to get really lucky at a used book store. I think new copies are only distributed through the books website.

No, you are using the $100 cost basis twice in your calculations there. You sold x number of shares in company A shares for $50 You traded y number of shares in company A for y*0.5 shares in company B x + y = 100 Gain or loss on the cash portion: Proceeds are $50 Cost basis is x*$1 50- (x*1) = gain or loss Cost basis of shares in company B: y*$1 Total cost basis: (x*$1) + (y*$1) = $100

Congrats all :D Awesome site, just wish I found it sooner

Okay, taking the unweighted average of share price change was bugging the crap out of me when the companies varied from 3 million to 4.5 billion market cap so I weighted it based on their latest closing market cap. Drumroll please................................ 20.07% weighted average return :P

Whoops, ya. Thanks for the correction :D

If he is counting percentages of all hands dealt then the people winning the most hands are aggressive fish. They win a lot of small pots with bluffing but the table adapts extremely quickly and they go broke once someone gets a good hand. If he is only counting percentages of hands where money was voluntarily put in the pot (VPIP) then the people winning the most hands are tight or passive fish. These play styles are pretty well known losers. You could play tight, abc poker at the lower stakes and be a winner, but it's basically a waste of time. I don't think the analogy to trading/investing really applies. In poker you can't sit back and take 1,000 pitches until you get a big hand. A) you bleed to death from blinds B) everyone with half a brain knows you have a hand and you won't get optimal returns from your monsters. You have to play at least a tight aggressive (TAG) style of play to obfuscate your hand. It's been a while but I think this is basically a minimum of 15% VPIP (at a full ring - 9 person table. The less people the higher the VPIP required). I only dabbled in studying/playing online. Winner at 10nl, 25nl, 50nl before I stopped. I'm sure there are posters here with far more experience than me if they want to correct anything. N.b. all styles of play are table dependent.

Price went down, value went up ???