I don’t know but I’ve done it. Think all interest used to be deductible then they dumped exemptions over the years but the interest for financial stuff stayed (like with mortgages)
If your stock is up 50 percent and you take out a loan at 50 percent loan to value, then the tax burden if you are forced to sell is going to be a helluva lot lower. If you get margin called because it means the stock has now traded down substantially.
I’m still not getting this part. Are you somehow able to deduct the loan amount against the gain? Is it counted as a deductible loss in some way?
Also I’m having a hard time understanding why you would be “forced to sell” in this scenario. If your stock goes up 50%, there is no need for a margin call. So why would one be forced to sell?
This is news to me. Does anyone deduct interest on auto loans? Did they ever?
No, I think you need to be set up in some structure so that the interest is a business expense. Disclaimer, I don’t make as much as LG. Not even in my imagination like Wil.
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Yes, I believe that all personal interest, including credit cards and auto loans, was deductible until the big 1986 tax reform.
I don’t think LG was writing off interest in 86, so I’m curious what he was talking about outside of mortgage and HELOC stuff.
Oh, sorry. Couldn’t pass up an opportunity to act smart about old tax rules.
I think he was just talking about having stock and, instead of selling it, taking out a margin loan with the stock collateralizing the loan. That margin interest is deductible for anyone, no complications required.
Yup, just posted this in a different thread. It’s completely indefensible.
More than 90% of the rooms would have no windows.
I think this answers Melkerson’s question. With the caveat I guess that you need have enough deductions to itemize, which I would assume anybody thinking about doing this easily would.
How is that legal? I thought there were laws regarding egress requirements which would mandate things like windows?
Are you a billionaire? Didn’t think so. Scoreboard. Chessmate.
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Sorry, the contract stated “no takesy backsies”
Is there any limit? It appears that it is only deductible up to the amount of your taxable investment income. If that is the case, what kind of investment income is being used to justify the deduction. Dividends? STCG?
Yeah this. It was for illiquid investments but essentially a margin loan. IDK I just fill in the checklist from my accountant everywhere and let them do their magic, but I know that was a deductible amount.
There used to be other investment related loopholes that have since been closed. Look up deemed investments, that was a fun one (essentially could invest pre-tax income and then ultimately get taxed at cap gains rates)
Anyone have words of advice on participating in an Employee Stock Purchase Plan (ESPP)?
Wife has the chance to buy up to 25k worth of shares annually at a 5% discount via payroll deduction with post-tax dollars. The shares allegedly go into a UBS account for the plan.
We max 401(k) and 403(b) contributions annually and both contribute the maximum to a backdoor Roth (rip?) each year.
Ticker symbol is PAYX (NASDAQ) if that matters.
Thoughts on this? We do have extra cash that needs to be deployed, but obviously we could chuck that more easily into our Fidelity taxable brokerage account and FSKAX or whatever.
My sense is that it is a decent deal (benefit looks to be about 1200$ if you max it based on current price), but I’m not aware of any gotchas here aside from “don’t put all of your eggs into your employer’s basket lol Enron” type of stuff.
How long do you have to hold shares after purchasing?
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She says there is no requirement to hold (aside from short term gains obv if less than a year or whatever and whatever commission UBS would charge on the sale). Shares are purchased quarterly at the closing stock price on the last trading day of the calendar quarter.
PAYX also pays a quarterly dividend (currently $0.66 per share), if that matters.