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a4f2a82349603cdb5b5309a7e2a56484
|
Does this sound like a great idea regarding being a landlord and starting a real estate empire?
|
[
{
"docid": "ec9961d911a037f952f77576264d16a0",
"text": "The idea you present is not uncommon, many have tried it before. It would be a great step to find landlords in your area and talk to them about lessons learned. It might cost you a lunch or cup of coffee but it could be the best investment you make. rent it out for a small profit (hopefully make around 3 - 5k a year in profit) Given the median price of a home is ~220K, and you are investing 44K, you are looking to make between a 6 and 11% profit. I would not classify this as small in the current interest rate environment. One aspect you are overlooking is risk. What happens if a furnace breaks, or someone does not pay their rent? While some may advocate borrowing money to buy rental real estate all reasonable advisers advocate having sufficient reserves to cover emergencies. Keep in mind that 33% of homes in the US do not have a mortgage and some investment experts advocate only buying rentals with cash. Currently owning rental property is a really good deal for the owners for a variety of reasons. Markets are cyclical and I bet things will not be as attractive in 10 years or so. Keep in mind you are borrowing ~220K or whatever you intend to pay. You are on the hook for that. A bank may not lend you the money, and even if they do a couple of false steps could leave you in a deep hole. That should at least give you pause. All that being said, I really like your gumption. I like your desire and perhaps you should set a goal of owning your first rental property for 5 years from now. In the mean time study and become educated in the business. Perhaps get your real estate license. Perhaps go to work for a property management company to learn the ins and outs of their business. I would do this even if I had a better paying full time job.",
"title": ""
},
{
"docid": "c2a5a0971e352bc083b87a6b8757baa0",
"text": "A lot of people do this. For example, in my area nice townhouses go for about $400K, so if you have $80,000 you can buy one and rent it. Here are the typical numbers: So you would make $350 per month or $4,200 per year on $80,000 in capital or about 5% profit. What can go wrong: (1) The property does not rent and sits vacant. You must come up with $2100 in mortgage payments, taxes, and insurance every month without fail or default. (2) Unexpected expenses. A new furnaces costs over $5,000. A new roof costs $7,000. A new appliance costs $600 to $2000 depending on how upscale your property is. I just had a toilet fixed for a leaky plunger. It cost me $200. As you can see maintenance expenses can quickly get a lot higher than the $50 shown above... and not only that, if you fix things as cheaply as possible (as most landlords do), not only does that decrease the rentability of the property, but it causes stuff to break sooner. (3) Deadbeats. Some people will rent your property and then not pay you. Now you have a property with no income, you are spending $2100 per month to pay for it, AND you are facing steep attorney fees to get the deadbeats evicted. They can fight you in court for months. (4) Damage, wear and tear. Whenever a tenant turns over there is always a lot of broken or worn stuff that has to be fixed. Holes in the wall need to be patched. Busted locks, broken windows, non-working toilets, stains on the carpet, stuck doors, ripped screens, leaky showers, broken tiles, painting exterior trim, painting walls, painting fences, etc. You can spend thousands every time a tenant changes. Other caveats: Banks are much more strict about loaning to non home owners. You usually have to have reserve income. So, if you have little or no income, or you are stretched already, it will be difficult to get commercial loans. For example, lets say your take-home pay is $7,000 and you have no mortgage at all (you rent), then it is fine, the bank will loan you the money. But lets say you only have $5,000 in take home pay and you have an $1,800 mortgage on your own home. In that case it is very unlikely a bank will allow you to assume a 2nd mortgage on a rental property. The more you try to borrow, the more reserve income the bank will require. This tends to set a limit on how much you can leverage.",
"title": ""
},
{
"docid": "aa680b0531e0827ad5254ef83fd98ec9",
"text": "This is a reasonable idea and many people have done it. But there are some risks that you need to mitigate. This is a viable business model, but it is a business and you need to treat it as such and expect to work quite hard at it.",
"title": ""
},
{
"docid": "990d7cea7a0d872a8b50cca148e7d234",
"text": "\"This is a common and good game-plan to learn valuable life skills and build a supplemental income. Eventually, it could become a primary income, and your strategic risk is overall relatively low. If you are diligent and patient, you are likely to succeed, but at a rate that is so slow that the primary beneficiaries of your efforts may be your children and their children. Which is good! It is a bad gameplan for building an \"\"empire.\"\" Why? Because you are not the first person in your town with this idea. Probably not even the first person on the block. And among those people, some will be willing to take far more extravagant risks. Some will be better capitalized to begin with. Some will have institutional history with the market along with all the access and insider information that comes with it. As far as we know, you have none of that. Any market condition that yields a profit for you in this space, will yield a larger one for them. In a downturn, they will be able to absorb larger losses than you. So, if your approach is to build an empire, you need to take on a considerably riskier approach, engage with the market in a more direct and time-consuming way, and be prepared to deal with the consequences if those risks play out the wrong way.\"",
"title": ""
},
{
"docid": "7a6ed41b4aea8dab6861258575a0034a",
"text": "\"This is a well worn path and not a bad idea. There are quite a few pitfalls but there are a lot of resources to learn for other people's mistakes. Having a plan and doing your research should help you avoid most of them. Here is some general advice to help get you started on the right foot. Know the market you are investing in. The city should have more than one major employer. The population should be rising and hopefully there are other positive economic indicators. Check the city's and state's chamber of commerce for useful information. You do not want to be stuck holding a bunch of upside down property in Detroit. Accurately calculate expenses. Set aside money for repairs. budget 5% of the rent or 100 a month for repairs if no repairs happen that money goes into the repair fund for the future. Set aside money for capital expenditures if the roof has a 10 years of life left in 10 years you better be ready to replace it same with any major appliances. Your area should have a baseline vacancy rate 5-8% in my area. That says out of a year your property will be vacant for around 6% of the year or 21 days for turnover. You should build that cushion into the budget as well setting aside a portion of the rent to cover that lean period. Some property management will offer \"\"eviction insurance\"\" which is basically them enforcing that savings. Financing maybe difficult a lot of banks like to see 25% down payments on investments. You will also face higher interest rates for investment properties. Banks generally also like to see enough money to cover 6 months worth of expenses in your account for all property. Some banks will not give financing for investment property to someone without 1-2 years of landlord experience. All in all finding money will be hard when you gets started and your terms may be less than ideal. (hopefully make around 3 - 5k a year in profit) If that includes loan pay-down and is not just cash-flow you are probably in the right ballpark. I can find $100-$200 dollars cash-flow a month on single family home in my area. Once loan pay-down is included your numbers are close. It sounds like you have a good attitude and a good plan. A book that I really enjoyed and I think may be useful is \"\"Start Small, Profit Big in Real Estate\"\" by Jay DeCima. I think of it as required reading for do-it-yourself real estate investors. Good luck and happy investing\"",
"title": ""
},
{
"docid": "a0e307477870f8f3bb1dbe9eead58366",
"text": "\"This can be done, and there have been many good suggestions on things to do and watch out for. But to my shock I don't see anyone offering any words of caution about property managers! Whatever you do, don't assume they have your best interests at heart. Do not assume that \"\"no news is good news\"\" and that if you aren't hearing of problems and are just collecting rent checks, everything must be fine. You can easily end up with tenants you would never have allowed yourself, or tenants with pets that you would not have allowed, etc. Especially if the manager doesn't want you to have a vacancy and potentially lose you as a client, they may very well lower their standards just to get the place occupied. And a year or two or three later, you may find yourself looking at a very large repair bill and wonder how on earth it could have happened when you supposedly had someone looking out for your property! There are quality, ethical property managers out there. They are not all bad to be certain. But whatever you do, check up on them. And with multiple properties - especially if in multiple areas/states etc. - this can be nearly a full time job in itself. As the saying goes, \"\"Trust, but verify\"\". I have never found this to apply more than with rental properties and property management. Don't leave anything significant to them 100%. You can't even assume that a rule like \"\"all expenses over $50 must be cleared by me first\"\", as that can simply mean that they don't bother to come to you for certain kinds of repairs that would cost more than that, or that they just get them \"\"taken care of\"\" by their own person (done poorly, illegally, etc.) and never tell you. Never trust their choice of tenants blindly. Visit the place yourself at least every few months - a quick driveby at a minimum or better if you can, arrange a reason to walk through the house personally. Check the back yard, never assume that the front yard is indicative of anything else. Never assume that a \"\"no pets\"\" rule will be followed, or that tenants wouldn't lie to the management about having pets. Never assume that the tenants won't move additional people into the property as well. Always expect a bare minimum of 1 month vacancy every year, and an additional minimum of 1 month's rental revenue in unexpected maintenance/repairs every year. This is at a minimum! You might do much better than this, and have a high quality tenant in place for years who costs next to nothing in extra maintenance. But do not count on it. Rental real estate investing looks so simple on paper, where it's just numbers. But reality has a very rude habit of surprising you when you least expect it. After all, no one expects the Spanish Inquisition! Good luck!\"",
"title": ""
},
{
"docid": "47cea5f4c2bd6ef611d52e55975e7338",
"text": "I have done something similar to this myself. What you are suggesting is a sound theory and it works. The issues are (which is why it's the reason not everyone does it) : The initial cost is great, many people in their 20s or 30s cannot afford their own home, let alone buy second properties. The time to build up a portfolio is very long term and is best for a pension investment. it's often not best for diversification - you've heard not putting all your eggs in one basket? With property deposits, you need to put a lot of eggs in to make it work and this can leave you vulnerable. there can be lots of work involved. Renovating is a huge pain and cost and you've already mentioned tennants not paying! unlike a bank account or bonds/shares etc. You cannot get to your savings/investments quickly if you need to (or find an opportunity) But after considering these and deciding the plunge is worth it, I would say go for it, be a good landlord, with good quality property and you'll have a great nest egg. If you try just one and see how it goes, with population increase, in a safe (respectable) location, the value of the investment should continue to rise (which it doesn't in a bank) and you can expect a 5%+ rental return (very hard to find in cash account!) Hope it goes well!",
"title": ""
},
{
"docid": "879062f352451bc4ee852520a91ffa83",
"text": "\"BEFORE you invest in a house, make sure you account for all the returns, risks and costs, and compare them to returns, risks and costs of other investments. If you invest 20% of a house's value in another investment, you would also expect a return. You also probably will not have the cost interest for the balance (80% of ???). I have heard people say \"\"If I have a rental property, I'm just throwing away money - I'll have nothing at the end\"\" - if you get an interest-only loan, the same will apply, if you pay off your mortgage, you're paying a lot more - you could save/invest the extra, and then you WILL have something at the end (+interest). If you want to compare renting and owning, count the interest against the rental incoming against lost revenue (for however much actual money you've invested so far) + interest. I've done the sums here (renting vs. owning, which IS slightly different - e.g. my house will never be empty, I pay extra if I want a different house/location). Not counting for the up-front costs (real estate, mortgage establishment etc), and not accounting for house price fluctuations, I get about the same \"\"return\"\" on buying as investing at the bank. Houses do, of course, fluctuate, both up and down (risk!), usually up in the long term. On the other hand, many people do lose out big time - some friends of mine invested when the market was high (everyone was investing in houses), they paid off as much as they could, then the price dropped, and they panicked and sold for even less than they bought for. The same applies if, in your example, house prices drop too much, so you owe more than the house is worth - the bank may force you to sell (or offer your own house as collateral). Don't forget about the hidden costs - lawn mowing and snow shoveling were mentioned, insurance, maintenance, etc - and risks like fluctuating rental prices, bad tenants, tenants moving on (loss of incoming, cleaning expenses, tidying up the place etc)....\"",
"title": ""
}
] |
[
{
"docid": "cdc8ee4b63ae9ac426fd4dad8942a239",
"text": "Huh, well it's working for me. I've got 3 properties and am a little over 25% of my goal to never work again. How would you suggest one get rich? I assume you have a better plan than he does?",
"title": ""
},
{
"docid": "3bc46add7bfe3ee10ee4eb7f944b698a",
"text": "It sounds like you plan to sell sooner or later. If your opinion is that there is still room for the housing market to grow, make your bet and sell later. The real estate market is much less liquid than other markets you might be invested in, so if you do end up seeing trouble (another housing crash) you may be stuck with your investment for longer than you hoped. I see more risk renting the house out, but I don't see significantly more reward. If you are comfortable with the risk, by all means proceed with your plan to rent. My opinion is contrary to many others here who think real estate investments are more desirable because the returns are less abstract (you can collect the rent directly from your tenants) but all investments are fraught with their own risks. If you like putting in a little sweat equity (doing your own repairs when things break at your rental) renting may be a good match for you. I prefer investments that don't require as much attention, and index funds certainly fit that bill for me.",
"title": ""
},
{
"docid": "18a41c6e82cb828cc6beeb5ccba6f277",
"text": "\"With a healthy income its quite possible to contribute too much into 401Ks/IRAs. For example, if your retired today and had 3 million or so, how much more would you need? Would an extra million materially change your life? Would it make you happier if you invested that extra in some rental properties or perhaps a business like a sandwich or ice cream shop where you have more direct control? This kind of discussion is possible as you indicate that you have taken care of your life financially. It seems at odds with the negative press describing the woefully condition of the standard person's finances. These articles ignore a very simple fact: its because of bad behavior. You, on the contrary, have behaved well and are in the process of reaping rewards. This is where I feel your \"\"mental gymnastics\"\" originates. Looking to engage in the rental market is no different then buying a franchise. You are opening a business of your own. You'll have to educate yourself and are likely to make a few mistakes that will cause you to write checks to solve. Your goal is to minimize those mistakes. After all, what do you know about the rental home business? I am guessing not much. Educate yourself. Read and spend some money on taking knowledgeable people out for coffee. In the end you should understand that although a poor decision may cost you money you cannot really make a bad decision. Lets say you do buy a rental property, things go south, you sell for a loss, etc.... In the end the \"\"butchers bill\"\" is 50K or so. Will that materially change your life? Probably not. The worst case is perhaps you have to work a year or two beyond the anticipated retirement age to make up that money. No big deal.\"",
"title": ""
},
{
"docid": "2f12b3ad22e5472415d13b933fe63d3f",
"text": "I would second the advice to not do this. Real estate ownership is complex to begin with, involving a constant stream of maintenance, financing, and other decisions. It is difficult enough to do for a single individual or a family as a unit (a couple), but at least spouses are forced to compromise. Friends are not, and you can end up with long-running conflicts and impasses. Financial transactions of any kind impose tensions on relationships, and friendships are no exception. If you want your friendship to survivie, do not sacrifice it to the financial arrangement which seems like a good idea at the moment. My advice would be to steer clear, no matter how attractive on the surface the deal might look. Focus on your own individual finances and use discipline and patience to save the amount needed for acquiring a separate investment property. But it will be 100% yours, and will save tons of headache. Since you are still considering this deal, it's a great time to politely change your mind and walk away - believe me, a few minutes of inconvenience will save you years of frustration. Good luck!",
"title": ""
},
{
"docid": "2f1d730eaf1d003c5d7ae2525da05a6c",
"text": "No. This logic is dangerous. The apples to apples comparison between renting and buying should be between similar living arrangements. One can't (legitimately) compare living in a 600 sq ft studio to a 3500 sq ft house. With the proposal you offer, one should get the largest mortgage they qualify for, but that can result in a house far too big for their needs. Borrowing to buy just what you need makes sense. Borrowing to buy a house with rooms you may never visit, not a great idea. By the way, do the numbers. The 30 year rate is 4%. You'd need a $250,000 mortgage to get $10,000 in interest the first year, that's a $312,000 house given an 80% loan. On a median income, do you think it makes sense to buy a house twice the US median? Last, a portion of the tax savings is 'lost' to the fact that you have a standard deduction of nearly $6,000 in 2012. So that huge mortgage gets you an extra $4000 in write-off, and $600 back in taxes. Don't ever let the Tax Tail wag the Investing Dog, or in this case the House Dog. Edit - the investment return on real estate is a hot topic. I think it's fair to say that long term one must include the rental value of the house in calculating returns. In the case of buying of way-too-big house, you are not getting the return, it's the same as renting a four bedroom, but leaving three empty. If I can go on a bit - I own a rental, it's worth $200K and after condo fee and property tax, I get $10K/yr. A 5% return, plus whatever appreciation. Now, if I lived there, I'd correctly claim that part of my return is the rental value, the rent I don't pay elsewhere, so the return to me is the potential growth as well as saved rent. But if the condo rents for $1200, and I'd otherwise live in a $600 apartment with less space, the return to me is lost. In my personal case, in fact, I bought a too big house. Not too big for our paycheck, the cost and therefore the mortgage were well below what the bank qualified us for. Too big for the need. I paid for two rooms we really don't use.",
"title": ""
},
{
"docid": "8eeab1aacfb9f67c350b65bcfffaba13",
"text": "To invest relatively small amounts in the real estate market, you could buy shares in a Real Estate Investment Trust (REIT), a type of mutual fund. Admittedly that's a very different proposition from trying to become a landlord; lower risk but lower return.",
"title": ""
},
{
"docid": "6568d63e1e16bc385ef85b971d630528",
"text": "\"You mention: High rent places are usually also high property value places. Given the tax incentives, it seems like a good long term idea to grab a house, so if we assume you have the option of working and buying a house in a high CoL or a low CoL city, I think you'd prefer the high cost. Because essentially, after 30 years, you'd have a million dollar house vs a quarter million dollar house. You've captured three quarters of a million dollars in rent, given my napkin math hypothetical. I think you're forgetting about some of the associated costs with \"\"owning\"\" a home, including:\"",
"title": ""
},
{
"docid": "990df5d54f35fc76dac95ac6c32c752c",
"text": "\"Another problem with this plan (assuming you get past Rocky's answer somehow) is that you assume that $50K in construction costs will translate to $50K in increased value. That's not always true; the ROI on home improvements is usually a lot less than 100%. You'd also owe more property taxes on your improvements, which would cut into your plan somewhat. But you also can't keep doing this forever. Soon enough, you'd run out of physical and/or legal space to keep adding additions to the house (zoning tends to limit how much you can build, unless you're in the middle of nowhere, and eventually you'd fill the lot), even if you did manage to keep obtaining more and more loans. And you'd quickly reach the point of diminishing returns on your expansions. Many homebuyers might be prepared to pay more for a third or fourth bedroom, but vanishingly few in most markets will pay substantially more for a second billiards room or a third home theater. At some point, your house isn't a mansion, it's \"\"that ridiculous castle\"\" only an eccentric would want, and the pool of potential buyers (and the price they'll pay for it) diminishes. And the lender, not being stupid, isn't going to go on financing your creation of a monstrosity, because they are the ones who will be stuck with the place if you default.\"",
"title": ""
},
{
"docid": "b564a2afd57d6a5281c9edc56494995e",
"text": "A real life experience. A friend of mine did that with his housemates. They bought a house together as students and it worked for them. The tricky bit is to have a very good contract with your housemates as to how the venture should work. What if? Somebody can't pay, somebody can't enjoy the house (on an extended trip), somebody wants out (marriage, etc.) It worked for my friend...",
"title": ""
},
{
"docid": "366e4f092dbfd5bf75a34ea777a4fe2b",
"text": "Here would be the big two you don't mention: Time - How much of your own time are you prepared to commit to this? Are you going to find tenants, handle calls if something breaks down, and other possible miscellaneous issues that may arise with the property? Are you prepared to spend money on possible renovations and other maintenance on the property that may occur from time to time? Financial costs - You don't mention anything about insurance or taxes, as in property taxes since most municipalities need funds that would come from the owner of the home, that would be a couple of other costs to note in having real estate holdings as if something big happens are you expecting a government bailout automatically? If you chose to use a property management company for dealing with most issues then be aware of how much cash flow could be impacted here. Are you prepared to have an account to properly do the books for your company that will hold the property or would you be doing this as an individual without any corporate structure? Do you have lease agreements printed up or would you need someone to provide these for you?",
"title": ""
},
{
"docid": "f20fdb3b3ea6780e82c610fcb1950bd8",
"text": "Your post seems to read as if you want to invest only in real estate rental properties as a start because they will be a reliable investment guaranteed to generate profits that you will be plowing back into buying even more rental properties, but you are willing to consider (possibly in later years) other forms of investment (in real estate) that will not require active participation in the management of the rental properties. While many participants here do own rental real estate and even manage it entirely, for most people, that is only a small part of their investment portfolio, and I suspect that hardly any will recommend real estate as the only investment the way you seem to want to do. Also, you might want to look more closely at the realities of rental real estate operations before jumping in. Things are not necessarily as rosy as they appear to you now. Not all your units will be rented all the time, and the rental income might not always be enough to cover the mortgage payments and the property taxes and the insurance payments and the repairs and maintenance and ... Depreciation of the property is another matter that you might not have thought about. That being said, you can invest in real estate through real estate investment trusts (REITs) or through limited partnerships where you have only a passive role. There are even mutual funds that invest in REITs or in REIT indexes.",
"title": ""
},
{
"docid": "f3651bb2af6000cf54640c7bce08638f",
"text": "Have you considered investing in real estate? Property is cheap now and you have enough money for several properties. The income from tenants could be very helpful. If you find it's not for you, you can also sell your property and recover your initial investment, assuming house prices go up in the next few years.",
"title": ""
},
{
"docid": "c14b4881f89e813dcec5a551b30856b2",
"text": "2 very viable options. Real Estate is cheap now and if you hold a few properties for the long term the price should rise. You can use them as rental properties to supplement your income. In addition agriculture is also very viable. How else you gunna feed 7 billion? Might as well cash in on that.",
"title": ""
},
{
"docid": "266fde9704582a3f139f5690f61fda24",
"text": "What does your cash flow look like? If you can comfortably afford to pay the extra cost and ride out the mortgage, it can be a nice investment. Better if you can manage the property yourself and are somewhat handy. Realize you should be able to raise rents over time so that it is cash flow even eventually. If cash flow is tight, sell it and re-fi your current place",
"title": ""
},
{
"docid": "43edc39c145d3f08bc65729cd44c8faa",
"text": "Yes this would be the same as when a corporation sells bonds. If it is the same as you describe. A product page would make it possible to give you a definitive answer. Also I strongly advice against taking out this type of loan if not for investment",
"title": ""
}
] |
fiqa
|
4fe94d762bb7818b22f857c356cf3bc4
|
Pros/cons of drawing income in retirement from sole-owner corporation vs. sole-proprietorship?
|
[
{
"docid": "18119c60e17d718132faa1012fcc402c",
"text": "\"Not really, no. The assumption you're making—withdrawals from a corporation are subject to \"\"[ordinary] income tax\"\"—is simplistic. \"\"Income tax\"\" encompasses many taxes, some more benign than others, owing to credits and exemptions based on the kind of income. Moreover, the choices you listed as benefits in the sole-proprietor case—the RRSP, the TFSA, and capital gains treatment for non-registered investments—all remain open to the owner of a small corporation ... the RRSP to the extent that the owner has received salary to create contribution room. A corporation can even, at some expense, establish a defined benefit (DB) pension plan and exceed individual RRSP contribution limits. Yes, there is a more tax-efficient way for small business owners to benefit when it comes time to retirement. Here is an outline of two things I'm aware of: If your retirement withdrawals from your Canadian small business corporation would constitute withdrawal from the corporation's retained earnings (profits), i.e. income to the corporation that had already been subject to corporate income tax in prior years, then the corporation is able to declare such distributions as dividends and issue you a T5 slip (Statement of Investment Income) instead of a T4 slip (Statement of Remuneration Paid). Dividends received by Canadian residents from Canadian corporations benefit from the Dividend Tax Credit (DTC), which substantially increases the amount of income you can receive without incurring income tax. See TaxTips.ca - Non-eligible (small business) dividend tax credit (DTC). Quote: For a single individual with no income other than taxable Canadian dividends which are eligible for the small business dividend tax credit, in 2014 approximately $35,551 [...] could be earned before any federal* taxes were payable. * Provincial DTCs vary, and so combined federal/provincial maximums vary. See here. If you're wondering about \"\"non-eligible\"\" vs. \"\"eligible\"\": private small business corporation dividends are generally considered non-eligible for the best DTC benefit—but they get some benefit—while a large public corporation's dividends would generally be considered eligible. Eligible/non-eligible has to do with the corporation's own income tax rates; since Canadian small businesses already get a big tax break that large companies don't enjoy, the DTC for small businesses isn't as good as the DTC for public company dividends. Finally, even if there is hardly any same-year income tax advantage in taking dividends over salary from an active small business corporation (when you factor in both the income tax paid by the corporation and the individual), dividends still allow a business owner to smooth his income over time, which can result in a lower lifetime average tax rate. So you can use your business as a retained earnings piggy bank to spin off dividends that attract less tax than ordinary income. But! ... if you can convince somebody to buy your business from you, then you can benefit from the lifetime capital gains exemption of up to $800,000 on qualifying small business shares. i.e. you can receive up to $800K tax-free on the sale of your small business shares. This lifetime capital gains exemption is a big carrot—designed, I believe, to incentivize Canadian entrepreneurs to develop going-concern businesses that have value beyond their own time in the business. This means building things that would make your business worth buying, e.g. a valued brand or product, a customer base, intellectual property, etc. Of course, there are details and conditions with all of what I described, and I am not an accountant, so please consult a qualified, conflict-free professional if you need advice specific to your situation.\"",
"title": ""
}
] |
[
{
"docid": "955e605d7d9e30b65de3ac4aae14081b",
"text": "you can begin drawing retirement income from 401k, ira and roth accounts at any age. the key is that it must be retirement income. you can't blow it all on an epic party, but you can withdraw a modest amount every year while preserving enough capital to last the rest of your life. there are 3 common strategies for doing this: side notes: techinical details: roth conversion ladder: substantially equal periodic payment plans:",
"title": ""
},
{
"docid": "fa823f87dc7c9574d811c0030e7ece80",
"text": "Generally, unless you explicitly elect otherwise, LLCs are transparent when it comes to taxes. So the money in the LLC is your money for tax purposes, there's no need to pay yourself a salary. In fact, the concept of salary for LLC members doesn't exist at all. It is either distributions or guaranteed payments (and even that is mostly relevant to multi-member LLCs). The only concern is the separation of personal and LLC finances - avoiding commingling. Mixing your personal and business expenses by using the same accounts/cards for both business and personal spending may cause troubles when it comes to the liability protection in case of a lawsuit. I'd suggest discussing this with a FL-licensed attorney. Bottom line - technically the withdrawal is just writing yourself a check from the business account or moving money between your personal and business accounts. If you're a sole member - you need not more than that. Make sure the operating agreement explicitly empowers you to do that, of course. There are no tax consequences, but as I mentioned - there may be legal consequences.",
"title": ""
},
{
"docid": "bb4dc2382fe36b9c9d01a1e44edaee35",
"text": "IANAL (and nor am I an accountant), so I can't give a definitive answer as to legality, but AFAIK, what you propose is legal. But what's the benefit? Avoiding corporation tax? It's simplistic – and costly – to think in terms like that. You need to run the numbers for different scenarios, and make a plan. You can end up ahead of the game precisely by choosing to pay some corporate tax each year. Really! Read on. One of the many reasons that self-employed Canadians sometimes opt for a corporate structure over being a sole proprietor is to be able to not pay themselves everything the company earns each year. This is especially important when a business has some really good years, and others, meh. Using the corporation to retain earnings can be more tax effective. Example: Imagine your corporation earns, net of accounting & other non-tax costs except for your draws, $120,000/year for 5 years, and $0 in year 6. Assume the business is your only source of income for those 6 years. Would you rather: Pay yourself the entire $120,000/yr in years 1-5, then $0 in year 6 (living off personal savings you hopefully accumulated earlier), subjecting the $120,000/yr to personal income tax only, leaving nothing in the corporation to be taxed? Very roughly speaking, assuming tax rates & brackets are level from year to year, and using this calculator (which simplifies certain things), then in Ontario, then you'd net ~$84,878/yr for years 1-5, and $0 in year 6. Overall, you realized $424,390. Drawing the income in this manner, the average tax rate on the $600,000 was 29.26%. vs. Pay yourself only $100,000/yr in years 1-5, leaving $20,000/yr subject to corporation tax. Assuming a 15.5% combined federal/provincial corporate tax rate (includes the small business deduction), then the corp. is left with $16,900/yr to add to retained earnings in years 1-5. In year 6, the corp. has $84,500 in retained earnings to be distributed to you, the sole owner, as a dividend (of the non-eligible kind.) Again, very roughly speaking, you'd personally net $73,560/yr in years 1-5, and then on the $84,500 dividend in year 6, you'd net $73,658. Overall, you realized $441,458. Drawing the income in this manner, the average tax rate on the $600K was 26.42%. i.e. Scenario 2, which spreads the income out over the six years, saved 2.84% in tax, or $14,400. Smoothing out your income is also a prudent thing to do. Would you rather find yourself in year 6, having no clients and no revenue, with nothing left to draw on? Or would you rather the company had saved money from the good years to pay you in the lean one?",
"title": ""
},
{
"docid": "fa9290fe5300a24c04c6f8ab01f18f66",
"text": "Sounds you need to read up on S corp structures. I think this would benefit you if you generate income even after you physically stopped working which is incomes from membership fees, royalties % of customer revenue, middle man etc... Under the Scorp, you as the sole member must earn a wage that fair and at current market value. You pay social security and Medicare on this wage. The interesting thing here is that an Scorp can pay out earning dividends without having to pay payroll taxes but the catch is that you, as the sole employee must earn a fair wage. As for paying the other member you may want to look into 1099 contract work plus a finders fee. The 1099 hourly wage does not require you to pay Medicare and SS. The common fee I'm used to is 5% of gross invoice. Then you would pay her an hourly wage. The company then bills these hours multiplied by 2 or 3 (or whatever you think is fair) to the client. Deduct expenses from this and that's your profit. Example. Contractor brings Client A which is estimated as a 100 hour project with $100 cost in supplies and requires 2 hours of your time @ $40/hr. You quote 100 hours @ $50 to client, client agrees and gives you down payment. You then present the contract work to your contractor, they complete the work in 100 hours and bill you at $25. You pay your contractor 2500 plus the 5% ($250) and your company earns $2070 (5000 - 2500 - 100-80) And you'll earn $80 minus the payroll tax. Then at the end of the quarter or year or however you want to do earning payouts your LLC- Scorp will write you a check for $2070 or whatever earning % you want to take. This is then taxed at your income tax bracket. One thing to keep in mind is what is preventing this other person from becoming your competition? A partnership would be great motivation to try and bring in as much work under the LLC. But if you start shafting people then they'll just keep the work and cut you out.",
"title": ""
},
{
"docid": "e7c53800da86c53cc3a8b7a9c9ae3974",
"text": "There are many aspects to consider in deciding what sort of company you want to form. Instead of an S-corporation, you should determine whether it would be better to form a Limited Liability Company (LLC), Limited Partnership (LP) or even a professional company (PC). Littleadv is correct: There is minimal benefit in forming an S-corp with you and your wife as the shareholders, if you will be the only contributor-worker. There are costs associated with an S-corporation, or any corporation, that might outweigh benefits from more favorable tax treatment, or personal protection from liability: Filing fees and disclosure rules vary from state to state. For example, my father was a cardiologist who had no employees, other than my grandmother (she worked for free), in a state with income taxes (NM). He was advised that a PC was best in New Mexico, while an S-Corp was better in Florida (there are no personal income taxes in Florida). The only way to know what to do requires that you consult an accountant, a good one, for guidance.",
"title": ""
},
{
"docid": "0798aa4e5d06e0deb5d8c966f0f35db5",
"text": "I see a lot of people making the mistake or being given bad advise in structuring a new business. If you have more than one shareholder, then by all means an S Corporation is a better structure for lower taxes; avoid double taxation. If, however, this is a one shareholder S Corp, then you had better 1099 yourself as a consultant or look into sole proprietorship. The tax benefits are much better either way. Dr. Suraiya Shaik Ali",
"title": ""
},
{
"docid": "40d3eb1c81f085cd157f373631b1f4c2",
"text": "\"The major pros tend to be: The major cons tend to be: Being in California, you've got state income tax to worry about as well. It might be worth using some of that extra cash to hire someone who knows what they're doing to handle your taxes the first year, at least. I've always maxed mine out, because it's always seemed like a solid way to make a few extra dollars. If you can live without the money in your regular paycheck, it's always seemed that the rewards outweighed the risks. I've also always immediately sold the stock, since I usually feel like being employed at the company is enough \"\"eggs in that basket\"\" without holding investments in the same company. (NB: I've participated in several of these ESPP programs at large international US-based software companies, so this is from my personal experience. You should carefully review the terms of your ESPP before signing up, and I'm a software engineer and not a financial advisor.)\"",
"title": ""
},
{
"docid": "54102d9b014f0b259219b94ee8a59e3c",
"text": "To answer your question 2, I can't think of any advantage of using your SSN over an EIN, but there are some advantages to having an EIN as a sole proprietor. So depending on the answer to question 1, you may want to consider either keeping your existing EIN or getting a new one, even if you are allowed to use your SSN instead.",
"title": ""
},
{
"docid": "07840ca3531beffb6cc1cd5266218a0c",
"text": "\"In the US, dividends are presently taxed at the same rates as capital gains, however selling stock could lead to less tax owed for the same amount of cash raised, because you are getting a return of basis or can elect to engage in a \"\"loss harvesting\"\" strategy. So to reply to the title question specifically, there are more tax \"\"benefits\"\" to selling stock to raise income versus receiving dividends. You have precise control of the realization of gains. However, the reason dividends (or dividend funds) are used for retirement income is for matching cash flow to expenses and preventing a liquidity crunch. One feature of retirement is that you're not working to earn a salary, yet you still have daily living expenses. Dividends are stable and more predictable than capital gains, and generate cash generally quarterly. While companies can reduce or suspend their dividend, you can generally budget for your portfolio to put a reliable amount of cash in your pocket on schedule. If you rely on selling shares quarterly for retirement living expenses, what would you have done (or how much of the total position would you have needed to sell) in order to eat during a decline in the market such as in 2007-2008?\"",
"title": ""
},
{
"docid": "b4c4472436470581adf08370392e7add",
"text": "\"The obvious advantage is turning your biggest liability into an income-generating asset. The downside are: (1), you have to find tenants (postings, time to show the place, credit/background check, and etc) (2), you have to deal with tenants (collection of rent, repairs of things that broke by itself, complaints from neighbors, termination, and etc) (3), you have to deal with the repairs In many ways, it's no different from running another (small) business, so it all boils down to how much time you are willing to invest and how handy you are in doing reno's and/or small repairs around the house. For profitability/ROI analysis, you want to assume collection of 11 months of rent per year (i.e. assume tenant doesn't renew after year, so you have the worst case scenario) and factor in all the associated expense (be honest). Renting out a second property is a bit tricky as you often have to deal with a large operating expense (i.e. mortgage), and renting a basement apartment is not bad financially and you will have to get used to have \"\"strangers\"\" downstairs.\"",
"title": ""
},
{
"docid": "fb4538721131cc3f19655a02ffa66286",
"text": "\"If you start an LLC with you as the sole member it will be considered a disregarded entity. This basically means that you have the protection of being a company, but all your revenues will go on your personal tax return and be taxed at whatever rate your personal rate calculates to based on your situation. Now here is the good stuff. If you file Form 2553 you can change your sole member LLC to file as an S Corp. Once you have done this it changes the game on how you can pay out what your company makes. You will need to employ yourself and give a \"\"reasonable\"\" salary. This will be reported to the IRS and you will file your normal tax returns and they will be taxed based on your situation. Now as the sole member you can then pay yourself \"\"distribution to share holders\"\" from your account and this money is not subject to normal fica and social security tax (check with your tax guy) and MAKE SURE to document correctly. The other thing is that on that same form you can elect to have a different fiscal year than the standard calendar IRS tax year. This means that you could then take part of profits in one tax year and part in another so that you don't bump yourself into another tax bracket. Example: You cut a deal and the company makes 100,000 in profit that you want to take as a distribution. If you wrote yourself a check for all of it then it could put you into another tax bracket. If your fiscal year were to end say on sept 30 and you cut the deal before that date then you could write say 50,000 this year and then on jan 1 write the other check.\"",
"title": ""
},
{
"docid": "537d0a768beb6bac683f1268f73aaecf",
"text": "Creating a corporation is not necessarily less taxes. In fact, you'll face the problem of double taxation, and since you must pay yourself a reasonable salary, if your corporation doesn't earn much to give you as dividend after the salary, and/or your tax bracket is low, you'll in fact may end up paying more taxes. Also there's a lot of bureaucracy involved in managing a corporation. Liability on the other hand is important, and what's more important - is asset separation and limiting the liability to the corporation assets, keeping your personal assets safe. To achieve that, you don't have to create a corporation, but you can create a Limited Liability Company (LLC). LLC are disregarded entities for tax purposes (i.e.: you won't have to pay taxes twice, only once as a sole proprietor/partner), but provide the liability limitation and asset separation. LLC's are much less formal, and require much less paperwork reducing the risk of corporate veil piercing because of non-compliance. I myself decided to manage my investments through LLC's for that very reason (asset separation).",
"title": ""
},
{
"docid": "1edca5b9b17bb709dc2829c540f211a5",
"text": "\"Those advantages you've described (tax treatment and employee match) are what you receive in exchange for \"\"locking up\"\" the money. Ultimately it's a personal choice of whether that tradeoff makes sense for you situation (I'll echo the response that the real answer to your question is planning). Roth options (either 401K or IRA) may be good compromises for you, since you can withdraw those contributions (but not the earnings) without any penalty, since you've already paid taxes on them. Another avenue to explore may be a self-directed IRA or a Solo 401(k), depending on your circumstances and eligibility. In both cases, there are plan providers that structure the plan to allow you to use the money to invest in things besides traditional stocks, bonds, and mutual funds (often referred to as \"\"checkbook control\"\" accounts). They are very commonly used among Real Estate investors (this thread from BiggerPockets has quite a bit of info). You'd want to consult with an accountant or financial adviser before going down that path.\"",
"title": ""
},
{
"docid": "8139827df5aa181c2aa883974232b178",
"text": "Something that's come up in comments and been alluded to in answers, but not explicit as far as I can tell: Even if your marginal tax rate now were equal to your marginal tax rate in retirement, or even lower, a traditional IRA may have advantages. That's because it's your effective tax rate that matters on withdrawls. (Based on TY 2014, single person, but applies at higher numbers for other arrangements): You pay 0 taxes on the first $6200 of income, and then pay 10% on the next $9075, then 15% on $27825, then 25% on the total amount over that up to $89530, etc. As such, even if your marginal rate is 25% (say you earn $80k), your effective rate is much less: for example, $80k income, you pay taxes on $73800. That ends up being $14,600, for an effective rate in total of 17.9%. Let's say you had the same salary, $80k, from 20 to 65, and for 45 years saved up 10k a year, plus earned enough returns to pay you out $80k a year in retirement. In a Roth, you pay 25% on all $10k. In a traditional, you save that $2500 a year (because it comes off the top, the amount over $36900), and then pay 17.9% during retirement (your effective tax rate, because it's the amount in total that matters). So for Roth you had 7500*(returns), while for Traditional the correct amount isn't 10k*(returns)*0.75, but 10k*(returns)*0.821. You make the difference between .75 and .82 back even with the identical income. [Of course, if your $10k would take you down a marginal bracket, then it also has an 'effective' tax rate of something between the two rates.] Thus, Roth makes sense if you expect your effective tax rate to be higher in retirement than it is now. This is very possible, still, because for people like me with a mortgage, high property taxes, two kids, and student loans, my marginal tax rate is pretty low - even with a reasonably nice salary I still pay 15% on the stuff that's heading into my IRA. (Sadly, my employer has only a traditional 401k, but they also contribute to it without requiring a match so I won't complain too much.) Since I expect my eventual tax rate to be in that 18-20% at a minimum, I'd benefit from a Roth IRA right now. This matters more for people in the middle brackets - earning high 5 figure salaries as individuals or low 6 figure as a couple - because the big difference is relevant when a large percentage of your income is in the 15% and below brackets. If you're earning $200k, then so much of your income is taxed at 28-33% it doesn't make nearly as much of a difference, and odds are you can play various tricks when you're retiring to avoid having as high of a tax rate.",
"title": ""
},
{
"docid": "7463e6b01c2f38e523cd6ba482a29b8a",
"text": "\"A couple of distinctions. First, if you were to \"\"invest in real estate\"\" were you planning to buy a home to live in, or buy a home to rent out to someone else? Buying a home as a primary residence really isn't \"\"investing in real estate\"\" per se. It's buying a place to live rather than renting one. Unless you rent a room out or get a multi-family unit, your primary residence won't be income-producing. It will be income-draining, for the most part. I speak as a homeowner. Second, if you are buying to rent out to someone else, buying a single home is quite a bit different than buying an REIT. The home is a lot less liquid, the transaction costs are higher, and all of your eggs are in one basket. Having said that, though, if you buy one right and do your homework it can set you on the road for a very comfortable retirement.\"",
"title": ""
}
] |
fiqa
|
40201f6ee96f221bad1b361df10dfbf9
|
First time consultant, doubts on Taxation
|
[
{
"docid": "823b2906fd183883e78f1d088118234d",
"text": "1.If the compensation that I receive is over 10 lakhs, how much would be deducted as tax No tax will be deducted by the company. You have to calculate the tax and pay in Advance by yourself. There are quite a few Banks that give you online facility to pay your tax. There is no service tax. Otherwise the tax slabs are right. The current budget has slightly revised the tax brackets. 2.So are these the right taxes and % that Need to be paid? If not do let me know the correct deductions. Yes. Revised brackets for financial year 2014-2015 are NIL for first 2.5 lakhs. Other brackets are unchanged. 4.What others legal options I have to decrease the tax liability? As an employee of my ex company I had once taken an FD (that reduced my tax) The options are same as salaried, i.e. you can claim exemption under 80C or on interest of housing loan, etc. As a consultant certain expenses can also be deducted. You should also talk to a CA who can help you with this as there will be some paperwork involved.",
"title": ""
},
{
"docid": "60d1a712627df48b4980974e0aeb01aa",
"text": "\"I would look into the possibility that the promise \"\"that no taxes will be withheld\"\" is all about your status as a 'consultant'. They may be meaning you to be treated like a business they buy services from. In Canada the distinction is very watery and I presume the same in India. If you agree to become a business, then you must look into how that business income will be taxed.\"",
"title": ""
},
{
"docid": "60833091fb5f878a8610f7b5990ddb4e",
"text": "This is how a consulting engagement in India works. If you are registered for Service Tax and have a service tax number, no tax is deducted at source and you have to pay 12.36% to service tax department during filing (once a quarter). If you do not have Service tax number i.e. not registered for service tax, the company is liable to deduct 10% at source and give the same to Income Tax Dept. and give you a Form-16 at the end of the financial year. If you fall in 10% tax bracket, no further tax liability, if you are in 30%, 20% more needs to be paid to Income Tax Dept.(calculate for 20% tax bracket). The tax slabs given above are fine. If you fail to pay the remainder tax (if applicable) Income Tax Dept. will send you a demand notice, politely asking you to pay at the end of the FY. I would suggest you talk to a CA, as there are implications of advance tax (on your consulting income) to be paid once a quarter.",
"title": ""
}
] |
[
{
"docid": "cf3539f86c66a80f473878e2c84b1c32",
"text": "\"It seems that you think you are freelancing, and they think you are an employee. What's bad for you, the tax office will also think you are an employee if they withhold tax for you. Alternatively, they think you are stupid, and they keep the money, but are actually not paying it to the tax office at all, in which case you will have a bad surprise when you do your tax returns. First, I'd ask them for proof that they are indeed paying these taxes into some account related to you. I'd then ask a tax adviser for some serious advice. If they are acting out of incompetence and not out of malice, then you should be mostly fine, but your work there will count as employment. Heaven knows why they treat you as an employee. Check your contract with them; whether it is between you and them or your company and them. It maybe that they never hired a contractor and believe that they have to pay employment tax. They don't. If your company sends them a bill, then they need to pay that bill, 100% of it, and that's it. Taxes are fully your business and your responsibility. As \"\"quid\"\" said, if they say they are withholding tax, then at the very least there must be a paystub that proves they have actually been paying these taxes. If they withhold taxes, and there is no paystub, then this looks like a criminal attempt to cheat you. If they have actually paid taxes properly into your account, then they are merely creating a mess that can hopefully be fixed. But it is probably complicated enough that you need a tax advisor, even if you had none before, since instead of paying to your company, they paid some money to the company, and some to you personally.\"",
"title": ""
},
{
"docid": "5da518f784ec0fbc3805e537c2035681",
"text": "There are few things going on here: My advice would be: with 75k income and a regular pay check there isn't a whole let you can do to adjust your tax burden. It's unlikely that any adviser will save enough money to warrant professional advice and the associated cost. Use off the shelf software for tax return and tax planning.",
"title": ""
},
{
"docid": "c3267da06090af6e036fcf7b12ec78df",
"text": "\"I agree with some of the points of the other answers but why not avoid all the guesswork? I highly recommend you not charge him now. Wait until the end of the year when you have much more information about both of your companies and then you can run the numbers both ways and decide if it would benefit you (collectively). If either of your businesses runs on a cash basis and you decide to invoice, just make sure the check is deposited before Dec 31. Update: If you want to do this for 2016, at least your husband's business would have to be using an accrual basis (since it's too late to take the deduction on a cash basis). Simply run the numbers both ways and see if it helps you. If it doesn't help enough to warrant it for 2016 you could rerun the numbers near the end of 2017 to see if it helps then. Diclaimer: I think it's OK to do this type of manipulation for the scenario you described since you have done (or are doing) the work and you are charging a reasonable fee, but realize that you shouldn't manipulate the amount of the invoice, or fabricate invoices. For example, you shouldn't ever think about such things as: \"\"If I invoice $50K instead of $3K, will that help us?\"\"\"",
"title": ""
},
{
"docid": "be8d414a0fd1c029f1c9ad663a449c4d",
"text": "I do NOT know the full answer but I know here are some important factors that you need to consider : Do you have a physical location in the United States? Are you working directly from Canada? With a office/business location in the United States your tax obligation to the US is much higher. Most likely you will owe some to the state in which your business is located in Payroll Tax : your employer will likely want to look into Payroll tax, because in most states the payroll tax threshold is very low, they will need to file payroll tax on their full-time, part-time employees, as well as contractor soon as the total amount in a fiscal year exceeds the threshold Related to No.1 do you have a social security number and are you legally entitled to working in the States as an individual. You will be receiving the appropriate forms and tax withholding info Related to No.3 if you don't have that already, you may want to look into how to obtain permissions to conduct business within the United States. Technically, you are a one person consulting service provider. You may need to register with a particular state to obtain the permit. The agency will also be able to provide you with ample tax documentations. Chances are you will really need to piece together multiple information from various sources to resolve this one as the situation is specific. To start, look into consulting service / contractor work permit and tax info for the state your client is located in. Work from state level up to kick start your research then research federal level, which can be more complex as it is technically international business service for Canada-US",
"title": ""
},
{
"docid": "6d5cf0484d73891f736864ce8371defa",
"text": "In general I'd advise you to do it the other way around in the future: Know what your plan is and what you need for it *before* reaching out publicly. That way you can respond more quickly and answer questions more easily. As for the meeting: you basically need to prepare three things. 1. What do you need to know when the meeting is over? 2. What can you offer the client? 3. What is a fair price for your time? Under 1: What kind of website do they want? Do you have complete freedom, or do you have to work within their existing branding? Can you deliver what they're asking? For example, if they want a CMS to manage their portfolio, can you build that? Under 2: What's your own portfolio like? What can you use to convince the client you have the capabilities to deliver what they're asking? (Note the difference with 1: that's if you can actually do it, this is if you can convince them of that fact). Under 3: Determine what you'd find a fair hourly wage, so that during the meeting you can estimate what the total price should be and when you should consider backing out. Finally you should consider what you'll do if you run into complications. As it's your first client, it's good to give it some thought ahead of time, but it probably won't come up during the meeting. As for being convincing: if you get #2 right you should be confident that you can actually do what you promise. If your portfolio is limited, you can look up websites yourself for other interior designers before the meeting so that you can go over them with the client. Ask which elements the client does and doesn't like, summarize it in the end and affirm you can deliver something combining those things.",
"title": ""
},
{
"docid": "20356b4f622f09c7e6e8bd7cbfd0e6e7",
"text": "Let me offer an anecdote to this - I started helping a woman, widowed, retired, who had been paying $500/yr to get her taxes done. As I mentioned in my comment here, she got a checklist each year and provided the info requested. From where I sat, it seemed a clerk entered the info into tax software. As part of the transition to me helping her, I asked the prior guy (very nice guy, really) for a quick consult. She took the standard deduction, but also showed a nice annual donation. Didn't take advantage of the QCD, donate directly from an IRA (she was over 70-1/2) to save on the tax of this sum. That could have saved her $500. She was in the 15% bracket, with some room left for a Roth conversion. Converting just enough to 'fill' that bracket each year seemed a decent strategy as it would avoid the 25% rate as her RMDs rose each year and would push her to 25%. To both items the guy suggested that this was not his area, he was not a financial planner. Yes, I understand different expertise. With how simple her return was, I didn't understand the value he added. If you go with a professional, be sure you have an understanding of what he will and won't do for you.",
"title": ""
},
{
"docid": "76d3a95d25ff7bb001a41cb51f5d5769",
"text": "\"Can I deduct the money that I giving to my team mates from the taxes that I pay? If yes, how should I record the transaction? Why? Why are you giving money to your team mates? That's the most important question, and any answer without taking this into account is not full. You would probably have to talk to a professional tax adviser (a CPA/EA licensed in your state) about the details, but in general - you cannot deduct money you give someone just because you feel like it. Moreover, it may be subject to an additional tax - the gift tax. PS: We don't have any partnership or something similar, it is just each of us on his own. Assuming you want to give your team mates money because you developed the project together - then you do in fact have a partnership. In order to split the income properly, you should get a tax ID for the partnership, and issue a 1065 and K-1 for each team mate. In most states, you don't need to \"\"register\"\" a partnership with the state. Mere \"\"lets do things together\"\" creates a partnership. Otherwise, if they work for you (as opposed to with you in the case above), you can treat it as your own business income, and pay your team mates (who are now your contractors/employees) accordingly. Be careful here, because the difference between contractor and employee in tax law is significant, and you may end up being on the hook for a lot of things you're not aware of. Bottom line, in certain situation you cannot deduct, in others you can - you have to discuss it with a professional. Doing these things on your own without fully understanding what each term means - is dangerous, and IRS doesn't forgive for \"\"honest mistakes\"\".\"",
"title": ""
},
{
"docid": "c645485700df18057afcf52108eca4f2",
"text": "In this situation I would recommend figuring out about what you would need to pay in taxes for the year. You have two figures (your salary and dependents) , but not others. Will you contribute to a 401K, do you itemize deductions, etc... If things are uncertain, I would figure my taxes as if I took the standard deduction. For argument's sake let's assume that comes out to $7300. I would then add $500 on to my total to cover potential increases in taxes/fees. You can adjust this up or down based on your ability to absorb having to pay or the uncertainty in your first calcuation. So now $7800, divide by 26 (the amount of paychecks you receive in a year) = $300 Then I would utilize a payroll calculator to adjust my exemptions and additional witholding so my federal withholding is as close as possible to this number. Or you can sit with your payroll department and do the same.",
"title": ""
},
{
"docid": "f0275cc6538a48f5f5155920d19db0f9",
"text": "Three points for you to keep in mind. 1. In the very first year, you should have 182 days outside India. So that in the year when you start your consultancy, you will not have any liability to pay tax on earning abroad. 2. Although you may be starting a consultancy abroad, if you do any services in India, there will be withholding tax depending on the country in which you have started the consultancy business. 3. Whatever money you repatriate is not taxable in India. However, if you you repatriate the money as gift to anyone who is not a relative, will be taxed in his/her hand.",
"title": ""
},
{
"docid": "20c142df943348a0135a62c9553986d0",
"text": "\"I don't see why you would need an \"\"international tax specialist\"\". You need a tax specialist to give you a consultation and training on your situation, but it doesn't seem too complicated to me. You invoice your client and get paid - you're a 1099 contractor. They should issue you a 1099 at the end of the year on everything they paid you. Once you become full-time employee - you become a W2 employee and will get a W2 at the end of the year on the amounts paid as such. From your perspective there's nothing international here, regular business. You have to pay your own taxes on the 1099 income (including SE taxes), they have to withhold taxes from your W2 income (including FICA). Since they're foreign employers, they might not do that latter part, and you'll have to deal with that on your tax return, any decent EA/CPA will be able to accommodate you with that. For the employer there's an issue of international taxation. They might have to register as a foreign business in your state, they might be liable for some payroll taxes and State taxes, etc etc. They might not be aware of all that. They might also be liable (or exempt) for Federal taxes, depending on the treaty provisions. But that's their problem. Your only concern is whether they're going to issue you a proper W2 and do all the withholdings or not when the time comes.\"",
"title": ""
},
{
"docid": "fcaf54599e1643faabf88cf789396fb3",
"text": "I guess you are making quite a bit of assumptions without clarifying what you are trying to achieve. As a non-resident you cannot incorporate a sole proprietorship in Singapore. You have to be citizen. Alternatively you can register a company that has its own norms like minimum number of directors and some being Singapore national, etc. As you are paying dividend and not salary to yourself, the company will be required to pay taxes on gains. So all consulting money is gain as there is no expense. The balance when you transfer to Spain would potentially get taxed as income to you subject to DTAA",
"title": ""
},
{
"docid": "d2a61b32f094a6140f2052e568c4a564",
"text": "Some advice from my side: - You can get your tax up to 4 years back, - The prices of tax advisory in Munich (for basic tax declaration) vary from 36 € up to 170 € - Depends how much your earn. Here you can calculate the the price for yourself: http://getdoido.com/tax_declaration If you want to know more how to do the tax declaration by yourself then check my last blog post where I described step-by-step how to make a tax declaration by yourself in Germany :)",
"title": ""
},
{
"docid": "9c19f9ceaab748d179323a7f07b6ec39",
"text": "It is a great advice. I would suggest going to the Companies House (it's in London somewhere), picking up all of their leaflets regarding requirements for different forms of corporate entity, and deciding if you want to have that burden. It is not a lot of work, you can essentially claim VAT on all business purchases (the way roughly it works, is that your company invoices your client, your client has to pay the fee + VAT (usually that VAT is then deducted by your client from it's VAT, so no loss there), and you pay the VAT on the difference between the service sales price, and your costs (computers etc.) ) You have to be careful to avoid excessive double taxation (paying income tax on both corporate income, and then your personal income off said company), but it usually comes off in your favor. Essentially, if you're making more than 50% of your income from services rendered, it is to your advantage to render such services as a business entity.",
"title": ""
},
{
"docid": "3b2575d1033e052c22614deb65dd7b7e",
"text": "\"Paypal linked with my bank account. 1.Can I use my Saving bank account to receive payments from my clients? Or is it necessary to open a current account? Yes you can get funds into your savings account. However it is advisable to keep a seperate account as it would help with your IT Returns. 2.I will be paying a certain % as commission on every sales to a couple of sales guys (who are not my employees but only working on commission). Can I show this as an expense in my IT returns? As you are earning as freelancer, you are eligible for certain deductions like Phone calls, Laptop, other hardware, payments to partners. It is important that you maintain a book of records. An accountant for a small fee of Rs 5 K should be able to help you. In the Returns you have to show Net income after all these deductions, there is no place to enter expenses. 3.Since I will be receiving all the payments in Euros so am I falling under a category of \"\"Exporter of services\"\"? The work you are doing can be Free Lancing. 4.Do I need an Import Export Code (IEC) for smoothly running this small business? You can run this without one as Free lancing. IEC would be when you grow big and are looking for various benefits under tax and pay different taxes and are incorporated as a company.\"",
"title": ""
},
{
"docid": "98863528ca9a2014fa3bc34c6c060f5a",
"text": "yes, i am incorporating monte carlo return scenarios for both equity and real estate. yeah there is a lot to consider in the case of the property being a condo where you have to account for property taxes as well as condo fees. the two projects have entirely different considerations and it's not like the money that is injected to one is similar to the other (very different) which is why i figured there should be differing discount rates. in any case, thanks for the discussion and suggestions.",
"title": ""
}
] |
fiqa
|
56f8bacd3173f18108ac1499fef8474c
|
Free “Rich Dad” education, with “free gift”: Is it legitimate, or is it a sales ploy?
|
[
{
"docid": "5d664fbfb68e97ecc4ec98ba26dbb090",
"text": "\"Robert Kiyosaki's is basically a get-rich quick author. But to answer your question: It is a sales pitch in disguise. See Marketplace's report on a Kiyosaki seminar, which reveals that the free work shop is a sales pitch for a 3-day work shop which costs several hundred dollars. And the 3-day workshop is a sales pitch for \"\"advanced\"\" training which can cost as much as $45,000 (presumably in Canadian dollars, as the report was done in Canada). He does touch on some basic sound principles, but it's mixed with a lot of really bad (and in some cases illegal) advice. You'll do much better to invest your time and money in reading materials that aren't advertised via infomercials. Kiyosaki may well be rich, but it's from selling his Rich Dad-branded material, not from investing in real estate, or any other investment portfolio See also John T. Reed's guru rating, and his review of Kiyosaki's book, Rich Dad, Poor Dad.\"",
"title": ""
},
{
"docid": "d740d394abaa903f2dee57c1e608dbdc",
"text": "As with any business, there's a huge learning curve. Rich Dad gives you the fundamentals.. which are sound.. you then need to spend time getting the nitty gritty details of the business ... be it real estate, stock investing etc. Kiyosaki is a wealthy man... I've listened to some of his podcasts and he know what he's talking about.. AND.. he's been in the business for 20+ years.",
"title": ""
},
{
"docid": "52dfd7c00f4651032be5d7f3fdf3a5a6",
"text": "Kiyosaki says his methods of actions are not suitable for the average investor. They are meant for those wanting to excel at investing, and are willing to work for it. Personally, I wouldn't want to own ten apartments, because it sounds like a terrible headache. I would much rather have a huge portfolio of index funds. I believe that Kiyosaki's method allegedly perform better than the passive 'invest-diversify-hold' strategy, but would require a new mindset and dedication, and are risky unless you are willing to invest a lot of time learning the fine details. I prefer to dedicate my time elsewhere.",
"title": ""
},
{
"docid": "d5600bed0504562a8904efa3439539e5",
"text": "I have taken the free Kiyosaki evening course, and it does give some good information. It is an upsell to the $500 weekend course, which I also took. That course taught me enough about real-estate investing to get started. I have not yet had the need to pursue his other, more expensive courses. Read his books, take the $500 course, read other people's books on real estate investing, talk to other like-minded individuals, and gain some experience. I understand real estate better than I understand paper assets because I spent more time studying real estate. If you want to invest in real estate, study it first. If you want to invest in paper assets, study those first.",
"title": ""
}
] |
[
{
"docid": "809d62aaa231ba9b8270f484a753a9d5",
"text": "Yes. It's terrible with terrible advice such as insider trading. The insider trading is really the only advice that's not common knowledge such as buy assets not liabilities and pay yourself first. There is nothing in this book that would help anyone become wealthy. In fact is stated that education and savings will not make you rich. Which may be true but those two should never be discounted! This guy is a scam artist and made his millions from the book and nothing else.",
"title": ""
},
{
"docid": "988c6575e4ce64a92a839e7605009f72",
"text": "It is absolutely a scam. Anyone who tells you they can give you a large amount of money for free is trying to scam you. Additional warning signs include:",
"title": ""
},
{
"docid": "e0fe70fcf216cba505a9ea34c1cb686f",
"text": "There's some really questionable advice in Rich Dad, Poor Dad. The one that I always thought was bad advice was when he wrote that people should always pay themselves first and worry about paying down debts later. So if you've got big credit card debts, you should first allocate money to saving and investing and pay your debts later. He says that will inspire you to come up with creative ways to get income to pay off that extra debt because you're under pressure. I don't buy it though. It's something that sounds good, but if you apply it, you end up broke quickly.",
"title": ""
},
{
"docid": "f6bdba3040528635a47946d6d4f18927",
"text": "Sounds like the seminar is about using OPM (other people's money), which means you're going to have to find not just real estate, but investors. Those investors are going to need a business plan, contracts, and a lot of work from you to provide as much equity as possible before the property is sold. If you're serious about Real Estate, I suggest finding the most successful broker/agent you can, buying them a beer, glass of wine, or cup of coffee, and picking their brain about it. It'll be cheaper then a scam seminar.",
"title": ""
},
{
"docid": "6e5ab272109b1379ea16fea75b9a8be9",
"text": "\"I feel like he's just doing this for the kicks and doesn't really believe in it. But then I see the numerous talks, the book etc and I can't decide. His entire basis for a \"\"idea meritocracy\"\" is that everyone should be truthful or \"\"radical transparency\"\". I do not see the connection at all. You cannot build an idea meritocracy because it inherently means you can judge if an idea succeeds or fails before implementing it. If you want to bias yourself toward successful ideas, it requires nothing more than allowing people to implement what they think and then rewarding the ones who succeed. Basically, I cannot see the point of this \"\"radical transparency\"\" etc. Except for one possibility - his computer algorithm. I feel like that is his grasp at immortality and the algorithm requires stupid tons of data to function. So why not give it to the best source for such data? Top ivy league graduates and brilliant people hired by the one of the biggest hedge funds on the planet. And then sell them on this idea that \"\"radical transparency\"\" is the basis for all success in the firm, and ask them to start inputting data on it.\"",
"title": ""
},
{
"docid": "e3feabf3c5377f19e11874057aade2f8",
"text": "\"This article is also light on sources. It overstates inherited wealth. People who work with rich people know the saying \"\"shirtsleeve to shirtsleeve in three generations\"\". There is a proclivity of rich descendants to squander their fortune, which totally negates a majority of this article. In sum, this article and news source insists on itself\"",
"title": ""
},
{
"docid": "f0e83abac79447e99dcab2e89824e042",
"text": "\"chapter 8 page 154: >\"\"My point is that it's doubts and cynicism that keep most people poor and playing it safe...only a person's doubts keep them poor...'Cynics criticize and winners analyze' was one of [Rich Dad's] favorite mottos\"\" -from chapter 8 page 154 of Robert Kiyosaki's first print edition of *Rich Dad Poor Dad* The whole page is about abandoning cynicism and has nothing to do with that Glenn-Beck-style rant/editorial you've linked to.\"",
"title": ""
},
{
"docid": "5def525b2a57b46bcad7d51eab491630",
"text": "\"Can I teach children an invaluable skill for free and provide a website or PayPal link for anyone who appreciates the result of my gift to their child and wishes to gift me money (or maybe they don’t have a child but believe in my revolutionary contribution to the future) as they see fit, up to $10K? Two immediately obvious problems with this strategy: What about when you receive gifts from people who aren't in the US? You have to declare, and pay taxes on, foreign gifts. It seems to me that these may not be gifts because they are given in connection with the service you provided rather than from \"\"detached and disinterested generosity\"\" as required to make the gift tax exempt. (See Commisioner v. Duberstein -- gift given to thank associate for a sales lead did not arise from detached generosity. See Stanton v. United States -- gift given in appreciation of services rendered may or may not be a gift for tax purposes. See also Bogardus v. Commissioner -- gifts inspired by past service can be tax exempt.)\"",
"title": ""
},
{
"docid": "65e92dfbe30dcb7849015a337a2daea3",
"text": "The money you receive from son would be treated as gift. As per gift tax you can get unlimited money from son and there is no tax implication. You are free to use money as you like. There is no restriction. Any profit you make is taxable as income to you.",
"title": ""
},
{
"docid": "e04d9bd2f8e0286cee97e550d281ad51",
"text": "We started with our son about age 5 or so. He was at the time old enough to understand that you buy stuff using money. We don't give allowance, rather we made up a job chart that he can put checks on, and give him a small amount for each job that he does. This is meant to enforce the idea of 'work and get paid, don't work don't get paid', and associate the concept of work and money. We also try to teach him the concept of giving, spending and saving, by having envelopes with those words on them and dividing the 'commission' money between them. The give money is used for a charitable organization. The save money is used in a couple of ways - either to save for a large item that he wants, or to put into a savings account. The spend it money he is free to buy whatever he wants with. We got this plan from the Dave Ramsey Show, and it has been really good so far. The best thing about it is that when we are at the store and he sees something he wants, we can ask 'did you bring your money?' This keeps the begging down to a minimum and also helps us teach him to make a list of stuff he wants and can save for.",
"title": ""
},
{
"docid": "23cc0532e6c7992d47926f8949ff67da",
"text": "\"Any advertisement for a \"\"business opportunity\"\" is nearly always a scam of some kind. In such deals, the seller is the one making the money. They rely on the fantasy of the average person who imagines themself with a profitable business. Real businessmen do not get their businesses from flyers on the sides of telephone poles. Real businessmen already know every aspect and detail of their business already. They do not need to pay some clown $10,000 to \"\"get them started\"\". If you are reading such advertisements, it means you have money, but do not know what to do with it. Although I cannot tell you what to do with your money. I can tell you this: giving it to somebody who advertises a \"\"great business opportunity\"\" would be a mistake.\"",
"title": ""
},
{
"docid": "02796cad037fa47f7f1dc2560189d293",
"text": "\"What is your biggest wealth building tool? Income. If you \"\"nerf\"\" your income with payments to banks, cable, credit card debt, car payments, and lattes then you are naturally handicapping your wealth building. It is sort of like trying to drive home a nail holding a hammer right underneath the head. Normal is broke, don't be normal. Normal obtains student loans while getting an education. You don't have to. You can work part time, or even full time and get a degree. As an example, here is one way to do it in Florida. Get a job working fast food and get your associates degree using a community college that are cheap. Then apply for the state troopers. Go away for about 5 months, earning an income the whole time. You automatically graduate with a job that pays for state schools. Take the next three years (or more if you want an advanced degree) to get your bachelors. Then start your desirable career. What is better to have \"\"wasted\"\" approx 1.5 years being a state trooper, or to have a student loan payment for 20 years? There is not even pressure to obtain employment right after graduation. BTW, I know someone who is doing exactly what I outlined. Every commercial you watch is geared toward getting you to sign on the line that is dotted, often going into debt to do so. Car commercials will tell you that you are a bad mom or not a real man if you don't drive the 2015 whatever. Think differently, throw out your numbers and shoot for zero debt. EDIT: OP, I have a MS in Comp Sci, and started one in finance. My wife also has a masters. We had debt. We paid that crap off. Work like a fiend and do the same. My wife's was significant. She planned on having her employer pay it off for each year she worked there. (Like 20% each year or something.) Guess what, that did not work out! She went to work somewhere else! Live like you are still in college and use all that extra money to get rid of your debt. Student loans are consumer debt.\"",
"title": ""
},
{
"docid": "b175b3c5764cb94644ab6dc1c639f056",
"text": "I can't tell if he's running something similar to a pyramid scheme >Everyone would work under the same Spartan conditions that Brito embraced. (In New York, Brito shares a large table with his head of sales and his finance chief.) “We always say the leaner the business, the more money we will have at the end of the year to share,” he said in a speech at Stanford in 2008. “I don’t have a company car. I don’t care. I can buy my own car. I don’t need the company to give me beer. I can buy my own beer.” That part is awesome though",
"title": ""
},
{
"docid": "8a8bafa654771734c6fee760c149c0fe",
"text": "No man, don't you see? The MAN is making students become perpetual debt slaves! To become another cog in the machine! It's all by design. Didn't happen by accident. Martha Stewart's polishing brass on the Titanic. It's all goin' down, man!",
"title": ""
},
{
"docid": "27d9e24ac779e2b2ae49ec352be8120e",
"text": "\"I doubt it. In the States you would only owe tax if you sold such an item at a profit. \"\"garage sales\"\" aren't taxable as they are nearly always common household items and sale is more about clearing out one's attic/garage than about profit. Keep in mind, if I pay for a book, and immediately sell it for the same price, there's no tax due, why would tax be due if I sell for a loss?\"",
"title": ""
}
] |
fiqa
|
79702e6ca780835570a542fd0b17bafa
|
Is the MBA an overrated degree/qualification?
|
[
{
"docid": "861b30cbf96958570789286d2028629b",
"text": "\"For some situations, an MBA can be overrated in the sense that given the cost of time and money, it isn't going to be a great return in some cases. There can be tens of thousands of dollars and a couple of years to get an MBA that some people believes should automatically make them worth $x more in their salary and life should be simple. I'd likely inquire as to what expectations do you have for what an MBA will do for you. Are you expecting to make connections in getting the degree? Are you expecting to learn about how to run a business from the coursework? Are you expecting something else? Depending on what you are expecting, I could see MBA as being anything from a great choice to a lousy choice for people. As noted by Pete Belford's comment, an MBA from a \"\"degree mill\"\" would be all but worthless. Where you go can reflect the value of the education as some universities are known for their program about this such as Ivy League schools.\"",
"title": ""
},
{
"docid": "bab2889767c18715a2a95569821f7ac5",
"text": "The quality of the MBA is really what decides if it's worth it. You have to make sure the school where you are going to is highly regarded or even prestigious. There is a big difference between what you find prestigious and others find prestigious. The student believing it is an awesome school is not enough, the companies and recruiters must believe it too. Make sure you do your homework on the ranking of the MBA program. Additionally, your undergraduate plays a role how well your MBA is perceived. A decent undergraduate degree complemented with an MBA from a highly ranked school will put you in a trajectory for a high salary and a management position.",
"title": ""
},
{
"docid": "cfccd74639a2963691ce0b45a6d06862",
"text": "There is a distinct difference between 'having a degree' and 'being genuinely smart and business savvy'. If you're genuinely smart and business savvy you could theoretically break into the business world with no degree and make a decent salary. The trouble there is that many people aren't smart and business savvy until they get a degree. On the other hand, it's very possible to get a degree and be completely oblivious about how to conduct your career (poor resume / interviewing skills, no business sense etc). In that case an MBA might not be totally useful (but probably still will be to a degree). However, if you ARE smart about how you conduct your career, an MBA should help you immensely.",
"title": ""
},
{
"docid": "50dc383bb6d53e0d880a0d14fe7763a4",
"text": "It depends on what you want it for If it is just salary then maybe not, for instance, some MBA programs may suggest their graduates make $100,000 per year, but you work in an oil field barely finishing high school and make $300,000 a year. If you go for the MBA right now, you may miss your chance to work in the oil industry for another few years (or weeks), but at the same time, the MBA lasts forever (although, real world experience is also relevant) and it may give you a leg up when you are 50 years old in the unemployment line (or maybe not, because you are overqualified) everything in life is a cost/benefit analysis Passing the GRE lasts for five years, so keep that in mind",
"title": ""
}
] |
[
{
"docid": "0681be109399381fe948ecb67b895dda",
"text": "If you can get into the top school, it's a no-brainer to go that route. An MBA at a top school will not only give you an education taught by world-renowned professors but also a large network of students and alumni.",
"title": ""
},
{
"docid": "b9c570c0829a187db8ac975d38fed142",
"text": "\"With any institution or organization, you're always going to have top, middle, and bottom performers. I don't think we should select prospective employees based on schools or brands, but the world is a vast place and having those things like brands as markers or indicators serves as a practical heuristic for recruiters. However, Many of my past colleagues from non \"\"top brand\"\" institutions are just as smart and capable. The idea is that the more selective the educational institution, the more likely it is to filter for top candidates who can then be fed into companies down the road. But the reality is that the filter is very narrow due to class size and school size so a lot of equally qualified candidates also get filtered out of the school because of marginal differences or sometimes just random luck. Therefore these incredible students end up attending their next top choice. That's the reason we shouldn't only hire from top schools. More talented people overflow to other schools. As a side note, Malcolm Gladwell is like the Myth Busters tv show, but for books. Entertaining, but ultimately flawed in several ways that he analyzes statistics and interprets data. Source: HBS MBA class of 2015. Currently interning at Amazon for summer. Will provide proof if required.\"",
"title": ""
},
{
"docid": "b7b429380409f445a03ac58e0b447a98",
"text": "I can't speak for all business schools but only my personal experiences as a student and then working professional. I graduated from a program ranked in the top 5 nationally and interviewed with several top companies (Intel, Ford, Sandisk, BP) right out of college before selecting the firm I began my career with. As I've moved on to other jobs having this degree has definitely opened doors for me and landed me interviews I might not otherwise have gotten. Plus the program I was in was heavily focused on case studies which is far superior to just lectures and note taking.",
"title": ""
},
{
"docid": "c37d4ffd623dc8f5e66a09a8b048068d",
"text": "\"Why? I did comp sci and have an MBA. I also do EMT work as a volunteer in a rural community. Do my toes are in both pools. I would really question deeply the motives from moving to business from medicine. Despite the articles you see, an MBA is hardly the road to riches. Most do okay. Top tier grads are making very good money. These are also a small % of people out there working. Even those making good money sacrifice that for really shitty hours and shit work for a while until they break into the higher earning spots. The \"\"models and bottles\"\" is exaggerated to beg in with, and less and less common every year. When someone asks me about getting an MBA or finance I ask why. What us their real reason. If its money, don't do it. Do it because you actual ly love the business of business. I have traded stocks since I was 12. Its always been interesting. If I forced myself to do it for the money, I'd be poor and miserable. I am not rich. But I am comfortable and I live the life and schedule I want. None of that is from that slip of paper. The knowledge I could have (and did) get on my own. I trade the markets, do real estate, and have 1-3 entrepreneural projects at any given time. Its the life I created for myself. I found it was really the only way for me to get what I wanted. My goals never fit we all with institution goals. TL;DR- what's your motivation? Its probably a shitty move.\"",
"title": ""
},
{
"docid": "26882f438edc69e359e71c6684c06d3b",
"text": "\"No, getting a liberal arts degree at a non-prestigious university is worthless. You can graduate from an Ivy League school or LAC equivalent with a degree in history/philosophy/English/etc. and go work on Wall Street or in MBB consulting. There very few fields where you have to be able to step in day 1 and have great technical knowledge. Mostly your degree and school are about signalling* that you can learn what's thrown at you. EDIT: \"\"Signalling\"\" and typos I couldn't correct on my phone.\"",
"title": ""
},
{
"docid": "85a7b4fe93b1eb94564c72924929b44e",
"text": "\"I have a BA in Economics from the University of North Texas and I think it's a wonderful degree. I paired it with a finance minor. As others have said, the BA degree has more theory and less quantitative skills, but I found the quant skills I learned in my BA (through multiple regression/time series) to be a great start for an entry level job out of college. I'll also say that while it's not a \"\"business\"\" degree, it has major implications in business. No, you won't know accounting, but the theory you learn in economics is applied in accounting, in operations, in finance, in marketing, etc. Honestly, if you're smart and you know how to apply what you learn in Econ, you can do whatever you want.\"",
"title": ""
},
{
"docid": "32a0db6c00812f8e1a420ecbb7ee3f94",
"text": "No studies are cited about the education of corporate management. I bet you'd find a lot of those MBA's have undergrad degrees in engineering and science. The company presidents where I worked were all former scientists or engineers with MBA's, including two astronauts. Other aerospace companies were the same. The more technical the business, the more I bet this is true.",
"title": ""
},
{
"docid": "6163023ef181f37dd937c24b217759ed",
"text": "\"Couple things, I will admit I was wrong about the total graduates at each of those programs; however, numbers taper out the lower the program is down to about 250-300 a class. Also, cut each of those numbers down to about 1/2 - 1/3 and you get the group that's actually focused on finance. Many MBAs do consulting, marketing, product development, etc nowadays. Also I'm a bit offended by you saying I don't understand the CFA. Couldn't be more mistaken boss, I'm siting for L3 in June like you. The requirement is only 2 years in an \"\"investment decision\"\" role, this also means A LOT of back office risk guys qualify. That's a pretty fungible qualification, you don't have to be a PM to qualify. I have a buddy who qualified having done 2 years in fund accounting, not exactly sell-side ER. I'm also going to guess you're a trader/brokerage/Cap Markets guy? If you wanna throw titles around I'm in a front office role at a BB, too, and worked at worked on buy-side research at a >$150bn value shop. CFA is definitely more desired in sell-side markets focused as opposed to IBD where an MBA is more useful (more strategy focused). The CFA is vital for boning up on quantitative skills an MBA won't cover, I'll absolutely give you that. But a lot of people fall into the trap of assuming a CFA is their ticket to bigger and better things. If you're working in back office risk management, getting a CFA doesn't immediately qualify you to do ER (which is a VERY common pitfall I see). Like an MBA it teaches everyone how to do the same type of analysis, too (another reason the title means less and less). Last weekend I had a conversation with a friend of a friend about this very thing! He's sitting for L3 CFA, works back office at a very notable HF, and expects to be moved up (without any indication that he will) to research when he's done. I asked his opinions about things like the European situation, fiscal cliff, and a hard landing in china. Not only was he not familiar these concepts he didn't even know what HFT was. The CFA gives you the tools to analyze the impacts of pension liabilities on EPS, but it still takes a passion about the markets, as well as creative/analytical judgement, to make it to ER. My only point is an MBA and CFA are very similar in many ways. Both tend to hold their noses way to high, too. It's about what you chose to get out of it and too often people care more about the title than the process, which is why they are still stuck in mediocrity after completing the designations. Go through a list of the biggest PMs in the business, most don't have either MBAs or CFAs! They achieved alpha by not following standard quantitative models but exploring creative and strategic avenues others undervalue while maintaining strict discipline. A model is a tool to better describe behavior and understanding of markets, it's not a solution.\"",
"title": ""
},
{
"docid": "b6c38f90732ad52a095e7778f0e22cb7",
"text": "Agreed my friend, and the UK is the country that is the furthest away from the European reality. You have schools charging 1 to 8k for a full years tuition. I know a case of someone having to sell his home to afford a top MBA in Europe (obviously it paid off), which goes to show how hard for europeans it is to afford US prices for education, meanwhile in the US they just hand it over to you. The problem comes when the Navients of the world come knocking on your door and you can't even save a penny",
"title": ""
},
{
"docid": "a8ca7eb8bc25b6b3e66e95e79a88a3ca",
"text": "I second the above post. I am a CFA charterholder, and have an MBA. The CFA Charter is the gold standard for asset management and investment research. Plus, it is a self-study program. You can sit for the Level I exam as a Senior in undergraduate, and this is a huge positive signal to prospective employers.",
"title": ""
},
{
"docid": "49c3bdca8231cd96261c8b730b808dc6",
"text": "Did you go to bschool? You actually do learn a lot. There are a lot of things that I do know that some of my fellow BA's in Business don't know. (business plan writing, how to properly read a financial statement, promotional strategy creation). Also, I got hooked up with a really cool internship that got me in front of some big VC's. There is value, is it worth the results? No. But let's be honest here, neither is law school (unless you go to a T14). Have you seen the job market? Brutal.",
"title": ""
},
{
"docid": "a5f8eea00fb62278790e63b033b88d19",
"text": ">What, specifically, do you believe it is about the MBA experience (2 semesters of core business skills, and 2 semesters of electives, all taken on top of a bachelors degree) that causes the problem? Business degrees are incredibly over-rated, I'm speaking as a business owner with quite a few employees here. I speak to a lot of business owners, some with degrees, some without, and most of them say the same - business cannot be taught in a classroom. The theory side to business is obviously helpful but in no way ensures you will become successful, and they really shouldn't be held with such high regard. In my own company I tend to try and avoid hiring people with business degrees, they tend to be incredibly arrogant (in my experience) and believe they deserve to be treated on the same level as entrepreneurs just because they have a degree.",
"title": ""
},
{
"docid": "238c94b81f6ac5b93957b99aede75c33",
"text": "\"Why not both? I have been working and studying at the same time since I was 13... for all purposes, when I finished high school, I was working and studying part time... until I got my B.Sc in Computer Science and Masters in Business Administration (MBA)... developed my career and now I am a senior executive making excellent money and supervising many people. In retrospect, I want to tell you that the degrees did not help me at all in my career in the sense that did not teach me anything of significance for real work and career life, nor did they lend me my first jobs. However(!!!), without a degree (piece of paper), I could not advance to my current position because \"\"degree required for this position\"\". One more thing, very important: when I studied for my MBA, and worked full(!) time, I had no choice but to take night classes (City University of NY, Baruch College, one of the best business schools in the country). **This was the best experience I had in all the of my college studies!** Why? Because all(!) the professors who teach in the night were working in the morning in their normal jobs - none of them were tenured professors. They were real business people, grounded, know what they are talking about, and they were teaching because they loved to teach and share the experience and knowledge. **Do you understand what I am saying here?** So, I did not get the theoretical nonsense from them. They actually taught us what really happens, the real approach to things, and the real issues to address. P/S: My son is following my way. Since he was 11, he works in the areas he like (Minecraft) and he made money since then, running classes, getting to know people in the field, getting experience, getting work ethics, etc. If he wants to go to Harvard, fine with me, but I think he just need to go to \"\"reasonable\"\" low cost college to get those pieces of papers called \"\"Diplomas\"\".\"",
"title": ""
},
{
"docid": "b239ecbe22ac4293f7f0df722ed82b8e",
"text": "You cannot deduct. Even if you could, unless you also hold the mortgage, it's unlikely that you would have sufficient deductions to exceed the standard deduction for a married couple.",
"title": ""
},
{
"docid": "d6d52b842cc2405c33403cbfcbd53cbb",
"text": "\"The root of the advice Bob is being given is from the premise that the market is temporarily down. If the market is temporarily down, then the stocks in \"\"Fund #1\"\" are on-sale and likely to go up soon (soon is very subjective). If the market is going to go up soon (again subjective) you are probably better in fictitious Fund #1. This is the valid logic that is being used by the rep. I don't think this is manipulative based on costs. It's really up to Bob whether he agrees with that logic or if he disagrees with that logic and to make his own decision based on that. If this were my account, I would make the decision on where to withdraw based on my target asset allocation. Bob (for good or bad reasons) decided on 2/3 Fund 1 and 1/3 Fund 2. I'd make the withdraw that returns me to my target allocation of 2/3 Fund 1 and 1/3 Fund 2. Depending on performance and contributions, that might be selling Fund 1, selling Fund 2, or selling some of both.\"",
"title": ""
}
] |
fiqa
|
aac833227c90d71eb816fc820a949f96
|
Self employed as IT consultant and as massage therapist: Do I need 2 HST numbers?
|
[
{
"docid": "d12eafeff696a9084ff5c95ad615c099",
"text": "Given your clarifying points, it sounds like you are running both businesses as one combined business. As such, you should be able to get just a single HST number and use that. However, let me please urge you to contact a professional accountant and possibly a lawyer, as it is very unusual to be performing these services without a business license, and you may be exposing yourself to civil penalties and placing your personal assets (e.g. your house) at risk. Additionally, it may be beneficial for you to run these as businesses as you can likely write off (more of) your expenses.",
"title": ""
}
] |
[
{
"docid": "1a47af56d5b794e7f58cdb39117264bd",
"text": "\"TL;DR - my understanding of the rules is that if you are required to register for GST (earning more than $75k per annum), you would be required to pay GST on these items. To clarify firstly: taxable income, and goods and services tax, are two different things. Any income you receive needs to be considered for income tax purposes - whether or not it ends up being taxable income would be too much to go into here, but generally you would take your expenses, and any deductions, away from your income to arrive at what would generally be the taxable amount. An accountant will help you do this. Income tax is paid by anyone who earns income over the tax free threshold. By contrast, goods and services tax is a tax paid by business (of which you are running one). Of course, this is passed on to the consumer, but it's the business that remits the payment to the tax office. However, GST isn't required to be charged and paid in all cases: The key in your situation is first determining whether you need to register for GST (or whether indeed you already have). If you earn less than $75,000 per year - no need to register. If you do earn more than that through your business, or you have registered anyway, then the next question is whether your items are GST-free. The ATO says that \"\"some education courses [and] course materials\"\" are GST-free. Whether this applies to you or not I'm obviously not going to be able to comment on, so I would advise getting an accountant's advice on this (or at the very least, call the ATO or browse their legal database). Thirdly, are your sales connected with Australia? The ATO says that \"\"A sale of something other than goods or property is connected with Australia if ... the thing is done in Australia [or] the seller makes the sale through a business they carry on in Australia\"\". Both of these appear to be true in your case. So in summary: if you are required to register for GST, you would be required to pay GST on these items. I am not a financial advisor or a tax accountant and this is not financial advice.\"",
"title": ""
},
{
"docid": "f1be9d7231a61302958e09ca27c1c4fe",
"text": "The Canada Revenue Agency describes in detail here what information businesses must generally include on their invoices so that GST/HST registrants can claim Input Tax Credits (ITCs) for the expenses. Quote: Sales invoices for GST/HST registrants You have to give customers who are GST/HST registrants specific information on the invoices, receipts, contracts, or other business papers that you use when you provide taxable goods and services. This information lets them support their claims for input tax credits (ITCs) or rebates for the GST/HST you charged. [...] The page quoted continues with a table describing what, specifically, needs to be on a sales invoice based on the total amount of the invoice; the requirements differ for: total sale under $30, total sale between $30 to $149.99, and total sale $150 or more. For the total sale under $30 category, the only things a sales invoice must contain to support an ITC claim are (1) the provider's business name, (2) the invoice date, and (3) the total amount paid/payable. i.e. When the total sale is under $30, there is no requirement for any GST/HST amount to be indicated separately, nor for a business number to be present on the invoice. Hence, IMHO (and I am neither an accountant nor a lawyer), if your Uber rides are for $30 or less, then you shouldn't expect a GST/HST number anyway, and a simple invoice as described should be enough for you to claim your ITCs. Whether or not the provider is registered in fact for GST/HST is beside the point. For amounts over $30, you need a bit more. While the page above specifies that the provider's business number should be included beginning with the next level of total sales, there are exceptions to those rules described at another page mentioned, Exceptions to invoice requirements, that specifically apply to the taxi/limousine case. Quote: Exceptions to invoice requirements GST/HST registrants are required to keep the necessary documentation to support their claim for ITCs and rebates. In certain circumstances the documentation requirements have been reduced. [...] For taxi or limousine fares your books and records must show: So at a minimum, for fare in excess of $30 total, you should ask the driver to note either (a) the amount of GST/HST charged, or (b) a statement that the fare includes GST/HST. The driver's business number need not be specified. Consequently, if your receipt for a ride in excess of $30 does not contain any such additional information with respect to GST/HST, then I would expect the receipt does not satisfy the CRA's requirements for supporting your ITC claim. i.e. Keep your individual rides under $30 each, or else get a better receipt from the driver when it is above that amount. p.s. It should go without saying, but your rides, of course, must be considered reasonable business expenses in order to qualify for GST/HST ITCs for your business. Receipts for rides of a personal nature are not eligible, so be sure to maintain proper records as to the business purpose and destination for each ride receipt so claimed.",
"title": ""
},
{
"docid": "6af2d7c818f1572b426e4c57f8e217fe",
"text": "\"11 / 111 / 11111 looks like the (old) tax number: it is used by the tax office to know who you are, it isn't good at all for the spanish company. It would even change when you move inside Germany. VAT IDs are not exclusive to GmbHs (but a GmbH always has one). As freelancers you can get at VAT ID but you don't always have to. The tax office offers a \"\"small business\"\" treatment (§ 19 UStG) for freelancers, kind of an opt-out for the VAT ID. As you do not have a VAT ID, this is probably your case. It means So what to do? If I were you, I'd write them that according to §19 UStG and the European Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, TITLE XII CHAPTER 1 \"\"Special scheme for small enterprises\"\" you were not assigned a VAT ID, and VAT is not applicable to your bill. The fact that VAT is not applicable in this case does not mean that they are allowed to refuse payment. I heard a rumour (but don't really know) that a number similar to the VAT ID is planned also for freelancers (Wirtschafts-IDNr.). You could go to your tax office and ask them about. Maybe that yields a number that satisfies spanish burocracy. AFAIK, you can go to your tax office and ask them to give you a real VAT number. But careful: that has the serious drawback that you have to do do an advance VAT estimate and pay that to the tax office at least quarterly (for bigger business monthly). And (AFAIK) you are not allowed to change back to the small business treatment for several years.\"",
"title": ""
},
{
"docid": "67b68ecf5c993aeea42bb178987d334d",
"text": "Yes, you are the proprietor of the business and your SSN is listed on Schedule C. The information on Schedule C is for your unincorporated business as a contractor; it is a sole proprietorship. You might choose to do this business under your own name e.g. Tim Taylor (getting paid with checks made out to Tim Taylor) or a modified name such as Tim the Tool Man Taylor (this is often referred to as DBA - Doing Business as), under a business name such as Tool Time etc. with business address being your home address or separate premises, and checking accounts to match etc. and all that is what the IRS wants to know about on Schedule C. Information about the company that paid you is not listed on Schedule C.",
"title": ""
},
{
"docid": "3829f2bd93fbc08fcf8d58ebe3c01c34",
"text": "\"ITR1 or ITR2 needs to be filed. Declare the income through freelancing in the section \"\"income from other sources\"\"\"",
"title": ""
},
{
"docid": "8c9b48ed7f140ddf25940da79b0bba86",
"text": "The VAT number should be equivalent from the point of view of your client. The fact that you are a sole trader and not a limited liability doesn't matter when it comes down to pay VAT. They should pay the VAT to you and you will pay it to the government. I'll guess that their issue is with tax breaks, it is a bit more tricky to receive a tax break on paid taxes if you buy something abroad (at least it is here in Finland). If they won't pay you because of that, you could open a LTD or contract the services of a 'management company' which will do the job of invoicing, receiving the money and passing it back to you, for a fee.",
"title": ""
},
{
"docid": "8d031287980a46fd870886fd6610e129",
"text": "Yes. You must register for GST as well, if you will be making over the threshold (currently $60,000). That's probably a bonus for you, as your home office expenses will mostly include GST, but your income will most likely be zero-rated. Check with an accountant or with the IRD directly. Just be certain to put aside enough money from each payment to cover income tax, GST and ACC. You will get a very large bill in your second year of business.",
"title": ""
},
{
"docid": "82d2d4a07821a9bb5dad39c545650d9a",
"text": "Assuming you have registered your activities as partnership and receiving this money as Individual, you need to show this under Schedule OS, 1d [other income]. this will be under the ITR-2 [tab CG-OS] XLS tax preparation utility given by Tax Department. The XLS can be found at https://incometaxindiaefiling.gov.in/portal/individual_huf.do If the funds you are receiving are large [more than say Rs 500,000] then suggest you incorporate a partnership firm or company, there are quite a few exceptions you can claim lowering you tax outgo. The fact that you are transferring funds to your partners can be an issue incase you get audited. You would need to have sufficient evidence to show that the money paid was for services rendered directly and not your income. It would be easier if you create a partnership or have the client directly pay to them. Again if the sum is small its fine, as the sum becomes large, it would get noticed by the tax authorities.",
"title": ""
},
{
"docid": "6931b28ed497d53fd8dcf1995532c920",
"text": "\"Also within Germany the tax offices usually determine which tax office is responsible for you by asking where you were more than 180 days of the year (if e.g. you have a second flat where you work). That's a default value, though: in my experience you can ask to be handled by another tax office. E.g. I hand my tax declaration to my \"\"home\"\" tax office (where also my freelancing adress is), even though my day-job is 300 km away. So if you work mostly from Poland and just visit the German customer a few times, you are fine anyways. Difficulties start if you move to Germany to do the work at your customer's place. I'm going to assume that this is the situation as otherwise I don't think the question would have come up. Close by the link you provided is a kind of FAQ on this EU regulation About the question of permanent vs. temporary they say: The temporary nature of the service is assessed on a case-by-case basis. Here's my German-Italian experience with this. Background: I had a work contract plus contracts for services and I moved for a while to Italy. Taxes and social insurance on the Italian contracts had to be paid to Italy. Including tax on the contract for services. Due to the German-Italian tax treaty, there is no double taxation. Same for Poland: this is part of EU contracts. By the way: The temporary time frame for Italy seemed to be 3 months, then I had to provide an Italian residence etc. and was registered in the Italian health care etc. system. Due to the German-Italian tax treaty, there is no double taxation. Same for Poland: this is part of EU contracts. Besides that, the German tax office nevertheless decided that my \"\"primary center of life\"\" stayed in Germany. So everything but the stuff related to the Italian contracts (which would probably have counted as normal work contracts in Germany, though they is no exact equivalent to those contract types) was handled by the German tax office. I think this is the relevant part for your question (or: argumentation with the German tax office) of temporary vs. permanent residence. Here are some points they asked: There is one point you absolutely need to know about the German social insurance law: Scheinselbständigkeit (pretended self-employment). Scheinselbständigkeit means contracts that claim to be service contracts with a self-employed provider who is doing the work in a way that is typical for employees. This law closes a loophole so employer + employee cannot avoid paying income tax and social insurance fees (pension contributions and unemployment insurance on both sides - health insurance would have to be paid in full by the self-employed instead of partially by the employer. Employer also avoids accident insurance, and several regulations from labour law are avoided as well). Legally, this is a form of black labour which means that the employer commits a criminal offense and is liable basically for all those fees. There is a list of criteria that count towards Scheinselbständigkeit. Particularly relevant for you could be\"",
"title": ""
},
{
"docid": "d80b85fb6340eec3bc24c5e8a104fab0",
"text": "You can't be doing it yourself. Only your employer can do it. If the employer doesn't provide the option - switch employers. The only way for you to do it yourself is if you're the employer, i.e.: self-employed.",
"title": ""
},
{
"docid": "573e48e9b9d4cbbfa1dee18393f88dd7",
"text": "The best way is for X to work as Independent consultant fro c.com from India by raising monthly invoices for the work done. This will avoid the complications and paperwork associated by registering a LLC in US by XF and then employing X as independent consultant in India. X may need to fill out W8-BEN forms so that there is no withholding in US Edit: Independent consultant means without having to register any legal entity either in India or in US. There are no legal regulations in US or in India to hire an independent contractor / consultant. There maybe internal policy of C.com not to have independent consultants. Payments can be made via transfer to Bank account.",
"title": ""
},
{
"docid": "6f502d2bdee21a91a60a914580f1d61e",
"text": "You can find a lot of information at the HRMC website at http://hmrc.gov.uk. If you don't want to work as an employee, you can register as self-employed (basically a one-man band), which is quite simple, you can start your own company, which is more work but can have tax advantages, or you can find umbrella companies which will officially employ you while in reality you are a freelancer and only do your billing through them. Umbrella companies can be anywhere from totally legal to extremely dodgy. If they promise you that you pay only five percent tax on your income through ingenious tricks, that's only until the tax office finds out and they will make you pay. Between self-employed and your own company, the big difference is whether you are actually working independently or not. If you work like an employee (take someone else's orders) and claim you are a company, the tax office doesn't like that. And if you pay very little taxes, they don't like that either. So self-employed is the safer choice but you will pay more taxes, close to what a normal employee would pay. Obviously you will have to pay tax on your income and NHS insurance. Obviously you are required to tell the government (actually HMRC) about your income. Not doing so would be tax evasion and get you into deep trouble when you are caught. I don't think you have to tell them the source of your income, but not telling them might look very suspicious and might get your accounts checked carefully. And unless you design a website for the mafia, why wouldn't you tell them? The bill payer will try to deduct your bill from their profits anyway, so it's no secret. Most important to remember: When you send out a bill and receive payment, you'll have to pay tax on it. When self employed, as a rule of thumb put one third away into a savings account for your tax bill. Don't spend it all or you will find yourself in deep trouble when your taxes need paying. Plus put some more away for times when you can't find work.",
"title": ""
},
{
"docid": "6ebd3ca1df268ba1bfae8b9a1718218e",
"text": "There is no strict need to do that, you can consider yourself to be consulting, a 10% of your payment will be withheld and paid as tax by the company, you can deduct up to 60% of your income as expenses and pay tax on the rest (factoring the tax deducted at source). In another approach, you could register for service tax and charge service tax on your invoice and pay to the service tax department, the tax calculations are similar to above. It will be good if you speak to a chartered accountant and get more clarity. As for business card, you could print it with your name and qualification, there are no restrictions on that.",
"title": ""
},
{
"docid": "563440e7c3bd9c4100cc7605236340c8",
"text": "\"I agree that you should have received both a 1099 and a W2 from your employer. They may be reluctant to do that because some people believe that could trigger an IRS audit. The reason is that independent contractor vs employee is supposed to be defined by your job function, not by your choice. If you were a contractor and then switched to be an employee without changing your job description, then the IRS could claim that you should have always been an employee the entire time, and so should every one of the other contractors that work for that company with a similar job function. It's a hornet's nest that the employer may not want to poke. But that's not your problem; what should you do about it? When you say \"\"he added my Federal and FICA W/H together\"\", do you mean that total appears in box 4 of your 1099? If so, it sounds like the employer is expecting you to re-pay the employer portion of FICA. Can you ask them if they actually paid it? If they did, then I don't see them having a choice but to issue a W2, since the IRS would be expecting one. If they didn't pay your FICA, then the amount this will cost you is 7.65% of what would have been your W2 wages. IMHO it would be reasonable for you to request that they send you a check for that extra amount. Note: even though that amount will be less than $600 and you won't receive a 1099 in 2017 for it, legally you'll still have to pay tax on that amount so I think a good estimate would be to call it 10% instead. Depending on your personality and your relationship with the employer, if they choose not to \"\"make you whole\"\", you could threaten to fill out form SS-8. Additional Info: (Thank you Bobson for bringing this up.) The situation you find yourself in is similar to the concept of \"\"Contract-to-Hire\"\". You start off as a contractor, and later convert to an employee. In order to avoid issuing a 1099 and W2 to the same person in a single tax year, companies typically utilize one of the following strategies: Your particular situation is closest to situation 2, but the reverse. Instead of retroactively calling you a W2 employee the entire time, your employer is cheating and attempting to classify you as a 1099 contractor the entire time. This is frowned upon by the IRS, as well as the employee since as you discovered it costs you more money in the form of employer FICA. From your description it sounds like your employer was trying to do you a favor and didn't quite follow through with it. What they should have done was never switch you to W2 in the first place (if you really should have been a contractor), or they should have done the conversion properly without stringing you along.\"",
"title": ""
},
{
"docid": "539476fa960d3b8b89cb5c46fb289d6e",
"text": "I would assume that under a certain threshold, HMRC doesn't even want to hear from you, because extracting taxes from you costs them more money than you are going to pay. On the other hand, I cannot find anything written about that subject. I'd suggest to call them at 0300 200 3300 and ask them. Have the annual cost of the server ready, and tell them that you will stop asking for donations if say 6 months of cost is covered. There may be an official threshold that I was unable to find. Obviously if you receive £1000 in donations and spend £100 for the server, they will want tax payment. If its £110 in donations and £100 for the server, they will likely not care. If they tell you to register as self-employed, it's not difficult, just a bit of a pain. In that case you'd have to pay tax on your income (donations) minus cost (cost for the server and any other cost).",
"title": ""
}
] |
fiqa
|
5a5483510633f6b60a6468f37fc56138
|
Taxable Website Ad Revenue
|
[
{
"docid": "d3d82e1a48bd6fd8afb26538e78100d8",
"text": "I'm not a tax advisor, but I've done freelance work, so... If any of your side-business revenue is reported on a 1099, you're now a business owner, which is why Schedule C must be filled out. As a business owner, minimum wage doesn't apply to you. All revenue is income to you, and you owe taxes on the profit, after subtracting legitimate (verifiable) business expenses. You'll want to talk to a real tax advisor if you're going to start expensing mileage, part of your house (if you use a home office), etc. Don't forget that you'll owe self-employment tax (the employer's half of your payroll tax). You can't save money on business taxes by paying yourself a wage and then counting it as an expense to the business. You'll definitely want to talk to a tax expert if you start playing around with finances as an (the) owner of the business. Income that is not reported on a 1099 should be reported as hobby income.",
"title": ""
},
{
"docid": "719f35b28cb051d605fcb396a7a2589f",
"text": "If the $5000 is income, then you need to pay income taxes on it. That's simply the way it works. Hourly rate has nothing to do with whether or not you pay taxes. If it helps, try to think of the $5000 as the first $5000 you make for the year. Now it's covered by your standard deduction and you're not paying taxes on it.",
"title": ""
}
] |
[
{
"docid": "28132702905866ef072acfc647b5f91a",
"text": "I would put it under advertising. Technically the domain name should be amortized over its useful life... you can't really expense it all in the first year, unless it fits within Section 179.",
"title": ""
},
{
"docid": "054ecd42afa51caf2182f0869bccc846",
"text": "Ok thanks for this. I am curious, how would they know its facebook that is directing these increased sales. If it's TV or radio, you can tell by increased revenues from increased spots. But for a facebook ad or a google ad, unless this is the only form of marketing, how are you sure (unless again you can ask, did you hear from us by google or fb) its from one of these websites. My thinking was for a physical product when i made this comment.",
"title": ""
},
{
"docid": "aeab8468a372c7d171129435c11b7c50",
"text": "\"For an example of a company that didn't do that, see Google: https://www.sec.gov/Archives/edgar/data/1652044/000165204417000014/goog10-qq12017.htm [emphasis added] >\"\"Adoption of ASC Topic 606, \"\"Revenue from Contracts with Customers\"\" On January 1, 2017, we adopted Topic 606 using the **modified retrospective method** applied to those contracts which were not completed as of January 1, 2017. Results for reporting periods beginning after January 1, 2017 are presented under Topic 606, while **prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.** We **recorded a net reduction to opening retained earnings of $15 million as of January 1, 2017 due to the cumulative impact of adopting Topic 606**, with the impact primarily related to our non-advertising revenues. The impact to revenues for the quarter ended March 31, 2017 was an increase of $14 million as a result of applying Topic 606.\"\"\"",
"title": ""
},
{
"docid": "159ebc98bb6fd24aa4857ed919b18228",
"text": "Do I report it as income? Is it subject to just the same amount of taxes (~30%) as regular income? Are there any restrictions on how it can be used? It is income. You can deduct the costs of maintaining the web page and producing the software from it (have an accountant do that for you, there are strict rules on how to do that, and you can only deduct up to the income if its a hobby and not a for-profit business), but otherwise it's earned income like any other self employment income. It is reported on your schedule C or on line 21 of your 1040 (miscellaneous income), and you're also liable for self-employment taxes on this income. There are no restrictions, it's your money. Technically, who is the donation even being made to? Me, just because I own the webpage? Yes. This is for the United States, but is there any difference if the donations come from overseas? No, unless you paid foreign taxes on the money (in which case you should fill form 1116 and ask for credit). If you create an official 501(c) organization to which the donations are given, instead of you getting it directly, the tax treatment will be different. But of course, you have to have a real charitable organization for that. To avoid confusion - I'm not a licensed tax professional and this is not a tax advice. If in doubt - talk to a EA/CPA licensed in your State.",
"title": ""
},
{
"docid": "b4d7b7b57435b276bd7d1d63e0ca96f6",
"text": "\"Yeah, I'm actually working on such a web server... And you're right, it's really an entire platform more than it is a web server (though you can certainly use it as \"\"just a web server\"\"). Also, I did loads of testing to see what it takes to prevent adblock from working properly. Avoid the obvious stuff like using standard banner sizes and serving images from a directory called \"\"ads\"\" (hehe). I don't want to give away my secrets just yet but if you too make it your goal to work around adblock you'll find nearly impenetrable solutions in no time :)\"",
"title": ""
},
{
"docid": "c1f72824ef2b3072f154a0d2fa565ef4",
"text": "Depending on what software you use. It has to be reported as a foreign income and you can claim foreign tax paid as a foreign tax credit.",
"title": ""
},
{
"docid": "3829f2bd93fbc08fcf8d58ebe3c01c34",
"text": "\"ITR1 or ITR2 needs to be filed. Declare the income through freelancing in the section \"\"income from other sources\"\"\"",
"title": ""
},
{
"docid": "afbca4d29419bb73a19199c8112612b3",
"text": "\"If you are in the US, you legally must file taxes on any income whatsoever. How much you will pay in taxes, if any, will depend on your total taxable income. Now, for small transactions, the payments are often not reported to the IRS so some people do not file or pay. The threshold at which they payer is required to send a 1099 to the IRS is $600. Patreon considers each donation a separate transaction and therefore does not send a 1099 to the IRS unless you make more than $20,000 in a calendar year. If they do not report it, the IRS will not know about it unless they audit you or something. However, you are technically and legally responsible to report income whether the IRS knows about it or not. -------- EDIT ------- Note that the payer files a 1099, not the recipient. In order to report your patreon income you will either use schedule C or add it to the amount on 1040 line 21 (\"\"other income\"\") depending on whether you consider this a business or a hobby. If it's a business and it's a lot of money you should consider sending in quarterly payments using a 1040-ES in order to avoid a penalty for too little withholding.\"",
"title": ""
},
{
"docid": "15a3ce075535c30d8b619174f5cd06e6",
"text": "Salaries and etc are a business expense and chargeable against revenue for tax purposes. It is NOT tax deductible but it is an expense on an income statement in calculating net profit (after tax). You could say salary & etc are tax effective but not tax deductible.",
"title": ""
},
{
"docid": "2fcf68e3f01cd08d7f4dbcf747e10e6d",
"text": "You can invoice your advertisers and use the date of the invoice for tax purposes. Some advertisers may want to pay monthly, weekly etc so that would require multiple entries as income on the relevant dates.",
"title": ""
},
{
"docid": "3ae4e3911e0d4d3cf06bfadd1fd38e56",
"text": "It is best to take advise from / appoint a professional CA. Will I have to pay GST? No GST is applicable. Exports outside of India do not have GST. Do I have to collect TDS when I send money to the PUBLISHERS ? No But another guy said, I have to pay 18% tax when receiving and sending payments, apart from that I have to collect 30.9% TDS when sending payment to the PUBLISHERS(outside India). There is only income tax applicable on profits. So whatever you get from Advertisers less of payments to publishers less of your expenses is your profit. Since you are doing this as individual, you will have to declare this as income from other sources and pay income tax as appropriate. Note there are restrictions on sending payments outside of India plus there are exchange rate fluctuations. It is best you open an Foreign Currency Resident [or Domestic] Account. This will enable you payout someone without much issues. Else you will have to follow FEMA and LRS schemes of RBI.",
"title": ""
},
{
"docid": "1d370b669a72ef0c912fcf327d67b3be",
"text": "[Reddit $20 million in revenue in 2016](https://www.recode.net/2016/4/28/11586522/reddit-advertising-sales-plans), is valued at $1.8 billion? I think this has more to do with our near zero interest rates world, and capital chasing returns in the stock market casino, than any rational business valuation. What goes up .......",
"title": ""
},
{
"docid": "418d1c8eb7b3bcbfe3ed9d3b91e0f720",
"text": "In an accounting position, a domain name would fall under an intangible asset. Copyrights and patents are intangible, while tangible assets would be buildings or land (also known as property, plant, and equipment). Noting above, you can list it as an expense for personal reasons, but that would be poor classification. Tangible and intangible assets come with expenses such as legal fees and design. In these instances, you would expense the cost, or fee, but add back that value to the tangible or intangible as it would be considered maintenance. Please read here for tax treatment of a domain name. Please read here for what an intangible asset is. Also read here on page 11 for more clarification by IFRS.",
"title": ""
},
{
"docid": "ecc3bdde1d9f426636c0fc2f5867d76e",
"text": "Ok go ahead and make a site like this and see how it does. Realistically nobody wants to sacrifice their own internet browsing speeds to remove a couple of skippable & blockable ads. It'd be great if gigabit fiber was available nationwide, but it isn't even close. 30% of households still have DSL. Your tech solution relies on building blocks that don't exist, and compromises that people don't want to make. Changing stuff over to P2P would require a massive infrastructure investment alongside with a rethinking of common web development principles. Before you go trying to reinvent the wheel, learn what pi is. The ad-based model works. The subscription-based model also works. Many sites are switching to a combination of the two. Servers allow for centralized updating of your content. The only broken thing is that ads aren't perfectly targeted to individual users, which is changing. If you don't want to see any ads, pay the website a subscription.",
"title": ""
},
{
"docid": "0660a055e498255f0629f66e7b8303f2",
"text": "\"Tax is often calculated per item. Especially in the days of the internet, some items are taxable and some aren't, depending on the item and your nexus. I would recommend calculating and storing tax with each item, to account for these subtle differences. EDIT: Not sure why this was downvoted, if you don't believe me, you can always check with Amazon: http://www.amazon.com/gp/help/customer/display.html/ref=hp_468512_calculated?nodeId=468512#calculated I think they know what they're talking about. FINAL UPDATE: Now, if someone goes to your site, and buys something from your business (in California) and the shipping address for the product is Nevada, then taxes do not have to be collected. If they have a billing address in California, and a shipping address in Nevada, and the goods are shipping to Nevada, you do not have to declare tax. If you have a mixture of tangible (computer, mouse, keyboard) and intangible assets (warranty) in a cart, and the shipping address is in California, you charge tax on the tangible assets, but NOT on the intangible assets. Yes, you can charge tax on the whole order. Yes for most businesses that's \"\"Good enough\"\", but I'm not trying to provide the \"\"good enough\"\" solution, I'm simply telling you how very large businesses run and operate. As I've mentioned, I've done several tax integrations using software called Sabrix (Google if you've not heard of it), and have done those integrations for companies like the BBC and Corbis (owned and operated by Bill Gates). Take it or leave it, but the correct way to charge taxes, especially given the complex tax laws of the US and internationally, is to charge per item. If you just need the \"\"good enough\"\" approach, feel free to calculate it by total. Some additional reading: http://en.wikipedia.org/wiki/Taxation_of_Digital_Goods Another possible federal limitation on Internet taxation is the United States Supreme Court case, Quill Corp. v. North Dakota, 504 U.S. 298 (1992),[6] which held that under the dormant commerce clause, goods purchased through mail order cannot be subject to a state’s sales tax unless the vendor has a substantial nexus with the state levying the tax. In 1997, the federal government decided to limit taxation of Internet activity for a period of time. The Internet Tax Freedom Act (ITFA) prohibits taxes on Internet access, which is defined as a service that allows users access to content, information, email or other services offered over the Internet and may include access to proprietary content, information, and other services as part of a package offered to customers. The Act has exceptions for taxes levied before the statute was written and for sales taxes on online purchases of physical goods.\"",
"title": ""
}
] |
fiqa
|
914123959e454479e430675a63d2d237
|
UK - reclaim VAT on purchases for freelance work
|
[
{
"docid": "ed623c193cfc05a8c04cb3925bf45a18",
"text": "If you mostly do work for businesses/individuals who are VAT registered it's a no-brainer to become VAT registered yourself... Although you will have to charge your customers VAT (and pass this on to HMRC) because they are VAT-registered they will reclaim the amount so it won't actually 'cost' them anything. At the same time, you can reclaim all the VAT you're currently being charged on your business expenditure (business equipment, tickets to business events, business software, accountancy/other business services you pay for, web hosting etc etc etc) However, if most of your clients are not VAT-registered it's not worth you registering. You would have to charge your customers an extra 20% (and they wouldn't be able to claim it back!) and you would have to pass this on to HMRC. Although you could still claim for goods and services you purchase for business use, essentially you'd just be another tax collector for HMRC. That said, at the end of the day it's up to you! VAT returns are quarterly and dead simple. Just keep a spreadsheet with your invoices (output tax) and receipts (input tax) and then do some basic maths to submit the final numbers to HMRC. No accountant required!",
"title": ""
},
{
"docid": "7384ba26029dc697a612316e7d27c1e7",
"text": "You are either VAT registered or you are not VAT registered. If you are not VAT registered, then you are not allowed to charge customers VAT, and you cannot reclaim VAT that you are paying. You are however allowed to deduct the cost of goods including VAT from your expenses. So if you buy a computer for £1000 + £200 VAT, and you can deduct the computer as an expense to reduce your profits that you pay income tax for, then the expense is £1,200 and not just £1,000. If you are VAT registered, then you MUST charge every customer 20% VAT. Business customers don't mind at all, but private customers will be happier if you don't charge VAT because your bills will be a lot lower. You take all the VAT that you received, then subtract all the VAT that you paid for business expenses and that you have invoices for, and send the remainder to HMRC four times a year. (The reason that businesses don't mind paying VAT is because they can in turn deduct the VAT they pay you from the VAT that they received and for every pound they give you, they give one pound less to HMRC). Note that when you have expenses that are deductible from your profits, you can now only deduct the cost excluding VAT. On the other hand, the VAT you receive doesn't count as income and doesn't lead to profits that you need to pay income tax for. It's your decision whether you want to be VAT registered or not, unless your revenue exceeds some limit (somewhere between £70,000 and £80,000 per year) where you must register for VAT.",
"title": ""
}
] |
[
{
"docid": "e64e4e41b617d2c494ffa890cb6abe93",
"text": "After a bit of rooting around the HMRC sites, I found this page which says this: One key difference is that digitised products are classed as electronically-supplied services for VAT and customs duties. These services are: For VAT purposes, the place of supply of these services is the country in which the customer lives. If you supply electronic services to a business customer in another European Union (EU) country, the customer accounts for any VAT due in that country. You should not charge UK VAT. If you supply electronic services to a consumer, charity or government body in another EU country, you have to account for UK VAT. If you supply electronic services to anyone in a country outside the EU, you don't pay any VAT. If, as a UK business, you buy electronic services from a company outside the UK, you have to account for VAT. If I read this correctly, I as the supplier of the website need to account for VAT only if the sponsor is a consumer, charity or government body in another EU country. It is not covered in this site, but I assume I must also account for VAT for a customer based in the UK. So in answer to the original question, a customer from Canada (which is currently outside the EU) would account for the VAT themselves, and I would simply charge the gross amount.",
"title": ""
},
{
"docid": "695f16aea2161d309f68ff92aa4f449b",
"text": "You can claim VAT back if you are VAT registered. You MUST be VAT registered if your turnover is more than £82,000. You MAY register if your turnover is less. However, you can only claim back as much VAT as you actually received, and you can only claim VAT back on purchases that were made for your business, not for private use. And you need to remember that if you are VAT registered, you MUST charge VAT on every income. If you mostly trade with private customers, it means that your prices all just went up by 20%, so it's not a good idea.",
"title": ""
},
{
"docid": "ba9c7a098b91c3adfcde14646cd9d9e2",
"text": "Is the VAT scam still on the go? I was under the impression that amazon have to pay vat according to the country the items are shipped to, not shipped from? It will be a complete fuck up on the part of our politicians if this loophole has not been closed yet.",
"title": ""
},
{
"docid": "3b36305cf5bd1204e47a99690160c354",
"text": "The vendor needs to do this using apportionment, according to the VAT rules for mixed supplies: If you make mixed supplies and the individual supplies are not liable to VAT at the same rate then you need to work out the tax value of each supply in order to calculate how much tax is due. If the tax value is based on the total price you charge (see paragraph 7.3) you do this by splitting that price between the supplies. This is called an apportionment ... There is no special method of apportionment ... However, your calculations must be fair and you must be able to justify them. It is usually best to use one of the methods shown in section 32. The section 32 referred to really relates to apportioning use between business and non-business purposes, but it implies that splitting up the total price in proportion to the original prices would probably be fair. So in your example the vendor might split the £5 discount equally between the spoon and the carrycot as they had the same gross cost, and pay VAT as if each had cost £7.50 gross. The vendor could also do it in proportion to their net (pre-VAT) prices and thus apportion a bit more of the discount to the carrycot than the spoon, but as this would lead to them paying slightly more tax overall they probably wouldn't choose to. However, none of this is likely to be too relevant to a consumer, since in the UK prices must be presented as the gross (VAT-inclusive) amounts and so the discounts will also apply to those amounts. It will of course affect how much of the purchase price the vendor ends up paying on to the government and thus might indirectly affect what discounts the vendor is willing to offer.",
"title": ""
},
{
"docid": "4a9011e433785e61732b017579a786a1",
"text": "Yes, but make sure you issue a 1099 to these freelancers by 1/31/2016 or you may forfeit your ability to claim the expenses. You will probably need to collect a W-9 from each freelancer but also check with oDesk as they may have the necessary paperwork already in place for this exact reason. Most importantly, consult with a trusted CPA to ensure you are completing all necessary forms correctly and following current IRS rules and regulations. PS - I do this myself for my own business and it's quite simple and straight forward.",
"title": ""
},
{
"docid": "b19b22ee8d55cec0980dff641e6ca784",
"text": "I would not expect any problems. Your interest will have tax deducted at 20% which I don't think you would be entitled to reclaim because you don't get a personal allowance if you aren't resident in the UK, and unless you have a huge amount of UK earnings you would not be legally liable to any higher rates of tax so there would be no issues there. If you were liable to more tax you would be obliged to inform the Inland Revenue.",
"title": ""
},
{
"docid": "bc055c6c70f3249b941ed39e3ca4554e",
"text": "As far as taxes are concerned, if your income is €10 to €20 a month, the Finanzamt doesn't even want to hear from you. To be on the safe side, give them a call and you will probably be told that there is a minimum amount, and if your revenue is below that you don't have to do anything. As far as VAT (MwSt) is concerned: You can only deduct it from VAT that you would have to pay to the government. If you are supposed to pay €100 VAT to the government, you can deduct up to €100 VAT paid to suppliers. If you don't pay VAT, you can't deduct it.",
"title": ""
},
{
"docid": "472b1c3431cd2096d17855cf59342fd4",
"text": "\"I'm thinking about visiting the UK and I'm wondering which things are affected by the VAT and which are not. Most consumer goods are subject to VAT at the standard rate. Most food sold in shops is zero-rated, with the exception of a handful of luxury foods. Food in cafes/restaurants and some takeaway food is subject to VAT at the standard rate. Most paper books are zero rated (IIRC books that come with CDs are an exception). Some services are exempt, insurance is a notable one, so are some transactions with charities. Some small buisnesses and sole traders may not be VAT registered in which case there is no VAT for you to pay (but they can't reclaim VAT on the goods and services they buy). (there is a distinction between zero-rated and exempt but it's not relavent to you as a customer). Some goods have special rules, notably second hand goods. Prices are normally given inclusive of VAT. The exception to this is suppliers who mostly deal in business to business transactions. Also as a non-UK resident is there a way to get a rebate/reimbursement on this tax? There is something called the \"\"retail export scheme\"\" which can get you a refund but there are a number of catches.\"",
"title": ""
},
{
"docid": "9b8cabcfb79bae49fcb9ee46fc5926a3",
"text": "VAT is charged to consumers and passed on to the Government. Income tax is paid by the employees. Corporate tax on income is the true tax on corporate value add, which isn't reflected in this practice. That being said, there is nothing unique or illegal to what Starbucks is doing, pretty much all global corporations have entities setup for the exclusive purpose of licensing IP/brands. The entity just needs to demonstrate an arm's length in transactions.",
"title": ""
},
{
"docid": "cbe990789e2fb4be1cceafe3db9efa52",
"text": "The scenarios you describe are obviously easy to catch. It is reasonably defined in tax law, but more needs to be done to exert the spirit of the rules. The problem is that when international businesses are cross charging there is limited information the tax offices have to argue the toss - for example a UK tax office cannot audit the accounts of its US parent in order to decide whether a cross charge representing license fees and marketing costs is fair - but these types of transaction are one of the primary mechanism for avoiding taxes. These are therefrom inferred by the UK companies accounts but not 'in the open' in the sense that they can be easily challenged with accurate information. And that is why it happens, people know about it, but it is still not easy to stop.",
"title": ""
},
{
"docid": "305d0bb481877f331240bc5ec2e0572e",
"text": "I love the flat rate VAT scheme. It's where you pay a percentage based on your industry. An example might be Computer repair services, where you'll pay 10.5% of your total revenue to the HMRC. But you'll be invoicing for VAT at 20% still. Would definitely recommend registering for it since you're expecting to cross the threshold anyway. And like DumbCoder said, you also get a first year discount of 1%, so in the example above, you'd end up paying 9.5% VAT on your turnover. I personally found it a pain to invoice without VAT (my clients expected it), so registering made sense regardless of the fact I was over threshold. The tricky bit is keeping under the £150k turnover so you stay eligible for the flat rate. It does get more complex otherwise.",
"title": ""
},
{
"docid": "be92248dc7b9b608aaeb2cdb65eb2bd0",
"text": "Several things to consider: I don't see why your friend should pay any tax. It's not his income at all. And I am not sure where your income should be taxed in this scenario. Is he declaring it as his income somehow? The bank won't do it for him, the transfer as such should be transparent. On the other hand, money transiting on his account could in principle look suspicious, although €300 is unlikely to raise alarm. What I do know is that if you do pay taxes, 20% is not particularly high as such. There are four brackets of income tax (and tax-like contributions to the pension system) in the Netherlands, between 36.55% and 52%. Rates for personal taxes in the Netherlands are simply way higher than what you might be used to in Eastern Europe or what has been mentioned in comments. In fact, if anything, 20% seems too low. I am at a loss guessing what it could correspond to, you could ask your friend how he came to that number. There various tax discounts (kortingen) and deductions (aftreken) that apply to freelance work (and some that apply to all incomes). €3000 yearly is quite low and would probably not be taxed at all if you were recently registered as freelance (zzp'er) in the Netherlands and had no other sources of income. But on the other hand, if your money is treated as being part of your friend's income, these wouldn't apply, as he is probably already benefiting from them. There are special rules for copyright fees. Not sure this is necessarily 100% kosher but I have met people who got paid that way for articles they wrote in trade publications.",
"title": ""
},
{
"docid": "58f2669e6bcfa652552c7c3a9dee0474",
"text": "Sales taxes are charged at the point of purchase, while a VAT is assessed during the production process of the item. In the end, the amount paid by the consumer is the same, but with the VAT, the tax was collected from the manufacturer, instead of the consumer. One of the big arguments for VAT is that it prevents lost revenue due to things like smuggling (if sales tax increases past 10% smuggling spikes, so the VAT is a good mechanism if you're looking to implement large taxes on goods). It also keeps the tax burden away from shippers and other tiers of the production process that don't change the intrinsic value of the item.",
"title": ""
},
{
"docid": "bab4950e509d64dcb449b74d6a9e57f5",
"text": "The problem with your profession is that it is hard to distinguish those activities as 'services rendered' or just a 'pastime hobby'. If you believe that both of those activities constitutes a 'service rendered in a professional capacity', then you should include it into the 'Goods and services for your own use' field. However, should you believe that those services rendered was not in a professional capacity and it was in a personal one (i.e. helping out), you need not include it in the field. In addition, should you feel that the pro-bono services rendered overlaps with your professional freelance work in any way, you might want to consider the service rendered to your dad and yourself as a 'professional service' and include it in Goods and services for your own use. Such examples include (but not limited to): It might be wise to call up the HMRC to clarify on your particular situation. But what I know is, this box was created to ensure that such services rendered should be considered a profit (i.e. an advantage, adds value) and not a loss (or no value).",
"title": ""
},
{
"docid": "25c3c0fedb487bda03a9b386cba5a700",
"text": "As 'anonymous' already mentioned, I think the correct answer is to go see an accountant. That said, if you are already have to fill in a tax return anyway (ie, you're already a high rate taxpayer) then I don't see why it should be an issue if you just told HMRC of your additional profit via your tax return. I never was in the situation of being employed with a side business in the UK, only either/or, but my understanding is that registering as self employed is probably more suitable for someone who doesn't PAYE already. I might be wrong on this as I haven't lived in the UK for a couple of years but an accountant would know the answer. Of course in either case, make sure that you keep each an every scrap of paper to do with your side business.",
"title": ""
}
] |
fiqa
|
c170c5057f05904125d55a5e6c66516b
|
What gives non-dividend stocks value to purchasers? [duplicate]
|
[
{
"docid": "b9a82cc5ffdef264b2df11525bdba9a3",
"text": "Dividends are not fixed. A profitable company which is rapidly expanding, and thus cash-strapped may very well skip dividends, yet that same fast growth makes it valuable. When markets saturate, and expansion stops, the same company may now have a large free cash flow so it can pay dividends.",
"title": ""
},
{
"docid": "2c22c52e4aaebff770a0c2e1acd89cf3",
"text": "\"A share of stock is a share of the underlying business. If one believes the underlying business will grow in value, then one would expect the stock price to increase commensurately. Participants in the stock market, in theory, assign value based on some combination of factors like capital assets, cash on hand, revenue, cash flow, profits, dividends paid, and a bunch of other things, including \"\"intangibles\"\" like customer loyalty. A dividend stream may be more important to one investor than another. But, essentially, non-dividend paying companies (and, thus, their shares) are expected by their owners to become more valuable over time, at which point they may be sold for a profit. EDIT TO ADD: Let's take an extremely simple example of company valuation: book value, or the sum of assets (capital, cash, etc) and liabilities (debt, etc). Suppose our company has a book value of $1M today, and has 1 million shares outstanding, and so each share is priced at $1. Now, suppose the company, over the next year, puts another $1M in the bank through its profitable operation. Now, the book value is $2/share. Suppose further that the stock price did not go up, so the market capitalization is still $1M, but the underlying asset is worth $2M. Some extremely rational market participant should then immediately use his $1M to buy up all the shares of the company for $1M and sell the underlying assets for their $2M value, for an instant profit of 100%. But this rarely happens, because the existing shareholders are also rational, can read the balance sheet, and refuse to sell their shares unless they get something a lot closer to $2--likely even more if they expect the company to keep getting bigger. In reality, the valuation of shares is obviously much more complicated, but this is the essence of it. This is how one makes money from growth (as opposed to income) stocks. You are correct that you get no income stream while you hold the asset. But you do get money from selling, eventually.\"",
"title": ""
},
{
"docid": "88bad5cf03d3a2c8d04785fcf5589fec",
"text": "\"One way to value companies is to use a Dividend discount model. In substance, it consists in estimating future dividends and calculating their present value. So it is a methodology which considers that an equity is similar to a bond and estimates its current value based on future cash flows. A company may not be paying dividends now, but because its future earnings prospects are good may pay some in the future. In that case the DDM model will give a non-zero value to that stock. If on the other hand you think a company won't ever make any profits and therefore never pay any dividends, then it's probably worth 0! Take Microsoft as an example - it currently pays ~3% dividend per annum. The stock has been listed since 1986 and yet it did not pay any dividends until 2003. But the stock has been rising regularly since the beginning because people had \"\"priced in\"\" the fact that there was a high chance that the company would become very profitable - which proved true in the long term (+60,000% including dividends since the IPO!).\"",
"title": ""
},
{
"docid": "8298d7869d0f0edb85f3c152d7d4f565",
"text": "\"Also note that a share of voting stock is a vote at the stockholder's meeting, whether it's dividend or non-dividend. That has value to the company and major stockholders in terms of protecting their own interests, and has value to anyone considering a takeover of the company or who otherwise wants to drive the company's policy. Similarly, if the company is bought out, the share will generally be replaced by shares in whatever the new owning company is. So it really does represent \"\"a slice of the company\"\" in several vary practical ways, and thus has fairly well-defined intrinsic value linked to the company's perceived value. If its price drops too low the company becomes more vulnerable to hostile takeover, which means the company itself will often be motivated to buy back shares to protect itself from that threat. One of the questions always asked when making an investment is whether you're looking for growth (are you hoping its intrinsic value will increase) or income (are you hoping it will pay you a premium for owning it). Non-dividend stocks are a pure growth bet. Dividend-paying stocks are typically a mixture of growth and income, at various trade-off points. What's right for you depends on your goals, timeframe, risk tolerance, and what else is already in your portfolio.\"",
"title": ""
},
{
"docid": "edc7ef593efc8e63c3943b0bccda0122",
"text": "Instead of giving part of their profits back as dividends, management puts it back into the company so the company can grow and produce higher profits. When these companies do well, there is high demand for them as in the long term higher profits equates to a higher share price. So if a company invests in itself to grow its profits higher and higher, one of the main reasons investors will buy the shares, is in the expectation of future capital gains. In fact just because a company pays a dividend, would you still buy it if the share price kept decreasing year after year? Lets put it this way: Company A makes record profits year after year, continually keeps beating market expectations, its share price keeps going up, but it pays no dividend instead reinvests its profits to continually grow the business. Company B pays a dividend instead of reinvesting to grow the business, it has been surprising the market on the downside for a few years now, it has had some profit warnings lately and its share price has consistently been dropping for over a year. Which company would you be interested in buying out of the two? I know I would be interested in buying Company A, and I would definitely stay away from Company B. Company A may or may not pay dividends in the future, but if Company B continues on this path it will soon run out of money to pay dividends. Most market gains are made through capital gains rather than dividends, and most people invest in the hope the shares they buy go up in price over time. Dividends can be one attractant to investors but they are not the only one.",
"title": ""
},
{
"docid": "361690718a70866828f1ed57f6cc28ba",
"text": "A Company start with say $100. Lets say the max it can borrow from bank is $100 @ $10 a year as Interest. After a years say, On the $200 the company made a profit of $110. So it now has total $310 Option 1: Company pays back the Bank $100 + $10. It further gave away the $100 back to shareholders as dividends. The Balance with company $100. It can again start the second year, borrow from Bank $100 @ 10 interest and restart. Option 2: Company pays back the Bank $100 + $10. It now has $200. It can now borrow $200 from Bank @ $20. After a year it makes a profit of $250. [Economics of scale result $30 more] Quite a few companies in growth phase use Option 2 as they can grow faster, achieve economies of scale, keep competition at bay, etc Now if I had a share of this company say 1 @ $1, by end of first year its value would be $2, at the end of year 2 it would be $3.3. Now there is someone else who wants to buy this share at end of year 1. I would say this share gives me 100% returns every year, so I will not sell at $2. Give me $3 at the end of first year. The buyer would think well, if I buy this at $3, first year I would notionally get $.3 and from then on $1 every year. Not bad. This is still better than other stocks and better than Bank CD etc ... So as long as the company is doing well and expected to do well in future its price keeps on increasing as there is someone who want to buy. Why would someone want to sell and not hold one: 1. Needs cash for buying house or other purposes, close to retirement etc 2. Is balancing the portfolio to make is less risk based 3. Quite a few similar reasons Why would someone feel its right to buy: 1. Has cash and is young is open to small risk 2. Believes the value will still go up further 3. Quite a few similar reasons",
"title": ""
},
{
"docid": "8be243534531945387a55667d9391d39",
"text": "\"As an owner of a share of a business you also \"\"own\"\" profits made by the business. But you delegate company management to reinvest those profits, on your behalf, to make even more profits. So your share of the business is a little money-making machine that should grow, without you having to pay taxes on the dividends and without you having to decide where to reinvest your share of the profit.\"",
"title": ""
},
{
"docid": "3ce1b8ea4794c2ad88e45f2f68c45be1",
"text": "\"Yes, I agree with you. Saying that the value of the stock will grow as the company grows and acquires more assets ... I don't see why. Okay, I'm a nice guy and I want to see other people do well, but what do I care how much money they're making if they're not giving any of it to ME? Frankly I think it's like people who buy commemorative plates or beanie babies or other \"\"collectibles\"\" as an investment. As long as others are also buying them as an investment, and buying and reselling at a profit, the value will continue to go up. But one day people say, Wait, is this little stuffed toy really worth $10,000? and the balloon bursts. Confer Dutch tulips: http://www.damninteresting.com/the-dutch-tulip-bubble-of-1637/ As I see it, what gives a non-dividend-paying stock value is mostly the expectation that at some time in the future it will pay dividends. This is especially true of new start-up companies. As you mentioned, there's also the possibility of a takeover. It wouldn't have to be a hostile takeover, any takeover would do. At that point the buying company either buys the stock or exchanges it for shares of their own. In the first case you now have cash for your investment and in the second case you now have stock in a dividend-paying company -- or in another non-dividend-paying company and you start the cycle over.\"",
"title": ""
},
{
"docid": "972477431e58893d9d8e5cb7f9dea618",
"text": "\"Most companies are taken over. One can reasonably guess that company X will be taken over for a price P, at some future point in time. Then the company has a value today, that is less than price P, by a large enough margin so that the investor will likely \"\"make out\"\" when the company finally is taken over at some unknown point in time. The exception is a company like Microsoft or Apple that basically grow too large to be taken over. But then they eventually start paying dividends when they become \"\"mature.\"\" Again, the trick, during the non-dividend paying period (e.g. ten or fifteen years ago) is to guess what dividends will be paid in some future time, and price the stock low enough today so that it will be worthwhile for the buyer.\"",
"title": ""
}
] |
[
{
"docid": "e5fd2fc3ea79e1c5c3779c8ed00a42f8",
"text": "\"Yes, there are non-stock analogs to the Price/Earnings ratio. Rental properties have a Price/Rent ratio, which is analogous to stocks' Price/Revenue ratio. With rental properties, the \"\"Cap Rate\"\" is analogous to the inverse of the Price/Earnings ratio of a company that has no long-term debt. Bonds have an interest rate. Depending on whether you care about current dividends or potential income, the interest rate is analogous to either a stock's dividend rate or the inverse of the Price/Earnings ratio.\"",
"title": ""
},
{
"docid": "dde8f7266f2819fb673198020fc362f7",
"text": "\"A dividend is one method of returning value to shareholders, some companies pay richer dividends than others; some companies don't typically pay a dividend. Understand that shareholders are owners of a company. When you buy a stock you now own a portion (albeit an extremely small portion) of that company. It is up to you to determine whether holding stock in a company is worth the risk inherent to equity investing over simply holding treasury notes or some other comparable no risk investment like bank savings or CDs. Investing isn't really intended to change your current life. A common phrase is \"\"investing in tomorrow.\"\" It's about holding on to money so you'll have it for tomorrow. It's about putting your money to work for you today, so you'll have it tomorrow. It's all about the future, not your current life.\"",
"title": ""
},
{
"docid": "8275ea015abe08b1d099c7fdeb640a42",
"text": "It is just a different category of stock issued by a company that gives its owners different treatment when it comes to dividend payment and a few other financial transactions. Preferred stock holders get treated with some preference with regard to the company's profits and assets. For example, dividends are typically guaranteed to preferred stock holders whereas the leadership in the company can elect at any time not to pay dividends to common stockholders. In the event the company is liquidated, the preferred stockholders also get to be in line ahead of common stockholders when the assets are distributed.",
"title": ""
},
{
"docid": "7260e33a94f0592cc40cc223803db899",
"text": "There are books on the subject of valuing stocks. P/E ratio has nothing directly to do with the value of a company. It may be an indication that the stock is undervalued or overvalued, but does not indicate the value itself. The direct value of company is what it would fetch if it was liquidated. For example, if you bought a dry cleaner and sold all of the equipment and receivables, how much would you get? To value a living company, you can treat it like a bond. For example, assume the company generates $1 million in profit every year and has a liquidation value of $2 million. Given the risk profile of the business, let's say we would like to make 8% on average per year, then the value of the business is approximately $1/0.08 + $2 = $14.5 million to us. To someone who expects to make more or less the value might be different. If the company has growth potential, you can adjust this figure by estimating the estimated income at different percentage chances of growth and decline, a growth curve so to speak. The value is then the net area under this curve. Of course, if you do this for NYSE and most NASDAQ stocks you will find that they have a capitalization way over these amounts. That is because they are being used as a store of wealth. People are buying the stocks just as a way to store money, not necessarily make a profit. It's kind of like buying land. Even though the land may never give you a penny of profit, you know you can always sell it and get your money back. Because of this, it is difficult to value high-profile equities. You are dealing with human psychology, not pennies and dollars.",
"title": ""
},
{
"docid": "c9b6e76052a90103ff5a9ddac9ac31a5",
"text": "\"Baseball cards don't pay dividends. But many profitable companies do just that, and those that don't could, some day. Profits & dividends is where your analogy falls apart. But let's take it further. Consider: If baseball cards could somehow yield a regular stream of income just for owning them, then there might be yet another group of people, call them the Daves. These Daves I know are the kind of people that would like to own baseball cards over the long term just for their income-producing capability. Daves would seek out the cards with the best chance of producing and growing a reliable income stream. They wouldn't necessarily care about being able to flip a card at an inflated price to a Bob, but they might take advantage of inflated prices once in a while. Heck, even some of the Steves would enjoy this income while they waited for the eventual capital gain made by selling to a Bob at a higher price. Plus, the Steves could also sell their cards to Daves, not just Bobs. Daves would be willing to pay more for a card based on its income stream: how reliable it is, how high it is, how fast it grows, and where it is relative to market interest rates. A card with a good income stream might even have more value to a Dave than to a Bob, because a Dave doesn't care as much about the popularity of the player. Addendum regarding your comment: I suppose I'm still struggling with the best way to present my question. I understand that companies differ in this aspect in that they produce value. But if stockholders cannot simply claim a percentage of a company's value equal to their share, then the fact that companies produce value seems irrelevant to the \"\"Bobs\"\". You're right – stockholders can't simply claim their percentage of a company's assets. Rather, shareholders vote in a board of directors. The board of directors can decide whether or not to issue dividends or buy back shares, each of which puts money back in your pocket. A board could even decide to dissolve the company and distribute the net assets (after paying debts and dissolution costs) to the shareholders – but this is seldom done because there's often more profit in remaining a going concern. I think perhaps what you are getting hung up on is the idea that a small shareholder can't command the company to give net assets in exchange for shares. Instead, generally speaking, a company runs somewhat like a democracy – but it's each share that gets a vote, not each shareholder. Since you can't redeem your shares back to the company on demand, there exists a secondary market – the stock market – where somebody else is willing to take over your investment based on what they perceive the value of your shares to be – and that market value is often different from the underlying \"\"book value\"\" per share.\"",
"title": ""
},
{
"docid": "0619eb0ed1ee60b67556347fb051ff16",
"text": "There are many reasons for buying stock for dividends. You are right in the sense that in theory a stock's price will go down in value by the amount of the dividend. As the amount of dividend was adding to the value of the company, but now has been paid out to shareholder, so now the company is worth less by the value of the dividend. However, in real life this may or may not happen. Sometimes the price will drop by less than the value of the dividend. Sometimes the price will drop by more than the dividend. And other times the price will go up even though the stock has gone ex-dividend. We can say that if the price has dropped by exactly the amount of the dividend then there has been no change in the stockholders value, if the price has dropped by more than the value of the dividend then there has been a drop to the stockholder's value, and if the price has gone up or dropped by less than the value of the dividend then there has been a increase to the stockholder's value. Benefits of Buying Stocks with Good Dividends: What you shouldn't do however, is buy stocks solely due to the dividend. Be aware that if a company starts reducing its dividends, it could be an early warning sign that the company may be heading into financial troubles. That is why holding a stock that is dropping in price purely for its dividend can be a very dangerous practice.",
"title": ""
},
{
"docid": "d68fc2a7722d857c5ffbe80888669754",
"text": "\"There are a LOT of reasons why institutional investors would own a company's stock (especially a lot of it). Some can be: The company is in one of the indices, especially big ones. Many asset management companies have funds that are either passive (track index) or more-or-less closely adhere to a benchmark, with the benchmark frequently being (based on/exactly) an index. As such, a stock that's part of an index would be heavily owned by institutional investors. Conclusion: Nothing definitive. Being included in an equity index is usually dependent on the market cap; NOT on intrinsic quality of the company, its fundamentals or stock returns. The company is considered a good prospect (growth or value), in a sector that is popular with institutional investors. There's a certain amount of groupthink in investing. To completely butcher a known IT saying, you don't get fired for investing in AAPL :) While truly outstanding and successful investors seek NON-popular assets (which would be undervalued), the bulk is likely to go with \"\"best practices\"\"... and the general rules for valuation and analysis everyone uses are reasonably similar. As such, if one company invests in a stock, it's likely a competitor will follow similar reasoning to invest in it. Conclusion: Nothing definitive. You don't know if the price at which those institutional companies bought the stock is way lower than now. You don't know if the stock is held for its returns potential, or as part of an index, or some fancy strategy you as individual investor can't follow. The company's technicals lead the algorithms to prefer it. And they feed off of each other. Somewhat similar in spirit to #2, except this time, it's algorithmic trading making decisions based on technicals instead of portfolio managers based on funamentals. Obviously, same conclusion applies, even more so. The company sold a large part of the stock directly to institutional investor as part of an offering. Sometimes, as part of IPO (ala PNC and BLK), sometimes additional capital raising (ala Buffett and BAC) Conclusion: Nothing definitive. That investor holds on to the investment, sometimes for reason not only directly related to stock performance (e.g. control of the company, or synergies). Also, does the fact that Inst. Own % is high mean that the company is a good investment and/or less risky? Not necessarily. In 2008, Bear Stearns Inst Own. % was 77%\"",
"title": ""
},
{
"docid": "292eac97244e913ab4153315d2e1571a",
"text": "Stock acquired through a (non-taxable) stock dividend has the same holding period as the stock on which the dividend was paid.",
"title": ""
},
{
"docid": "df968b0dad2a0f72bf0e625b8d5e3fa0",
"text": "\"There is one other factor that I haven't seen mentioned here. It's easy to assume that if you buy a stock, then someone else (another stock owner) must have sold it to you. This is not true however, because there are people called \"\"market makers\"\" whose basic job is to always be available to buy shares from those who wish to sell, and sell shares to those who wish to buy. They could be selling you shares they just bought from someone else, but they also could simply be issuing shares from the company itself, that have never been bought before. This is a super oversimplified explanation, but hopefully it illustrates my point.\"",
"title": ""
},
{
"docid": "9ff4b83c8e5627b710d84964fc9b0a85",
"text": "\"This answer will expand a bit on the theory. :) A company, as an entity, represents a pile of value. Some of that is business value (the revenue stream from their products) and some of that is assets (real estate, manufacturing equipment, a patent portfolio, etc). One of those assets is cash. If you own a share in the company, you own a share of all those assets, including the cash. In a theoretical sense, it doesn't really matter whether the company holds the cash instead of you. If the company adds an extra $1 billion to its assets, then people who buy and sell the company will think \"\"hey, there's an extra $1 billion of cash in that company; I should be willing to pay $1 billion / shares outstanding more per share to own it than I would otherwise.\"\" Granted, you may ultimately want to turn your ownership into cash, but you can do that by selling your shares to someone else. From a practical standpoint, though, the company doesn't benefit from holding that cash for a long time. Cash doesn't do much except sit in bank accounts and earn pathetically small amounts of interest, and if you wanted pathetic amounts of interests from your cash you wouldn't be owning shares in a company, you'd have it in a bank account yourself. Really, the company should do something with their cash. Usually that means investing it in their own business, to grow and expand that business, or to enhance profitability. Sometimes they may also purchase other companies, if they think they can turn a profit from the purchase. Sometimes there aren't a lot of good options for what to do with that money. In that case, the company should say, \"\"I can't effectively use this money in a way which will grow my business. You should go and invest it yourself, in whatever sort of business you think makes sense.\"\" That's when they pay a dividend. You'll see that a lot of the really big global companies are the ones paying dividends - places like Coca-Cola or Exxon-Mobil or what-have-you. They just can't put all their cash to good use, even after their growth plans. Many people who get dividends will invest them in the stock market again - possibly purchasing shares of the same company from someone else, or possibly purchasing shares of another company. It doesn't usually make a lot of sense for the company to invest in the stock market themselves, though. Investment expertise isn't really something most companies are known for, and because a company has multiple owners they may have differing investment needs and risk tolerance. For instance, if I had a bunch of money from the stock market I'd put it in some sort of growth stock because I'm twenty-something with a lot of savings and years to go before retirement. If I were close to retirement, though, I would want it in a more stable stock, or even in bonds. If I were retired I might even spend it directly. So the company should let all its owners choose, unless they have a good business reason not to. Sometimes companies will do share buy-backs instead of dividends, which pays money to people selling the company stock. The remaining owners benefit by reducing the number of shares outstanding, so they own more of what's left. They should only do this if they think the stock is at a fair price, or below a fair price, for the company: otherwise the remaining owners are essentially giving away cash. (This actually happens distressingly often.) On the other hand, if the company's stock is depressed but it subsequently does better than the rest of the market, then it is a very good investment. The one nice thing about share buy-backs in general is that they don't have any immediate tax implications for the company's owners: they simply own a stock which is now more valuable, and can sell it (and pay taxes on that sale) whenever they choose.\"",
"title": ""
},
{
"docid": "0ca1c1d902376642b2036114196a52f8",
"text": "Imagine that a company never distributes any of its profits to its shareholders. The company might invest these profits in the business to grow future profits or it might just keep the money in the bank. Either way, the company is growing in value. But how does that help you as a small investor? If the share price never went up then the market value would become tiny compared to the actual value of the company. At some point another company would see this and put a bid in for the whole company. The shareholders wouldn't sell their shares if the bid didn't reflect the true value of the company. This would mean that your shares would suddenly become much more valuable. So, the reason why the share price goes up over time is to represent the perceived value of the company. As this could be realised either by the distribution of dividends (or a return of capital) to shareholders, or by a bidder buying the whole company, the shares are actually worth something to someone in the market. So the share price will tend to track the value of the company even if dividends are never paid. In the short term a share price reflects sentiment, but over the long term it will tend to track the value of the company as measured by its profitability.",
"title": ""
},
{
"docid": "7da8771edbf816b4663db5e5ab68588d",
"text": "Stock basically implies your ownership in the company. If you own 1% ownership in a company, the value of your stake becomes equal to 1% of the valuation of the entire company. Dividends are basically disbursal of company's profits to its shareholders. By holding stocks of a company, you become eligible to receiving dividends proportional to your ownership in the company. Dividends though are not guaranteed, as the company may incur losses or the management may decide to use the cash for future growth instead of disbursing it to the shareholders. For example, let's say a company called ABC Inc, is listed on NYSE and has a total of 1 million shares issued. Let's say if you purchase 100 stocks of ABC, your ownership in ABC will become Let's say that the share price at the time of purchase was $10 each. Total Investment = Stock Price * Number of Stocks Purchased = $10 * 100 = $1,000 Now, let's say that the company declares a dividend of $1 per share. Then, Dividend Yield = Dividend/Stock Price = $1/$10 = 10% If one has to draw analogy with other banking products, one can think of stock and dividend as Fixed Deposits (analogous to stock) and the interest earned on the Fixed Deposit (analogous to dividend).",
"title": ""
},
{
"docid": "7f56bfa4b4678efd8cc9806a01578457",
"text": "Would you mind adding where that additional value comes from, if not from the losses of other investors? You asked this in a comment, but it seems to be the key to the confusion. Corporations generate money (profits, paid as dividends) from sales. Sales trade products for money. The creation of the product creates value. A car is worth more than General Motors pays for its components and inputs, even including labor and overhead as inputs. That's what profit is: added value. The dividend is the return that the stock owner gets for owning the stock. This can be a bit confusing in the sense that some stocks don't pay dividends. The theory is that the stock price is still based on the future dividends (or the liquidation price, which you could also consider a type of dividend). But the current price is mostly based on the likelihood that the stock price will increase rather than any expected dividends during ownership of the stock. A comment calls out the example of Berkshire Hathaway. Berkshire Hathaway is a weird case. It operates more like a mutual fund than a company. As such, investors prefer that it reinvest its money rather than pay a dividend. If investors want money from it, they sell shares to other investors. But that still isn't really a zero sum game, as the stock increases in value over time. There are other stocks that don't pay dividends. For example, Digital Equipment Corporation went through its entire existence without ever paying a dividend. It merged with Compaq, paying investors for owning the stock. Overall, you can see this in that the stock market goes up on average. It might have a few losing years, but pick a long enough time frame, and the market will increase during it. If you sell a stock today, it's because you value the money more than the stock. If it goes up tomorrow, that's the buyer's good luck. If it goes down, the buyer's bad luck. But it shouldn't matter to you. You wanted money for something. You received the money. The increase in the stock market overall is an increase in value. It is completely unrelated to trading losses. Over time, trading gains outweigh trading losses for investors as a group. Individual investors may depart from that, but the overall gain is added value. If the only way to make gains in the stock market was for someone else to take a loss, then the stock market wouldn't be able to go up. To view it as a zero sum game, we have to ignore the stocks themselves. Then each transaction is a payment (loss) for one party and a receipt (gain) for the other. But the stocks themselves do have value other than what we pay for them. The net present value of of future payments (dividends, buyouts, etc.) has an intrinsic worth. It's a risky worth. Some stocks will turn out to be worthless, but on average the gains outweigh the losses.",
"title": ""
},
{
"docid": "17afa73737a789d0d8c3f1ddca93da58",
"text": "\"Stock has value to the buyer even if it does not currently pay dividends, since it is part ownership of the company (and the company's assets). The owners (of which you are now a part) hire managers to make a \"\"dividend policy decision.\"\" If the company can reinvest the profits into a project that would earn more than the \"\"minimum acceptable rate of return,\"\" then they should do so. If the company has no internal investment opportunities at or above this desired rate, then the company has an obligation to declare a dividend. Paying out a dividend returns this portion of profit to the owners, who can then invest their money elsewhere and earn more. For example: The stock market currently has, say, a 5% rate of return. Company A has a $1M profit and can invest it in a project with an expected 10% rate of return, so they should do so. Company B has a $1M profit, but their best internal project only has an expected 2% rate of return. It is in the owners' best interest to receive their portion of their company's profit as a dividend and re-invest it in other stocks. (Others have pointed out the tax deferrment portion of dividend policy, so I skipped that)\"",
"title": ""
},
{
"docid": "20ff5cb24583d12967d4db5e7d7eea81",
"text": "Buybacks do not increase the company's value. Cash is traded for outstanding shares. This is similar to a dividend, but instead of cash, investors receive a rising share-price. Whether an investor prefers a cash dividend or capital gains is less important than the outcome that their investment is gaining value for them.",
"title": ""
}
] |
fiqa
|
a1a52afc9e4ad4b87fda0db0f4f54066
|
Does the stock market create any sort of value?
|
[
{
"docid": "635b2da07686ff2edc334ce3019a7d44",
"text": "\"You are correct that a share of stock in a company has zero intrinsic value. Even if the company typically pays dividends, there's no guarantee that it will continue to do so. A share's only worth comes from: So that's one step better than a Ponzi scheme, because in a Ponzi scheme there's not actually any value present behind the scenes, making option (2) literally impossible. In this way company stock is similar to paper money. It's only worth something because people believe it's worth something. Slightly better than company stock is company bonds. Since a bond is a contract between you and the company, if the company should go out of business then bondholders at least get to stand near the front of the line when the company's assets are liquidated. I work in finance, and the vast majority of my colleagues agree that the secondary stock market (what the average citizen simply calls \"\"the stock market\"\") is a giant confidence game. And yet it's so profitable to believe in the value of equities the way everyone else does, that we all happily pretend these ones and zeroes we move around have actual value.\"",
"title": ""
},
{
"docid": "57ae1dabaed20e2a1c7a8d770aa3941a",
"text": "\"I probably don't understand something. I think you are correct about that. :) The main way money enters the stock market is through investors investing and taking money out. Money doesn't exactly \"\"enter\"\" the stock market. Shares of stock are bought and sold by investors to investors. The market is just a mechanism for a buyer and seller to find each other. For the purposes of this question, we will only consider non-dividend stocks. Okay. When you buy stock, it is claimed that you own a small portion of the company. This statement has no backing, as you cannot exchange your stock for the company's assets. For example, if I bought $10 of Apple Stock early on, but it later went up to $399, I can't go to Apple and say \"\"I own $399 of you, here you go it back, give me an iPhone.\"\" The only way to redeem this is to sell the stock to another investor (like a Ponzi Scheme.) It is true that when you own stock, you own a small portion of the company. No, you can't just destroy your portion of the company; that wouldn't be fair to the other investors. But you can very easily sell your portion to another investor. The stock market facilitates that sale, making it very easy to either sell your shares or buy more shares. It's not a Ponzi scheme. The only reason your hypothetical share is said to be \"\"worth\"\" $399 is that there is a buyer that wants to buy it at $399. But there is a real company behind the stock, and it is making real money. There are several existing questions that discuss what gives a stock value besides a dividend: The stock market goes up only when more people invest in it. Although the stock market keeps tabs on Businesses, the profits of Businesses do not actually flow into the Stock Market. In particular, if no one puts money in the stock market, it doesn't matter how good the businesses do. The value of a stock is simply what a buyer is willing to pay for it. You are correct that there is not always a correlation between the price of a stock and how well the company is doing. But let's look at another hypothetical scenario. Let's say that I started and run a publicly-held company that sells widgets. The company is doing very well; I'm selling lots of widgets. In fact, the company is making incredible amounts of money. However, the stock price is not going up as fast as our revenues. This could be due to a number of reasons: investors might not be aware of our success, or investors might not think our success is sustainable. I, as the founder, own lots of shares myself, and if I want a return on my investment, I can do a couple of things with the large revenues of the company: I can either continue to reinvest revenue in the company, growing the company even more (in the hopes that investors will start to notice and the stock price will rise), or I can start paying a dividend. Either way, all the current stock holders benefit from the success of the company.\"",
"title": ""
},
{
"docid": "778461d4d04e1f3b3c412fae5425ec10",
"text": "When you own stock in a company, you do literally own part of the business, even if it's a small portion. Anyone amassing over 50% of shares really does have a controlling interest. No, you can't trade a handful of AAPL shares back to Apple for an iPod, but you can sell the shares and then go buy an iPod with the proceeds. Stock prices change over time because the underlying companies are worth more or less and people are willing to pay more or less for those shares. There is no Ponzi scheme because each share you own can be bought or sold on the open market. Dividends come from the company profits, not from other investors. On the other hand, money only has value because everyone believes it has value. There's the real conspiracy.",
"title": ""
},
{
"docid": "8c3e351e7d6508d85ab2dce52c1be6bd",
"text": "\"With regards to \"\"the stock market,\"\" there are actually two markets involved here: PRIMARY MARKET Value is created in the primary market where capital is exchanged for a residual interest in an opportunity. As a theoretical example, if a person operating solo (or with a small team) were to discover or create a breakthrough product, such as an retro-aging pill, that person likely wouldn't have the financial means to fully capitalize on his new-found idea. Others with more capital may also soon discover his idea or improve upon it and exploit it before he has a chance to. For a real life example, a person studying at a California university during the 1990s discovered a method to index internet webpages and was approached by some students after a talk on the subject. He returned to his native southern Europe country seeking funds to develop the web-indexing business and failed to do so. Two of the students that approached him found capital readily available from investors in their campus sphere; their business is today one of the biggest in the world. They had exchanged part of their residual interest for capital to develop their business. The primary market of the stock market works mostly same in creating value. It is also dependent upon the secondary market. SECONDARY MARKET The secondary market indicates the day-to-day value of an enterprise. That market allows shareholders to manage their risk appetites and the enterprise's operators to execute their shareholders' interest for gains. In most cases, a secondary market reference will be used for pricing a primary market issuance. Without that reference, capital would be allocated less efficiently creating additional costs for all involved, issuers and investors. Consider what would happen if you sought to purchase a house and the mortgage lenders had no indication what the property was worth. This would make capital very expensive or possibly deny you access to credit. By having an indication, all involved are better off. That is value creating. There are some large developed economies' equity markets, such as that in Germany, where many large enterprises stay privately held and credit financing, mostly from banks, is used. The approach has proven successful as well. So why do some nations' financial markets still rely on capricious stock markets when private credit financing may do just fine in many cases? It's largely a matter of national culture. Countries such as the Netherlands, the UK and the US have long had active equity markets in continuous use that investors have trusted for centuries. CONCLUSION When leaders of an enterprise wish to grow the business to a large size with investment from the stock market, they aren't limited by the size of their banks' capital. Those leaders and their prospective investors will rely on the secondary market to determine values. In addition, if the leaders raise equity instead of debt capital, they are usually accorded more flexibility to take risks since shareholders usually have their own flexibility to transfer those risks to other investors if for any number of reasons they choose to do so. Stock markets create value in many other ways. The above are the main ways.\"",
"title": ""
},
{
"docid": "cb8c0f954bb7a2e6924705100868bec4",
"text": "Let's say that you bought a share of Apple for $10. When (if ever) their stock sold for $10, it was a very small company with a very small net worth; that is, the excess of assets over liabilities. Your $10 share was perhaps a 1/10,000,000th share of a tiny company. Over the years, Apple has developed both software and hardware that have real value to the world. No-one knew they needed a smartphone and, particularly, an iPhone, until Apple showed it to us. The same is true of iPads, iPods, Apple watches, etc. Because of the sales of products and services, Apple is now a huge company with a huge net worth. Obviously, your 1/10,000,000th share of the company is now worth a lot more. Perhaps it is worth $399. Maybe you think Apples good days are behind it. After all, it is harder to grow a huge company 15% a year than it is a small company. So maybe you will go into the marketplace and offer to sell your 1/10,000,000th share of Apple. If someone offers you $399, would you take it? The value of stocks in the market is not a Ponzi scheme, although it is a bit speculative. You might have a different conclusion and different research about the future value of Apple than I do. Your research might lead you to believe the stock is worth $399. Mine might suggest it's worth $375. Then I wouldn't buy. The value of stocks in the market is based on the present and estimated future value of living, breathing companies that are growing, shrinking and steady. The value of each company changes all the time. So, then, does the price of the stock. Real value is created in the stock market when real value is created in the underlying company.",
"title": ""
},
{
"docid": "fcfc24656923521c499bc64b56448b3c",
"text": "\"It's not a ponzi scheme, and it does create value. I think you are confusing \"\"creating value\"\" and \"\"producing something\"\". The stock market does create value, but not in the same way as Toyota creates value by making a car. The stock market does not produce anything. The main way money enters the stock market is through investors investing and taking money out. The only other cash flow is in through dividends and out when businesses go public. & The stock market goes up only when more people invest in it. Although the stock market keeps tabs on Businesses, the profits of Businesses do not actually flow into the Stock Market. Earnings are the in-flow that you are missing here. Business profits DO flow back into the stock market through earnings and dividends. Think about a private company: if it has $100,000 in profits for the year then the company keeps $100,000, but if that same company is publicly traded with 100,000 shares outstanding then, all else being equal, each of those shares went up by $1. When you buy stock, it is claimed that you own a small portion of the company. This statement has no backing, as you cannot exchange your stock for the company's assets. You can't go to an Apple store and try to pay with a stock certificate, but that doesn't mean the certificate doesn't have value. Using your agriculture example, you wouldn't be able to pay with a basket of tomatoes either. You wouldn't even be able to pay with a lump of gold! We used to do that. It was called the barter system. Companies also do buy shares back from the market using company cash. Although they usually do it through clearing-houses that are capable of moving blocks of 1,000 shares at a time.\"",
"title": ""
},
{
"docid": "bcd6f38df9a8a466e7cc2fa5acde92d6",
"text": "\"In general, I think you're conflating a lot of ideas. The stock market is not like a supermarket. With the exception of a direct issue, you're not buying your shares from the company or from the New York Stock Exchange you're buying from an owner of stock, Joe, Sally, a pension fund, a hedge fund, etc; it's not sitting on a shelf at the stock market. When you buy an Apple stock you don't own $10 of Apple, you own 1/5,480,000,000th of Apple because Apple has 5,480,000,000 shares outstanding. When a the board gets together to vote on and approve a dividend the approved dividend is then divided by 5.48 billion to determine how much each owner receives. The company doesn't pay dividends out to owners from a pot of money it received from new owners; it sold iPhones at a profit and is sending a portion of that profit to the owners of the company. \"\"When you buy stock, it is claimed that you own a small portion of the company. This statement has no backing, as you cannot exchange your stock for the company's assets.\"\" The statement does have backing. It's backed by the US Judicial system. But there's a difference between owning a company and owning the assets of the company. You own 1/5,480,000,000 of the company and the company owns the company's assets. Nevermind how disruptive it would be if any shareholder could unilaterally decide to sell a company's buildings or other assets. This is not a ponzi scheme because when you buy or sell your Apple stock, it has no impact on Apple, you're simply transacting with another random shareholder (barring a share-repurchase or direct issue). Apple doesn't receive the proceeds of your private transaction, you do. As far as value goes, yes the stock market provides tons of value and is a staple of capitalism. The stock market provides an avenue of financing for companies. Rather than taking a loan, a company's board can choose to relinquish some control and take on additional owners who will share in the spoils of the enterprise. Additionally, the exchanges deliver value via an unbelievable level of liquidity. You don't have to go seek out Joe or Sally when you want to sell your Apple stock. You don't need to put your shares on Craigslist in the hope of finding a buyer. You don't have to negotiate a price with someone who knows you want to sell. You just place an order at an exchange and you're aligned with a buyer. Also understand that anything can move up or down in value without any money actually changing hands. Say you get your hands on a pair of shoes (or whatever), they're hot on the market, very rare and sought after. You think you can sell them for $1,000. On tonight's news it turns out that the leather is actually from humans and the CEO of the company is being indicted, the company is falling apart, etc. Your shoes just went from $1,000 to $0 with no money changing hands (or from $1,000 to $100,000 depending on how cynical you are).\"",
"title": ""
},
{
"docid": "c91297683206cb39dec045727fa5d288",
"text": "The stock market exists for two reasons. It lets companies raise money to invest, and it lets company owners cash out and get money instead of part-ownership of a company when they are ready to do so. But to accomplish these goals effectively, it needs many more transactions than just those kinds of transaction, because you have to be able to find a buyer when you need one and to have a market price. So there are also a lot of transactions that are just to try to make short-term profit. But we need those transactions to provide the market liquidity to let the stock market work properly for its actual purposes.",
"title": ""
},
{
"docid": "764546861d56bdb5f695573a8b26477b",
"text": "When you own a share, you also own a vote (in most cases). That vote is your means of controlling the assets and management of the company. If you had enough votes and wanted to trade a share for an iPhone or liquidate the company entirely, you could do it. The only thing that prevents you from doing that is that companies are not set up to handle the transaction that way. Stock holders are usually trying to buy investments, not iPhones. There are companies that have more cash in the bank than the market cap (total value) of their stock. They usually don't remain as public companies for long in that case. An investor or group of investors buy them up and split the cash. If you had enough shares of Apple, you could do that to; or, just trade one for an iPhone.",
"title": ""
},
{
"docid": "f3a49ec7121ccfbb8f02d19603c6f2f6",
"text": "You are right, it is a Ponzi scheme unless it pays all of the profits as dividends. Here's why: today's millenials are saving a lot less, and instead they choose to be spenders. It's just that their mentality is different. If the trend continues there will be more spenders and less savers. That means that in 20 years from now, a company might sell more and make more profits, but because there are less investors on the market it will worth less (judging by supply and demand this has to be true). Doesn't that seem like a disconnect to you guys? Doesn't that just prove that all those profits are not really yours, but instead you're just sitting on the side making bets about them? If I own a company from the point where it goes public and while the value goes up I hold on to it for 50 years. Let's say for 45 years it made tons of profits but never paid a cent in dividend, and then in 5 years it goes out of business. What happened to all the profits they made throughout the 45 years? If you owned a restaurant that made a profit for 45 years and then went bankrupt you are fine, you took your profits every year because why on earth would you reinvest 100% of the profit forever? But what if you could sell 49.9% of that restaurant on the stock market, get all of that IPO money and still keep all of the profits while claiming that you reinvest it forever? That's exactly what they do! They just buy expensive things for personal use, from fancy cars to private jets, they just write it down as an investment and you can't see what the money was spent on because you are not a majority stakeholder, you have no power. It was not like this forever, companies used to pay all of their profits in dividends and be valued according to that. Not anymore. Now they are just in it for the growth, it will keep growing as long as people keep buying into it, and that's the exact definition of a Ponzi scheme.",
"title": ""
}
] |
[
{
"docid": "5f818a172800ab3e8c4068baf50271cc",
"text": "The short answer to your question is yes. Company performance affects stock price only through investors' views. But note that selling for higher and lower prices when the company is doing well or poorly is not an arbitrary choice. A stock is a claim on the future cash flows of the firm, which ultimately come from its future profits. If the company is doing well, investors will likely expect that there will large cash flows (dividends) in the future and be willing to pay more to hold it (or require more to sell it). The price of a stock is equal what people think the future dividends are worth. If market participants started behaving irrationally, like not reacting to changes in the expected future cash flows, then arbitrageurs would make a ton of money trading against them until the situation was rectified.",
"title": ""
},
{
"docid": "f07ac4680194626215deef6479418a33",
"text": "\"The answer is partly and sometimes, but you cannot know when or how. Most clearly, you do not take somebody else's money if you buy shares in a start-up company. You are putting your money at risk in exchange for a share in the rewards. Later, if the company thrives, you can sell your shares for whatever somebody else will pay for your current share in the thriving company's earnings. Or, you lose your money, when the company fails. (Much of it has then ended up in the company's employees' pockets, much of the rest with the government as taxes that the company paid). If the stockmarket did not exist, people would be far less willing to put their money into a new company, because selling shares would be far harder. This in turn would mean that fewer new things were tried out, and less progress would be made. Communists insist that central state planning would make better decisions than random people linked by a market. I suggest that the historical record proves otherwise. Historically, limited liability companies came first, then dividing them up into larger numbers of \"\"bearer\"\" shares, and finally creating markets where such shares were traded. On the other hand if you trade in the short or medium term, you are betting that your opinion that XYZ shares are undervalued against other investors who think otherwise. But there again, you may be buying from a person who has some other reason for selling. Maybe he just needs some cash for a new car or his child's marriage, and will buy back into XYZ once he has earned some more money. You can't tell who you are buying from, and the seller can only tell if his decision to sell was good with the benefit of a good few years of hindsight. I bought shares hand over fist immediately after the Brexit vote. I was putting my money where my vote went, and I've now made a decent profit. I don't feel that I harmed the people who sold out in expectation of the UK economy cratering. They got the peace of mind of cash (which they might then reinvest in Euro stocks or gold or whatever). Time will tell whether my selling out of these purchases more recently was a good decision (short term, not my best, but a profit is a profit ...) I never trade using borrowed money and I'm not sure whether city institutions should be allowed to do so (or more reasonably, to what extent this should be allowed). In a certain size and shortness of holding time, they cease to contribute to an orderly market and become a destabilizing force. This showed up in the financial crisis when certain banks were \"\"too big to fail\"\" and had to be bailed out at the taxpayer's expense. \"\"Heads we win, tails you lose\"\", rather than trading with us small guys as equals! Likewise it's hard to see any justification for high-frequency trading, where stocks are held for mere milliseconds, and the speed of light between the trader's and the market's computers is significant.\"",
"title": ""
},
{
"docid": "90da7807b82f18388c78a07d60511260",
"text": "\"It's not either or. Much of the time the value of the stock has some tangible relation to the financial prospects of the company. The value of Ford and GM stock rose when they were selling a lot of cars, and collapsed when their cars became unpopular. Other companies (Enron for example) frankly 'cook the books' to make it appear they are prospering, when they are actually drowning in debt and non-performing assets. So called \"\"penny stocks\"\" have both low prices and low volumes and are susceptible to \"\"pump and dump\"\" schemes, where a manipulator buys a bunch of the stock, touts the stock to the world, pointing to the recent increase in price. They then sell out to all the new buyers, and the price collapses. If you are going to invest in the stock market it's up to you to figure out which companies are which.\"",
"title": ""
},
{
"docid": "8fd096c812c0ad78c3fd458f3ed8988e",
"text": "In fact markets are not efficient and participants are not rational. That is why we have booms and busts in markets. Emotions and psychology play a role when investors and/or traders make decisions, sometimes causing them to behave in unpredictable or irrational ways. That is why stocks can be undervalued or overvalued compared to their true value. Also, different market participants may put a different true value on a stock (depending on their methods of analysis and the information they use to base their analysis on). This is why there are always many opportunities to profit (or lose your money) in liquid markets. Doing your research, homework, or analysis can be related to fundamental analysis, technical analysis, or a combination of the two. For example, you could use fundamental analysis to determine what to buy and then use technical analysis to determine when to buy. To me, doing your homework means to get yourself educated, to have a plan, to do your analysis (both FA and TA), to invest or trade according to your plan and to have a risk management strategy in place. Most people are too lazy to do their homework so will pay someone else to do it for them or they will just speculate (on the latest hot tip) and lose most of their money.",
"title": ""
},
{
"docid": "d4f69ccdb76cbda9b9628b622c45fcca",
"text": "There are two ways that an asset can generate value. One is that the asset generates some revenue (e.g. you buy a house for $100,000 and rent it out for $1,000 per month) and the second way is that the asset appreciates (e.g you buy a house for $100,000, you don't rent it out and 5 years later you sell it for $200,000). Stocks are the same.",
"title": ""
},
{
"docid": "82335e5ef5b4f58813208eb857409415",
"text": "How do we define worth? To stock traders and some investors it has value either as a transaction or as a piece in an asset allocation strategy. Is is likely to generate long term revenues and profits that reflect the historical relationship between those factors and stock price performance? Unlikely. It might be a good short term play for the nimble investor but the real test of 'worth' will be after the initial hype dies down. It is what happens to the stock 90 days after it goes public that matters for the long term. Forgetting contributions to society, knowledge and culture, the markets will at that point make their determination about value.",
"title": ""
},
{
"docid": "c28eb69add00010b45511f54bf8ebe0e",
"text": "\"Maria, there are a few questions I think you must consider when considering this problem. Do fundamental or technical strategies provide meaningful information? Are the signals they produce actionable? In my experience, and many quantitative traders will probably say similar things, technical analysis is unlikely to provide anything meaningful. Of course you may find phenomena when looking back on data and a particular indicator, but this is often after the fact. One cannot action-ably trade these observations. On the other hand, it does seem that fundamentals can play a crucial role in the overall (typically long run) dynamics of stock movement. Here are two examples, Technical: suppose we follow stock X and buy every time the price crosses above the 30 day moving average. There is one obvious issue with this strategy - why does this signal have significance? If the method is designed arbitrarily then the answer is that it does not have significance. Moreover, much of the research supports that stocks move close to a geometric brownian motion with jumps. This supports the implication that the system is meaningless - if the probability of up or down is always close to 50/50 then why would an average based on the price be predictive? Fundamental: Suppose we buy stocks with the best P/E ratios (defined by some cutoff). This makes sense from a logical perspective and may have some long run merit. However, there is always a chance that an internal blowup or some macro event creates a large loss. A blended approach: for sake of balance perhaps we consider fundamentals as a good long-term indication of growth (what quants might call drift). We then restrict ourselves to equities in a particular index - say the S&P500. We compare the growth of these stocks vs. their P/E ratios and possibly do some regression. A natural strategy would be to sell those which have exceeded the expected return given the P/E ratio and buy those which have underperformed. Since all equities we are considering are in the same index, they are most likely somewhat correlated (especially when traded in baskets). If we sell 10 equities that are deemed \"\"too high\"\" and buy 10 which are \"\"too low\"\" we will be taking a neutral position and betting on convergence of the spread to the market average growth. We have this constructed a hedged position using a fundamental metric (and some helpful statistics). This method can be categorized as a type of index arbitrage and is done (roughly) in a similar fashion. If you dig through some data (yahoo finance is great) over the past 5 years on just the S&P500 I'm sure you'll find plenty of signals (and perhaps profitable if you calibrate with specific numbers). Sorry for the long and rambling style but I wanted to hit a few key points and show a clever methods of using fundamentals.\"",
"title": ""
},
{
"docid": "c9762f2e3e92994e473a00118bd94166",
"text": "For me, spending my spare time on my career offers better return on investment (time) than stock investing, so I don't have the time to try to craft strategies about stock confusion anyway. It just serves as further proof to me that trying to time the market on short time scales is doomed unless you can account for all the irrationality of human behavior.",
"title": ""
},
{
"docid": "547c5288c6257859afa48a19b2a24f88",
"text": "\"As an aside, why does it seem to be difficult to get a conclusive answer to this question? I'm going to start by trying to answer this question and I think the answer here will help answer the other questions. Here is a incomplete list of the challenges involved: So my question is, is there any evidence that value investing actually beats the market? Yes there is a lot of evidence that it works and there is a lot of evidence that it does not. timday's has a great link on this. Some rules/methods work over some periods some work during others. The most famous evidence for value investing probably comes from Fama and French who were very careful and clever in solving many of the above problems and had a large persistent data set, but their idea is very different from Damodaran's, for instance, and hard to implement though getting easier. Is the whole field a waste of time? Because of the above problems this is a hard question. Some people like Warren Buffet have clearly made a lot of money doing this. Though it is worth remembering a good amount of the money these famous investors make is off of fees for investing other peoples' money. If you understand fundamental analysis well you can get a job making a lot of money doing it for a company investing other peoples' money. The markets are very random that it is very hard for people to tell if you are good at it and since markets generally go up it is easy to claim you are making money for people, but clearly banks and hedge funds see significant value in good analysts so it is likely not entirely random. Especially if you are a good writer you can make a more money here than most other jobs. Is it worth it for the average investor saving for retirement? Very, very hard to say. Your time might be better spent on your day job if you have one. Remember because of the fees and added risk involved over say index investing more \"\"Trading is Hazardous to Your Wealth.\"\"\"",
"title": ""
},
{
"docid": "e5c08b35cfcbd50dd86e92a143e7f99e",
"text": "Stock prices reflect future expectations of large groups of people, and may not be directly linked to traditional valuations for a number of reasons (not definitive). For example, a service like Twitter is so popular that even though it has no significant revenue and loses money, people are simply betting that it is deeply embedded enough that it will eventually find some way to make money. You can also see a number of cases of IPOs of various types of companies that do not even have a revenue model at all. Also, if there is rapid sales growth in A but B sales are flat, no one is likely to expect future profit growth in B such that the valuation will remain steady. If sales in A are accelerating, there may be anticipation that future profits will be high. Sometimes there are also other reasons, such as if A owns valuable proprietary assets, that will hold the values up. However, more information about these companies' financials is really needed in order to understand why this would be the case.",
"title": ""
},
{
"docid": "076ed20173f85274209c411312206559",
"text": "\"The price of a company's stock at any given moment is established by a ratio of buyers to sellers. When the sellers outnumber the buyers at a given price, the stock price drops until there are enough people willing to buy the stock to balance the equation again. When there are more people wanting to purchase a stock at a given price than people willing to sell it, the stock price rises until there are enough sellers to balance things again. So given this, it's easy to see that a very large fund (or collection of very large funds) buying or selling could drive the price of a stock in one direction or another (because the sheer number of shares they trade can tip the balance one way or another). What's important to keep in mind though is that the ratio of buyers to sellers at any given moment is determined by \"\"market sentiment\"\" and speculation. People selling a stock think the price is going down, and people buying it think it's going up; and these beliefs are strongly influenced by news coverage and available information relating to the company. So in the case of your company in the example that would be expected to triple in value in the next year; if everyone agreed that this was correct then the stock would triple almost instantly. The only reason the stock doesn't reach this value instantly is that the market is split between people thinking this is going to happen and people who think it won't. Over time, news coverage and new information will cause one side to appear more correct than the other and the balance will shift to drive the price up or down. All this is to say that YES, large funds and their movements CAN influence a stock's trading value; BUT their movements are based upon the same news, information, analysis and sentiment as the rest of the market. Meaning that the price of a stock is much more closely tied to news and available information than day to day trading volumes. In short, buying good companies at good prices is just as \"\"good\"\" as it's ever been. Also keep in mind that the fact that YOU can buy and sell stocks without having a huge impact on price is an ADVANTAGE that you have. By slipping in or out at the right times in major market movements you can do things that a massive investment fund simply cannot.\"",
"title": ""
},
{
"docid": "7f56bfa4b4678efd8cc9806a01578457",
"text": "Would you mind adding where that additional value comes from, if not from the losses of other investors? You asked this in a comment, but it seems to be the key to the confusion. Corporations generate money (profits, paid as dividends) from sales. Sales trade products for money. The creation of the product creates value. A car is worth more than General Motors pays for its components and inputs, even including labor and overhead as inputs. That's what profit is: added value. The dividend is the return that the stock owner gets for owning the stock. This can be a bit confusing in the sense that some stocks don't pay dividends. The theory is that the stock price is still based on the future dividends (or the liquidation price, which you could also consider a type of dividend). But the current price is mostly based on the likelihood that the stock price will increase rather than any expected dividends during ownership of the stock. A comment calls out the example of Berkshire Hathaway. Berkshire Hathaway is a weird case. It operates more like a mutual fund than a company. As such, investors prefer that it reinvest its money rather than pay a dividend. If investors want money from it, they sell shares to other investors. But that still isn't really a zero sum game, as the stock increases in value over time. There are other stocks that don't pay dividends. For example, Digital Equipment Corporation went through its entire existence without ever paying a dividend. It merged with Compaq, paying investors for owning the stock. Overall, you can see this in that the stock market goes up on average. It might have a few losing years, but pick a long enough time frame, and the market will increase during it. If you sell a stock today, it's because you value the money more than the stock. If it goes up tomorrow, that's the buyer's good luck. If it goes down, the buyer's bad luck. But it shouldn't matter to you. You wanted money for something. You received the money. The increase in the stock market overall is an increase in value. It is completely unrelated to trading losses. Over time, trading gains outweigh trading losses for investors as a group. Individual investors may depart from that, but the overall gain is added value. If the only way to make gains in the stock market was for someone else to take a loss, then the stock market wouldn't be able to go up. To view it as a zero sum game, we have to ignore the stocks themselves. Then each transaction is a payment (loss) for one party and a receipt (gain) for the other. But the stocks themselves do have value other than what we pay for them. The net present value of of future payments (dividends, buyouts, etc.) has an intrinsic worth. It's a risky worth. Some stocks will turn out to be worthless, but on average the gains outweigh the losses.",
"title": ""
},
{
"docid": "e6e2c4144b03eee8275d2caeee234a0b",
"text": "\"Company values (and thus stock prices) rely on a much larger time frame than \"\"a weekend\"\". First, markets are not efficient enough to know what a companies sales were over the past 2-3 days (many companies do not even know that for several weeks). They look at performance over quarters and years to determine the \"\"value\"\" of a company. They also look forward, not backwards to determine value. Prior performance only gives a hint of what future performance may be. If a company shut its doors over a weekend and did no sales, it still would have value based on its future ability to earn profits.\"",
"title": ""
},
{
"docid": "3564c1649053ad2f0f001e03b5135072",
"text": "Pretty sure the null hypothesis here is that trading equities at a high frequency is a zero sum game. The is no gain that isn't someone else's loss. No goods are created, no knowledge is gained, no value is produced. Note, I didn't say value is destroyed either.",
"title": ""
},
{
"docid": "392d53e0c27b44b922d2b8d50513eb4d",
"text": "\"You can think of the situation as a kind of Nash equilibrium. If \"\"the market\"\" values stock based on the value of the company, then from an individual point of view it makes sense to value stock the same way. As an illustration, imagine that stock prices were associated with the amount of precipitation at the company's location, rather than the assets of the company. In this imaginary stock market, it would not benefit you to buy and sell stock according to the company's value. Instead, you would profit most from buying and selling according to the weather, like everyone else. (Whether this system — or the current one — would be stable in the long-term is another matter entirely.)\"",
"title": ""
}
] |
fiqa
|
558cf4f1ef8efaf37dd465ac3343a749
|
Market Hours and Valuations
|
[
{
"docid": "e6e2c4144b03eee8275d2caeee234a0b",
"text": "\"Company values (and thus stock prices) rely on a much larger time frame than \"\"a weekend\"\". First, markets are not efficient enough to know what a companies sales were over the past 2-3 days (many companies do not even know that for several weeks). They look at performance over quarters and years to determine the \"\"value\"\" of a company. They also look forward, not backwards to determine value. Prior performance only gives a hint of what future performance may be. If a company shut its doors over a weekend and did no sales, it still would have value based on its future ability to earn profits.\"",
"title": ""
},
{
"docid": "989448718845535e4a5840c6685f35e0",
"text": "Stock values are generally reflective of a company's overall potential; and to some extent investor confidence in the prospect of a continued growth of that potential. Sales over such a short period of time such as a single weekend do not noticeably impact a stock's valuation. A stock's value has more to do with whether or not they meet market expectations for sales over a certain period of time (generally 1 quarter of a year) than it does that they actually had sales (or profits) on any given day. Of course, catastrophic events, major announcements, or new product releases do sometimes cause significant changes in a stock's value. For this reason you will often see stocks have significant volatility in periods around earnings announcements, merger rumors, or when anything unexpected happens in the world that might benefit or hurt their potential sales and growth. But overall a normal, average weekend of sales is already built into the price of a stock during normal trading.",
"title": ""
}
] |
[
{
"docid": "b3df873e2c35947a0dea12b229e1a6b2",
"text": "The NYSE holidays are listed online here: https://www.nyse.com/markets/hours-calendars",
"title": ""
},
{
"docid": "705ee9b2dcdf79ccdb72df415ee392af",
"text": "thanks. I have real time quotes, but in the contest, if you put in a market order the trade might happen at the delayed quote price and not the real time price. Does anyone know at which price it will trade, delayed or real time?",
"title": ""
},
{
"docid": "efd0097229164057ef16b3e11f442cf7",
"text": "The closest I can think of from the back of my head is http://finviz.com/map.ashx, which display a nice map and allows for different intervals. It has different scopes (S&P500, ETFs, World), but does not allow for specific date ranges, though.",
"title": ""
},
{
"docid": "3277fb0725c621d0a061c147680bee5d",
"text": "Hours appear to be relatively consistent, at least in my experience. Analysts (all levels) have much more flexible schedules and travel much more but are responsible for more information/responsibility. The difference is that associates do the grunt work with models/writing and analysts provide more direction/fine tuning and interact with clients more(they're on the phone half the time from 7-4 every day). Its generally not night work but if a company announces earnings after market close and then has an evening conference call, we need to have the report out by the next morning well before the market opens, so yeah sometimes it can get pretty late.",
"title": ""
},
{
"docid": "de44418b1a4e0c4e0b86ac2e3c8cc274",
"text": "\"During market hours, there are a lot of dealers offering to buy and sell all exchange traded stocks. Dealers don't actually care about the company's fundamentals and they set their prices purely based on order flow. If more people start to buy than sell, the dealer notices his inventory going down and starts upping the price (both his bid and ask). There are also traders who may not be \"\"dealers\"\", but are willing to sell if the price goes high enough or buy if the price goes low enough. This keeps the prices humming along smoothly. During normal trading hours, if you buy something and turn around and sell it two minutes later, you'll probably be losing a couple cents per share. Outside normal market hours, the dealers who continue to have a bid and ask listed know that they don't have access to good price information -- there isn't a liquid market of continuous buying and selling for the dealer to set prices he considers safe. So what does he do? He widens the spread. He doesn't know what the market will open tomorrow at and doesn't know if he'll be able to react quickly to news. So instead of bidding $34.48 and offering at $34.52, he'll move that out to $33 and $36. The dealer still makes money sometimes off this because maybe some trader realized that he has options expiring tomorrow, or a short position that he's going to get a margin call on, or some kind of event that pretty much forces him to trade. Or maybe he's just panicking and overreacting to some news. So why not trade after hours? Because there's no liquidity, and trading when there's no liquidity costs you a lot.\"",
"title": ""
},
{
"docid": "c18cae75fef4be13785d41f25b2afd15",
"text": "The usual lazy recommendation: See what similar objects, in similar condition, of similar age, have sold for recently on eBay. That establishes a fair market value by directly polling the market.",
"title": ""
},
{
"docid": "e62eb8056bd1d8bfc666a98e2fbf0919",
"text": "\"Nobody has mentioned the futures market yet. Although the stock market closes at 4pm, the futures market continues trading 24 hours a day and 5.5 days a week. Amongst the products that trade in the future market are stock index futures. That includes the Dow Jones, the S&P 500. These are weighted averages of stocks and their sectors. You would think that the price of the underlying stock dictates the price of the average, but in this day and age, the derivative actually changes the value of the underlying stock due to a very complex combination of hedging practices. (this isn't meant to be vague and mysterious, it is \"\"delta hedging\"\") So normal market fluctuations coupled with macroeconomic events affect the futures market, which can ripple down to individual stocks. Very popular stocks with large market caps will most certainly be affected by futures market trading. But it is also worth mentioning that futures can function completely independently of a \"\"spot\"\" price. This is where things start to get complicated and long winded. The futures market factor is worth mentioning because it extends even outside of the aftermarket and pre-market hours of stock trading.\"",
"title": ""
},
{
"docid": "89e3beda30f53ba8ac2de67b874e8dd3",
"text": "This question is impossible answer for all markets but there are 2 more possibilities in my experience:",
"title": ""
},
{
"docid": "cd6d21819d04068e9eea9dada5e04ac5",
"text": "The opening price is derived from new information received. It reflects the current state of the market. Opening Price Deviation (from Investopedia): Investor expectation can be changed by corporate announcements or other events that make the news. Corporations typically make news-worthy announcements that may have an effect on the stock price after the market closes. Large-scale natural disasters or man-made disasters such as wars or terrorist attacks that take place in the afterhours may have similar effects on stock prices. When this happens, some investors may attempt to either buy or sell securities during the afterhours. Not all orders are executed during after-hours trading. The lack of liquidity and the resulting wide spreads make market orders unattractive to traders in after-hours trading. This results in a large amount of limit or stop orders being placed at a price that is different from the prior day’s closing price. Consequently, when the market opens the next day, a substantial disparity in supply and demand causes the open to veer away from the prior day’s close in the direction that corresponds to the effect of the announcement, news or event.",
"title": ""
},
{
"docid": "e42588337b533431d5839a751b472ca7",
"text": "You typically need to specify that you want the GTC order to be working during the Extended hours session. I trade on TD Ameritrade's Thinkorswim platform, and you can select DAY, GTC, EXT or GTC_EXT. So in your case, you would select GTC_EXT.",
"title": ""
},
{
"docid": "59cb85ca6365148f787ab8d328ae0bd3",
"text": "\"One idea: If you came up with a model to calculate a \"\"fair price range\"\" for a stock, then any time the market price were to go below the range it could be a buy signal, and above the range it could be a sell signal. There are many ways to do stock valuation using fundamental analysis tools and ratios: dividend discount model, PEG, etc. See Wikipedia - Stock valuation. And while many of the inputs to such a \"\"fair price range\"\" calculation might only change once per quarter, market prices and peer/sector statistics move more frequently or at different times and could generate signals to buy/sell the stock even if its own inputs to the calculation remain static over the period. For multinationals that have a lot of assets and income denominated in other currencies, foreign exchange rates provide another set of interesting inputs. I also think it's important to recognize that with fundamental analysis, there will be extended periods when there are no buy signals for a stock, because the stocks of many popular, profitable companies never go \"\"on sale\"\", except perhaps during a panic. Moreover, during a bull market and especially during a bubble, there may be very few stocks worth buying. Fundamental analysis is designed to prevent one from overpaying for a stock, so even if there is interesting volume and price movement for the stock, there should still be no signal if that action happens well beyond the stock's fair price. (Otherwise, it isn't fundamental analysis — it's technical analysis.) Whereas technical analysis can, by definition, generate far more signals because it largely ignores the fundamentals, which can make even an overvalued stock's movement interesting enough to generate signals.\"",
"title": ""
},
{
"docid": "00f280b6a3bea0118a4054cc628994ab",
"text": "After-hours trading and alternate venues allow one to trade outside of regular market hours. However there are a few reasons why you would not want to: The purpose of an exchange is to improve liquidity by gathering all buyers and sellers in the same place at the same time. If trading was 24/7, not all market participants would be trading at the same time. Some markets (including NASDAQ) depend on market makers or specialists to help liquidity. These exchanges are able to mandate that the market maker actively make a market in a security during a meaningful percentage of the trading day. Requiring 24/7 active market making may not be reasonable. Trading systems, meaning both exchange infrastructure and market participant infrastructure, need maintenance time. It's nice to have the evenings and weekends for scheduled work. Post-trade clearing and settlement procedures are still somewhat manual at times. You need staff around to handle these processes.",
"title": ""
},
{
"docid": "6a620ff4f8a59262eff925e15f8fb94b",
"text": "\"You'd have to check the rules for your broker to make sure that the term is being used in its usual sense, but the typical answer to your question is \"\"no.\"\" A GTC will execute during market hours. You would need to explicitly specify extended hours if you want to execute outside of market hours (which your broker may or may not support).\"",
"title": ""
},
{
"docid": "cfc6a71d87f7cc84ff75401a7965d421",
"text": "I look at the following ratios and how these ratios developed over time, for instance how did valuation come down in a recession, what was the trough multiple during the Lehman crisis in 2008, how did a recession or good economy affect profitability of the company. Valuation metrics: Enterprise value / EBIT (EBIT = operating income) Enterprise value / sales (for fast growing companies as their operating profit is expected to be realized later in time) and P/E Profitability: Operating margin, which is EBIT / sales Cashflow / sales Business model stability and news flow",
"title": ""
},
{
"docid": "c974fce2e0de21ef5938bef66aad614f",
"text": "\"Using your example link, I found the corresponding chart for a stock that trades on London Stock Exchange: https://ca.finance.yahoo.com/echarts?s=RIO.L#symbol=RIO.L;range=1d As you can see there, the chart runs from ~8:00am to ~4:30pm, and as I write this post it is only 2:14pm Eastern Time. So clearly this foreign chart is using a foreign time zone. And as you can see from this Wikipedia page, those hours are exactly the London Stock Exchange's hours. Additionally, the closing price listed above the graph has a timestamp of \"\"11:35AM EST\"\", meaning that the rightmost timestamp in the graph (~4:30pm) is equal to 11:35AM EST. 16:30 - 11:30 = 5 hours = difference between London and New York at this time of year. So those are two data points showing that Yahoo uses the exchange's native time zone when displaying these charts.\"",
"title": ""
}
] |
fiqa
|
fa962386a62444a813eeb612edff861f
|
Borrowing 100k and paying it to someone then declaring bankruptcy
|
[
{
"docid": "4ebdef47b59f8a0bdd4e4fba0440b5b3",
"text": "This is fraud and could lead to jail time. The vast majority of people cannot obtain such loans without collateral and one would have to have a healthy income and good credit to obtain that kind of loan to purchase something secured by a valuable asset, such as a home. Has this been done before? Yes, despite it being the US, you may find this article interesting. Hopefully, you see how the intent of this hypothetical situation is stealing.",
"title": ""
},
{
"docid": "1ea12d08b27c305c365845315d008efb",
"text": "This is called a fraudulent conveyance because its purpose is to prevent a creditor from getting repaid. It is subject to claw back under US law, which is a fancy way of saying that your friend will have to pay the bank back. Most jurisdictions have similar laws. It is probably a crime as well, but that varies by jurisdiction.",
"title": ""
},
{
"docid": "dbb366333dff9b93b005f8c8ed0d9ac7",
"text": "Note that in the UK at least this scam - not so dissimilar from what you propose - seems be perfectly legal behaviour: Evidence to date is that both of you can expect to walk away without much consequence.",
"title": ""
},
{
"docid": "3732c03ce8f43f586a8a38188d3be293",
"text": "This sounds like a crazy idea, but in reality people don't make the wisest decisions when considering bankruptcy in Australia. My suggestion would be to get some advice from an insolvency specialist.",
"title": ""
}
] |
[
{
"docid": "944149a6b55094f1bf61f9e833deb019",
"text": "You're going to want to work with a collection agency or law firm that specializes in collections. They'll buy the debt from you for something like 10-25% depending on the state and whether they are interested in something this small. People who don't pay rent and get wages garnished for $6k are a bad risk. They'll discount the judgement significantly since the risk of bankruptcy is probably pretty high.",
"title": ""
},
{
"docid": "73665670f8f89a0dfc6e8dd8afc68fdb",
"text": "A $100K house and $100K are not equivalent assets. Here's a hypothetical... You and I both work for the same company, and both get a $100K bonus (yes, I said it's hypothetical). You decide to use the $100K to pay off your house. I put the money in the bank. Six months later, our company lays both of us off. I have $100K in the bank. I can last for quite a while with that much money in the bank. You have a house, but you can't get a mortgage or home equity loan, because you don't have a job. The only way you can access the money is by selling the house, which requires you to pay money to a real estate agent and perhaps taxes, and leaves you looking for a place to live. That assumes there isn't something systemic going on - like the credit crash - and there is credit available for somebody else to buy your house.",
"title": ""
},
{
"docid": "f0c395884f356a9dbf7e2bb8583a555c",
"text": "\"First, when a debt collector says, \"\"It's to your advantage to give me money now\"\", I'd take that with a grain of salt. My ex-wife declared bankruptcy and when debt collectors couldn't find her, they somehow tracked me down and told me that I should tell her that it would be to her advantage to pay off this debt before the bankruptcy went through. That was total nonsense of course. The whole point of bankruptcy is to not have to pay the debt. Why would you pay it just before it was wiped off the books? (Now that I think of it, I'm surprised that they didn't tell me that I should pay her debts.) As others have noted, this would be controlled by state law. But in general, when someone dies any debts are payed from the assets of the estate, and then whatever is left goes to the heirs. If nothing is left or the debts exceed the assets, then the heirs get nothing, but they don't have to pay somebody else's debts. I don't see how you could \"\"put the house under your name\"\". If he left the house to you in his will, then after any debts are settled in accordance with state law, the house would transfer to you. But you can't just decide to put the house in your name outside of the legal inheritance process. If you could, then people could undermine a will at any time by just deciding to take an asset left to someone else and \"\"put it in their name\"\". Or as in this case, people could undermine the rights of creditors by transferring all assets to themselves before debts were paid. Even if there's some provision in your state for changing the name on a deed prior to probate to facilitate getting mortgages and taxes paid or whatever, I would be quite surprised if this allowed you to shelter assets from legitimate creditors. It would be a gaping loophole in inheritance law. Frankly, if your father's debts are more than the value of his assets, including the value of the house, I suspect you will not be able to keep the house. It will be sold to pay off the creditors. I would certainly talk to a lawyer about this as there might be some provision in the law that you can take advantage of. I'll gladly yield on this point to anyone with specific knowledge of New Jersey inheritance law.\"",
"title": ""
},
{
"docid": "55467febe0d49ff69a56f5882b99fb1a",
"text": "I dunno. Borrow $65,000 with zero collateral, string the lender along for 20+ years, then die? Sounds like a great decision to me. I wonder why a bank would ever take the other end of that lemon of a deal? Oh, right...",
"title": ""
},
{
"docid": "148f0f976110c67e4db7052db46b5637",
"text": "\"Without all the details it's hard to tell what options you may have, but none of them are good. When you cosign you are saying that, you believe the primary signer will make good on the loan, but that if he doesn't you will. You are 100% responsible for this debt. As such, there are some actions you can take. First, really try to stress to your friend, that they need to get you outta this loan. Urge them to re-finance with out you if they can. Next look for \"\"better\"\" ways of defaulting on the loan and take them. Depending on what the loan is for you could deed-in-lue or short sale. You may just have to admit default. If you work with the bank, and try not to drag out the process, you will likely end up in a better place down the line. Also of importance is ownership. If you pay the loan, do you get ownership of the thing the loan was secured against? Usually not, but working with an attorney and the bank, maybe. For example, if it's a car, can the \"\"friend\"\" sign over the car to you, then you sell it, and reduce your debt. Basically as a cosigner, you have some rights, but you have all the responsibilities. You need to talk to an attorney and possibly the bank, and see what your options are. At this point, if you think the friend is not that much of a friend anymore, it's time to make sure that any conversation you have with them is recorded in email, or on paper.\"",
"title": ""
},
{
"docid": "471cf77dadff4da873d468a9f47e4634",
"text": "Trying to forcefully reclaim the money will ruin the relationship. In general it's bad practice to loan money to family.",
"title": ""
},
{
"docid": "a60720b47aafa8386b9d4ed668e79f7d",
"text": "Once the loan is taken out, Chase would turn around and sell that debt to others, getting all their money upfront and leaving both the person who took the loan out and the new creditor holding the bag. I worked for a company that used to do this with loans for other things. They company was Norvergence and were complete scumbags.",
"title": ""
},
{
"docid": "47f824d42ed7ff0928853fa65f72d426",
"text": "\"I am not sure how anyone is answering this unless they know what the loan was for. For instance if it is for a house you can put a lien on the house. If it is for the car in most states you can take over ownership of it. Point being is that you need to go after the asset. If there is no asset you need to go after you \"\"friend\"\". Again we need more specifics to determine the best course of action which could range from you suing and garnishing wages from your friend to going to small claims court. Part of this process is also getting a hold of the lending institution. By letting them know what is going on they may be able to help you - they are good at tracking people down for free. Also the lender may be able to give you options. For example if it is for a car a bank may help you clear this out if you get the car back plus penalty. If a car is not in the red on the loan and it is in good condition the bank turns a profit on the default. If they can recover it for free they will be willing to work with you. I worked in repo when younger and on more than a few occasions we had the cosigner helping. It went down like this... Co-signer gets pissed like you and calls bank, bank works out a plan and tells cosigner to default, cosigner defaults, banks gives cosigner rights to repo vehicle, cosigner helps or actually repos vehicle, bank gets car back, bank inspects car, bank asks cosigner for X amount (sometimes nothing but not usually), cosigner pays X, bank does not hit cosigners credit, bank releases loan and sells car. I am writing this like it is easy but it really requires that asset is still in good condition, that cosigner can get to the asset, and that the \"\"friend\"\" still is around and trusts cosigner. I have seen more than a few cosigners promise to deliver and come up short and couple conspiring with the \"\"friend\"\". I basically think most of the advice you have gotten so far is crap and you haven't provided enough info to give perfect advice. Seeking a lawyer is a joke. Going after a fleeing party could eat up 40-50 billable hours. It isn't like you are suing a business or something. The lawyer could cost as much as repaying the loan - and most lawyers will act like it is a snap of their fingers until they have bled you dry - just really unsound advice. For the most part I would suggest talking to the bank and defaulting but again need 100% of the details. The other part is cosigning the loan. Why the hell would you cosign a loan for a friend? Most parents won't cosign a loan for their own kids. And if you are cosigning a loan, you write up a simple contract and make the non-payment penalties extremely costly for your friend. I have seen simple contracts that include 30% interests rates that were upheld by courts.\"",
"title": ""
},
{
"docid": "3d4199c0128572c50ece971a7a9078e1",
"text": "\"If you're looking for an analogy or exercise, I saw a personal finance show that had people climb stairs, with the debt as weight. Every flight of stairs more \"\"interest\"\" and loans to cover income gaps have to be added to the total debt they carry up the stairs. Can't find the video online though. But I think you need to ask your brother what he thinks his problem is, that will be solved with more loans. It's likely that your brother's problem can't be solved with advice. Since he's not spending rationally, rational arguments have no sway. I suspect he'll tell you his problem is one or two angry creditors, perhaps even ones you don't know about, rather than a fundamental imbalance between income and expenses. Robbing Peter to pay Paul, or moving weights from one backpack compartment to another, doesn't solve the underlying problems. Whatever you do, another loan from you should be off the table. He's an adult now, with problems the size of which you can't help with. We both know how his story ends: all creditors cut him off, and he's in court over garnished wages and creditors fighting over his assets. Reality is the only argument that will have any sway. He's far too personally invested in his scheme to admit defeat, which is why neither words not images nor moving pictures will help him with this learning disability.\"",
"title": ""
},
{
"docid": "58086f490032a28d2d7dafa584763a52",
"text": "Get a Bankrupsy lawyer. They'll tell you to stop paying the bills and use the money to pay their fee. Yes... You do need to pay in advance. I can tell you honestly that it was the best thing that ever happened to me. Think about it this way... When you loan someone moneyyou're placing a bet that they'll pay you back. You try to keep the dos in your favor by using credit ratings etc but sometimes you win and sometimes you lose that bet. It's nothing personal. It's business. The casino doesn't feel bad when you lose your bets and your money and you don't expect them to. The person placing the bet knows what they're doing and knows all about the risks, etc. it's a calculated risk. Again... It's just business and it's nothing personal. It's also not nesessairly a failure. Depending on the situation... Bankrupsy is an excellent business decision. Big business do it all the time. Sometimes bankruptcy is a very smart decision and not going bankrupt is the worst decision you can make. My only regret with my own bankruptcy is that I didn't do it sooner. I could have saved the family years of unnecessary hardship and I could have gotten it over with much sooner. Don't be emotional. Be smart and do the smart thing.",
"title": ""
},
{
"docid": "c1433c2b4e305081725ff8e0f04e16db",
"text": "\"Exactly it. I declared bankruptcy over 7 years ago. I was in a bad situation - I was laid off, the jobs in Salt Lake dried up after the Olympics, everything was in the crapper. I found new work - in California. Went off and lived there alone for six months while my wife and children stayed behind. We used all of our savings keeping up on the mortgage, paying bills - and living like paupers. Once my wife came down, we knew we couldn't afford a place in CA *and* our home, so we rented it out. To people who didn't pay their rent for six months, and we were so far away we couldn't just fly back to make it happen. And my wife was pregnant this whole time. Finally, because of my wife, we gave in. And I felt awful. I had failed my family, I had failed my wife - and I felt like I had failed myself. I remember being so ashamed I told *no one* for almost 6 years. Until I found out I wasn't the only one. Until I had close friends tell me of their troubles. I hadn't been overly irresponsible, I hadn't been buying up big TVs and junk. I was just trying to make a living, did good work - and just got caught up in bad luck. But the shame didn't go away. And it's only now, when I know more, when I see companies declare bankruptcy, or very wealthy people do so, that I realize that yeah - I have to take care of my shit, and I do everything I can for that. But at the same time, if bad stuff happens, I shouldn't spend my life beating up on myself because I had \"\"shit happen.\"\" Shit happens. Everybody should have a second chance to try again. Learn from the mistakes you made, plan better if you can, and realize that the best laid plans of might and men oft go awry. Try again, and hopefully it'll work out better next time.\"",
"title": ""
},
{
"docid": "aafdddb3091909bfbfb4540db55893ac",
"text": "I have an example that may be interesting for your question. My grandfather had a tennis club around 35 years ago, and some other businesses. Some investments went bad and he was heading for bankruptcy due to the tennis club's expensive payments. So he asked to renegotiate a variable rate rather than a fixed rate, even though the interest rates were going up, not down. The idea was that if the current situation is going to bankrupt you, taking a chance might be better. As an analogy, if you can't swim and you'll drown in 6 feet of water, it doesn't matter that you're taking the risk to go deeper. You might have to take that chance to survive. He did keep the tennis club in the end but that's irrelevant here. For student loans, if I'm not mistaken, declaring bankruptcy doesn't free you of all their debt, so it may not be applicable. And this situation is when renegotiating, not when negotiating the first time. because obviously if you're in trouble financially, taking a loan you know you can't repay is suicide.",
"title": ""
},
{
"docid": "1569f93563ab208396b84015c60d687d",
"text": "* Absolutely agree with /u/IsAnAlpaca * You /must/ not agree to this without seeing his balance sheet. * That means assets and liabilities, but also ask for the last 12 months' cash flow * Inability or unwillingness to provide any of those things is a HUGE no-go red flag.",
"title": ""
},
{
"docid": "d9de70bcd9812008c3cdf3d20cee28ba",
"text": "I had a similar situation, except the debtor had no connection to us whatsoever, other than holding our phone number previously. We tried going through channels to deal with it, and had no success. At the end of the day, I was very abusive to the people calling, and forwarded the number to a very irritating destination.",
"title": ""
},
{
"docid": "d701e65d752ded1d87e896f088aea506",
"text": "\"Somehow I just stumbled onto this thread... > You essentially robbed the person holding the debt (since you promised to pay it off). Depends on leverage, with fractional reserve lending. Banks are permitted to loan out 30x their actual assets, or more. If I have $1 but can loan out $30, and anything more than $1 gets paid back, I haven't lost any money. In addition, I can write off the amount defaulted, *and the government will pay me back* for certain types of loans. With student loans, since they are almost impossible to discharge, gov't will pursue the borrower for years and decades, and ultimately collect more interest. Here is an article on it: http://online.wsj.com/article/SB10001424052748704723104576061953842079760.html > According to Kantrowitz, the government stands to earn $2,010.44 more in interest from a $10,000 loan that defaulted than if it had been paid in full over a 20-year term, and $6,522.00 more than if it had been paid back in 10 years. Alan Collinge, founder of borrowers' rights advocacy Student Loan Justice, said the high recovery rates provide a \"\"perverted incentive\"\" for the government to allow loans to go into default. Kantrowitz estimates the recovery rate would need to fall to below 50% in order for default prevention efforts to become more lucrative than defaults themselves. Not to mention: http://studentloanjustice.org/defaults-making-money.html > So essentially, the Department is given a choice: Either do nothing and get nothing, or outlay cash with the knowledge that this outlay will realize a 22 percent return, ultimately (minus the governments cost of money and collection costs). From this perspective, it is clear that based solely on financial motivations, and without specific detailed knowledge of the loan (i.e. borrower characteristics, etc.), the chooser would clearly favor the default scenario, for not only the return, but perhaps the potential savings in subsidy payment as well, And don't forget the penalties accruing to the person defaulting; they will probably have to move out of the country in order to escape collection. And let's factor in the huge ROI the lender sees by creating an indentured servant class. Plus, the gov't will issue as much currency as it wants, to make *itself* whole. And how much of a loss IS the loss, when the whole of the loan amount went right back into the local economy, paying professors, janitors, landlords, grocery stores, etc.? And don't forget all THOSE taxes (income and sale) that the gov't collects. Government will collect ~30%-50% of the loan immediately as income and sales tax, plus a portion of it every time the money changes hands (I pay income tax, then use some of my after-tax money to pay you for a product or service, and you still have to pay tax on that money, and so on). So it's more complicated than having \"\"robbed the person holding the debt\"\". Banks at 30x leverage don't lose money as long as they get back 1/30th of the total amount lent out, including interest, fees, and penalties, before considering write-offs and government repayment. In fact, the point of over-leverage is so you CAN make loans that have risk attached. If you could only lend what you actually had, you would have to stay away from anything risky because it would be too easy to lose money. Having virtual $ to bet means you can serve market segments that have higher risk. This makes MORE money for the banks, that's why they do it. They are already playing with funny money, so they don't lose any even if you default and move to another country. And the money you \"\"spent\"\" has also made its way back to them in various amounts, such as your professor's mortgage payments, auto loan, etc. Your taking on debt already helped the bank get its OTHER loans repaid. So, roughly speaking, if you took out $90,000 and $3,000 of that made its way back to the bank through various means, they haven't lost any money, because it only cost them $3,000 actual dollars in the first place.\"",
"title": ""
}
] |
fiqa
|
3f4997e2f0fed6d60f7dfb4ec1cda853
|
Does getting a 1099 from another state count as working in another state if I was physically in my home state?
|
[
{
"docid": "a3a3447a48bcef183f29199d563d0e38",
"text": "This depends on the state law. In case of the State of New York - these are the criteria for sourcing the NY income: As a sole proprietor or partnership, your New York source income includes: Business activities As a nonresident sole proprietor or partnership, you carry on a business, trade, profession, or occupation within New York State if you (or your business): As you can see, the qualification depends on the way you do business, and the amount of business transactions you have in New York. If it is not clear to you - talk to a CPA/EA licensed to practice in the State of New York to give you an advice.",
"title": ""
},
{
"docid": "55715160ffb9d0ff8f1fffdcabadff6c",
"text": "You might need to check yes... but I would check out New York's nonresident income tax requirements... My guess is yes if you meet the requirements, but I am not an expert nor do I work in the accounting or legal field. Check out New York's nonresident tax page explaination",
"title": ""
}
] |
[
{
"docid": "97cbde3c965690a53a5b344eaf7ebe19",
"text": "Forms 1099 and W2 are mutually exclusive. Employers file both, not the employees. 1099 is filed for contractors, W2 is filed for employees. These terms are defined in the tax code, and you may very well be employee, even though your employer pays you as a contractor and issues 1099. You may complain to the IRS if this is the case, and have them explain the difference to the employer (at the employer's expense, through fines and penalties). Employers usually do this to avoid providing benefits (and by the way also avoid paying payroll taxes). If you're working as a contractor, lets check your follow-up questions: where do i pay my taxes on my hourly that means does the IRS have a payment center for the tax i pay. If you're an independent contractor (1099), you're supposed to pay your own taxes on a quarterly basis using the form 1040-ES. Check this page for more information on your quarterly payments and follow the links. If you're a salaried employee elsewhere (i.e.: receive W2, from a different employer), then instead of doing the quarterly estimates you can adjust your salary withholding at that other place of work to cover for your additional income. To do that you submit an updated form W4 there, check with the payroll department on details. Is this a hobby tax No such thing, hobby income is taxed as ordinary income. The difference is that hobby cannot be at loss, while regular business activity can. If you're a contractor, it is likely that you're not working at loss, so it is irrelevant. what tax do i pay the city? does this require a sole proprietor license? This really depends on your local laws and the type of work you're doing and where you're doing it. Most likely, if you're working from your employer's office, you don't need any business license from the city (unless you have to be licensed to do the job). If you're working from home, you might need a license, check with the local government. These are very general answers to very general questions. You should seek a proper advice from a licensed tax adviser (EA/CPA licensed in your state) for your specific case.",
"title": ""
},
{
"docid": "7fd6d379a23acdd8369d63e87fb51d0e",
"text": "You're not physically present in the US, you're not a US citizen, you're not a green card holder, and you don't have a business that is registered in the US - US laws do not apply to you. You're not in any way under the US jurisdiction. Effectively connected income is income effectively connected to your business in the US. You're not in the US, so there's nothing to effectively connect your income to. Quote from the link: You usually are considered to be engaged in a U.S. trade or business when you perform personal services in the United States. You ask: If I form an LLC or C corp am I liable for this withholding tax? If you form a legal entity in a US jurisdiction - then that entity becomes subjected to that jurisdiction. If you're physically present in the US - then ECI may become an issue, and you also may become a resident based on the length of your stay.",
"title": ""
},
{
"docid": "616eeb050776c24607530a993d6be9d5",
"text": "\"New York will want to you to pay taxes on income from \"\"New York sources\"\". I'm not sure what this means to a freelance web developer. If your wife is doing freelance web development under the same business entity as she did in New York (ie. a New York sole proprietor, corporation, etc), you probably do need to file. From nonresident tax form manual: http://tax.ny.gov/pdf/2011/inc/it203i_2011.pdf If you were a nonresident of New York State, you are subject to New York State tax on income you received from New York State sources in 2011. If you were a resident of New York State for only part of 2011, you are subject to New York State tax on all income you received while you were a resident of the state and on income you received from New York State sources while you were a nonresident. To compute the amount of tax due, use Form IT-203, Nonresident and Part-Year Resident Income Tax Return. You will compute a base tax as if you were a full-year resident, then determine the percentage of your income that is subject to New York State tax and the amount of tax apportioned to New York State.\"",
"title": ""
},
{
"docid": "9e54f8026b89f25711e7092dcbbaf3e1",
"text": "From the Massachusetts Department of Revenue: 1st - Massachusetts Source Income That is Excluded Massachusetts gross income excludes certain items of income derived from sources within Massachusetts: non-business related interest, dividends and gains from the sale or exchange of intangibles, and qualified pension income. 2nd - Massachusetts Source Income That is Included: Massachusetts gross income includes items of income derived from sources within Massachusetts. This includes income: 3rd - Trade or business, Including Employment Carried on in Massachusetts: A nonresident has a trade or business, including any employment carried on in Massachusetts if: A nonresident generally is not engaged in a trade or business, including any employment carried on in Massachusetts if the nonresident's presence for business in Massachusetts is casual, isolated and inconsequential. A nonresident's presence for business in Massachusetts will ordinarily be considered casual, isolated and inconsequential if it meets the requirements of the Ancillary Activity Test (AAT) and Examples. When nonresidents earn or derive income from sources both within Massachusetts and elsewhere, and no exact determination can be made of the amount of Massachusetts source income, an apportionment of income must be made to determine that amount considered Massachusetts gross income. 4th - Apportionment of Income: Apportionment Methods: The three most common apportionment methods used to determine Massachusetts source income are as follows: Gross income is multiplied by a: So if you go to Massachusetts to work, you have to pay the tax. If you collect a share of the profit or revenue from Massachusetts, you have to pay tax on that. If you work from Oregon and are paid for that work, then you don't pay Massachusetts tax on that. If anything, your company might have to pay Oregon taxes on revenue you generate (you are their agent or employee in Oregon). Does the answer change depending on whether the income is reported at 1099 or W-2? This shouldn't matter legally. It's possible that it would be easier to see that the work was done in Oregon in one or the other. I.e. it doesn't make any legal difference but may make a practical difference. All this assumes that you are purely an employee or contractor and not an owner. If you are an owner, you have to pay taxes on any income from your Massachusetts business. Note that this applies to things like copyrights and real estate as well as the business. This also assumes that you are doing your work in Oregon. If you live in Oregon and travel to Massachusetts to work, you pay taxes on your Massachusetts income in Massachusetts.",
"title": ""
},
{
"docid": "ed944c03c1e7096cb07630e758530dac",
"text": "Both states will want to tax you. Your tax home is where you maintain a domicile, are registered to vote, etc. and you will probably want to keep this as MA since you state that MA is your permanent residence and you are staying in a rented place in PA. But be careful about voter registration; that is one of the items that can be used to determine your state of residence. OK, so if you and your spouse are MA residents, you should file jointly as residents in MA and as nonresidents in PA. Do the calculations on the nonresident return first, and then the calculations on the resident return. Typically, on a nonresident tax return, the calculations are effectively the following: Report all your income (usually AGI from the Federal return). Call this $X. Compute the PA state tax due on $X. Note that you follow the rules for nonresidents in doing this, not the calculations used by PA residents. Call the amount of tax you computed as $Y. What part of the total income $X is attributable to PA sources? If this amount is $Z, then you owe PA $Y times (Z/X). On the resident return in MA, you will likely get some credit for the taxes paid to PA, and this will reduce your MA tax burden. Usually the maximum credit is limited to the lesser of actual tax paid to PA and what you would have had to pay MA for the same income. As far as withholding is concerned, your employer in PA will withhold PA taxes as if you are a PA resident, but you can adjust the amount via the PA equivalent of IRS Form W4 so as to account for any additional tax that might be due because you will be filing as a nonresident. Else you can pay estimated taxes via the PA equivalent of IRS Form 1040ES. Similarly, your wife can adjust her withholding to account for the MA taxes that you will owe on the joint income, or you can pay estimated taxes to MA too. Note that it is unlikely that your employer in Pennsylvania will withhold Massachusetts taxes (and send them to Massachusetts) for you, e.g. if it is a ma-and-pa store, but there may be special deals available if your employer does business in both states, i.e. is a MA-and-PA store.",
"title": ""
},
{
"docid": "be8d414a0fd1c029f1c9ad663a449c4d",
"text": "I do NOT know the full answer but I know here are some important factors that you need to consider : Do you have a physical location in the United States? Are you working directly from Canada? With a office/business location in the United States your tax obligation to the US is much higher. Most likely you will owe some to the state in which your business is located in Payroll Tax : your employer will likely want to look into Payroll tax, because in most states the payroll tax threshold is very low, they will need to file payroll tax on their full-time, part-time employees, as well as contractor soon as the total amount in a fiscal year exceeds the threshold Related to No.1 do you have a social security number and are you legally entitled to working in the States as an individual. You will be receiving the appropriate forms and tax withholding info Related to No.3 if you don't have that already, you may want to look into how to obtain permissions to conduct business within the United States. Technically, you are a one person consulting service provider. You may need to register with a particular state to obtain the permit. The agency will also be able to provide you with ample tax documentations. Chances are you will really need to piece together multiple information from various sources to resolve this one as the situation is specific. To start, look into consulting service / contractor work permit and tax info for the state your client is located in. Work from state level up to kick start your research then research federal level, which can be more complex as it is technically international business service for Canada-US",
"title": ""
},
{
"docid": "608b9a57aea1d893428fa4e580031074",
"text": "\"Yes, you must file North Carolina AND South Carolina income tax. If you live in one state and work in another, the income is potentially taxed twice. Most states give a credit for taxes paid to the other state. Often you pay the tax in the state where you worked, and then if the tax rate in the state where you live is higher, you pay the difference. But the details depend on the tax laws of the two states involved. I'm not an expert on either Carolina's tax laws. Start by getting the forms and instructions from both states and see what they say. Or if you're using tax software, see if it handles this case. If someone else on here knows the specifics of the tax laws for the Carolinas, I gladly yield. :-) Many states establish \"\"reciprocity agreements\"\" with other states, usually the neighboring states, that generally say that if the state you live in and the state you work in are both party to the agreement, then you only pay tax in the state you live in. This simplifies things a lot. Unfortunately, neither North Carolina nor South Carolina have such agreements with each other or with any other state.\"",
"title": ""
},
{
"docid": "04b3ee3f698ca5b4f450524d8a56f4aa",
"text": "\"Am I eligible for declaring my earnings to the IRS? You're always eligible. You're probably asking whether you're required. In the US it doesn't matter where you deposit the money, it matters where you earn it. Money is earned where the services are provided. This is called \"\"sourcing\"\". So if you are working in a foreign country - you're only subject to the US laws to the extent you're a US citizen/permanent resident or qualify for the substantial presence test.\"",
"title": ""
},
{
"docid": "776d1b6aa23bf68f4ab21bf947292452",
"text": "If I hire someone in Utah to do sales for me over the phone, and he works out of his home, am I required to register an LLC or file my current one as a foreign entity in Utah? Yes, since you've established presence in Utah. You'll register your current LLC in Utah, no point creating another one. If my sales guy, or I, call businesses in, say, Florida, and sell a few businesses our services for online work like maybe a website design, etc. Are we required to file our LLC In Florida as either a new LLC or a foreign one? No, you need to register where you (your company, including your employees or physical offices) are physically present. You don't need to register in any state you ship products or provide services to. If no-one of your company's employees is present in Florida and you don't have an office/rent a storage there - then you have no presence in Florida. If you actually go there to provide the services - then you do.",
"title": ""
},
{
"docid": "46a36a35ae2c95ebde6fa7d46367d2ac",
"text": "Disclaimer: I am not a tax specialist You probably need a sales tax permit if you're going to sell goods, since just about every state taxes goods, though some states have exemptions for various types of goods. For services, it gets tricker. There is a database here that lists what services are taxed in what states; in Wyoming, for example, cellphone services and diaper services are taxed, while insurance services and barber services are not. For selling over the internet, it gets even dicier. There's a guide on nolo.com that claims to be comprehensive; it states that the default rule of thumb is that if you have a physical presence in a state, such as a warehouse or a retail shop or an office, you must collect tax on sales in that state. Given your situation, you probably only need to collect sales tax on customers in Wyoming. Probably. In any event, I'd advice having a chat with an accountant in Wyoming who can help walk you through what permits may or may not be needed.",
"title": ""
},
{
"docid": "d658c3ec1d9279c81cc4cf3a58c86168",
"text": "\"Short answer: Yes. For Federal income tax purposes, you are taxed on your total income, adding up positives and negatives. If business A made, say, $100,000 while business B lost $20,000, then your total income is $80,000, and that's what you'll be taxed on. As @littleadv says, of course any business losses you claim must qualify as business losses under IRS rules. And yes, there are special rules about losses that the IRS considers \"\"passive\"\". If you have wage income in addition to business income, business losses don't offset wage income for social security and medicare tax purposes. You can't get a refund of the social security tax deducted from your paycheck. I don't know if this is relevant to you, but: If you have businesses in different states, each is taxed by that state. For example I have two tiny side businesses, one in Michigan and one in Ohio. Last year the Michigan business made money while the Ohio business lost money. So my federal income was Michigan minus Ohio. My Ohio income was negative so I owed no Ohio income tax. But I couldn't subtract my Ohio losses from my Michigan income for Michigan income tax purposes. Thus, having, say, $10,000 income in Michigan and $10,000 in Ohio would result in lower taxes than $30,000 income in Michigan and a $10,000 loss in Ohio, even though the total income in both cases is the same. And this would be true even if the tax rates in both states were identical.\"",
"title": ""
},
{
"docid": "9532e3944d518f5fadec4985faa3d889",
"text": "You're most likely required to file in both for 2013 - since you've lived in both. From 2014 and on you're definitely a NY resident (since you're renting a place there and live there), and you may very well continue being NJ resident (since you're essentially continue being domiciled there). I suggest talking to a EA/CPA licensed in NY and NJ to try and see what you can do to avoid being resident in both the states, or see if it is at all an issue other than filing everything double.",
"title": ""
},
{
"docid": "275036777972139623012c23df65cd37",
"text": "California and New York are very aggressive when it comes to revenue and taxes. As such, mere having an employee in these States creates a nexus and tax/filing liability for the company. @Adam Wood mentioned sales tax - that is correct. Having an employee in the State of California will require collecting sales tax for CA, and if until now your employer didn't have to - that would be a good enough reason to refuse your request. In addition to sales taxes, there's also the issue of corporate filings (they will now have to file paperwork in CA and pay CA franchise taxes just because of you) and payroll taxes (which are pretty high in CA and NY). It will also subject the to CA/NY/WA labor laws, which are more liberal than in most of the other States. Washington doesn't have personal income tax, but does have corporate income tax and sales tax, so I'm guessing the reasons to exclude this State are the same.",
"title": ""
},
{
"docid": "eb16551aaaa62f19ddaf2a03ef09ae10",
"text": "It is not a question of where you have your driver's license. It is a question of the states' tax related residency rules. (Though a driver's license can be a part of that question.) Since you likely have a residence in NYC and so can prove residency through a lease, bills, etc., you probably have to file as a NYS/NYC resident. I do have to question your maintaining a California driver's license if you are not a resident. If you are attempting to maintain dual-residency, look into both states' residency rules to see if you are liable for taxes in both states. California seems particularly picky about these types of situations, probably due to concerns that you may be trying to circumvent California taxes. That said, it usually revolves around income in the state. Of course, if you maintain residency in California as well, the argument can be made that you owe some taxes due to the fact that you take advantage of state services. (E.g. you drive on California roads.) I suggest you consult a tax professional knowledgeable in these issues to sort out the details.",
"title": ""
},
{
"docid": "315f44287b4b9fb02ee1ace85ecca3f4",
"text": "According to the Colorado form CY104PN, Colorado taxes income earned while working in or being a resident of the State of Colorado. Assuming you never set foot in the State of Colorado, I read it as if you will only be liable to pay taxes in the State of New York (on all of your income, of course). You can get a more reliable opinion from a Colorado-licensed CPA.",
"title": ""
}
] |
fiqa
|
d2b17e46810349445b4ed23d1626aaf3
|
American taxes if living outside the US and get paid by US company on a US bank account
|
[
{
"docid": "5a285a126c4ec7591bb3e03afcd6adc6",
"text": "I agree with Joe, having the money deposited to the US bank account may land you in trouble. Technically, a US business paying a foreigner must withhold 30% of the payment, unless a tax treaty says otherwise. The US business should do that based on your W8-BEN/W8-ECI form that you should have given to the business before being paid. I'm guessing, that by paying to your US bank account, you (and your American counterpart) are trying to avoid this withholding. That may cause trouble for both of you. I would suggest you talking to a professional (EA/CPA licensed in the State where the business is located) and having the situation resolved ASAP. You may not be liable for the US taxes at all, but because of incorrectly reporting the income/expense - you and the US business may end up paying way more than the $0 you otherwise would have, in penalties.",
"title": ""
},
{
"docid": "62d4d02c96f3c835c9f5f8998ccd9e9d",
"text": "Technically, if you earn in US (being paid there, which means you have a work visa) and live in other country, you must pay taxes in both countries. International treaties try to decrease the double-taxation, and in this case, you may pay in your country the difference of what you have paid in US. ie. your Country is 20% and USA is 15%, you will pay 5%, and vice-versa. This works only with certain areas. You must know the tax legislation of both countries, and I recommend you seek for advisory. This site have all the basic information you need: http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion Good luck.",
"title": ""
}
] |
[
{
"docid": "85896178999fb87373832224dfd7bb96",
"text": "\"The short answer is that there is no US tax due if all you are doing is moving assets held abroad to the US. Whether you are a \"\"returning\"\" US citizen (or will continue your residence in the Philippines) is not relevant to this. The long answer is that you may be liable for a lot of other fines and taxes if you have not been doing any of several things correctly. As a US citizen, you are required to declare your worldwide income on your US income tax returns. Have you been filing US income tax returns during your time abroad? and have you been declaring the income that you have received from non-US sources each year? This includes wages, interest, dividends, capital gains, rental income from real estate, gambling income, lottery winnings, Nobel prizes, everything. If you have been paying income tax to other countries on this income, then it is generally possible to get a deduction for this tax payment from the income that will be taxed by the US (or a credit for the tax payment against your US Federal income tax liability) depending on the existence of tax treaties or (when the US Senate refuses to approve a tax treaty) a Double Taxation Avoidance Agreement between the US and other countries. In some cases, foreign earned income up to a certain limit is not taxed by the US at all. Even if you have been filing US income tax returns correctly, and can thus account for the $45,000 in your savings account, or you received that money as a gift or inheritance and can account for it on that basis, have you been filing reports with the US Treasury since the year when the total value of all your foreign bank accounts and other financial assets (stocks and bonds etc but not real estate) first exceeded $10,000? In prior years, this was a matter of filling out and submitting Form TD F 90-22.1 but more recently (since 2010?), you need to fill out and submit FinCEN Form 114. Have you been submitting the required documentation all along? Note that there are severe penalties for failure to fine FinCEN Form 114, and these penalties do not get waived by tax treaties. In summary, you might (or you might not) have several other tax or legal issues to worry about than just taxes on the transfer of your money from the Philippines to the US.\"",
"title": ""
},
{
"docid": "c1208ebc915c575fdffa0a2486c77dab",
"text": "Well according to US logic, an individual can be born outside the US to an American parent, never have even stepped foot in the US or even be aware of their American citizenship, but still owe taxes and reporting to the IRS. There are no true international corporations as each country has to have its own subsidiary in order to follow local laws. (well EU being common market can just have one EU) Those subsidiaries are owned by whatever percentage by the headquarters, but are distinct companies.",
"title": ""
},
{
"docid": "feb2ecb57b9ac11c3fe943205c63ea0f",
"text": "As the name says, its for income earned in a Foreign country. If you have been paying US income tax on this while living in the US, nothing is going to change here. You should be informing yourself on how to avoid double taxation in your new country of residence. Passive income earned abroad (dividends, interest) also do not fall under this exemption. The purpose of the Foreign Earned Income Exclusion is to make it easy for expats who work abroad to avoid double income taxation without going through the complicated process of applying for tax credits. The US is the only industrial country that taxes its residents regardless of where they reside. That is also why it only goes to about $100,000 a year. If you are a high earner, they want to make it more difficult. Also as a side note, since you are going to be abroad for a year. I will point out that if you have more than $10,000 in foreign accounts at any point in the year you need to declare this in an FBAR form. This is not advertised as well as it should be and carries ridiculous penalties for non-compliance. I can't count the number of times I have heard a US expat say that they were unaware of this.",
"title": ""
},
{
"docid": "e7e18992948f103e302b59bfe41d5930",
"text": "Does my prior answer here to a slightly different question help at all? Are there capital gains taxes or dividend taxes if I invest in the U.S. stock market from outside of the country?",
"title": ""
},
{
"docid": "37feddb6cb3a7bb862d4267ba2ae404f",
"text": "I'm not missing the point. Canada will still charge you/a corporation income taxes on worldwide income so long as you are resident in Canada. If you are incorporated in Canada but resident elsewhere, you are only subject to tax on Canadian-sourced income. In the US, where you are incorporated is the method of determining liability. Why is one method of determining jurisdiction correct and not the other? If you are a corporation residing in Canada, you still pay Canadian taxes on worldwide income, even if that income is sourced in another country.",
"title": ""
},
{
"docid": "caf5c4379954fbdcf10d0bc39778f4e7",
"text": "This often occurs because of misrepresentation of the corporation income. Most of the income in the US is payed at or a little below the 35% rate... But when the figure is calculated non-US income is counted alongside US income. For some reason, in the US it makes sense for corporations to pay income taxes in the countries they actually made the income in AND the US. Mind you... Only USA and Eritrea have this sort of backwards thinking. So yeah... If they make $100 worldwide income, out of which $50 is US income, and the company reports $15 in US taxes, they get represented as paying 15% effective tax rate when in reality they payed 30% on US taxes for their US income.",
"title": ""
},
{
"docid": "f358501a7f9abf6f372a1afd9f0f7be5",
"text": "except that most companies are small companies and most business owners end up as families at some point. I'm starting a business abroad and will be taxed at 35% in the USA even if I don't live there. There's ways to get around it, but I'm not sure exactly how to do it yet nor am I making enough money yet to justify the up front expense of doing this",
"title": ""
},
{
"docid": "3f8d9c0e276776b3ddd1f8b084e6b365",
"text": "In the United States the general policy is that the IRS would consider it income when you have access to the money. I work for a company that has a contract with another company. Near the end of the year I turn in a time card that has my hours that I worked as of that date. Because they don't pay me until early January the money on the check is counted in the new year. I couldn't touch the money until they issued the check. If they had paid me on December 31st it would have counted as the old year, even if I only had a short window to have access to it before the year ended. It would even count as old year money if I held on to the December check, but didn't deposit it until March. So it would become income when you could use it. So If you could access it via a check, or debit card, or transfer it to the bank it is now income. Of course that is in the United States. You would need to see what the situation is in Singapore.... The edge cases always depend on the country.",
"title": ""
},
{
"docid": "c1f3dacf4ab2b77562a40c470a5c78f4",
"text": "Your bank doesn't care about your immigration status, it cares about your tax status. You're a US tax resident and will open a US-resident account, not an international account (regardless of where the money comes from).",
"title": ""
},
{
"docid": "1f7667a2760ae4f21cf8be02f371e524",
"text": "\"Its not for US citizens - its for US residents. If the US considers you as a tax resident - you'll be treated the same as a US citizen, regardless of your immigration status. The question is very unclear, since it is not mentioned whether your US sourced income \"\"from the Internet\"\" is sales in the US, sales on-line, services you provide, investments, or what else. All these are treated differently. For some kinds of US-sourced income you should have paid taxes in the US already, regardless of where you physically reside. For others - not. In any case, if you become US tax resident, you'll be taxed on your worldwide income, not only the $10K deposited in the US bank account. ALL of your income, everywhere in the world, must be declared to the US government and will be taxed. You should seek professional advice, before you move to the US, in order to understand your responsibilities, liabilities and rights. I suggest looking for a EA/CPA licensed in California and experienced with taxation of foreigners (look for someone in the SF or LA metropolitan areas). Keep in mind that there may be a tax treaty between the US and your home country that may affect your Federal (but not California) taxes.\"",
"title": ""
},
{
"docid": "3952f02414674a677415876312af53fe",
"text": "First, yes, your LLC has to file annual taxes to the US government. All US companies do, regardless of where their owners live. Second, you will also probably be liable to personally file a return in the US and unless the US has a tax treaty with India (which I don't believe it does) you may end up paying taxes on your same income to both countries. Finally, opening a US bank account as a foreign citizen can be very tricky. You need to talk to a US accountant who is familiar with Indian & US laws.",
"title": ""
},
{
"docid": "e3c276445f1d5db3e000e6ae79c6709e",
"text": "And if you need to pay business taxes outside of the regular US 1040 form, you can use the IRS' Electronic Federal Tax Payment System (EFTPS). Basically, you enroll your bank accounts, and you can make estimated, penalty, etc. payments. The site can be found here.",
"title": ""
},
{
"docid": "f9589a3228d51c680546c138e8a52d9b",
"text": "Do I pay tax to the US and then also pay it in India for my income, or does my American partner, who holds 15% of the monthly income, pay tax in the US for his income? Of course you do, what kind of question is this? You have income earned in the US by a US entity, and the entity is taxed. Since LLC is a disregarded entity - the tax shifts to you personally. You should file form 1040NR. You should also talk to a tax professional who's proficient in the Indo-US tax treaty, since it may affect your situation.",
"title": ""
},
{
"docid": "8364441010f6737d8fc4c32e0f598d57",
"text": "The United States taxes nonresident aliens on two types of income: First, a nonresident alien who is engaged in a trade or business in the United States is taxed on income that is effectively connected with that trade or business. Second, certain types of U.S.-source payments are subject to income tax withholding. The determination of when a nonresident alien is engaged in a U.S. trade or business is highly fact-specific and complex. However, keeping assets in a U.S. bank account should not be treated as a U.S. trade or business. A nonresident alien's interest income is generally subject to U.S. federal income tax withholding at a rate of 30 percent under Section 1441 of the tax code. Interest on bank deposits, however, benefit from an exception under Section 1441(c)(10), so long as that interest is not effectively connected with a U.S. trade or business. Even though no tax needs to be withheld on interest on a bank deposit, the bank should still report that interest each year to the IRS on Form 1042-S. The IRS can then send that information to the tax authority in Brazil. Please keep in mind that state and local tax rules are all different, and whether interest on the bank deposits is subject to state or local tax will depend on which state the bank is in. Also, the United States does tax nonresident aliens on wages paid from a U.S. company, if those wages are treated as U.S.-source income. Generally, wages are U.S.-source income if the employee provides services while physically present in the United States. There are a few exceptions to this rule, but they depend on the amount of wages and other factors that are specific to the employee's situation. This is an area where you should really consult with a U.S. tax advisor before the employment starts. Maybe your company will pay for it?",
"title": ""
},
{
"docid": "026253eb0466607bb63f7801dcfa4d32",
"text": "As Mhoran said, the risks of buying a bankrupt company are huge, and even successful bankruptcy turnarounds don't involve keeping the same stock. For instance, the GM bankruptcy was resolved by the company more or less selling all its valuable assets (brands, factories, inventory) to a new version of itself, using that money to pay off what liabilities it could, and then dissolving. The new company then issued new stock, and you had to buy the new stock to see it rise; the old stock became worthless. AA could have gone the same way; Delta could have bought it out of bankruptcy and consumed it outright, with any remaining shareholders being paid off at market value. That's probably the best the market was hoping for. Instead, the deal is a much more equal merger; AMR brings a very large airport network and aircraft fleet to the table, and Delta brings its cash, an also-considerable fleet and network, and a management team that's kept that airline solvent. The stockholders, therefore, expect to be paid off at a much higher per-share price, either in a new combined stock, in Delta stock, or in cash.",
"title": ""
}
] |
fiqa
|
3e8aaccc1ac84c17ca837a0f8432b786
|
What does HMRC (the UK tax agency) view as valid expenses for travel?
|
[
{
"docid": "cb60d460053ce5c63ebde8691c96b90a",
"text": "Food is almost never a valid expense. Reason for it is simple - if you were not conducting business you would have to eat too. Ad 1. I don't see why travel in that case would not be a valid expense, as the only reason for you to travel there is for business reasons. Ad 2. Unlikely as there is a duality of purpose. So while part of it may be business, you are also getting personal benefit from the visit (coffee/cakes etc) so that generally is a no. Ad 3. No, while you can claim for entertainment of employees (to sensible extends), that doesn't work when entertaining clients. Ad 4. If any part of the trip is for leisure then you cannot claim it as business expense, sorry! If there is any duality of use then it's not a business expense. And food, as always, is a no go.",
"title": ""
}
] |
[
{
"docid": "05b5668a792f490a1eda8dc402f8125e",
"text": "\"DirectGov has a good overview here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017814 and answers to your specific questions here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10013435 In short, you do need to declare the rental income on your tax return and will need to pay tax on it (and note that only the mortgage interest (not the full repayment) is deductible as an \"\"allowable expense\"\", see the full list of what is deductible here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10014027 ).\"",
"title": ""
},
{
"docid": "706cab9010b11714da53588d1d51bd40",
"text": "Short answer: it's complicated. The UK govt pages on foreign income are probably your best starting point: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/LeavingOrComingIntoTheUK/DG_10027480 As you can see, it depends on your precise residence status here. (There is a tax treaty between the UK and the US so you wouldn't be double taxed on the income either way. But there might still be reporting obligations).",
"title": ""
},
{
"docid": "26934933debfc980c3627ccfc5be78e7",
"text": "\"Worksheets/ Documentation: (From my experience filing my business deductions through several tax preparers.) Keep all your calculations, but only submit the calculations and worksheets requested by the tax form. Most travel deductions are just a category total. If the IRS wants more info, it will ask for it. Information from the book Home Business Tax Deductions (from Nolo) (2012): Traveling with kids: In chapter 9 (\"\"Leaving Town: Business Travel\"\"), in the section \"\"Taking People With You\"\", it specifically discusses your situation. Paraphrasing, it says that you can deduct the amount any eligible expenses would have cost you if you were traveling without your kids. So, you can deduct the cost the smaller hotel room that you and your wife would have normally rented if you were alone. How your side trips affect your business deductions: According to the book, since you spent 50% or more of your time on business activities while traveling in the U.S.: Deducting meals shared with your kids: You can deduct meals as either entertainment or travel expenses. I would recommend you buy one of Nolo's books on deductions, as it goes into much more detail than I do here.\"",
"title": ""
},
{
"docid": "626a2197689b19ff93c95f514d201984",
"text": "With a question like this you should talk to a tax professional who knows about international tax and knows about both the UK and the country you will be working in. They will give you up to date advice on what can be an extremely complex question. However to get you started I'll tell you what I was told when I did this nearly twenty years ago. It's all about whether you are resident in the UK for tax purposes or not. If you are, you will pay UK tax. If not, you wont (assuming you are being paid outside the UK - check with your professional exactly what is involved). In those days you could be counted as 'non resident' if you spent a complete period of twelve months outside the UK. You can make occasional visits to the UK without invalidating that. Again, check exactly how much you are allowed to return while still being not resident. Usually you will have to pay tax in the country where you are resident, but check the rules there. With some skilful timing you may be able to be considered non-resident in bouth countries, at least for some of the time. Again, your tax professional will know. The bank account question - again get a professional. I don't think it's a problem, but you may have to establish that you are being paid in the foreign country. In general you are going to need an account in the country where you work, so if its a problem get paid there and transfer any money you need in the UK.",
"title": ""
},
{
"docid": "358ca6cdfe9780ec08e4a2d93d91605b",
"text": "My understanding (I am not a lawyer or tax expert) is that you are not allowed to work for free, but you can pay yourself minimum wage for the hours worked. There are probably National Insurance implications as well but I don't know. The main thing is, though, that if HMRC think that you've set up this system as a tax avoidance scheme then they're allowed to tax you as though all the income had been yours in the first place. If you are considering such a setup I would strongly advise you to hire a qualified small business accountant who will be familiar with the rules and will be able to advise you on what is and is not possible / sensible. Falling outside the rules (even inadvertently) leaves you liable to a lot of hassle and potentially fines etc.",
"title": ""
},
{
"docid": "5581a60e50161d4d3ba607cddf4e983e",
"text": "Tax regulations vary from country to country - some permitting more deductions, some less - but here are a few guidelines. As regards the home-office: As regards the deductions: Think of it like this: in order to have space for a home-office you needed a bigger home. That leads to increased rates, heating, insurance and so on. Many tax regulators recognise that these are genuine expenses. The alternative is to rent a separate office and incur greater expenses, leading to increased deductions and less overall tax paid (which won't finance the deficit). The usual test for deductions is: was the expense legitimately incurred in the pursuit of revenue? The flexibility permitted will vary by tax authority but you can frequently deduct more than you expected.",
"title": ""
},
{
"docid": "25c3c0fedb487bda03a9b386cba5a700",
"text": "As 'anonymous' already mentioned, I think the correct answer is to go see an accountant. That said, if you are already have to fill in a tax return anyway (ie, you're already a high rate taxpayer) then I don't see why it should be an issue if you just told HMRC of your additional profit via your tax return. I never was in the situation of being employed with a side business in the UK, only either/or, but my understanding is that registering as self employed is probably more suitable for someone who doesn't PAYE already. I might be wrong on this as I haven't lived in the UK for a couple of years but an accountant would know the answer. Of course in either case, make sure that you keep each an every scrap of paper to do with your side business.",
"title": ""
},
{
"docid": "99cdc7e19168d7ce036cfcc197e78300",
"text": "The key factors here are You will need to pay tax in the UK only if you live more than 183 days - that too in a tax year. Indian tax system will also classify you as a NR (Non-resident) if you live outside for more than 182 days in a tax year. In your case, your income will be in India and will stay in India. So there should not be any UK tax until you try and get that money to the UK. I will not go into outlining what if you want to go down that road since it does not apply. As for tax in India, You will need to pay tax since the source of income is Indian. Hope this helps.",
"title": ""
},
{
"docid": "6b590adfbf41f34aee714780ff043bb5",
"text": "Some items are VAT Exempt or Reduced, but in short you will pay it on almost any all consumer goods. Assuming you are a visitor to the UK from a non-EU nation then Her Majesty will refund you with the appropriate paperwork",
"title": ""
},
{
"docid": "b7e451ff517411ed28490bc8763abde4",
"text": "This is essentially a reimbursement of your expense. Since you can deduct the expense, the fact that the reimbursement is taxable doesn't affect you much. You deduct your home office expenses on your annual tax return using form 8829. See the IRS site for more details. If you're asking about the UK tax, there may be some other considerations, but from the US tax perspective it is (nearly) a wash.",
"title": ""
},
{
"docid": "f7dda4d298962e5676469e1351ccb15d",
"text": "\"Some of the 45,000 might be taxable. The question is how was the stipend determined. Was it based on the days away? The mile driven? The cities you worked in? The IRS has guidelines regarding what is taxable in IRS Pub 15 Per diem or other fixed allowance. You may reimburse your employees by travel days, miles, or some other fixed allowance under the applicable revenue procedure. In these cases, your employee is considered to have accounted to you if your reimbursement doesn't exceed rates established by the Federal Government. The 2015 standard mileage rate for auto expenses was 57.5 cents per mile. The rate for 2016 is 54 cents per mile. The government per diem rates for meals and lodging in the continental United States can be found by visiting the U.S. General Services Administration website at www.GSA.gov and entering \"\"per diem rates\"\" in the search box. Other than the amount of these expenses, your employees' business expenses must be substantiated (for example, the business purpose of the travel or the number of business miles driven). For information on substantiation methods, see Pub. 463. If the per diem or allowance paid exceeds the amounts substantiated, you must report the excess amount as wages. This excess amount is subject to income tax with-holding and payment of social security, Medicare, and FUTA taxes. Show the amount equal to the substantiated amount (for example, the nontaxable portion) in box 12 of Form W-2 using code “L\"\"\"",
"title": ""
},
{
"docid": "c11d1781a910fe53b160db6f0ac43cb5",
"text": "The IRS Guidance pertaining to the subject. In general the best I can say is your business expense may be deductible. But it depends on the circumstances and what it is you want to deduct. Travel Taxpayers who travel away from home on business may deduct related expenses, including the cost of reaching their destination, the cost of lodging and meals and other ordinary and necessary expenses. Taxpayers are considered “traveling away from home” if their duties require them to be away from home substantially longer than an ordinary day’s work and they need to sleep or rest to meet the demands of their work. The actual cost of meals and incidental expenses may be deducted or the taxpayer may use a standard meal allowance and reduced record keeping requirements. Regardless of the method used, meal deductions are generally limited to 50 percent as stated earlier. Only actual costs for lodging may be claimed as an expense and receipts must be kept for documentation. Expenses must be reasonable and appropriate; deductions for extravagant expenses are not allowable. More information is available in Publication 463, Travel, Entertainment, Gift, and Car Expenses. Entertainment Expenses for entertaining clients, customers or employees may be deducted if they are both ordinary and necessary and meet one of the following tests: Directly-related test: The main purpose of the entertainment activity is the conduct of business, business was actually conducted during the activity and the taxpayer had more than a general expectation of getting income or some other specific business benefit at some future time. Associated test: The entertainment was associated with the active conduct of the taxpayer’s trade or business and occurred directly before or after a substantial business discussion. Publication 463 provides more extensive explanation of these tests as well as other limitations and requirements for deducting entertainment expenses. Gifts Taxpayers may deduct some or all of the cost of gifts given in the course of their trade or business. In general, the deduction is limited to $25 for gifts given directly or indirectly to any one person during the tax year. More discussion of the rules and limitations can be found in Publication 463. If your LLC reimburses you for expenses outside of this guidance it should be treated as Income for tax purposes. Edit for Meal Expenses: Amount of standard meal allowance. The standard meal allowance is the federal M&IE rate. For travel in 2010, the rate for most small localities in the United States is $46 a day. Source IRS P463 Alternately you could reimburse at a per diem rate",
"title": ""
},
{
"docid": "5092af7fd472dc29e497ab8860e2097c",
"text": "There are really only two options: invoiced, or paid. Everything else is not relevant from a tax or accounting point of view. Of course, if you're invoicing as you go along or collecting deposits once things are in your order books, then that amount of money is relevant. Working things out according to when you invoice is called working on an accrual basis. Working it out according to when you get paid is called working on a cash basis. Wikipedia explains the distinction, which also applies to your expenses: when did you incur them (get the bill) vs when you did you pay it. In some jurisdictions and for some kinds of companies, you can choose which of these two bases to work on (but no other basis.) There is advice on the UK government website about keeping your accounts. It includes a link to a PDF and on page 15 of that 100 page PDF it states: 2.14 The financial statements, with the exception of cash flow information, shall be prepared on the accruals basis of accounting. HENCE, ALL INCOME AND CHARGES RELATING TO THE FINANCIAL YEARTO WHICH THE ACCOUNTS RELATE MUST BE TAKEN INTO ACCOUNT, WITHOUT REGARD TO THE DATE OF PAYMENT OR RECEIPT. That seems pretty clear to me. When you invoice. Period.",
"title": ""
},
{
"docid": "255ced4517b0b7d6b04e2db97cfaec4c",
"text": "The answer on the Canadian Government's website is pretty clear: Most employees cannot claim employment expenses. You cannot deduct the cost of travel to and from work, or other expenses, such as most tools and clothing. However, that is most likely related to a personal vehicle. There is a deduction related to Public Transportation: You can claim cost of monthly public transit passes or passes of longer duration such as an annual pass for travel within Canada on public transit for 2016. The second sleeping residence is hard to justify as the individual is choosing to work in this town and this individual is choosing to spent the night there - it is not currently a work requirement. As always, please consult a certified tax professional in your country for any final determinations on personal (and corporate) tax laws and filings.",
"title": ""
},
{
"docid": "2b3eb961fe4796f80757fdd694888379",
"text": "IRS Publication 463 is a great resource to help you understand what you can and can't deduct. It's not a yes/no question, it depends on the exact company use, other use, and contemporaneous record keeping.",
"title": ""
}
] |
fiqa
|
681e2130ec94c004b4e1f47192943889
|
Indian citizen working from India as freelancer for U.S.-based company. How to report the income & pay tax in India?
|
[
{
"docid": "2335c529b2a79cd1f83f13f9d7143e9a",
"text": "You can receive money directly into your savings bank account. It is perfectly legal. FYI the Bank as part of regulation would report this to RBI. As the funds are received for the services you have rendered, You are liable to pay tax on the income. The income is taxed as professional income similar to the income of Doctors, Lawyers, Accountants etc. If you are paying your colleagues, it would be treated as expense. Not only this, you can also treat any phone calls you make, or equipment your purchase [laptop, desk etc] as expense. The difference become your actual income and you would be taxed as per the rate for individuals. It's advisable you contact an accountant who would advise you better for a nominal fee [few thousand rupees] and help you pay the tax and file the returns. With or without accountant It is very important for you to record all payments and expenses in a book of accounts.",
"title": ""
},
{
"docid": "9ef9fa13f0b1dca2d499a4b823b64647",
"text": "There is no reason for you to open a firm. However, it will help you, if you operate separate bank account for business and personal purposes. You can run your business as proprietorship business. Your inward remittance is your income. You can deduct payment made to your colleagues as salary. You should pay them by way of cheques or bank transfer only. You are also entitled to deduct other business expenses provided you keep proper receipt of the same such as broadband connection charges, depreciation on equipment and more importantly, rent on your house. If your total receipt from such income exceeds INR 60,00,000 you will need to withhold tax on payment made to your colleagues as also subject to audit of your accounts. If you want to grow your business, suggest you should take an Import / Export Code in your own name. You can put any further question in this regard.",
"title": ""
}
] |
[
{
"docid": "53bf4107ad51b4faddf73e9e30b2330c",
"text": "Staying out of India for a certain duration on a year (financial year) deems one to be considered NRI (non-resident Indian). NRIs are not taxed under Indian tax law as they are deemed subject to the resident country tax laws, so for NRI there is no tax liability in India. For your specific case, you could consult a Charted Accountant (CA) and he/she will be able to tell you exactly after looking at your financial data.",
"title": ""
},
{
"docid": "3369c12dde48989e1b07d98607b795fb",
"text": "You won't be paying any taxes for income generated in the US as long as you are not-resident in India. You pay US taxes. You can file a null return in India just in case (all zeroes). If you have any income in India - bank deposits in your name, house rental income and so on - that needs to be declared and tax needs to be paid in India.",
"title": ""
},
{
"docid": "b0e89d948d1a3eeeb4332ed2e5712a2a",
"text": "Tax Deducted at source is applicable to Employee / Employer [contract employee] relations ... it was also made applicable for cases where an Indian company pays for software products [like MS Word etc] as the product is not sold, but is licensed and is treated as Royalty [unlike sale of a consumer product, that you have, say car] ... Hence it depends on how your contract is worded with your India clients, best is have it as a service agreement. Although services are also taxed, however your contract should clearly specify that any tax in India would be borne by your Indian Client ... Cross Country taxation is an advanced area, you will not find good advice free :)",
"title": ""
},
{
"docid": "4c209b6413218de97335fc1c5d4d5f1b",
"text": "\"My tax preparing agent is suggesting that since the stock brokers in India does not have any US state ITINS, it becomes complicated to file that income along with US taxes Why? Nothing to do with each other. You need to have ITIN (or, SSN more likely, since you're on H1b). What brokers have have nothing to do with you. You must report these gains on your US tax return, and beware of the PFIC rules when you do it. He says, I can file those taxes separately in India. You file Indian tax return in India, but it has nothing to do with the US. You'll have to deal with the tax treaty/foreign tax credits to co-ordinate. How complicated is it to include Indian capital gains along with US taxes? \"\"How complicated\"\" is really irrelevant. But in any case - there's no difference between Indian capital gains and American capital gains, unless PFIC/Trusts/Mutual funds are involved. Then it becomes complicated, but being complicated is not enough to not report it. If PIFC/Trusts/Mutual funds aren't involved, you just report this on Schedule D as usual. Did anybody face similar situation More or less every American living abroad. Also the financial years are different in India and US Irrelevant.\"",
"title": ""
},
{
"docid": "2ef4e47b64b903efa22be3cfe708549a",
"text": "There are no clear guidelines. If you are selling as individual, then what ever profit you make gets added to your overall income as you pay tax accordingly. This is true for sole proprietor or partnership kind of firms. If you are registered as a Company, the profits are taxed as business income. There may be VAT and other taxes. Please consult a CA who can guide you in specifics as for eCommerce, there is no defined law and one has to interpret various other tax laws.",
"title": ""
},
{
"docid": "7c2718faab7ee5008d2257c0669ca216",
"text": "\"I'm assuming that by saying \"\"I'm a US resident now\"\" you're referring to the residency determination for tax purposes. Should I file a return in the US even though there is no income here ? Yes. US taxes its residents for tax purposes (which is not the same as residents for immigration or other purposes) on worldwide income. If yes, do I get credits for the taxes I paid in India. What form would I need to submit for the same ? I am assuming this form has to be issued by IT Dept in India or the employer in India ? The IRS doesn't require you to submit your Indian tax return with your US tax return, however they may ask for it later if your US tax return comes under examination. Generally, you claim foreign tax credits using form 1116 attached to your tax return. Specifically for India there may also be some clause in the Indo-US tax treaty that might be relevant to you. Treaty claims are made using form 8833 attached to your tax return, and I suggest having a professional (EA/CPA licensed in your State) prepare such a return. Although no stock transactions were done last year, should I still declare the value of total stocks I own ? If so what is an approx. tax rate or the maximum tax rate. Yes, this is done using form 8938 attached to your tax return and also form 114 (FBAR) filed separately with FinCEN. Pay attention: the forms are very similar with regard to the information you provide on them, but they go to different agencies and have different filing requirements and penalties for non-compliance. As to tax rates - that depends on the types of stocks and how you decide to treat them. Generally, the tax rate for PFIC is very high, so that if any of your stocks are classified as PFIC - you'd better talk to a professional tax adviser (EA/CPA licensed in your State) about how to deal with them. Non-PFIC stocks are dealt with the same as if they were in the US, unless you match certain criteria described in the instructions to form 5471 (then a different set of rules apply, talk to a licensed tax adviser). I will be transferring most of my stock to my father this year, will this need to be declared ? Yes, using form 709. Gift tax may be due. Talk to a licensed tax adviser (EA/CPA licensed in your State). I have an apartment in India this year, will this need to be declared or only when I sell the same later on ? If there's no income from it - then no (assuming you own it directly in your own name, for indirect ownership - yes, you do), but when you sell you will have to declare the sale and pay tax on the gains. Again, treaty may come into play, talk to a tax adviser. Also, be aware of Section 121 exclusion which may make it more beneficial for you to sell earlier.\"",
"title": ""
},
{
"docid": "60833091fb5f878a8610f7b5990ddb4e",
"text": "This is how a consulting engagement in India works. If you are registered for Service Tax and have a service tax number, no tax is deducted at source and you have to pay 12.36% to service tax department during filing (once a quarter). If you do not have Service tax number i.e. not registered for service tax, the company is liable to deduct 10% at source and give the same to Income Tax Dept. and give you a Form-16 at the end of the financial year. If you fall in 10% tax bracket, no further tax liability, if you are in 30%, 20% more needs to be paid to Income Tax Dept.(calculate for 20% tax bracket). The tax slabs given above are fine. If you fail to pay the remainder tax (if applicable) Income Tax Dept. will send you a demand notice, politely asking you to pay at the end of the FY. I would suggest you talk to a CA, as there are implications of advance tax (on your consulting income) to be paid once a quarter.",
"title": ""
},
{
"docid": "70772d40b7d6a28b23290a08fa72a915",
"text": "This is taxable in India. You need to declare the income and pay taxes accordingly",
"title": ""
},
{
"docid": "7b6283d1a0db1485ca2d42467220e43e",
"text": "Prachi - While most non-resident aliens are not allowed to claim the standard deduction here are some exceptions: IRS Law under Article 21: ARTICLE 21 Payments Received by Students and Apprentices This falls under the U.S.A.-India Tax Treaty. Sources: I hope this helps. So, yes, I do believe you would be able to claim the standard deduction, although it's always good to check with a tax adviser.",
"title": ""
},
{
"docid": "0a998ba4e2f818772ac51100aeaa986e",
"text": "I am from India. I visited US 6-8 times on business VISA and then started 2 Member LLC. Myself and My wife as LLC Members. We provide Online Training to american students from India. Also Got EIN number. Never employed any one. Do i need to pay taxes? Students from USA pays online by Paypal and i am paying taxes in India. Do i need to pay Taxes in US? DO i need to file the Tax returns? Please guide me. I formed LLC in 2010. I opened an Office-taken Virtual office for 75 USD per month to open LLC in 2010. As there is physical virtual address, am i liable for US taxes? All my earning is Online, free lancing.",
"title": ""
},
{
"docid": "11d9870d5f19e2e39ff3218c3432a08f",
"text": "Yes you need to pay taxes in India. Show this as other income and pay tax according to your tax bracket. Note you need to pay the taxes quarterly if the net tax payable is more than 10,000.",
"title": ""
},
{
"docid": "d16bd31eccc19c4eaf928074113c0f68",
"text": "I still have my bank account active in usa. Can my company legally deposit my salary in my bank account? Of course they can. Where they deposit is of no consequence (in the US, may be in India). It is who they deposit it for that matters. You need to file form W8 with the company, and they may end up withholding portion of that pay for IRS. You'll need to talk to a tax adviser in India about how to report the income back at home, and you may need to talk to a tax adviser in the US about what to do if the company does indeed remit withholding from your earnings.",
"title": ""
},
{
"docid": "35c5605589b6b4dbdea21675a10af603",
"text": "There might be a problem. Some reporting paperwork will have to be done for the IRS, obviously, but technically it will be business income zeroed out by business expense. Withholding requirements will shift to your friend, which is a mess. Talk to a licensed tax adviser (EA/CPA) about these. But the immigration may consider this arrangement as employment, which is in violation of the visa conditions. You need to talk to an immigration attorney.",
"title": ""
},
{
"docid": "cf1c0c8f4ce07239858da167fbbcade1",
"text": "You can and are supposed to report self-employment income on Schedule C (or C-EZ if eligible, which a programmer likely is) even when the payer isn't required to give you 1099-MISC (or 1099-K for a payment network now). From there, after deducting permitted expenses, it flows to 1040 (for income tax) and Schedule SE (for self-employment tax). See https://www.irs.gov/individuals/self-employed for some basics and lots of useful links. If this income is large enough your tax on it will be more than $1000, you may need to make quarterly estimated payments (OR if you also have a 'day job' have that employer increase your withholding) to avoid an underpayment penalty. But if this is the first year you have significant self-employment income (or other taxable but unwithheld income like realized capital gains) and your economic/tax situation is otherwise unchanged -- i.e. you have the same (or more) payroll income with the same (or more) withholding -- then there is a 'safe harbor': if your withholding plus estimated payments this year is too low to pay this year's tax but it is enough to pay last year's tax you escape the penalty. (You still need to pay the tax due, of course, so keep the funds available for that.) At the end of the first year when you prepare your return you will see how the numbers work out and can more easily do a good estimate for the following year(s). A single-member LLC or 'S' corp is usually disregarded for tax purposes, although you can elect otherwise, while a (traditional) 'C' corp is more complicated and AIUI out-of-scope for this Stack; see https://www.irs.gov/businesses/small-businesses-self-employed/business-structures for more.",
"title": ""
},
{
"docid": "d1b56254525ee1a4d3bd61ecf5a539da",
"text": "Before answering specific question, you are liable to pay tax as per your bracket on the income generated. I work with my partner and currently we transfer all earning on my personal bank account. Can this create any issue for me? If you are paying your partner from your account, you would need to maintain proper paperwork to show the portion of money transferred is not income to you. Alternatively create a join Current Account. Move funds there and then move it to your respective accounts. Which sort off account should be talk and by whose name? Can be any account [Savings/Current]. If you are doing more withdrawls open Current else open Savings. It does not matter on whos name the account is. Paperwork to show income matters from tax point of view. What should we take care while transfering money from freelance site to bank? Nothing specific Is there any other alternative to bank? There is paypal etc. However ultimately it flows into a Bank Account. What are other things to be kept in mind? Keep proper record of actual income of each of you, along with expenses. There are certain expenses you can claim from income, for example laptop, internet, mobile phone etc. Consult a CA he will be able to guide and it does not cost much.",
"title": ""
}
] |
fiqa
|
baed489a8c194cd9573631e7668fd1f7
|
Additional credit card with different limit on same account?
|
[
{
"docid": "90444e54339405ab045d9a427e75f038",
"text": "You can look into getting a business credit card. When I had my Chase business credit card, I could add authorized users to the main account and set a spending limit on each card.",
"title": ""
},
{
"docid": "15719a8b8ee5b0361f43e22b91f3d55b",
"text": "\"Generally not. Since authorized user cards are the same account and the difference between the two (the original and the AU card) are minimal. Note, there's nothing technically stopping banks from offering this as a feature, two cards do have identifiers that indicate they're separate cards, but the banks concern for your needs stops at how much they can bleed from you, and \"\"helping you control your spending\"\" is not part of that.\"",
"title": ""
}
] |
[
{
"docid": "7fa07862de504222737b3d46f2e2ed20",
"text": "\"Unless you have a history of over-using credit (i.e. you've gotten yourself into debt trouble), then I think that the banker is giving you bad advice in telling you to get your own credit limit reduced. Having more credit available to you that is left unused will make your utilization ratio lower, which is generally better for your credit score, according to this article on CreditKarma.com. The \"\"sweet spot\"\" seems to be 1-20% utilization of your total credit. (But remember, this is only one factor in your credit score, and not even the biggest-- having a long history of on-time payments counts the most.) My own personal experience seems to bear this out. I have two major credit cards that I use. One card has a high credit limit (high for me anyway) and I use it for just about everything that I buy-- groceries, gas, durable goods, services, you name it. The other card has a limit that is about 1/3 of the first, and I use it for a few recurring bills and occasional purchases where they don't take the first card. I also have a couple of department store cards that I use rather infrequently (typically 1 purchase every 3 months or so). At the end of each month, when the respective statements post, each card has a balance that is 15% or less of the credit limit on that card. I pay off the entire balance on each card each month, and the cycle repeats. I have never been late on a payment, and my credit history for all of these cards goes back 10 years. My credit score is nearly as high as it can go. If having unused credit were a detriment, I would expect my score to be much lower. So, no, having \"\"too much credit available\"\" is not going to hurt you, unless you are not using it at all, or are tempted to abuse it (use too much). The key is to use common sense. Have a small number of cards, keep them active, spend within your means so you can pay off the balance in full after the statement posts, and never be late on your payments. That's all it takes to have good credit.\"",
"title": ""
},
{
"docid": "9cca679a295a5864a66e8217c08eff7b",
"text": "\"I think they gave you the answer: You haven't previously shown that you can run that particular card up to (near) its existing maximum and then pay it off, so they don't have a strong indication that you can handle that large an unsecured loan. Generally, requests to have the limits raised when there isn't evidence that the customer is finding the current limit inconvenient are going to be considered suspicious. Remember, a great credit rating does not require that they consider you a good risk -- it's just one of the things they consider. Why do you need the limit raised? Have you tried contacting the bank's credit department directly and discussing what they will or won't let you do? Re paying off the card every month: Remember, they do get a processing fee from the vendor. They'd prefer that we paid interest (I'm told the term of art for those of us who don't is \"\"deadbeats\"\"), but they certainly don't lose money when we don't. And they'd generally rather have us be loyal customers who MIGHT someday pay interest, and who are bringing in fees, than have us go elsewhere.\"",
"title": ""
},
{
"docid": "40f9e55d3cf2caa66995bade903e3711",
"text": "Contrary to what many people think, credit card companies pass nearly all fraud costs via purchased goods onto the merchant who sells them. As a result, they stand a very high chance of getting the money from a fraudulent purchase of a specific purchased item back, as they just chargeback the merchant who has to stomach the cost. This is not the case for cash transactions obviously, where as soon as the money leaves the ATM fraudulently it is as good as gone. As a result, the risk profile of the two types of transaction is wildly different, and the credit limits of each reflect this.",
"title": ""
},
{
"docid": "652bfcc11a6d2b4f91435b4c8ab97692",
"text": "Try to get a second card in your business' name, with a separate card number (like you would get one for a spouse). They may or may not allow that free (you wouldn't want to pay a second fee), and it might be only possible with the second card bearing the same number, which makes it useless. But it is worth a try.",
"title": ""
},
{
"docid": "870698d1faf244c51861b34a51f37bd5",
"text": "\"As anecdotal experience, we have a credit account in my name as offered by bank's marketing before I could qualify by common rules for newcomers (I have an account there for years so they knew my history and reliability dynamics I guess), and my wife is subscribed as a secondary user to the same credit account with a separate card. So we share the same limits (e.g. max month usage/overdraft) and benefits (bank's discounts and bonuses when usage passes certain thresholds - and it's easier to gain these points together than alone) so in the end maintenance of the card costs zero or close to that on most months, while the card is in a program to get discounts from hundreds of shops and even offers a free or discounted airport lounge access in some places :) But the bonus program is just that - benefits come and go as global economics changes; e.g. we had free car assistance available for a couple of years but it is gone since last tariff update. Generally it is beneficial for us to do all transactions including rent etc. via these two credit cards to the same account, and then recharge its overdraft as salaries come in - we have an \"\"up to 50 days\"\" cooloff period (till 20th of next calendar month) with no penalties on having taken the loans - but if we ever did overstretch that, then tens of yearly percents would kick in. Using the card(s) for daily ops, there is a play on building up the credit history as well: while we don't really need the loans to get from month to month, it helps build an image in the face of credit organizations, which can help secure e.g. favorable mortgage rates (and other contract conditions) which are out of pocket money range :) I'd say it is not only a \"\"we against the system\"\" sort of game though, as it sort of trains our own financial discipline - every month we have (a chance) to go over our spendings to see what we did, and so we more regularly think about it in the end - so the bank probably benefits from dealing with more-educated less-random customers when it comes to the bigger loans. Regarding internet, we tend to trust more to a debit card which we populate with pocket money sufficient for upcoming or already placed (blocked) transactions. After all, a malicious shop can not sip off thousands of credit money - but only as much as you've pre-allocated there on debit.\"",
"title": ""
},
{
"docid": "6eeebb604046b2dd9274a55dbadbaf4f",
"text": "Your credit score is definitely affected by the age of your credit accounts, so if you frequently close one card and open another new one, you're adversely affecting the overall average age of accounts. This is something to consider and whether it is worth what you're trying to achieve. Sometimes, if you're a good customer and are insistent enough, you can simply call your credit card company and use the threat of closing your account in favor of another card that offers something attractive to get your current bank to sweeten its incentives to keep your business. I know many people who've done this with real success, and they spare themselves the hassle of obtaining a new card and suffering the short term consequences on their credit report. This might be an avenue worth trying before you just close the account and move on. I hope this helps. Good luck!",
"title": ""
},
{
"docid": "8d9c3a008d3b59f6749d8538c2abda64",
"text": "Apparently it is up to the credit card company on how they want to report your available balance. Another disadvantage to the no-limit credit card may not be apparent to most people, but it is something noted by organizations like The Motley Fool, which is expert in many issues of finance and investment. Part of your credit score, about 30%, considers the amount of money you have borrowed, and the limit on your present credit cards. A no-limit credit card company may report your limit as $0 if you have not used the card, or they may report a maximum limit available to you. They may not, nor are they obligated, to report times when you put tons of expenses on a credit card and then paid them off. While some companies will report your timely payments and paid off amounts, others simply report an extremely low limit. For instance if you spent $100 US Dollars (USD), your limit might be considered $100 USD, or it may merely be reported as zero. You’ll need to check with a credit card company on how they report payments and limits on a no-limit credit card before you obtain one. Some people who are scrupulous are paying off their cards at the end of each month suffer major losses to their credit score, without even realizing it, if their spending ability is rated at zero, or their payments don’t count toward showing credit worthiness. Source",
"title": ""
},
{
"docid": "507f0484eeed35cce069afeba03b1ac3",
"text": "Problems with your plan (in no particular order) there is a limit, once they have decided that you have enough credit they won't offer any more. If the economy changes (like it did in 2008) they can reduce the limit on existing accounts. If you don't use them, they may decide to close them. Using existing cards will encourage the bank to increase the limit on that card. opening cards can make some lenders nervous. Having a new card close to when you are applying for a mortgage or a car loan can make them less likely to lend you the max. You have to decide: Are you trying to buildup your credit limit? or your credit score?",
"title": ""
},
{
"docid": "95d09eb0abac324be064402b319b207c",
"text": "I'm not sure if someone else answered already in the same manner I will. I can't guarantee for sure if it's the same in the U.S.A. (it might since major credit cards companies like Visa/MC/AMEX are American companies) but in Canada having/keeping unused CC is a disadvantage because of the following: Banks and financing companies look more at the total amount of credit available to you than at how much purchases you have on your cards. Ex: Let's say that you have the following: - Visa cc with $10,000 limit and $2000 worth of purchases (made more than 30 days ago) on it. - Mastercard cc with $10,000 limit as well and $1000 worth of purchases (less than 30 days old) - A major retail store cc with $2000 limit and $0 balance. Hypothetical situation: You want a bank loan to do some expensive house repairs and are looking for a lower interest rate than what your cc can offer. The bank will not care about the amount on the cards. They will add-up all the limits of your cc and treat your loan request as if ALL your cards were filled to their respective limit. So in this case: they will consider you as being right now in debt of $10K+$10K+$2K = $22,000 instead of only $3000 and they might: 1. refuse you the loan 2. grant it only if you transfer all purchases on a single card and cancel all the others. 3. Once the $3000 is transferred on one of the cards (and the others cancelled), they can require that you reduce the limit of that card. Hope this helps!",
"title": ""
},
{
"docid": "9e2725a626169f8bb0452fe6787d91dd",
"text": "The credit limit is not going to be the problem; the daily spending limit is more likely be tripped first. I'm not a lawyer but if you are not responsible for the credit card details being leaked it is very unlikely that the bank will be able to charge you for fraudulent spending on the card. The important thing is to notify the bank as soon as possible once you realize there is a problem and if practical keep evidence of that notification, it will then be the banks problem to fix. From my understanding Singapore has relatively good consumer protection and it is unlikely the bank will get very far even if they try to charge you.",
"title": ""
},
{
"docid": "b4da24f321fb782c3eadaf9e189c1c90",
"text": "Is my understanding okay ? If so, it seems to me that this system is rather error prone. By that I mean I could easily forget to make a wire some day and be charged interests while I actually have more than enough money on the check account to pay the debt. Which is where the credit card company can add fees so you pay more and they make more money. Don't forget that in the credit case, you are borrowing money rather than using your own. Another thing that bothers me is that the credit card apparently has a rather low credit limit. If I wanted to buy something that costs $2500 but only have a credit limit of $1500, can I make a preemptive wire from my check account to the VISA account to avoid facing the limit ? If so, what is the point for the customer of having two accounts (and two cards for that matter...) ? If you were the credit card company, do you believe people should be given large limits first? There are prepaid credit cards where you could put a dollar amount on and it would reject if the balance gets low enough. Iridium Prepaid MasterCard would be an example here that I received one last year as I was involved in the floods in my area and needed access to government assistance which was given this way. Part of the point of building up a credit history is that this is part of how one can get the credit limits increased on cards so that one can have a higher limit after demonstrating that they will pay it back and otherwise the system could be abused. There may be a risk that if you prepay onto a credit card and then want to take back the money that there may be fees involved in the transaction. Generally, with credit cards the company makes money on the fees involved for transactions which may come from merchants or yourself as a cash advance on a credit card will be charged interest right away while if you buy merchandise in a store there may not be the interest charged right away.",
"title": ""
},
{
"docid": "1bca6efbe832423d0184f47a61d09dc1",
"text": "I don't know about India, but here in the US banks, and more friendly institutions such as credit unions, use to offer the option of a 'secured' credit card where the card was secured by placing a lock on money in a savings account equal to the credit limit on the card. So for example, if you had $1500 in savings, you could have them lock say $1000, which you would not be able to withdraw from savings, in return for a credit card account with a credit limit of $1000. Typically you still earned interest on the full amount of the savings, you were just limited to having to maintain a minimum balance in that account of $1000.",
"title": ""
},
{
"docid": "7bfa0d3c95302ce39cc3ed6fcf02b429",
"text": "Hits to your credit rating for canceling one of the newer cards will be a small hit for a few months. You do have some options. I also believe that a person with good credit should have multiple cards: I like having a cash back card for the majority of our transactions. Unfortunately that card isn't accepted everywhere, so I have two other cards with broad market coverage to make sure we always have an option if the vendor doesn't take the main card. Also having multiple cards makes sure that if there is an issue with one card you are never caught without a card. One time the main card was rejected by a gas station because my wife just used the same account to buy gas across town. When we got home their was a fraud alert message on our phone.",
"title": ""
},
{
"docid": "342a3b88df4846cd1e17381d27005525",
"text": "\"A few years ago I had a US bank credit card that was serviced (all support, website, transaction issues) handled by FIA Card Services (part of Bank of America). I could create one-use credit card numbers, or time-limited (for example, 3 months) numbers. I could also create (\"\"permanent)) extra card numbers. All of these could have a max charge value (IIRC, even a fixed value), so you could have a separate card number, with a limit, just for a subscription service or gym membership. The Bank issuing the card cancelled the entire card offering, so I lost these features. Maybe FIA still provides these features on cards they service. As a note to pjc50 (can't comment in this SE yet), Japan has had contactless cards for >10 years, but during use they tend to place them in a special tray (with the sensor underneath) during the transaction.\"",
"title": ""
},
{
"docid": "8edec56f6e8886c6593c04371274b994",
"text": "Each ATM, the machine, belongs to one or more networks. Those networks work with multiple types of cards. Each card belongs to one or more networks. The overlap of the networks the machine belongs to, and the card belongs to determines if the card works and what fees and limits apply. In general if the credit card belongs to one of the major networks (VISA, Master Card, American Express and Discover) you shouldn't have a problem finding a ATM that will give you a cash advance, or even a cash advance without an ATM Fee. Each credit card network should have a web interface to show you where the ATMs are that will work with the card. If it is a store credit card it still might belong to one of the major networks. If the bank that issues the card is local you can probably get a cash advance at the bank branch. Use the website to see if the ATM/Branch locations are convenient for you. The actual limits are a function of the card type, and the credit limit that you have been approved for. In my experience the maximum amount of cash advance outstanding is half the credit limit, but you need to check with your card. Keep in mind unless you have a special offer from the credit card company expect that there will be a fee charged by the credit card company for the cash advance, this is in addition to a fee charged by the ATM. Also remember that interest starts to accumulate on day one of the cash advance. It isn't like a regular purchase that might not be charged interest until the cycle closes and the payment is due. The documentation from the credit card company will describe all the fees and limits.",
"title": ""
}
] |
fiqa
|
7c5e6ae8ab42ff3548bcd0e792cabd56
|
Strategies for paying off my Student loans
|
[
{
"docid": "6e749d75baf01102ec18f7913553b5f3",
"text": "My advice is that if you've got the money now to pay off your student loans, do so. You've saved up all of that money in one year's time. If you pay it off now, you'll eliminate all of those monthly payments, you'll be done paying interest, and you should be able to save even more toward your business over the next year. Over the next year, you can get started on your business part time, while still working full time to pile up cash toward your business. Neither you nor your business will be paying interest on anything, and you'll start out in a very strong position. The interest on your student loans might be tax deductible, depending on your situation. However, this doesn't really matter a whole lot, in my opinion. You've got about $22k in debt, and the interest will cost you roughly $1k over the next year. Why pay $1k to the bank to gain maybe $250 in tax savings? Starting a business is stressful. There will be good times and bad. How long will it take you to pay off your debt at $250 a month? 5 or 6 years, probably. By eliminating the debt now, you'll be able to save up capital for your business even faster. And when you experience some slow times in your business, your monthly expenses will be less.",
"title": ""
},
{
"docid": "c4b02dc1399ac958d79cd4f2b20e5a4c",
"text": "Considering I'm in a nearly identical situation, I'll speak to my personal strategy and maybe there's some value for you as well. You have ~$22k in loans, which you say you could pay off today. So, what I read is that you're sitting there with a $22k investment and want to know which investment to make: pay down debt, invest in yourself/start up, or some variation between those options. Any investor worth his salt will ask a couple of questions: what is my risk, and what is my gain? Paying off your student loans offers no financial risk at the cost of opportunity risk, and gains you returns of 3.4%, 6.8%, 3.4%, 4.5%, and 6.8%. Those percentage gains are guaranteed and the opportunity risk is unknown. Investing in a startup is inherently risky, with the potential for big payoffs. But with this investment, you are accepting a lot of risk for potentially some gain (it could be the next Apple, it could also fail). So, with your situation (like mine), I'd say it's best to accept the easy investment for now and fully vet out your tech start up idea in the meantime.",
"title": ""
},
{
"docid": "95a81e325d968cc68b3e4865abd6482b",
"text": "Starting up a company is fun, stressful, and exciting. It's also often a lot harder than you expect. Income, revenue, and cash flow are big concerns, and you need to be able to eat while you're hunting down your first paying customers. Don't pay off all the debt if that will leave you without any money for living expenses. Perhaps a compromise is in order? Pay off the high-interest loans first, and continue to make payments on the lower-interest loans while you start up. It doesn't have to be all or nothing.",
"title": ""
}
] |
[
{
"docid": "29922615ca4e1e72732efd362bcf2a41",
"text": "\"I don't have enough reputation in this community to comment yet, so this \"\"answer\"\" is really just a minor furtherance of JoeTaxpayer's comment... THe only thing I might add to this great answer - make all minimum payments, and send all extra available cash to the highest interest card. If OP will pay in full after 6 month, this may make little difference, but it will be a few dollars in his pocket instead of the bank. – JoeTaxpayer♦ Dec 2 at 17:42 ...on Ben Miller's excellent answer. Once you have taken JoeTaxpayer's advice and ordered your cards by interest rate and have paid off the highest interest card first, take that same payment and add it to your next-highest card's minimum payment. Once THAT is payed off, take the combined amounts that you were paying to cards one and two and apply it all to card three along with its minimum payment. You see where this is going. By aggregating your payments thusly, each card will get paid off successively more quickly than the previous one, without increasing your overall payments to the cards, and you are retiring the highest-interest debt first. Your last card will then be paid off in record time, because you have combined all of the payments for cards 1-4. One other amplification: Since we don't know which account has which interest rate, it may be more advantageous to order them by balance, with the smallest first. That way you retire the first card quickly, which gives you a sense of accomplishment, and by the time you reach your highest balance card, you have snowballed all of your payments and are now throwing boulders instead of pebbles at it. You'll have to do that math to see which method has the most benefit. Then roll it all into the car payment. Then roll it into your student debt. Etc.\"",
"title": ""
},
{
"docid": "109e10e02e4805f60b4c8bff30f5dee2",
"text": "Finish off the student loans. If your absolute goal is saving as much as you possibly can for retirement, then you of course will be best off by maxing your IRA contribution every year. However, student loans are just another thing hanging over you, and nothing feels better than getting rid of a large debt. Pay them off, take yourself out to a nice dinner to celebrate, and tuck away what you have left over in your IRA. Paying off student loans is a great accomplishment - celebrate it! The difference long-term will be negligible.",
"title": ""
},
{
"docid": "ab0b002019998dadfd61f5d5231a3e07",
"text": "Excellent question and it is a debate that is often raised. Mathematically you are probably best off using option #1. Any money that is above and beyond minimum payments earns a pretty high interest rate, about 6.82% in the form of saved interest payments. The problem is you are likely to get discouraged. Personal finance is a lot about behavior, and after working at this for a year, and still having 5 loans, albeit a lower balance, might take a bit of fight out of you. Paying off such a large balance, in a reasonable time, will take a lot of fight. With the debt snowball, you pay the minimum to the student loan, save in an outside account, and when it is large enough, you execute option #2. So a year from now you might only have three loans instead of five. If you behaved exactly the same your balance would be higher after that year then using the previous method. However often one does not behave the same. Because the goals are shorter and more attainable it is easier to delay some gratification. The 8 dollars you are saving in your weekly gas budget, because of low prices, is meaningful when saving for a 4K goal, where it is meaningless when looking at it as a 74K goal. With the 4K goal you are more apt to put that money in your savings, where the 74K goal you might spend it on a latte. For me, the debt snowball worked really well. With either option make sure that excess payments actually go to a reduction in principle not a prepayment of interest. Given this you may be left with no option. For example if method #1 you only prepay interest, you are forced to use option #2.",
"title": ""
},
{
"docid": "1d7a72fc20efe28acab0c88c7cfe516f",
"text": "You are making close to 200 K a year which is great. The aggressive payments on loans takes out around 30K which is good. The fact that you are not able to save is bad. Rather than pushing off your savings to later, scale down the lifestyle and push the upgrade to lifestyle for later",
"title": ""
},
{
"docid": "152b637940a0aa25faccd23d12b3fb4e",
"text": "\"Place your savings into safe interest-bearing accounts. Take out the loans. Keep constant track of your net worth. Having 100,000$ and 80,000$ in interest free debt is better than having 20,000$. You can always convert money + debt into less money and less debt, but you cannot always convert less money and less debt into more money and more debt. Now, there are risks; that is why you want an interest-bearing account to place your savings in to offset the debt. This minimizes the risk. It also reduces the return. It is arguable that you should be at your most financially risky at a young age. I'd argue that your future earnings are your by far largest asset at this point, and as a high school student going into college those future earnings have extremely high variability. Your financial situation is extremely unpredictable; being conservative about your high-leverage student-loan + education investments is probably justified. The fact you can manage arbitrage here means you should; and if you are careful, you can eliminate risk and get almost risk-free profit from the maneuver. If your money is in less than perfectly safe accounts, you are now doing leveraged investing and magnifying the risk and return of said investments. If your money must be spent on college or you'll be financially punished, then you may want to consider pulling it out before the last possible legal point just in case something goes wrong. Apparently 529 plans may not treat \"\"paying off student loans\"\" as a valid way to spend the money. You may need to talk to a lawyer or accountant about the legality of using these plans to pay off student loans, and the tax/penalties involved.\"",
"title": ""
},
{
"docid": "ecd7676456c99f54acf9236555651deb",
"text": "Its almost always better to pay off loans sooner rather than later. Being debt free is amazingly liberating. However, in your case, I'd be reluctant to make significant headway on a loan repayment program. Here's why: The best investment you can make, right now, is in yourself. Completing your education should be the top priority. The next would be to meet the requirements of a job after received after school is complete. So what I would do is estimate the amount of money it would take to complete school. Add to that an estimate of an amount to move to a new city and setup a household. That amount should be held in reserve. Anything above that can used to pay down loans. Once you complete school and get settled into a job, you can then take that money and also throw it at your loans.",
"title": ""
},
{
"docid": "493fd71559a53d5e00e75781492a9850",
"text": "Keep 3-6 months (or more if you need to, for me the number is 9 months) worth of expenses in an emergency fund. Put the rest against the student loan. The length of time depends on your situation. I have family, and work in IT. Changing jobs takes me longer, because ... reasons. Having less than 6-9 months of buffer means that I have to rush and possibly take a position that is not a good fit, or get behind on payments. So, set aside your emergency fund, add to it if you need to. Once it is fully funded, take the money you were using to fund the emergency fund and budget that to clearing student loans. Also, don't start new credit cards, and be sure to never carry a balance on them. I know it seems like a lot, but keep in mind that yours is small, and you'll likely be able to knock it out in a very short time. Edit (after OP listed expenses): Taking into account the expenses you listed, it looks like you have about 2000 per month in expenses (if you're in emergency fund mode, luxuries can wait, and you can tighten the belt on food, so go with the lower end of your estimate.) Lets say you have 600 a month to work with. My suggestion would be bring savings up to $6000. That will take you two months. Then pay 850 a month to student loans. You'll be paid off in a year, and still have 6000 for emergencies. Once you're done, you will have 850 a month to save and invest. With patience, persistence and care, you can start a nest egg that will allow you to remain financially independent. Search around for FIRE (financial independence, retire early) and other strategies for retirement savings and investing. Be sure to save for retirement. The worst inheritance to leave your loved ones would be to become financially dependent upon them in your later years. And watch out for credit, it's a trap.",
"title": ""
},
{
"docid": "934d84cd728be42ec4f3f01466e993c3",
"text": "Please direct personal finance questions to /r/personalfinance However, my opinion is that you are unlikely to earn more than 7% annualized returns from any combination of asset offerings in your 401k over the next several years; therefore, you should pay off your student loans first. I am ignoring tax consequences, but /r/personalfinance may be able to provide a more quantitative answer.",
"title": ""
},
{
"docid": "1ee79f89d2eccdf0d137f986fd276ece",
"text": "It doesn't make a whole lot of sense to save up and wait to make a payment on any of these loans. Any dollar you pay today works better than saving it and waiting months to pay it, no matter which loan it will be applied to. Since your lender won't let you choose which loan your payment is being applied to, don't worry about it. Just make as big a payment as you can each month, and try to get the whole thing out of your life as soon as possible. The result of this will be that the smaller balance loans will be paid off first, and the bigger balance loans later. It is unfortunate that the higher interest rate loans will be paid later, but it sounds like you don't have a choice, so it is not worth worrying about. Instead of thinking of it as 5 loans of different amounts, think of it as one loan with a balance of $74,000, and make payments as quickly and as often as possible. For example, let's say that you have $1000 a month extra to throw at the loans. You would be better off paying $1000 each month than waiting until you have $4000 in the bank and paying it all at once toward one loan. How the lender divides up your payment is less significant than when the lender gets the payment.",
"title": ""
},
{
"docid": "4b9b57c631289fcd2c862379e592700e",
"text": "Basically you have 4 options: Use your cash to pay off the student loans. Put your cash in an interest-bearing savings account. Invest your cash, for example in the stock market. Spend your cash on fun stuff you want right now. The more you can avoid #4 the better it will be for you in the long term. But you're apparently wise enough that that wasn't included as an option in your question. To decide between 1, 2, and 3, the key questions are: What interest are you paying on the loan versus what return could you get on savings or investment? How much risk are you willing to take? How much cash do you need to keep on hand for unexpected expenses? What are the tax implications? Basically, if you are paying 2% interest on a loan, and you can get 3% interest on a savings account, then it makes sense to put the cash in a savings account rather than pay off the loan. You'll make more on the interest from the savings account than you'll pay on interest on the loan. If the best return you can get on a savings account is less than 2%, then you are better off to pay off the loan. However, you probably want to keep some cash reserve in case your car breaks down or you have a sudden large medical bill, etc. How much cash you keep depends on your lifestyle and how much risk you are comfortable with. I don't know what country you live in. At least here in the U.S., a savings account is extremely safe: even the bank goes bankrupt your money should be insured. You can probably get a much better return on your money by investing in the stock market, but then your returns are not guaranteed. You may even lose money. Personally I don't have a savings account. I put all my savings into fairly safe stocks, because savings accounts around here tend to pay about 1%, which is hardly worth even bothering. You also should consider tax implications. If you're a new grad maybe your income is low enough that your tax rates are low and this is a minor factor. But if you are in, say, a 25% marginal tax bracket, then the effective interest rate on the student loan would be more like 1.5%. That is, if you pay $20 in interest, the government will then take 25% of that off your taxes, so it's the equivalent of paying $15 in interest. Similarly a place to put your money that gives non-taxable interest -- like municipal bonds -- gives a better real rate of return than something with the same nominal rate but where the interest is taxable.",
"title": ""
},
{
"docid": "080056d630bff8fef41c2b47594e2d9a",
"text": "I'd be tempted to pay off the 35k in student loans immediately, but if you have to owe money, it's hard to beat zero percent. So I don't think I would pay it all off. Maybe cut it in half to make it a more comfortable payment. Currently, you are looking at $6K a year to pay them off, which is about 20% of your income. Cut that in half and you will sleep better! Definitely pay off the medical and credit cards. You're probably paying 20% on that. Clean it up. If you need a car, buy yourself a car. You have no savings, so I would put the rest in some kind of money market savings account. You are at an age where many people go through frequent changes. Maybe you get your own place, and you'll need to furnish it. Maybe you go back to school. Maybe you get married or have kids. Maybe you take a year off and backpack through Europe or Asia. You have a nice little windfall that puts you in a nice position to enjoy being young, so I would not lock it up into a 401k or other long term situation.",
"title": ""
},
{
"docid": "6236c533a709b202a826720071e1f5a7",
"text": "\"Although there is no single best answer to your situation, several other people have already suggest it in some form: always pay off your highest after-tax (!) interest loan first! That being said, you probably also have heard about the differentiation for good debt vs. bad debt. Good debt is considered a mortgage for buying your primary home or, as is the case here, debt for education. As far as I am concerned, those are pretty much the only two types of debt I'd ever tolerate. (There may be exceptions for health/medical reasons.) Everything else is consumer debt and my personal rule is, don't buy it if you don't have the money for it! Meaning, don't take on consumer debt. One other thing you may consider before accelerating paying off your student debt, the interest paid on it may be tax deductible. So you should look at what the true interest is on your student loan after taxes. If it is in the (very) low single digits, meaning between 1-3%, you may consider using the extra money towards an automatic investment plan into an ETF index fund. But that would be a question you should discuss with your tax accountant or financial adviser. It is also critical in that case that you don't view the money invested as \"\"found\"\" money later on, unless you have paid off all your debt. (This part is the most difficult for most people so be very cautious and conscious if you decide to go this route!) At any rate, congratulations on making so much progress paying off your debt! Keep it going.\"",
"title": ""
},
{
"docid": "7f4660e81b6cac0d44cedec2044272b9",
"text": "My recommendation would be to pay off your student loan debt as soon as possible. You mention that the difference between your student loan and the historical, long-term return on the stock market is one-half percent. The problem is, the 7% return that you are counting on from the stock market is not guaranteed. You might get 7% over the next few years, but you also might do much worse. The 6.4% interest that you will save by aggressively paying off your debt is guaranteed. You are concerned about the opportunity cost of paying your debt early. However, this cost is only temporary. By drawing out your debt payments, you have a long-term opportunity cost. By this, I mean that 4 years from now, you could still have 6 years of debt payments hanging over your head, or you could be debt free with all of your income available to save, spend, or invest as you see fit. In my opinion, prolonging debt just to try to come out 0.5% ahead is not worth the hassle or risk.",
"title": ""
},
{
"docid": "6dd9d2457e4a336bbf0ff70a00cdd6f6",
"text": "Should I use the profit to pay down student loans or just roll it into my next house in order to have a lower mortgage amount? Calculate the amount of interest in each scenario, where the two scenarios are: Use extra cash to pay down student loans, take out a full mortgage. Use extra cash to make a big down payment on the next house, keep paying down student loans at normal rate. In both scenarios the student loan rate will stay the same. However in the second scenario you may get a lower interest rate from making a larger down payment. So then calculate the total interest resulting from each scenario: student loan rateXremaining student loan balance=student loan interest new mortgage rateXnew mortgage balance=mortgage interest scenario 1 interest = student loan interest+mortgage interest student loan rateXstudent loan balance = student loan interest new mortgage rate with large down paymentXnew mortgage balance after large down payment = mortgage interest scenario 2 interest = student loan interest+mortgage interest Whichever scenario's interest is lower will save money.",
"title": ""
},
{
"docid": "9bda4d0109e8e1b2b372413376670038",
"text": "Try to cash flow as much as you can. You can work and go to school, if you replace playing beer pong with a job you'll be in a lot better off at graduation, grade wise and debt wise. Make a budget, for each month and for each semester, plan cut cost accordingly. Used books, sometimes even the next to recent version. Read this book for more info Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents",
"title": ""
}
] |
fiqa
|
1d57d3f2a2ec5b3345a8f9a25b29ee23
|
Is there a White-list of Trusted Online Vendors?
|
[
{
"docid": "8c45ec28837ec110e437b539ed937129",
"text": "\"I'm going to go with \"\"ridiculous notion.\"\" :) The vast majority of businesses are legitimate, run by honest people trying to earn a living for themselves and their employees. These days, almost all of them accept credit cards. Crooked businesses are a very small minority. When a bad business over charges you, you dispute the charge, and you get your money back. But that's not all that happens. The bad merchant pays penalties for this, and if it happens more than a couple of times, the merchant loses their merchant account with their bank, which means that they lose their ability to accept credit card payments anymore. A crooked business is not able to rob people via credit card for very long at all. A whitelist would certainly not be able to include every legitimate business. And a blacklist would never be able to be kept up-to-date, as bad businesses come and go continuously; as soon as a business was added to the blacklist, they would lose their merchant account and would no longer need to be on the list. What you are describing is very rare. My brother once had a bad experience with a tech support company where they were repeatedly charging him for a service they never performed. But a credit card chargeback took care of it. If that company made a habit of that, I'm sure that they got in trouble with their bank. Instead, the most common credit card fraud happens when crooks use your credit card at perfectly legitimate businesses. But your whitelist/blacklist wouldn't help you with that at all.\"",
"title": ""
}
] |
[
{
"docid": "d855a6639f5e5496aa280c5cbeca1f5a",
"text": "I don't understand why businesses that supposedly offer a legitimate product decide to host 3rd party code. Is their actual product so worthless that they need the extra few cents from ad revenue? And there are open source analytic packages that tell you how many times people click on things on your web page and how they were referred. I don't see the reason behind relying on other packages unless you really need to compare yourselves to the competition-- which probably doesn't come up in boardroom meetings every day.",
"title": ""
},
{
"docid": "7cefa73cfa45f438cf139281ac832089",
"text": "No. Brokers and HFT are two different entities, mostly. No HFT shops have prior information about a client order. PM me if you want to discuss more in detail. Getting beyond the scope of this post.",
"title": ""
},
{
"docid": "bdfc7642df93ade5220c28e1d09e3f68",
"text": "This kind of thing is right up my ally. I am based in Australia so suggestions will be Australian based. I was looking at starting up a private consultancy. Basically use neto as your ERM and online website. link in to xero for accounts. Netos predictive inventory module tells you when to restock on raw materials.",
"title": ""
},
{
"docid": "88de644e447bf7a91d1e7d0a69d2ff47",
"text": "Embrace the web. Let folks search for info while they're in your store. make the Salesmen do it. give your customer all the info they need to pull the trigger and buy the product. Just say we'll match Amazon or Newegg on this and the sale's a lock.",
"title": ""
},
{
"docid": "21fe332df485ef839ba1dfa57f47ed91",
"text": "Have you considered a service that allows you to generate credit card numbers on the fly? DoNotTrackMe allows you to generate a CC number on the fly, for a specific amount. If the vendor tries to charge more, it will fail. If it gets stolen, it's useless. I don't know the specific fees off hand, but they have an annual fee for the feature. Still, for the protection, doesn't seem like a bad way to go. Note: I have no affiliation with DNTM, I'm just a very happy user of their email protection products. The Masked Cards faq is here.",
"title": ""
},
{
"docid": "5ff0d2b58a0072ba0922d31010282b2d",
"text": "There are companies who sell data gleaned in aggregate from credit card providers to show how much of what category of product is sold online or offline, but that data is not cheap. 1010data is one such data aggregator we are talking to right now. Haven’t seen pricing yet but I expect 6 figures to access the data",
"title": ""
},
{
"docid": "3387cda63d8029bd1e06eacb936a17bf",
"text": "The are legit, I have been a member for more than 15 years. I have used there services many many many times. I have never sold any, I have only been a customer. The friend who sold me the service did very well for himself selling and recruiting.",
"title": ""
},
{
"docid": "69244fe41231d70ad9024bb0c7344d57",
"text": "It sounds like the items shipped directly from the vendor need to be recorded into your system when the order is confirmed, that way cost of goods sold and revenue don't get lost. You'll have a record of re-orders and cancels and other such things too.",
"title": ""
},
{
"docid": "2c682ef5283bb51dbcdf86854fba99e8",
"text": "Yes, but note that some credit card companies let you create virtual cards--you can define how much money is on them and how long they last. If you're worried about a site you can use such a card to make the payment, then get rid of the virtual number so nobody can do dirty deeds with it. In practice, however, companies that do this are going to get stomped on hard by the credit card companies--other than outright scams it basically does not happen. (Hacking is another matter--just pick up the newspaper. It's not exactly unusual to read of hackers getting access to credit card information that they weren't supposed to have access to in the first place.) So long as you deal with a company that's been around for a while the risk is trivial.",
"title": ""
},
{
"docid": "6b316b9df9a23a3168f27e058368574f",
"text": "Whether or not I trust them depends entirely on the personal finance application. In the cases of Mint and Quicken, I would trust both. Always make sure to do plenty of research before submitting any personal information to any source.",
"title": ""
},
{
"docid": "94676d16248b873816005083aa338782",
"text": "Are you looking for a company that can help you get more website visitors? If yes, then get in touch with White Digital (NE) Ltd! This company offers search engine optimisation services that can help business websites attract potential customers. Such services include keyword and competitor research, full website SEO health check, Google set-up and directory citations, and so much more! Visit White Digital (NE) Ltd’s website, https://white.digital, for more information on web design and development services.",
"title": ""
},
{
"docid": "356d0adb9f20c3d726d205d4fb67286f",
"text": "The closest thing to purchasing prospects we did was buy an email list that contained the names of several thousand people who fit our profile. Personally, I am not in favor of doing that. The companies you are buying from really don't understand what you want and you end up getting a hodge podge of information that never really gets you anywhere. Outside of that I am sure there are other services that provide prospecting, but the best lists are always developed internally. Good luck!",
"title": ""
},
{
"docid": "ee3f659b49268480e5c6e2a7b63b6b66",
"text": "Are you dropshipping (I'll have to tune my answer a bit if so)? Suggest you're probably looking for a supply chain consultant. As you've found, ecomm is a bit of a loaded term and will get you the wrong kinds of folks. Sounds like in your case, you're looking for more classical-style supply chain help and e-commerce just happens to be the vehicle with which the consumers place orders - though correct me if I'm off.",
"title": ""
},
{
"docid": "035e03018aa1d2da9746f0c75cd7ad7f",
"text": "Seems like it's more dependent on who you want to be your supplier. The times I've been involved in requesting this, each company had its own application form. They usually need proof of business activity, which gets back to SpecKK's answer.",
"title": ""
},
{
"docid": "c9ca73093da2b020403e5db113fab51c",
"text": "No. At least not in my case. Without divulging too much information. I don't tell any of my distributors how to sell my company's products our engage their customer base, but due to the nature of my business, I am frequently called on for product selection, marketing, quality, etc. Distributors often utilize their account reps and managers to help them push products on their customer base. The only way this could be seen as truthful, in my opion, is direct retail distribution. Because how are you going to track the product after it has been purchased by a consumer.",
"title": ""
}
] |
fiqa
|
8b2629bbec8b8c534fce72277e4d1ea8
|
Using a cash account can someone trade all day on it?
|
[
{
"docid": "df3ba61964ad73d3b460b90526748266",
"text": "No, you cannot. The cash settlement period will lock up your cash depending on the product you trade. Three business days for stocks, 1 business day for options, and you would need waaaaaay more than $5,000 to trade futures.",
"title": ""
},
{
"docid": "13e66e7b5bb601ced10427a971fb9003",
"text": "According to Regulation T, you can make as many day trade (round trip) stock purchases using a cash account as long as you have the funds to cover each and every round trip sale. However, the funds generated from the sales cannot be used again to purchase new stocks until the settlement period (T-2 or T-3) is over. For example, say you have $10000 dollars in your cash account and no securities. You buy 1000 shares of XYZ stock in the morning at one dollar per share and you sell the stock 30 minutes later because it went up say by 50 cents. According to Regulation T, you cannot use the money generated from the sale of your 1000 shares until after the settlement date. However, you can use the remaining $9000 dollars in your account to execute other trades just as the first trade. You can do this as many times as you want as long as you have funds available to pay for the transaction the same day it's executed. The only thing to worry about and that isn't clear, is, what happens if you perform this action more than 3 times in a week? Does it mean that your cash account now becomes a margin account subject to margin account rules because you executed more than three round trip trades in a five day rolling period?",
"title": ""
}
] |
[
{
"docid": "5f53938fe4acef1c5ca2cc4e5bb639f7",
"text": "\"TLDR: Why can't banks give me my money? We don't have your money. Who has my money? About half a dozen different people all over the world. And we need to coordinate with them and their banks to get you your money. I love how everyone seems to think that the securities industry has super powers. Believe me, even with T+3, you won't believe how many trades fail to settle properly. Yes, your trade is pretty simple. But Cash Equity trades in general can be very complicated (for the layman). Your sell order will have been pushed onto an algorithmic platform, aggregated with other sell order, and crossed with internal buy orders. The surplus would then be split out by the algo to try and get the best price based on \"\"orders\"\" on the market. Finally the \"\"fills\"\" are used in settlement, which could potentially have been filled in multiple trades against multiple counterparties. In order to guarantee that the money can be in your account, we need 3 days. Also remember, we aren't JUST looking at your transaction. Each bank is looking to square off all the different trades between all their counter parties over a single day. Thousands of transactions/fills may have to be processed just for a single name. Finally because, there a many many transactions that do not settle automatically, our settlements team needs to co-ordinate with the other bank to make sure that you get your money. Bear in mind, banks being banks, we are working with systems that are older than I am. *And all of the above is the \"\"simplest\"\" case, I haven't even factored in Dark Pools/Block trades, auctions, pre/post-market trading sessions, Foreign Exchange, Derivatives, KYC/AML.\"",
"title": ""
},
{
"docid": "5551e1d6c53d78ac4f021ce3d5c4c4b4",
"text": "I traded futures for a brief period in school using the BrokersXpress platform (now part of OptionsXpress, which is in turn now part of Charles Schwab). They had a virtual trading platform, and apparently still do, and it was excellent. Since my main account was enabled for futures, this carried over to the virtual account, so I could trade a whole range of futures, options, stocks, etc. I spoke with OptionsXpress, and you don't need to fund your acount to use the virtual trading platform. However, they will cancel your account after an arbitrary period of time if you don't log in every few days. According to their customer service, there is no inactivity fee on your main account if you don't fund it and make no trades. I also used Stock-Trak for a class and despite finding the occasional bug or website performance issue, it provided a good experience. I received a discount because I used it through an educational institution, and customer service was quite good (probably for the same reason), but I don't know if those same benefits would apply to an individual signing up for it. I signed up for top10traders about seven years ago when I was in secondary school, and it's completely free. Unfortunately, you get what you pay for, and the interface was poorly designed and slow. Furthermore, at that time, there were no restrictions that limited the number of shares you could buy to the number of outstanding shares, so you could buy as many as you could afford, even if you exceeded the number that physically existed. While this isn't an issue for large companies, it meant you could earn a killing trading highly illiquid pink sheet stocks because you could purchase billions of shares of companies with only a few thousand shares actually outstanding. I don't know if these issues have been corrected or not, but at the time, I and several other users took advantage of these oversights to rack up hundreds of trillions of dollars in a matter of days, so if you want a realistic simulation, this isn't it. Investopedia also has a stock simulator that I've heard positive things about, although I haven't used it personally.",
"title": ""
},
{
"docid": "96eaaf4d4da27faaa9cee053a3e9931b",
"text": "\"If you're going to be a day trader, you really need to know your stuff. It's risky, to say the least. One of the most important elements to being successful is having access to very fast data streams so that you can make moves quickly as trends stat to develop in the markets. If you're planning on doing this using consumer-grade sites like eTrade, that's not a good idea. The web systems of many of the retail brokerage firms are not good enough to give you data fast enough for you to make good, timely decisions or to be able to execute trades way that day traders do in order to make their money. Many of those guys are living on very thin margins, sometimes just a few cents of movement one way or the other, so they make up for it with a large volume of trades. One of the reasons you were told you need a big chunk of money to day trade is that some firms will rent you out a \"\"desk\"\" and computer access to day trade through their systems if you're really serious about it. They will require you to put up at least a minimum amount of money for this privilege, and $25k may not be too far out of the ballpark. If you've never done day trading before, be careful. It doesn't take much to get caught looking the wrong way on a trade that you can't get out of without losing your shirt unless you're willing to hold on to the stock, which could be longer than a day. Day trading sounds very simple and easy, but it isn't. You need to learn about how it works (a good book to read to understand this market is \"\"Flash Boys\"\" by Michael Lewis, besides being very entertaining), because it is a space filled with very sophisticated, well-funded firms and individuals who spend huge sums of money to gain miniscule advantages in the markets. Be careful, whatever you do. And don't play in day trading with your retirement money or any other money you can't afford to walk away from. I hope this helps. Good luck!\"",
"title": ""
},
{
"docid": "2317c3ed8e078885f5a21b928db1cb73",
"text": "If I buy 10 stocks on Monday and sell the same on Tuesday (different trading day) would I be considered a day trader? No. It is only counting if you buy something and then sell that same something during the same trading session. And that counter only lasts for 5 days, things that happened outside of that time period get removed from the counter. If the counter reaches a number (three to five, depending on the broker), then you are labelled as a pattern day trader, and will have your trading capabilities severely restricted unless you have an account size greater than $25,000",
"title": ""
},
{
"docid": "b8a45a3e2b81cc0f49f2d5dd2fa11139",
"text": "Not really practical... The real problem is getting the money into a form where you *can* invest it in something. It's not like E\\*Trade will let you FedEx them a briefcase of sequentially numbered hundreds and just credit your account, no questions asked. That **is** the hard part.",
"title": ""
},
{
"docid": "a3b07a4b217c94d673981374e4e7ced8",
"text": "This can be done, you can be prosecuted for some forms of it, in any case there are more riskless ways of doing what you suggested. First, buying call options from market makers results in market makers buying shares at the same delta as the call option. (100 SHARES X DELTA = How many shares MM's bought). You can time this with the volume and depth of the shares market to get a bigger resulting move caused by your options purchase to get bigger quote changes in your option. So on expiration day you can be trade near at the money options back and forth between being out the money and in the money. You would exit the position into liquidity at a profit. The risk here is that you can be sitting on a big options position, where the commissions costs get really big, but you can spread this out amongst several options contracts. Second, you can again take advantage of market maker inefficiencies by getting your primary position (whether in the share market or options market) placed, and then your other position being a very large buy order a few levels below the best bid. Many market makers and algorithms will jump in front of your, they think they are being smart, but it will raise the best bid and likely make a few higher prints for the mark, raising the price of your call option. And eventually remove your large buy order. Again, you exit into liquidity. This is called spoofing. There have been some regulatory actions against people in doing this in the last few years. As for consequences, you need to put things into perspective. US capital market regulators have the most nuanced regulations and enforcement actions of worldwide capital market regulators, and even then they get criticized for being unable or unwilling to curb these practices. With that perspective American laws are basically a blueprint on what to do in 100 other country's stock exchanges, where the legislature has never gotten around to defining the same laws, the securities regulator is even more underfunded and toothless, and the markets more inefficient. Not advice, just reality.",
"title": ""
},
{
"docid": "12fd823d45e5e046592c8b8e6b1fc39f",
"text": "\"You need to have 3 things if you are considering short-term trading (which I absolutely do not recommend): The ability to completely disconnect your emotions from your gains and losses (yes, even your gains but especially your losses). The winning/losing on a daily basis will cause you to start taking unnecessary risk in order to win again. If you can't disconnect your emotions, then this isn't the game for you. The lowest possible trading costs to enter and exit a position. People will talk about 1% trading costs; that rule-of-thumb doesn't apply anymore. Personally, my trading costs are a total 13.9 basis points to enter and exit a $10,000 position and I think it's still too high (that's just a hair above one-eighth of 1% for you non-traders). The ability to \"\"gut-check\"\" and exit a losing position FAST. Don't hesitate and don't hope for it to go up. GTFO. If you are serious about short-term trading then you must close all positions on a daily basis. Don't do margin in today's market as many valuations are high and some industries are not trending as they have in the past. The leverage will kill you. It's not a question of \"\"if\"\", it's a when. You're new. Don't trade anything larger than a $5,000 position, no matter what. Don't hold more than 10% of your portfolio in the same industry. Don't be afraid to sit on 50% cash or more for months at a time. Use money market funds to park cash because they are T+1 settlement and most firms will let you trade the stock without cash as long as you effect the money market trade on the same day since stock settlement is T+3.\"",
"title": ""
},
{
"docid": "753e47184ba649c5d93162873e6e30a3",
"text": "\"My 401k allows cash holdings to 100% if desired. I'm not sure why some won't, they are making money on your money after all. If you are looking to the funds vehicles for investing suggestions however, they will never allow cash. I found you must go into \"\"Invest on my own\"\" vehicle to make that change. I have beaten and timed this market several times by sitting with cash on the sidelines. The only time I missed it was when I talked to a fund administrator in 2008 dot com crash and stayed in at this suggestion. I told him I didn't see where the market could go much higher as I had made 12-28% on some funds. He was dead wrong of course and I lost 50% that year. Now, trust me, in 2017, assets are grossly overvalued. If they won't let you deposit to cash, don't invest and just save your money until the next crash.\"",
"title": ""
},
{
"docid": "fe88f147ee1185df8e18652d0ffef41a",
"text": "You'll have to take cash from your Credit Card account and use that to trade. I doubt any brokerage house will take credit cards as it's trading without any collateral (since credit cards are an unsecured credit)",
"title": ""
},
{
"docid": "065db451d8f3c8bfac3ce4d576a099a7",
"text": "There's no limitation on what you can invest in, including trading stocks (as long as trading is not a business activity, like day-trading or investing for others). You just need to make sure you have a tax ID (either ITIN or SSN) and pay taxes on all the gains and dividends. Also, consider your home country tax laws, since you're still tax resident in your home country (most likely).",
"title": ""
},
{
"docid": "eb22f51c5e620c368ae9efe4b3d807f8",
"text": "They are using several banks, hedge funds or other financial institutions, in order to diversify the risk inherent to the fact that the firm holding (a fraction of) their cash, can be insolvent which would makes them incur a really big loss. Also, the most available form of cash is very often reinvested everyday in overnight*products and any other highly liquid products, so that it can be available quickly if needed. Since they are aware that they are not likely to need all of their cash in one day, they also use longer terms or less liquid investments (bonds, stocks, etc..).",
"title": ""
},
{
"docid": "d7757af949d34fb59fec0397d70582f1",
"text": "\"The difficulty is that you are thinking of a day as a natural unit of time. For some securities the inventory decisions are less than a minute, for others, it can be months. You could ask a similar question of \"\"why would a dealer hold cash?\"\" They are profit maximizing firms and, subject to a chosen risk level, will accept deals that are sufficiently profitable. Consider a stock that averages 1,000 shares per day, but for which there is an order for 10,000 shares. At a sufficient discount, the dealer would be crazy not to carry the order. You are also assuming all orders are idiosyncratic. Dividend reinvestment plans (DRIP) trigger planned purchases on a fixed day, usually by averaging them over a period such as 10 days. The dealer slowly accumulates a position leading up to the date whenever it appears a good discount is available and fills the DRIP orders out of their own account. The dealer tries to be careful not to disturb the market leading up to the date and allows the volume request to shift prices upward and then fills them.\"",
"title": ""
},
{
"docid": "524cddb28590d076ce9cdaf36faf147c",
"text": "So ... how are you going to have a bank run if you got rid of cash? I suspect big investors will attempt (have already attempted?) to pull their cash, but regular people? Not like running to the ATM will do much good and I don't think they have offshore accounts. Excuse my naïveté, but that's the first thing that came to my mind...",
"title": ""
},
{
"docid": "f7cf47e5739f6c4898bf5d089140baa9",
"text": "Yes, you will need to create an actual account. However, when all is done and you are about to log in, there will be an option on whether you want to log in as a live trader or a paper trader. Select the paper trading option and log in and get rich off fake money.",
"title": ""
},
{
"docid": "2dc4fec57148f221da98f849fa2699b5",
"text": "\"....causes loses [sic] to others. Someone sells you a stock. The seller receives cash. You receive a stock certificate. This doesn't imply a loss by either party especially if the seller sold the stock for more than his purchase price. A day trading robot can make money off of the price changes of a stock only if there are buyers and sellers of the stock at certain prices. There are always two parties in any stock transaction: a buyer and a seller. The day trading robot can make money off of an investment for 20 years and you could still make money if the investment goes up over the 20 years. The day trading robot doesn't \"\"rob\"\" you of any profit.\"",
"title": ""
}
] |
fiqa
|
099bbb9168822337df96ab7e2e9e24bc
|
Why doesn't change in accounts receivable on balance sheet match cash flow statement?
|
[
{
"docid": "1bb77fd32ae8e227ef16984ac4c5b8b9",
"text": "\"I'm not an expert, but here is my best hypothesis. On Microsoft's (and most other company's) cash flow statements, they use the so-called \"\"indirect method\"\" of accounting for cash flow from operations. How that works, is they start with net income at the top, and then adjust it with line items for the various non-cash activities that contributed to net income. The key phrase is that these are accounting for the non-cash activities that contribute to net income. If the accounts receivable amount changes from something other than operating activity (e.g., if they have to write off some receivables because they won't be paid), the change didn't contribute to net income in the first place, so doesn't need to be reconciled on the cash flow statement.\"",
"title": ""
},
{
"docid": "86855ce8af084a18f712895f3cfb987b",
"text": "\"Increase in A/R in balance sheet includes the A/R of acquired businesses. Change in A/R in cash flow statement might say \"\"excluding effects of business acquisitions\"\".\"",
"title": ""
},
{
"docid": "d1dbe7bda5a57a5d62c4680327a932c6",
"text": "It is difficult to reconcile historical balance sheets with historical cash flow statements because there are adjustments that are not always clearly disclosed. Practitioners consider activity on historical cash flow statements but generally don't invest time reconciling historical accounts, instead focusing on balancing projected balance sheets / cash flow statements. If you had non-public internal books, you could reconcile the figures (presuming they are accurate). In regards to Mike Haskel's comment, there's also a section pertaining to operating capital, not just effects on net income.",
"title": ""
},
{
"docid": "77d21de280c5002caced348149bc390e",
"text": "\"QUICK ANSWER What @Mike Haskel wrote is generally correct that the indirect method for cash flow statement reporting, which most US companies use, can sometimes produce different results that don't clearly reconcile with balance sheet shifts. With regards to accounts receivables, this is especially so when there is a major increase or decrease in the company's allowances for doubtful accounts. In this case, there is more to the company's balance sheet and cash flow statements differences per its accounts receivables than its allowances for doubtful accounts seems responsible for. As explained below, the difference, $1.25bn, is likely owing more to currency shifts and how they are accounted for than to other factors. = = = = = = = = = = DIRTY DETAILS Microsoft Corp. generally sells to high-quality / high-credit buyers; mostly PC, server and other devices manufacturers and licensees. It hence made doubtful accounts provisions of $16mn for its $86,833mn (0.018%) of 2014 sales and wrote off $51mn of its carrying balance during the year. Its accounting for \"\"Other comprehensive income\"\" captures the primary differences of many accounts; specifically in this case, the \"\"foreign currency translation\"\" figure that comprises many balance sheet accounts and net out against shareholders' equity (i.e. those assets and liabilities bypass the income statement). The footnotes include this explanation: Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (“OCI”) What all this means is that those two balance sheet figures are computed by translating all the accounts with foreign currency balances (in this case, accounts receivables) into the reporting currency, US dollars (USD), at the date of the balance sheets, June 30 of the years 2013 and 2014. The change in accounts receivables cash flow figure is computed by first determining the average exchange rates for all the currencies it uses to conduct business and applying them respectively to the changes in each non-USD accounts receivables during the periods. For this reason, almost all multinational companies that report using indirect cash flow statements will have discrepancies between the changes in their reported working capital changes during a period and the dates of their balance sheet and it's usually because of currency shifts during the period.\"",
"title": ""
}
] |
[
{
"docid": "8e67b6911d14a79d53b0b47b4fdd2ac1",
"text": "\"Accounts track value: at any given time, a given account will have a given value. The type of account indicates what the value represents. Roughly: On a balance sheet (a listing of accounts and their values at a given point in time), there is typically only one equity account, representing net worth, I don't know much about GNUCash, though. Income and expenses accounts do not go on the balance sheet, but to find out more, either someone else or the GNUCash manual will have to describe how they work in detail. Equity is more similar to a liability than to assets. The equation Assets = Equity + Liabilities should always hold; you can think of assets as being \"\"what my stuff is worth\"\" and equity and liabilities together as being \"\"who owns it.\"\" The part other people own is liability, and the part you own is equity. See balance sheet, accounting equation, and double-entry bookkeeping for more information. (A corporate balance sheet might actually have more than one equity entry. The purpose of the breakdown is to show how much of their net worth came from investors and how much was earned. That's only relevant if you're trying to assess how a company has performed to date; it's not important for a family's finances.)\"",
"title": ""
},
{
"docid": "aacdae478cdb8a98b2b69eed4440805e",
"text": "In general you need to ask yourself how serious you are about tracking your finances. If your GNUCash 'cleared' balance doesn't match your statement, it represents an error on either your part or much less likely the banks part. Tracking down this error might be a real pain, but you will also likely learn from it. So to answer your question - find the entry or entries that don't match and fix them. That said, sometimes indeed this can be very tedious, time consuming and frustrating, especially if it is for a relatively small dollar amount. Time too is money, so in these cases, the 'Expense:Adjustment' might be a reasonable approach.",
"title": ""
},
{
"docid": "28e5a864f6bc6bba8050209a3d569d11",
"text": "\"1. That's a really complicated answer. In short, I think we need to make accounting rules much simpler (I say this as an accountant) in combination with financial education in K-12 school. Most adults in this country can't tell you which is a better investment: something that returns 5% monthly or something that returns 10% annually. They don't know that accounting income and cash flow are different things and what they mean. Accounting rules are sometimes ridiculous. Look at the balance sheet of even a moderate size company. What's in \"\"Other Comprehensive Income\"\" and why is that different than net income? Why is it that American Airlines, one of the largest airlines in the world doesn't have a single airplane on their balance sheet? 2. That might be a step in the right direction, but I'm just not sure how effective something like that would be. More comprehensive might be better, but then there's going to be less people that want to take the time.\"",
"title": ""
},
{
"docid": "6da3ec1ab9296aa05074dbbc608a1c5c",
"text": "\"Exactly what accounts are affected by any given transaction is not a fixed thing. Just for example, in a simple accounting system you might have one account for \"\"stock on hand\"\". In a more complex system you might have this broken out into many accounts for different types of stock, stock in different locations, etc. So I can only suggest example specific accounts. But account type -- asset, liability, capital (or \"\"equity\"\"), income, expense -- should be universal. Debit and credit rules should be universal. 1: Sold product on account: You say it cost you $500 to produce. You don't say the selling price, but let's say it's, oh, $700. Credit (decrease) Asset \"\"Stock on hand\"\" by $500. Debit (increase) Asset \"\"Accounts receivable\"\" by $700. Credit (increase) Income \"\"Sales\"\" by $700. Debit (increase) Expense \"\"Cost of goods sold\"\" by $500. 2: $1000 spent on wedding party by friend I'm not sure how your friend's expenses affect your accounts. Are you asking how he would record this expense? Did you pay it for him? Are you expecting him to pay you back? Did he pay with cash, check, a credit card, bought on credit? I just don't know what's happening here. But just for example, if you're asking how your friend would record this in his own records, and if he paid by check: Credit (decrease) Asset \"\"checking account\"\" by $1000. Debit (increase) Expense \"\"wedding expenses\"\" by $1000. If he paid with a credit card: Credit (increase) Liability \"\"credit card\"\" by $1000. Debit (increase) Expense \"\"wedding expenses\"\" by $1000. When he pays off the credit card: Debit (decrease) Liability \"\"credit card\"\" by $1000. Credit (decrease) Asset \"\"cash\"\" by $1000. (Or more realistically, there are other expenses on the credit card and the amount would be higher.) 3: Issue $3000 in stock to partner company I'm a little shakier on this, I haven't worked with the stock side of accounting. But here's my best stab: Well, did you get anything in return? Like did they pay you for the stock? I wouldn't think you would just give someone stock as a present. If they paid you cash for the stock: Debit (increase) Asset \"\"cash\"\". Credit (decrease) Capital \"\"shareholder equity\"\". Anyone else want to chime in on that one, I'm a little shaky there. Here, let me give you the general rules. My boss years ago described it to me this way: You only need to know three things to understand double-entry accounting: 1: There are five types of accounts: Assets: anything you have that has value, like cash, buildings, equipment, and merchandise. Includes things you may not actually have in your hands but that are rightly yours, like money people owe you but haven't yet paid. Liabilities: Anything you owe to someone else. Debts, merchandise paid for but not yet delivered, and taxes due. Capital (some call it \"\"capital\"\", others call it \"\"equity\"\"): The difference between Assets and Liabilities. The owners investment in the company, retained earnings, etc. Income: Money coming in, the biggest being sales. Expenses: Money going out, like salaries to employees, cost of purchasing merchandise for resale, rent, electric bill, taxes, etc. Okay, that's a big \"\"one thing\"\". 2: Every transaction must update two or more accounts. Each update is either a \"\"debit\"\" or a \"\"credit\"\". The total of the debits must equal the total of the credits. 3: A dollar bill in your pocket is a debit. With a little thought (okay, sometimes a lot of thought) you can figure out everything else from there.\"",
"title": ""
},
{
"docid": "8f39fca14ea7afb4292fba4707c494ce",
"text": "Your account entries are generally correct, but do note that the last transaction is a mixture of the balance sheet and income statement. If Quickbooks doesn't do this automatically then the expense must be manually removed from the balance sheet. The expense should be recognized on the balance sheet and income statement when it accrues, and it accrues when the prepaid rent is extinguished when consumed by the landlord, so that is when the second entry in your question should be booked. The cash flow statement will reflect all of these cash transactions immediately.",
"title": ""
},
{
"docid": "4c3533a0299064bf878acac048095187",
"text": "The primary drivers of cash flow in a software firm is the productivity and skill of your employees. How is that reflected in a balance sheet? Well, take a company like Adobe or Salesforce, or even Microsoft. What would you be able to tell about each from their balance sheets? You can look at their cash level, and what else would matter?",
"title": ""
},
{
"docid": "05f2384f318fceeaea2560c1da8ccd3d",
"text": "\"If the answer were \"\"no,\"\" you still found the 'black swan' type exception that proves the answer to be \"\"yes,\"\" right? My experience is this - again just my experience, my bank - When by balance goes below $10, I have the account trigger an email. I wrote a check I forgot to register and subtract, so the email was sent and the account balance in fact showed negative. I transferred to cover the check and the next day, there was a history that didn't go negative, the evening deposit was credited prior to check clearing. I set up my bills on line. I set a transfer in advance for the same dollar amount as a bill that was due, e.g. $1000 transfer for a $1000 bill. I woke up to an email, and the account showed the bill was paid prior to the transfer. So one line showed going -$900, and the next line +$100 after transfer. Even though it's the same online process. Again, the next day the history re-ordered to look like I was never negative. But even on a day I know I'm having payments issued, I can never just ignore that email. The first time this happened, I asked the bank, and they said if the negative went until the next day, I'd get an overdraft/short balance notice. This is a situation to ask your bank how they handle this.\"",
"title": ""
},
{
"docid": "35124c3aee792df13fe3a69a181155f4",
"text": "\"Here is where I am confused. On the income statement I am looking at it has a line item in cogs that is \"\"change in jobs in progress\"\". Change in JIP = (Starting raw materials, wip, and finished goods) - (Ending raw materials, wip, and finished goods) for the accounting period. From what I researched cost of goods manufactured is added to cogs: \"\"The formula for the cost of goods manufactured is the costs of: direct materials used + direct labor used + manufacturing overhead assigned = the manufacturing costs incurred in the current accounting period + beginning work-in-process inventory - ending work-in-process inventory. A manufacturer's cost of goods sold is computed by adding the finished goods inventory at the beginning of the period to the cost of goods manufactured and then subtracting the finished goods inventory at the end of the period.\"\" So it isnt wip that is in the income statement it is change in inventory. Why do they include the \"\"change of inventory\"\" in cogs? Wont this just be material and labor that should be in for the next accounting period cog calculation?\"",
"title": ""
},
{
"docid": "53dd714fdcde93886c79bef5635ec6a9",
"text": "\"First, please allow me to recommend that you do not try gimmickry when financials do give expected results. It's a sure path to disaster and illegality. The best route is to first check if accounts are being properly booked. If they are then there is most likely a problem with the business. Anything out of bounds yet properly booked is indeed the problem. Now, the reason why your results seem strange is because investments are being improperly booked as inventory; therefore, the current account is deviating badly from the industry mean. The dividing line for distinguishing between current and long term assets is one year; although, modern financial accounting theorists & regulators have tried to smudge that line, so standards do not always adhere to that line. Therefore, any seedlings for resale should be booked as inventory while those for potting as investment. It's been some time since I've looked at the standards closely, but this used to fall under \"\"property, plant, & equipment\"\". Generally, it is a \"\"capital expenditure\"\" by the oldest definition. It is not necessary to obsess over initial bookings because inventory turnover will quickly resolve itself, so a simple running or historical rate can be applied to the seedling purchases. The books will now appear more normal, and better subsequent strategic decisions can now be made.\"",
"title": ""
},
{
"docid": "9fb5f84f227bcf9ce8d5c1fe5e39467d",
"text": "\"I added \"\"Shared money in account\"\" (SMIA) as sub-account of my bank checking (CA) account and moved current difference to that account so total of CA was not changed but now private and shared money is separated. My cases would be handled the following The only downside I see is that now my balance in CA transaction log do not match exactly with bank so reconciliation will be slightly harder.\"",
"title": ""
},
{
"docid": "df9b83154409d75086d28fcae731b329",
"text": "\"Ugh... yes, you have to tell us what information you have available. It would be a completely different answer if, for example, you had a balance sheet for a prior period and an income statement for the current period and had to estimate the working capital accounts. If you can't be bothered to \"\"want to give the problem\"\" nobody is going to be bothered to help you with it. Inventory days = days of COGS in inventory. (15 / 360 times cogs). AR is 35 days of sales in AR. 35/360* sales. Vendor credit is accounts payable -- 40 /360 * COGS. If your sales and COGs are given by operating cycle rather than annually, use 50 instead of 360. (for whatever reason, convention says use 360 instead of 365).\"",
"title": ""
},
{
"docid": "00d92ce163cbaa2219366d5a87720ef9",
"text": "You increase the capital account by the additional contributions and retained earnings and decrease the capital account by the distributions of return of capital and/or losses. Distributing gains doesn't change the capital account. So in your case it would be: 1st year we lost money Assuming you lost 20K, and the interests are even, it will look like this: 1st year we break even Nothing changes - you break even, means the balance sheet doesn't change (in this example). 1st year we made money Assume you gained 20K and kept it: If you didn't retain the earnings, it would look the same as case 2 - no change. Note that this is only the financial accounting, tax accounting might look differently. For example, in the US Partnerships (or LLCs taxed as) are pass-through entities, on in case 3 while you retained the earnings, the partners will still be taxed. I'm of course neither CPA nor a licensed tax adviser. I suggest you get a consultation with one. Only a CPA can provide a reliable accounting advice or sign official financial statements, reviews and audits. Only a EA, CPA or an Attorney specializing in tax law can provide a tax advice.",
"title": ""
},
{
"docid": "4a6861c5a6ac2146025b8a13d9207d3c",
"text": "That's pretty typical for introductory problems. It's leading you into an NPV question. They're keeping the cash flows the same to illustrate the time value of money to show you that even though the free cash flow is the same in year 1 and year 4 or whatever when you discount it to present value today's stream is worth more than tomorrow's",
"title": ""
},
{
"docid": "6ac32be0cbf98c69d5b81fc6ed9aab89",
"text": "Any accounting software should be able to handle this. When you invoice them, set the invoice date to the date of the event. Then receive a partial payment against that invoice. This will cause your accounting software to display the service income in the correct period as well. So if you sent them invoice for August 7, 2014 event on May 5th, 2014 and they gave you $500 due, you would see this Income in August ($500 on Cash basis, $1000 on Accrual basis. When you received the other $500 in August, you would see $1000 for both methods). You would not see any income in May, when you created the invoice. This is better for revenue matching with the correct period. When you send them same invoice (say 30 days before the event), Set the software to show payments already received (it seems that most online accounting software will do this by default). Here is an example in Freshbooks. Here is an example in Xero: Seems they both display information on when you can expect payment on the their respective dashboards. In the Desktop version of Quickbooks (which I use a lot), it will not show the balance of the customer by default on an invoice. You will have to modify the invoice template. There are more details on that here. In Desktop version of Quickbooks, you can look at Cash Flow Forecast report to see the expected amount coming in. I hope that helps and good luck.",
"title": ""
},
{
"docid": "5ea816f8a5cdceb7b98027f7392c287e",
"text": "They changed the way trailing interest is calculated back in 2008 if I recall correctly. The idea at the time was that the interest charges to the customer were somewhat less, but it made trying to get a payoff quote a PITA. They used to take payments for more than the current balance due at that time, however. I can't provide any insight as to why they won't now, though.",
"title": ""
}
] |
fiqa
|
61e8fdd57f4ed17904cc8107b645d947
|
When does Ontario's HST come into effect?
|
[
{
"docid": "7d3077586f1ca10a37851e7b9c4f23a8",
"text": "\"It looks like the HST will be in effect in Ontario on July 1st, 2010. As to whether it will replace GST with HST for all services, it looks like some sectors may get special treatment: Ontario may exempt mutual funds from HST (National Post). But it doesn't look final yet. However, I would suggest that most service-based businesses in Ontario need to prepare to start charging 13% HST instead of 5% GST. It will be the law. On the \"\"goods\"\" side of the new harmonized tax, it looks like certain goods will still be exempt from the provincial portion. Here's a quote from the Ontario Budget 2009 News Release: \"\"Books, diapers, children's clothing and footwear, children's car seats and car booster seats, and feminine hygiene products would be exempt from the provincial portion of the single sales tax.\"\" Here's some additional information on the introduction of the HST, from the province: General Transitional Rules for Ontario HST. And finally, another interesting article from the Ottawa Business Journal: Preparing For Ontario Sales Tax Harmonization – It's Not Too Early UPDATE: I just received an insert from Canada Revenue Agency included with my quarterly GST statement. Titled \"\"Harmonization of the Sales Tax in Ontario and British Columbia\"\", it contains a section titled \"\"What this means for you\"\" (as in, you the business owner). Here's an excerpt: [...] All Ontario and B.C. registrants would need to update their accounting and point-of-sale systems to accomodate the change in rate and new point-of-sale rebates for the implementation date of July 1, 2010. The harmonization of the sales tax in Ontario and B.C. may affect the filing requirements of registrants outside of these two provinces. Registrants will report their HST according to their current GST filing frequency. As a result of the harmonization, there will be changes to the rebates for housing and public service bodies. More information will be released as it becomes available. Visit the CRA web site often, at www.cra.gc.ca/harmonization, for the most up-to-date information on the harmonization of the sales tax and how it may affect you. [...] Last, I found some very detailed information on the HST here: NOTICE247 - Harmonized Sales Tax for Ontario and British Columbia - Questions and Answers on General Transitional Rules for Personal Property and Services. Chances are anything you want to know is in there.\"",
"title": ""
},
{
"docid": "e58a8128222084751b0288d74167d85e",
"text": "In general you must charge HST on and after July 1, 2010. However, in the case of delivered sales, you must charge HST if the transfer of goods will happen on or after July 1,2010. Example: A person comes into my hypothetical store on June 29, 2010 and buys a couch. They opt to have it delivered by my truck on July 2, 2010. I should charge HST on this purchase, not GST/PST. References:",
"title": ""
},
{
"docid": "a7ebe417a11689afa1585e43c14ceded",
"text": "(community wiki) Ontario special HST sales tax transition rebate cheques: When and how much? What will happen to quarterly GST cheques when HST starts in Ontario? Ontario HST rebate: When would I qualify? Ontario gas prices & HST: What will happen to prices at the pump on July 1, 2010? How will Ontario’s HST apply to books / textbooks, which were PST exempt before? How can I minimize the impact of the HST? How does the HST affect a condominium purchase? Will I need to pay HST on condo maintenance fees? My Ontario small business collects only PST (beneath GST threshold). How will HST affect me?",
"title": ""
}
] |
[
{
"docid": "ce25b1830452e713b8ff2b84a9d71f11",
"text": "\"Mutual funds generally make distributions once a year in December with the exact date (and the estimated amount) usually being made public in late October or November. Generally, the estimated amounts can get updated as time goes on, but the date does not change. Some funds (money market, bond funds, GNMA funds etc) distribute dividends on the last business day of each month, and the amounts are rarely made available beforehand. Capital gains are usually distributed once a year as per the general statement above. Some funds (e.g. S&P 500 index funds) distribute dividends towards the end of each quarter or on the last business day of the quarter, and capital gains once a year as per the general statement above. Some funds make semi-annual distributions but not necessarily at six-month intervals. Vanguard's Health Care Fund has distributed dividends and capital gains in March and December for as long as I have held it. VDIGX claims to make semi-annual distributions but made distributions three times in 2014 (March, June, December) and has made/will make two distributions this year already (March is done, June is pending -- the fund has gone ex-dividend with re-investment today and payment on 22nd). You can, as Chris Rea suggests, call the fund company directly, but in my experience, they are reluctant to divulge the date of the distribution (\"\"The fund manager has not made the date public as yet\"\") let alone an estimated amount. Even getting a \"\"Yes, the fund intends to make a distribution later this month\"\" was difficult to get from my \"\"Personal Representative\"\" in early March, and he had to put me on hold to talk to someone at the fund before he was willing to say so.\"",
"title": ""
},
{
"docid": "8d031287980a46fd870886fd6610e129",
"text": "Yes. You must register for GST as well, if you will be making over the threshold (currently $60,000). That's probably a bonus for you, as your home office expenses will mostly include GST, but your income will most likely be zero-rated. Check with an accountant or with the IRD directly. Just be certain to put aside enough money from each payment to cover income tax, GST and ACC. You will get a very large bill in your second year of business.",
"title": ""
},
{
"docid": "c2c9a9969e6b2773320f3dfe7362f70a",
"text": "You actually don't need an accountant. They'll be expensive and at this early a stage unnecessary - what you need is a good bookkeeper who can keep track of what comes in and what goes out. You'll need that to know if you're making money or not and to show the government at the end of the year. Get a copy of QuickBooks and pick up Bookkeeping for Dummies to at least get a sense for what's going on. Have you registered as a sole proprietorship? Make sure you have a vendor's permit so you can legally sell your services in Ontario. You may need to collect HST, in which case you'll need to register for an HST # and submit it on a quarterly basis. Whatever you do, don't fuck with the government - they can freeze your bank accounts to get money they're owed. You need to keep money on hand to pay for any taxes you might owe on the business, ESPECIALLY if it's a sole proprietorship where you'll be tempted to treat profit as income. You don't want to end up with nothing in the bank at the end of the year and $40k owing to the CRA. Get a separate bank account - don't mix personal and business, it's messy. Expense everything you reasonably can.",
"title": ""
},
{
"docid": "ad766ebd8bb78cde5a30f7e50124700c",
"text": "I'm a bot, *bleep*, *bloop*. Someone has linked to this thread from another place on reddit: - [/r/talkbusiness] [Starting a restaurant in Toronto (Canada)](https://np.reddit.com/r/talkbusiness/comments/789f5l/starting_a_restaurant_in_toronto_canada/) [](#footer)*^(If you follow any of the above links, please respect the rules of reddit and don't vote in the other threads.) ^\\([Info](/r/TotesMessenger) ^/ ^[Contact](/message/compose?to=/r/TotesMessenger))* [](#bot)",
"title": ""
},
{
"docid": "f1be9d7231a61302958e09ca27c1c4fe",
"text": "The Canada Revenue Agency describes in detail here what information businesses must generally include on their invoices so that GST/HST registrants can claim Input Tax Credits (ITCs) for the expenses. Quote: Sales invoices for GST/HST registrants You have to give customers who are GST/HST registrants specific information on the invoices, receipts, contracts, or other business papers that you use when you provide taxable goods and services. This information lets them support their claims for input tax credits (ITCs) or rebates for the GST/HST you charged. [...] The page quoted continues with a table describing what, specifically, needs to be on a sales invoice based on the total amount of the invoice; the requirements differ for: total sale under $30, total sale between $30 to $149.99, and total sale $150 or more. For the total sale under $30 category, the only things a sales invoice must contain to support an ITC claim are (1) the provider's business name, (2) the invoice date, and (3) the total amount paid/payable. i.e. When the total sale is under $30, there is no requirement for any GST/HST amount to be indicated separately, nor for a business number to be present on the invoice. Hence, IMHO (and I am neither an accountant nor a lawyer), if your Uber rides are for $30 or less, then you shouldn't expect a GST/HST number anyway, and a simple invoice as described should be enough for you to claim your ITCs. Whether or not the provider is registered in fact for GST/HST is beside the point. For amounts over $30, you need a bit more. While the page above specifies that the provider's business number should be included beginning with the next level of total sales, there are exceptions to those rules described at another page mentioned, Exceptions to invoice requirements, that specifically apply to the taxi/limousine case. Quote: Exceptions to invoice requirements GST/HST registrants are required to keep the necessary documentation to support their claim for ITCs and rebates. In certain circumstances the documentation requirements have been reduced. [...] For taxi or limousine fares your books and records must show: So at a minimum, for fare in excess of $30 total, you should ask the driver to note either (a) the amount of GST/HST charged, or (b) a statement that the fare includes GST/HST. The driver's business number need not be specified. Consequently, if your receipt for a ride in excess of $30 does not contain any such additional information with respect to GST/HST, then I would expect the receipt does not satisfy the CRA's requirements for supporting your ITC claim. i.e. Keep your individual rides under $30 each, or else get a better receipt from the driver when it is above that amount. p.s. It should go without saying, but your rides, of course, must be considered reasonable business expenses in order to qualify for GST/HST ITCs for your business. Receipts for rides of a personal nature are not eligible, so be sure to maintain proper records as to the business purpose and destination for each ride receipt so claimed.",
"title": ""
},
{
"docid": "481b8423ba7e31615b1775bafe7d3029",
"text": "I looked at this a little more closely but the answer Victor provided is essentially correct. The key to look at in the google finance graph is the red labled SMA(###d) would indicate the period units are d=days. If you change the time axis of the graph it will shift to SMA(###m) for period in minutes or SMA(###w) for period in weeks. Hope this clears things up!",
"title": ""
},
{
"docid": "de65a195799a90cbf017660532c71024",
"text": "Multistate Impact of the American Taxpayer Relief Act of 2012 In general, states with rolling conformity will follow this change. States with specific date conformity will continue to follow the date of conformity currently in effect and will not follow the change. A few states may have their own QSBS rules and will not conform to or be impacted by this provision of the Act. The chart that follows summarizes these principles as applied to the enumerated states: STATE: QSBS Exclusion Conformity: California statutes refer to the IRC QSBS provisions but modify and limit their applicability, and would not be impacted by this provision of the Act. However, California’s provisions were ruled unconstitutional in recent litigation and the California Franchise Tax Board has recently taken the position that gain exclusions and deferrals will be denied for all open tax years. Florida Florida does not impose an income tax on individuals and therefore this provision of the Act is inapplicable and will have no impact. Illinois Due to its rolling conformity, Illinois follows this provision of the Act. Because New York effectively provides for rolling conformity to the IRC, through reference to federal adjusted gross income as the state starting point, New York effectively follows this provision of the Act. Texas does not impose an income tax on individuals",
"title": ""
},
{
"docid": "7e4e81a9dd457ff0c047054f2d09ff6a",
"text": "\"FWIW, I've got a printed Amazon.ca invoice that was included in a shipment of books that I received in July, 2013. In the right-side side panel, at the bottom and in fine print, it reads: Amazon.com.ca, Inc. 410 Terry Avenue North Seattle, WA 98109-5210 GST Registration Number/No enregistrement TPS 85730 5932 RT0001 [etc.] If I view the same order online at Amazon.ca, the on-screen version does not have that detail. Interestingly, at the bottom of the online invoice page it says: \"\"Please note: This is not a VAT invoice.\"\" That probably should've said \"\"GST/HST\"\", for Canada, and not \"\"VAT\"\", which is presumably for the United Kingdom. So, it would appear that Amazon may only print their GST/HST details on the shipped invoice printout. Which made me wonder: Did you purchase something that was fulfilled electronically, i.e. no physical shipment to you? e.g. a Kindle book, an app, or a service like Cloud Drive? If no physical invoice shipped means one doesn't get the required GST details, then there's still a Canadian tax requirement Amazon isn't fulfilling on such invoices, though not as broad an issue as you suspected. On the other hand, if you did get a physical invoice [and your comment confirmed you did], then what you were seeking was most likely printed on that version, just as mine was. At the moment, I'm not sure why Amazon wouldn't also include the GST number on electronic versions of invoices (whether received by email, or viewed on the web site) but if I find out more, I'll update my answer later.\"",
"title": ""
},
{
"docid": "701e8af5fd8da73baf91d54053149cb0",
"text": "In Ontario, common law marriage requires 3 years of cohabitation, and doesn't give rights to property (which remains separate). I'd say in your situation you can still file as single, but I'd suggest asking your tax accountant to be sure.",
"title": ""
},
{
"docid": "caff17a8e58f867e2b8edd998ab5b806",
"text": "\"This is the best tl;dr I could make, [original](https://www.bloomberg.com/news/articles/2017-10-25/with-economy-almost-home-poloz-treads-carefully-on-rate-path) reduced by 88%. (I'm a bot) ***** > The Canadian economy is almost home, according to the nation's central bank, but Stephen Poloz is trying to make sure the roof doesn't cave in. > The economy is in a "Sweet spot" where it "Could be capable of generating more non-inflationary growth than we are assuming," Poloz said in a press conference following the rate decision. > Excess capacity in the labor market suggests little risk of inflation overheating in the near term, said Poloz, who highlighted involuntary part-time workers, subdued work force participation among youths, lower than expected hours worked and softness in wage growth as signs the economy has further room for improvement. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/78t6fn/with_economy_almost_home_poloz_is_treading/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ \"\"Version 1.65, ~235204 tl;drs so far.\"\") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr \"\"PM's and comments are monitored, constructive feedback is welcome.\"\") | *Top* *keywords*: **growth**^#1 **bank**^#2 **rate**^#3 **economy**^#4 **expects**^#5\"",
"title": ""
},
{
"docid": "f494c007a256f5583640314dcdc4ac32",
"text": "It has basically been kicked out of every Canadian city for being illegal while the cities make new regulations for them. Now they have the new regulations and it's pretty decent. They were definitely illegal though (injunctions issued and everything), but now operate within the laws.",
"title": ""
},
{
"docid": "29aa93d3c3af81a6236d2e1905ada5a1",
"text": "This site has the best information I could find, other than a Bloomberg terminal: Quantumonline.com QUANTUMONLINE.COM SECURITY DESCRIPTION: SCANA Corp., 2009 Series A, 7.70% Enhanced Junior Subordinated Notes, issued in $25 denominations, redeemable at the issuer's option on or after 1/30/2015 at $25 per share plus accrued and unpaid interest, and maturing 1/30/2065 which may be extended to 1/30/2080. Interest distributions of 7.70% ($1.925) per annum are paid quarterly on 1/30, 4/30, 7/30 & 10/30 to holders of record on the record date which is the business day prior to the payment date (NOTE: the ex-dividend date is at least 2 business days prior to the record date). Distributions paid by these debt securities are interest and as such are NOT eligible for the preferential 15% to 20% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders. Units are expected to trade flat, which means accrued interest will be reflected in the trading price and the purchasers will not pay and the sellers will not receive any accrued and unpaid interest. The Notes are unsecured and subordinated obligations of the company and will rank equally with all existing and future unsecured and subordinated indebtedness of the company. See the IPO prospectus for further information on the debt securities by clicking on the ‘Link to IPO Prospectus’ provided below.",
"title": ""
},
{
"docid": "7ffef3f15795d301785bb58e85f6fa15",
"text": "I suspect that the payments were originally due near the end of each quarter (March 15, June 15, September 15, and December 15) but then the December payment was extended to January 15 to allow for end-of-year totals to be calculated, and then the March payment was extended to April 15 to coincide with Income Tax Return filing.",
"title": ""
},
{
"docid": "1a2d6f5e9aee81d3da4405f9e2b98a3e",
"text": "\"Amazon has some major issues with growing out in Seattle, primarily infrastructure and geography. Seattle's infrastructure is stretched, leading to some hilarious activity - \"\"http://kuow.org/post/seattle-traffic-got-so-bad-guy-started-flying-work\"\". Also, Seattle is locked between the sea and the mountains, and with a limited supply of land, there isn't anywhere to build economically. NO ROOM TO GROW. Ontario has a few good things going for it: Healthcare, Immigration, Low corporate taxes, Education... But there are also some elephants. Ontario has some of the highest land costs in the world, longest commute times on the planet, and a government which will inevitably need to raise taxes. If I had to bet, we'll probably see Amazon set up shop in a City with low land costs, ring roads, and a low debt government. A place with room to grow. Raleigh/Durham Dallas-Fort Worth Denver Minneapolis Salt Lake City Cincinnati\"",
"title": ""
},
{
"docid": "14a9111f0d41690460427ab8a1cace5d",
"text": "In a word, yes. You can buy very low cost index ETFs, like VTI, VEA, BND, FBND and rebalance in proportion to your age and risk tolerance. Minimal management and low cost.",
"title": ""
}
] |
fiqa
|
788000c0cd93651492463e4bf2c461cb
|
When does a low PE ratio not indicate a good stock?
|
[
{
"docid": "258018bc30de9480e38e90433adec6f5",
"text": "\"Yes, there are situations where a stock is a bad buy in spite of a low PE. PE ratio tells you the current share price divided by the prior 4 quarters earnings per share. It does not consider: Imagine someone walked up to you and said, \"\"Do you want to buy a piece of my business? I'll sell you 1% of it for $1000. Last year the business earned $25000.\"\" A quick calculation shows a PE of 4 [$1000/($25000 *.01)]. Even though this PE is comparatively low, you wouldn't buy in without a lot more info. What kinds of things might you ask? PE is one tiny component of an informed investment decision.\"",
"title": ""
},
{
"docid": "7e2e68179cb7715afc6b734828b30557",
"text": "PE can be misleading when theres a good risk the company simply goes out of business in a few years. For this reason some people use PEG, which incorporates growth into the equation.",
"title": ""
},
{
"docid": "eaa8cc9360cece43923f2b00278f1931",
"text": "\"Some companies have a steady, reliable, stream of earnings. In that case, a low P/E ratio is likely to indicate a good stock. Other companies have a \"\"feast or famine\"\" pattern, great earnings one year, no earnings or losses the following year. In that case, it is misleading to use a P/E ratio for a good year, when earnings are high and the ratio is low. Instead, you have to figure out what the company's AVERAGE earnings may be for some years, and assign a P/E ratio to that.\"",
"title": ""
}
] |
[
{
"docid": "763b874917da099d22ea9724fbc4d829",
"text": "PEG is Price to Earnings Growth. I've forgotten how it's calculated, I just remember that a PEG ratio of 1-2 is attractive by Graham & Dodd standards.",
"title": ""
},
{
"docid": "7260e33a94f0592cc40cc223803db899",
"text": "There are books on the subject of valuing stocks. P/E ratio has nothing directly to do with the value of a company. It may be an indication that the stock is undervalued or overvalued, but does not indicate the value itself. The direct value of company is what it would fetch if it was liquidated. For example, if you bought a dry cleaner and sold all of the equipment and receivables, how much would you get? To value a living company, you can treat it like a bond. For example, assume the company generates $1 million in profit every year and has a liquidation value of $2 million. Given the risk profile of the business, let's say we would like to make 8% on average per year, then the value of the business is approximately $1/0.08 + $2 = $14.5 million to us. To someone who expects to make more or less the value might be different. If the company has growth potential, you can adjust this figure by estimating the estimated income at different percentage chances of growth and decline, a growth curve so to speak. The value is then the net area under this curve. Of course, if you do this for NYSE and most NASDAQ stocks you will find that they have a capitalization way over these amounts. That is because they are being used as a store of wealth. People are buying the stocks just as a way to store money, not necessarily make a profit. It's kind of like buying land. Even though the land may never give you a penny of profit, you know you can always sell it and get your money back. Because of this, it is difficult to value high-profile equities. You are dealing with human psychology, not pennies and dollars.",
"title": ""
},
{
"docid": "b1e00b39ad638ff408ef177d9410a9e8",
"text": "Typically a private company is hit by demand supply issues and cost of inputs. In effect at times the cost of input may go up, it cannot raise the prices, because this will reduce demand. However certain public sectors companies, typically in Oil & Engery segements the services are offered by Public sector companies, and the price they charge is governed by Regulatory authorities. In essence the PG&E, the agreement for price to customers would be calculated as cost of inputs to PG&E, Plus Expenses Plus 11.35% Profit. Thus the regulated price itself governs that the company makes atleast 11.35% profit year on year. Does this mean that the shares are good buy? Just to give an example, say the price was $100 at face value, So essentially by year end logically you would have made 111.35/-. Assuming the company did not pay dividend ... Now lets say you began trading this share, there would be quite a few people who would say I am ready to pay $200 and even if I get 11.35 [on 200] it still means I have got ~6% return. Someone may be ready to pay $400, it still gives ~3% ... So in short the price of the stock would keep changing depending how the market percieves the value that a company would return. If the markets are down or the sentiments are down on energy sectors, the prices would go down. So investing in PG&E is not a sure shot way of making money. For actual returns over the years see the graph at http://www.pgecorp.com/investors/financial_reports/annual_report_proxy_statement/ar_html/2011/index.htm#CS",
"title": ""
},
{
"docid": "7a4af6d5d949050b38d46a09f9238888",
"text": "And the kind folk at Yahoo Finance came to the same conclusion. Keep in mind, book value for a company is like looking at my book value, all assets and liabilities, which is certainly important, but it ignores my earnings. BAC (Bank of America) has a book value of $20, but trades at $8. Some High Tech companies have negative book values, but are turning an ongoing profit, and trade for real money.",
"title": ""
},
{
"docid": "590aa6996f150a72de01c54b41dfb58b",
"text": "A value of zero or a negative value makes the percent change meaningless. Saying 100% when going from 0 to some other value is simply wrong. I have seen a similar situation several times when looking at a public company with a loss last quarter. On Google Finance or some other service, the PE ratio will be blank, N/A, or something like that. If the company does not currently have earnings, then the PE ratio is meaningless. Likewise, if the company previously did not have earnings, then the percent change of the earnings is meaningless. Also consider the example where the previous value was negative. If the previous value was negative 1 and the current value is positive 99, then this happens: A negative change? But the value went up! Obviously that value does not make sense and should not be shown.",
"title": ""
},
{
"docid": "e72405e4b94676de0eaf1aac18d330f2",
"text": "In my IRA I try to find stocks that are in growing sectors but have are undervalued by traditional metrics like PE or book value; I make sure that they have lower debt levels than their peers, are profitable, and at least have comparable margins. I started trading options to make better returns off of indices or etfs. It seems overlooked but it's pretty good, in another thread I was telling someone about my strategy buy applying it to thier portfolio: https://www.reddit.com/r/options/comments/77bt17/ive_been_trading_stocks_for_a_year_and_am/dolydu8/?context=3 I double checked, I told him/her I would buy the DIA Jan 19 2018 call 225 for 795. 8 days later it's trading for 1085. Nearly 50% in a week. It'll never be 300% earnings returns, but I'm happy to take it slow. Shorting is a very different animal it takes a lot to get things right.",
"title": ""
},
{
"docid": "b14dd8648d5c653d81d1eed23318e43d",
"text": "This can arise with very thinly traded stocks for large blocks of shares. If the market only has a few thousand dollars available at between 8.37 and 12.5 the price is largely meaningless for people who want to invest in hundreds of thousands/millions of dollars worth, as the quoted price can't get them anywhere near the number of shares they want. How liquid is the stock in question?",
"title": ""
},
{
"docid": "955455502d9a711735c3029de66b96ca",
"text": "The intrinsic value of a company is based on their profits year on year along with their expect future growth. A company may be posting losses, but if the market determines there's any chance they will turn a profit one day, or be a takeover target, it assigns value to those shares. In normal times, you'll observe a certain P/E range. Price to earning ratio is a simple way to say the I will pay X$ for a dollar's worth of earnings. A company that's in a flat market and not growing may command a P/E of only 10. Another company that's expanding their products and increasing market share may see a 20 P/E. Both P/Es are right for the type of company involved.",
"title": ""
},
{
"docid": "2ffd01eef86a6cb41ff9c06ef701b72b",
"text": "In general, liquidity is a good thing, because it means it is easy for you to buy or sell a stock. Since high liquidity stocks have a lot of trading, the bid-ask spreads tend to be pretty low. That means you can go into the market and trade easily and cheaply at just about any time. For low liquidity stocks, the bid-ask spreads can get pretty high, so it can make it hard or expensive to get into or out of your trades. On the flip side, everyone pays attention to high liquidity stocks, so it's harder to get an edge in your trading. For a company like Microsoft there are 30-50 full time analysts that cover them, thousands of professional traders and millions of investors in general all reading the same new articles and looking through the same financials as you. But in low liquidity stocks, there probably aren't any analysts, a few professional traders and maybe a few thousand total investors, so it can be easier to find a good buy (or sell). In general, high liquidity doesn't mean that everyone is selling or everyone is buy, it just means everyone is trading.",
"title": ""
},
{
"docid": "90da7807b82f18388c78a07d60511260",
"text": "\"It's not either or. Much of the time the value of the stock has some tangible relation to the financial prospects of the company. The value of Ford and GM stock rose when they were selling a lot of cars, and collapsed when their cars became unpopular. Other companies (Enron for example) frankly 'cook the books' to make it appear they are prospering, when they are actually drowning in debt and non-performing assets. So called \"\"penny stocks\"\" have both low prices and low volumes and are susceptible to \"\"pump and dump\"\" schemes, where a manipulator buys a bunch of the stock, touts the stock to the world, pointing to the recent increase in price. They then sell out to all the new buyers, and the price collapses. If you are going to invest in the stock market it's up to you to figure out which companies are which.\"",
"title": ""
},
{
"docid": "49af1a7aa7b174792ea7e082421cc332",
"text": "\"It's been said before, but to repeat succinctly, a company's current share price is no more or less than what \"\"the market\"\" thinks that share is worth, as measured by the price at which the shares are being bought and sold. As such, a lot of things can affect that price, some of them material, others ethereal. A common reason to own stock is to share the profits of the company; by owning 1 share out of 1 million shares outstanding, you are entitled to 1/1000000 of that company's quarterly profits (if any). These are paid out as dividends. Two key measurements are based on these dividend payments; the first is \"\"earnings per share\"\", which is the company's stated quarterly profits, divided by outstanding shares, with the second being the \"\"price-earnings ratio\"\" which is the current price of the stock divided by its EPS. Your expected \"\"yield\"\" on this stock is more or less the inverse of this number; if a company has a P/E ratio of 20, then all things being equal, if you invest $100 in this stock you can expect a return of $5, or 5% (1/20). As such, changes in the expected earnings per share can cause the share price to rise or fall to maintain a P/E ratio that the pool of buyers are willing to tolerate. News that a company might miss its profit expectations, due to a decrease in consumer demand, an increase in raw materials costs, labor, financing, or any of a multitude of things that industry analysts watch, can cause the stock price to drop sharply as people look for better investments with higher yields. However, a large P/E ratio is not necessarily a bad thing, especially for a large stable company. That stability means the company is better able to weather economic problems, and thus it is a lower risk. Now, not all companies issue dividends. Apple is probably the most well-known example. The company simply retains all its earnings to reinvest in itself. This is typically the strategy of a smaller start-up; whether they're making good money or not, they typically want to keep what they make so they can keep growing, and the shareholders are usually fine with that. Why? Well, because there's more than one way to value a company, and more than one way to look at a stock. Owning one share of a stock can be seen quite literally as owning a share of that company. The share can then be valued as a fraction of the company's total assets. Sounds simple, but it isn't, because not every asset the company owns has a line in the financial statements. A company's brand name, for instance, has no tangible value, and yet it is probably the most valuable single thing Apple owns. Similarly, intellectual property doesn't have a \"\"book value\"\" on a company's balance sheet, but again, these are huge contributors to the success and profitability of a company like Apple; the company is viewed as a center of innovation, and if it were not doing any innovating, it would very quickly be seen as a middleman for some other company's ideas and products. A company can't sustain that position for long even if it's raking in the money in the meantime. Overall, the value of a company is generally a combination of these two things; by owning a portion of stock, you own a piece of the company's assets, and also claim a piece of their profits. A large company with a lot of material assets and very little debt can be highly valued based solely on the sum of its parts, even if profits are lagging. Conversely, a company more or less operating out of a storage unit can have a patent on the cure for cancer, and be shoveling money into their coffers with bulldozers.\"",
"title": ""
},
{
"docid": "158613481e53d89848c31269ff5ff721",
"text": "I don't think it makes sense to allow accounting numbers that you are not sure how to interpret as being a sell sign. If you know why the numbers are weird and you feel that the reason for it bodes ill about the future, and if you think there's a reason this has not been accounted for by the market, then you might think about selling. The stock's performance will depend on what happens in the future. Financials just document the past, and are subject to all kinds of lumpiness, seasonality, and manipulation. You might benefit from posting a link to where you got your financials. Whenever one computes something like a dividend payout ratio, one must select a time period over which to measure. If the company had a rough quarter in terms of earnings but chose not to reduce dividends because they don't expect the future to be rough, that would explain a crazy high dividend ratio. Or if they were changing their capital structure. Or one of many other potentially benign things. Accounting numbers summarize a ton of complex workings of the company and many ratios we look at could be defined in several different ways. I'm afraid that the answer to your question about how to interpret things is in the details, and we are not looking at the same details you are.",
"title": ""
},
{
"docid": "cfc6a71d87f7cc84ff75401a7965d421",
"text": "I look at the following ratios and how these ratios developed over time, for instance how did valuation come down in a recession, what was the trough multiple during the Lehman crisis in 2008, how did a recession or good economy affect profitability of the company. Valuation metrics: Enterprise value / EBIT (EBIT = operating income) Enterprise value / sales (for fast growing companies as their operating profit is expected to be realized later in time) and P/E Profitability: Operating margin, which is EBIT / sales Cashflow / sales Business model stability and news flow",
"title": ""
},
{
"docid": "c13c73a337f0b416dd0e626ae4d9b7cf",
"text": "To be fair, the analyst is talking about the book value of the firm. Basically, the value of all the stuff it owns now. There are plenty of companies with negative book value that can justify a positive share price. Ford, for instance, had negative book value but positive future earnings.",
"title": ""
},
{
"docid": "16b8b7de9304dbd8cc5d377e97780409",
"text": "\"There are two common types of P/E ratio calculations: \"\"trailing\"\" and \"\"forward\"\" (and then there are various mixes of the two). Trailing P/E ratios are calculated as [current price] / [trailing 12-month EPS]. An alternative is the Forward P/E ratio, which is based on an estimate of earnings in the coming 12 months. The estimate used is usually called \"\"consensus\"\" and, to answer your question, is the average estimate of analysts who cover the stock. Any reputable organization will disclose how they calculate their financials. For example, Reuters uses a trailing ratio (indicated by \"\"TTM\"\") on their page for BHP. So, the first reason a PE ratio might not jump on an announcement is it might be forward looking and therefore not very sensitive to the realized earnings. The second reason is that if it is a trailing ratio, some of the annual EPS change is known prior to the annual announcement. For example, on 12/31 a company might report a large drop in annual earnings, but if the bulk of that loss was reported in a previous quarterly report, then the trailing EPS would account partially for it prior to the annual announcement. In this case, I think the first reason is the culprit. The Reuters P/E of nearly 12 is a trailing ratio, so if you see 8 I'd think it must be based on a forward-looking estimate.\"",
"title": ""
}
] |
fiqa
|
356fe5efa351a742ecd4359f778ed81f
|
Are in-kind donations from my S-Corp tax-deductible in any way?
|
[
{
"docid": "c7f98dd7ed1bf4829b4c4624c3f71b51",
"text": "\"You should probably have a tax professional help you with that (generally advisable when doing corporation returns, even if its a small S corp with a single shareholder). Some of it may be deductible, depending on the tax-exemption status of the recipients. Some may be deductible as business expenses. To address Chris's comment: Generally you can deduct as a business on your 1120S anything that is necessary and ordinary for your business. Charitable deductions flow through to your personal 1040, so Colin's reference to pub 526 is the right place to look at (if it was a C-corp, it might be different). Advertisement costs is a necessary and ordinary expense for any business, but you need to look at the essence of the transaction. Did you expect the sponsorship to provide you any new clients? Did you anticipate additional exposure to the potential customers? Was the investment (80 hours of your work) similar to the costs of paid advertisement for the same audience? If so - it is probably a business expense. While you can't deduct the time on its own, you can deduct the salary you paid yourself for working on this, materials, attributed depreciation, etc. If you can't justify it as advertisement, then its a donation, and then you cannot deduct it (because you did receive something in return). It might not be allowed as a business expense, and you might be required to consider it as \"\"personal use\"\", i.e.: salary.\"",
"title": ""
},
{
"docid": "abe8b5b68a0c31cf7d1413d9103a608d",
"text": "\"The relevant IRS publication is 526, Charitable Contributions. The section titled \"\"Contributions you cannot deduct\"\" begins on page 6; item 4 reads: \"\"The value of your time or services.\"\" I read that to mean that, if the website you built were a product, you could deduct its value. I don't understand the legal distinction between goods and services I originally said that I believe that a website is considered a service. Whether a website is a service or a product appears to be much more controversial that I originally thought. I cannot find a clear answer. I'm told that the IRS has a phone number you can call for rulings on this type of question. I've never had to use it, so I don't know how helpful it is. The best I can come up with is the Instructions for Form 1120s, the table titled \"\"Principal Business Activity Codes,\"\" starting on page 39. That table suggests to me that the IRS defines things based on what type of business you are in. Everything I can find in that table that a website could plausibly fall under has the word \"\"service\"\" in its name. I don't really feel like that's a definitive answer, though. Almost as an afterthought, if you were able to deduct the value of the website, you would have to subtract off whatever the value of the advertisement is. You said that it's not much, but there's probably a simple way of estimating that.\"",
"title": ""
}
] |
[
{
"docid": "e3fbc8def7c62a89fdfaa00e3e20db01",
"text": "\"As others have mentioned, it's important that there is a fair assessment of the market value of the items being donated. Joel's point about the government not looking kindly upon overvalued donations also applies in Canada: the CRA doesn't look kindly upon donation schemes such as \"\"buy-low, donate-high arrangements.\"\" Since nobody has offered up authoritative information for Canada yet, here's something to look at: Excerpts: 3) Gifts in kind of a taxpayer include capital property, depreciable property, personal-use property ... [...] 6) The fair market value of a gift in kind as of the date of the donation (the date on which beneficial ownership is transferred from the donor to the donee) must be determined before an amount can be recorded on a receipt for tax purposes. [...] The person who determines the fair market value of the property must be competent and qualified to evaluate the particular property being transferred by way of a gift. Property of little or only nominal value to the donor will not qualify as a gift in kind. Used clothing of little value would be an example of a non-qualifying contribution. You will need to find a charity that would both value the books you would be donating and be willing to issue you a receipt for your charitable donation. Whatever receipt they issue should be in line with fair market value of the goods donated. Assume your donation receipt will be challenged, and keep both: Finally, reasonable comparables might be prices for similar used goods, not a percentage of new. Though, if you can't find a price for a particular title in the used market, an estimate consistent with other valuations in the lot would be better than nothing, perhaps.\"",
"title": ""
},
{
"docid": "441d66b4f3a0b06654ca14ea69393c53",
"text": "You better consult with a tax adviser (EA or CPA) on this, my answer doesn't constitute such an advice. Basically, you're selling stuff on Kickstarter. No matter how they call it (projects, pledges, rewards - all are just words), you're selling stuff. People give you money (=pledges) and in return you're giving them tangible or intangible goods (=rewards). All the rest is just PR. So you will pay taxes on all the money you get, and you will be able to deduct some of the expenses (depends on whether its a business or a hobby, the deduction may be full or limited). It doesn't matter if you use LLC or your own account from the financial/taxation point of you, but it matters legally. LLC limits your personal liability, but do get a legal advice on this issue, and whether it is at all relevant for you. If you raise funds in 2012 you pay taxes on the money in 2012. If you go into production in 2013 - you can deduct expenses in 2013. If you're classified as a hobby, you'll end up paying full taxes in 2012 and deducting nothing in 2013. Talk to a tax adviser.",
"title": ""
},
{
"docid": "2d0bac85c4c6e84de436bb69d1aa694e",
"text": "\"Technically, this is considered \"\"income\"\" for you, and is actually not considered a \"\"donation\"\" for your donors, but is instead a \"\"gift\"\" (not tax-deductible for your donors). So, you are technically required to report it, and there is a pretty significant audit trail that can be followed to prove you made that money. I don't know if PayPal is required to file 1099s for payments received, but if you've ever received such a document, so has the IRS, and they'll match it to the income you claimed and see a discrepancy, triggering an audit. Depending on the amount that it affects your taxes (it can be significant; if you have a $50k/yr day job, you'd owe the government 25 cents on every dollar donated), they can let it slide, they may simply dock your next return, or they may come after you for interest and penalties or even charge you with criminal tax fraud if they could prove you maliciously attempted to conceal this revenue. Now, if you already itemize using a Schedule A, then you can erase this income by deducting the costs of the server, not to exceed the amount of the donations. The best you can do is offset it; you cannot use this deduction to reduce taxable income from other sources. Also, you must itemize; you can't take your standard deduction, and with a maximum possible deduction of the actual costs of running the server ($1500, IF you receive enough donations to fully pay for it) compared to one person's standard deduction ($5800), you'll want to take the standard deduction if you don't have other significant deductions (medical expenses, mortgage interest/property taxes, etc). If you were charging users a monthly fee for use of the server, then you've basically created a de facto sole proprietorship, and you would still have to count the fees as income, but could then deduct the full cost of running the server. You'd fill out a Schedule C listing the revenue and expenses, and back them up with statements from your ISP/hosting company and from PayPal. Now, this would apply if you were running the server with the primary goal of making a regular profit; Schedule C cannot be used for income from a \"\"hobby\"\", undertaken primarily for enjoyment and where a few bucks in revenue is gravy. Whether you think you can get away with that in your current situation is your prerogative; I don't think you would, given that the donations are solicited and optional, and thus there is no expectation of ever turning a profit on this game server.\"",
"title": ""
},
{
"docid": "15427b2d873c0374357b161b8e64aa0e",
"text": "\"Nope, not deductible. It's true that some investment expenses are deductible, mainly as \"\"miscellaneous itemized expenses\"\", though only the amount that exceeds 2% of your adjusted gross income. But as explained in IRS Pub 550, which lays out the relevant rules: Stockholders' meetings. You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you have no interest other than owning stock. This is true even if your purpose in attending is to get information that would be useful in making further investments.\"",
"title": ""
},
{
"docid": "f62ac4aa1bf452b003ae5b0df6d20dd8",
"text": "Not sure how authoritative it is, but according to this site, yes: Can a corporation, partnership or other non-living entity make the contribution to an ESA? Yes. The tax law does not restrict the ability to make contributions to living individuals. Corporations and other entities may make contributions without regard for the usual donor income limit. However, the same site indicates that you can just give the child the $2K and have them contribute to their own ESA, so yes, the income limit is pretty easy to get around.",
"title": ""
},
{
"docid": "b13137b08509ded0d14669718b79b904",
"text": "It is correct, in general. Gift tax is indeed at 35%, but you have the first 14K of your gift exempt from it for each person you give to, yearly (verify the number, it changes every year). You can also use your lifetime exemption ($5.45M in 2016, subject to change each year), but at the amounts you're talking about it still will not be enough. Charitable (501(c)) organizations, paying for someone's tuition or medical expenses (directly to the providers), political donations, transfer between you and your spouse - these are all exempt from gift tax. If you have 10 millions to give, I'm sure you can afford a $200 consultation with a EA/CPA licensed in your state.",
"title": ""
},
{
"docid": "df8090240dd334ad2c157f72bb3e0944",
"text": "\"Yes, you can make the election to file your LLC as an S-Corp, and Turbo Tax Business can help you with the S-Corp business return. You need to make sure you're set up correctly and there are a lot of things to be aware of. For example, the whole \"\"reasonable salary\"\" thing is a can of worms. So while the answer to your question is \"\"yes, it's manageable, you can do it on your own,\"\" it might be worthwhile to have a professional help you the first year, make sure it's set up right, and then you can do it on your own in subsequent years.\"",
"title": ""
},
{
"docid": "fe5167bac9cafefbf51d6b2b56d5510e",
"text": "Generally this is simply a matter of the business paying taxes on the sale (income), balanced by a credit (charitable deduction), which eventually adds up to their not paying taxes on money they collected in order to pass it along to the charity. Note that because the business is taking the deduction on that donation, you can't take a deduction on the charitable portion of your purchase.",
"title": ""
},
{
"docid": "76d3a95d25ff7bb001a41cb51f5d5769",
"text": "\"Can I deduct the money that I giving to my team mates from the taxes that I pay? If yes, how should I record the transaction? Why? Why are you giving money to your team mates? That's the most important question, and any answer without taking this into account is not full. You would probably have to talk to a professional tax adviser (a CPA/EA licensed in your state) about the details, but in general - you cannot deduct money you give someone just because you feel like it. Moreover, it may be subject to an additional tax - the gift tax. PS: We don't have any partnership or something similar, it is just each of us on his own. Assuming you want to give your team mates money because you developed the project together - then you do in fact have a partnership. In order to split the income properly, you should get a tax ID for the partnership, and issue a 1065 and K-1 for each team mate. In most states, you don't need to \"\"register\"\" a partnership with the state. Mere \"\"lets do things together\"\" creates a partnership. Otherwise, if they work for you (as opposed to with you in the case above), you can treat it as your own business income, and pay your team mates (who are now your contractors/employees) accordingly. Be careful here, because the difference between contractor and employee in tax law is significant, and you may end up being on the hook for a lot of things you're not aware of. Bottom line, in certain situation you cannot deduct, in others you can - you have to discuss it with a professional. Doing these things on your own without fully understanding what each term means - is dangerous, and IRS doesn't forgive for \"\"honest mistakes\"\".\"",
"title": ""
},
{
"docid": "6b4a8a58510c0a359f5cf29ba9cb6373",
"text": "I don't do corporate tax exclusively, but I don't think you're correct. The idea of pre-tax and post-tax earnings is significantly different from corporations than individuals since individuals see their taxes come out when they earn it and corporations pay taxes quarterly. At the very least, it's certainly not equivalent to a charitable contribution.",
"title": ""
},
{
"docid": "bcfbda6f6efd84f91788beed892a5c23",
"text": "\"Donations, particularly those in the context of you providing a free service (software, libraries, etc.) are a notable grey area in tax code. Simply naming a button \"\"Donate\"\" doesn't necessarily classify the money transfer as a \"\"gift\"\". The IRS can decide that it's money you're being paid to continue your excellent work/service, making it taxable income (unless you're a registered non-profit organization). In the instance of Patreon, and many other crowd-funding services, you're providing a certain level of \"\"service\"\" for each tier of donations (such as early access or something, I'm not sure what you're offering), which means they're receiving consideration for their donations, which most likely makes it fall into taxable income (again, unless you're a registered non-profit organization). State tax law is even more convoluted, and you should consult your tax professional for clarification on your specific situation.\"",
"title": ""
},
{
"docid": "4d9bdb78150f5089baeab672332d02d2",
"text": "Federal income taxes are indeed expenses, they're just not DEDUCTIBLE expenses on your 1120. Federal Income Tax Expense is usually a subcategory under Taxes. This is one of the items that will be a book-to-tax difference on Schedule M-1. I am presuming you are talking about a C corporation, as an S corporation is not likely to be paying federal taxes itself, but would pass the liability through to the members. If you're paying your personal 1040 taxes out of an S-corporation bank account, that's an owner's draw just like paying any of your personal non-business expenses. I would encourage you to get a tax professional to prepare your corporate tax returns. It's not quite as simple as TurboTax Business makes it out to be. ;) Mariette IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law.",
"title": ""
},
{
"docid": "159ebc98bb6fd24aa4857ed919b18228",
"text": "Do I report it as income? Is it subject to just the same amount of taxes (~30%) as regular income? Are there any restrictions on how it can be used? It is income. You can deduct the costs of maintaining the web page and producing the software from it (have an accountant do that for you, there are strict rules on how to do that, and you can only deduct up to the income if its a hobby and not a for-profit business), but otherwise it's earned income like any other self employment income. It is reported on your schedule C or on line 21 of your 1040 (miscellaneous income), and you're also liable for self-employment taxes on this income. There are no restrictions, it's your money. Technically, who is the donation even being made to? Me, just because I own the webpage? Yes. This is for the United States, but is there any difference if the donations come from overseas? No, unless you paid foreign taxes on the money (in which case you should fill form 1116 and ask for credit). If you create an official 501(c) organization to which the donations are given, instead of you getting it directly, the tax treatment will be different. But of course, you have to have a real charitable organization for that. To avoid confusion - I'm not a licensed tax professional and this is not a tax advice. If in doubt - talk to a EA/CPA licensed in your State.",
"title": ""
},
{
"docid": "9f142318cefb577f98c5922214fdc2a4",
"text": "\"If this is truly hobby income (you do not intend to operate as a business and don't have a profit motive) then report the income on Line 21 (\"\"other income\"\") of form 1040. If this is a business, then the income and expenses belong on a Schedule C to form 1040. The distinction is in the treatment of profits and losses - your net profits on a business are subject to self-employment tax, while hobby income is not. Net losses on a business are deductible against other income; net losses on a hobby are miscellaneous itemized deductions in the \"\"2%\"\" box on Schedule A. From a tax point of view, selling apps and accepting donations are different. Arguably, donations are gifts; gifts are not taxable income. The hobby/business and income/gift distinctions are tricky. If the dollar amounts are small, nobody (including the IRS) really cares. If you start making or losing a lot of money, you'll want to get a good tax person lined up who can help you decide how to characterize these items of income and expens, how to put them on your return, and how to defend the return on audit if necessary.\"",
"title": ""
},
{
"docid": "8b8d28b5cc468191072149c2e1c9c59f",
"text": "Here is a quote from the IRS website on this topic: You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The insurance can also cover your child who was under age 27 at the end of 2011, even if the child was not your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. One of the following statements must be true. You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ (Form 1040), Net Profit From Business; or Schedule F (Form 1040), Profit or Loss From Farming. You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., box 14, code A. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2, Wage and Tax Statement. The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business. For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual. For partners, a policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. If you previously filed returns without using Medicare premiums to figure the deduction, you can file timely amended returns to refigure the deduction. For more information, see Form 1040X, Amended U.S. Individual Income Tax Return. Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction. Take the deduction on Form 1040, line 29.",
"title": ""
}
] |
fiqa
|
4f0c891ee5211052bfe8ea10c12cc953
|
What does the settlement date of short interest mean?
|
[
{
"docid": "e1fdcd7e54bb83602f5e55c5b27dc940",
"text": "At the bottom of the page you linked to, NASDAQ provides a link to this page on nasdaqtrader.com, which states Each FINRA member firm is required to report its “total” short interest positions in all customer and proprietary accounts in NASDAQ-listed securities twice a month. These reports are used to calculate short interest in NASDAQ stocks. FINRA member firms are required to report their short positions as of settlement on (1) the 15th of each month, or the preceding business day if the 15th is not a business day, and (2) as of settlement on the last business day of the month.* The reports must be filed by the second business day after the reporting settlement date. FINRA compiles the short interest data and provides it for publication on the 8th business day after the reporting settlement date. The dates you are seeing are the dates the member firms settled their trades. In general (also from nasdaq.com), the settlement date is The date on which payment is made to settle a trade. For stocks traded on US exchanges, settlement is currently three business days after the trade.",
"title": ""
}
] |
[
{
"docid": "f4644d808e6ad59b2b32bb273f916605",
"text": "Just adding on a touch, when market participants refer to swaps they are talking about the fixed leg. So for example, if I said a 5y Receiver, it means I am receiving fixed, paying floating. Ie I want yields to fall. Opposite for a Payer. Swaption is just an option on these swaps, so basic swaptions: Long Payer Short Payer Long Receiver Short Receiver",
"title": ""
},
{
"docid": "274e727752ce9db03711d4dd8ccc5128",
"text": "No. You shorted the stock so you are not a shareholder. If you covered your short, again you are not a shareholder as you statement of account must show. You cannot participate in the net settlement fund.",
"title": ""
},
{
"docid": "95c2adec4356b3c197307f57a31ce4a5",
"text": "Brokerage firms must settle funds promptly, but there's no explicit definition for this in U.S. federal law. See for example, this article on settling trades in three days. Wikipedia also has a good write-up on T+3. It is common practice, however. It takes approximately three days for the funds to be available to me, in my Canadian brokerage account. That said, the software itself prevents me from using funds which are not available, and I'm rather surprised yours does not. You want to be careful not to be labelled a pattern day trader, if that is not your intention. Others can better fill you in on the consequences of this. I believe it will not apply to you unless you are using a margin account. All but certainly, the terms of service that you agreed to with this brokerage will specify the conditions under which they can lock you out of your account, and when they can charge interest. If they are selling your stock at times you have not authorised (via explicit instruction or via a stop-loss order), you should file a complaint with the S.E.C. and with sufficient documentation. You will need to ensure your cancel-stop-loss order actually went through, though, and the stock was sold anyway. It could simply be that it takes a full business day to cancel such an order.",
"title": ""
},
{
"docid": "f1a0bab43fe7bd385d1f5b7263d5969a",
"text": "It's not compound interest. It is internal rate of return. If you have access to Excel look up the XIRR built-in function.",
"title": ""
},
{
"docid": "91284308cba499b85643f7b82623a40f",
"text": "Underwriting manager here. It's not a big deal. Call your processor or loan officer tomorrow to make sure it's been cleared. My guess is that the underwriter or loan officer noted the discrepancy and corrected it in their systems. You'll have to sign a updated 1003 and 4506T at closing with correct info. In other words...no biggie, no worries. Not a show stopper at all.",
"title": ""
},
{
"docid": "db92ce858b3591cf4d0933e4c1a1d624",
"text": "\"No, it means that is only the notional value of that underlying asset of that contract, generally. The contract specification itself is listed on the exchange's websites, and there are really no assumptions you can make about a particular contract. Where S&P futures have one set of specifications, such as what it actually represents, how many each contract holds, how to price profits and losses... a different contract, such as FTSE 100 stock futures have a completely different set of specifications. Anyway in this one example the s&p 500 futures contract has an \"\"initial margin\"\" of $19,250, meaning that is how much it would cost you to establish that contract. Futures generally require delivery of 1,000 units of the underlying asset. So you would take the underlying asset's price and multiple it by 1,000. (what price you use is also mentioned in the contract specification), The S&P 500 index is $1588 you mentioned, so on Jun2013 you would have to delivery $1588 x 1000, or $1,588,000. GREAT NEWS, you only have to put up 1.2% in principal to control a 1.5 million dollar asset! Although, if even that amount is too great, you can look at the E-Mini S&P futures, which require about 1/10th the capital and delivery. This answer required that a lot of different subjects be mentioned, so feel free to ask a new question about the more specific topics.\"",
"title": ""
},
{
"docid": "b6bd677c1e3ea129e086763705a7bdad",
"text": "\"The \"\"c.\"\" is probably circa, or \"\"about.\"\" Regulatory settlements is in blue because it's negative; the amount is in parentheses, which indicates a loss. WB and CB might be wholesale banking and commercial banking? BAU probably means \"\"business as usual\"\" or things that don't directly apply to the project. Incremental investment is the additional cash a company puts towards its long-term capital assets. FX is probably foreign exchange.\"",
"title": ""
},
{
"docid": "557a6cad91cdbb47585518cd2448d807",
"text": "If they short the contract, that means, in 5 months, they will owe if the price goes up (receive if the price goes down) the difference between the price they sold the future at, and the 3-month Eurodollar interbank rate, times the value of the contract, times 5. If they're long, they receive if the price goes up (owe if the price goes down), but otherwise unchanged. Cash settlement means they don't actually need to make/receive a three month loan to settle the future, if they held it to expiration - they just pay or receive the difference. This way, there's no credit risk beyond the clearinghouse. The final settlement price of an expiring three-month Eurodollar futures (GE) contract is equal to 100 minus the three-month Eurodollar interbank time deposit rate.",
"title": ""
},
{
"docid": "962ea288290efde34f5522ca7d5171a9",
"text": "Michael gave a good answer describing the transaction but I wanted to follow up on your questions about the lender. First, the lender does charge interest on the borrowed securities. The amount of interest can vary based on a number of factors, such as who is borrowing, how much are they borrowing, and what stock are they trying to borrow. Occasionally when you are trying to short a stock you will get an error that it is hard to borrow. This could be for a few reasons, such as there are already a large amount of people who have shorted your broker's shares, or your broker never acquired the shares to begin with (which usually only happens on very small stocks). In both cases the broker/lender doesnt have enough shares and may be unwilling to get more. In that way they are discriminating on what they lend. If a company is about to go bankrupt and a lender doesnt have any more shares to lend out, it is unlikely they will purchase more as they stand to lose a lot and gain very little. It might seem like lending is a risky business but think of it as occurring over decades and not months. General Motors had been around for 100 years before it went bankrupt, so any lender who had owned and been lending out GM shares for a fraction of that time likely still profited. Also this is all very simplified. JoeTaxpayer alluded to this in the comments but in actuality who is lending stock or even who owns stock is much more complicated and probably doesnt need to be explained here. I just wanted to show in this over-simplified explanation that lending is not as risky as it may first seem.",
"title": ""
},
{
"docid": "45f7684814dbac7f3eed5ce793c0413b",
"text": "The purpose of making sure you met the safe harbor was to avoid the penalty. Having achieved that goal the tax law allows you to wait until April 15th to pay the balance. So do so. Put enough money aside to make sure you can easily make that payment. I was in this exact situation a few years ago. I planned my w4 to make the safe harbor, and then slept easy even though the house settlement was in May and I didn't have to make the IRS payment unti 11 months later in April.",
"title": ""
},
{
"docid": "29c773c8f73383cc694b0fada66b967a",
"text": "\"In India the Short is what is called in other markets call as \"\"Naked Short\"\" [I think I got the right term]. It means that you can only short sell intra day and by the end of the day you have to buy back the shares [at whatever price, if you don't; the exchange will do it by force the next day]. In other markets the Intra day shorts are not allowed and one can short for several days by borrowing shares from someone else [arranged by broker] India has a futures market, so you can sell/buy something today with the execution date of one month. This is typically a fixed day of the month [I think last Thursday]\"",
"title": ""
},
{
"docid": "5f2843f0727becf25573f503842927fc",
"text": "On expiry, with the underlying share price at $46, we have : You ask : How come they substract 600-100. Why ? Because you have sold the $45 call to open you position, you must now buy it back to close your position. This will cost you $100, so you are debited for $100 and this debit is being represented as a negative (subtracted); i.e., -$100 Because you have purchased the $40 call to open your position, you must now sell it to close your position. Upon selling this option you will receive $600, so you are credited with $600 and this credit is represented as a positive (added) ; i.e., +$600. Therefore, upon settlement, closing your position will get you $600-$100 = $500. This is the first point you are questioning. (However, you should also note that this is the value of the spread at settlement and it does not include the costs of opening the spread position, which are given as $200, so you net profit is $500-$200 = $300.) You then comment : I know I am selling 45 Call that means : As a writer: I want stock price to go down or stay at strike. As a buyer: I want stock price to go up. Here, note that for every penny that the underlying share price rises above $45, the money you will pay to buy back your short $45 call option will be offset by the money you will receive by selling the long $40 call option. Your $40 call option is covering the losses on your short $45 call option. No matter how high the underlying price settles above $45, you will receive the same $500 net credit on settlement. For example, if the underlying price settles at $50, then you will receive a credit of $1000 for selling your $40 call, but you will incur a debit of $500 against for buying back your short $45 call. The net being $500 = $1000-$500. This point is made in response to your comments posted under Dr. Jones answer.",
"title": ""
},
{
"docid": "29051a1f78e6280e783af10934bd5ac1",
"text": "Purchases and sales from the same trade date will both settle on the same settlement date. They don't have to pay for their purchases until later either. Because HFT typically make many offsetting trades -- buying, selling, buying, selling, buying, selling, etc -- when the purchases and sales settle, the amount they pay for their purchases will roughly cancel with the amount they receive for their sales (the difference being their profit or loss). Margin accounts and just having extra cash around can increase their ability to have trades that do not perfectly offset. In practice, the HFT's broker will take a smaller amount of cash (e.g. $1 million) as a deposit of capital, and will then allow the HFT to trade a larger amount of stock value long or short (e.g. $10 million, for 10:1 leverage). That $1 million needs to be enough to cover the net profit/loss when the trades settle, and the broker will monitor this to ensure that deposit will be enough.",
"title": ""
},
{
"docid": "604d6e6632bbe79b43c46d666b062db5",
"text": "TL;DR: The date they were granted. (Usually, this follows both an offer and acceptance.) It's not uncommon for a new vesting clock to start when there's a new round of funding coming in, because the investors want to make sure the key people are going to be engaged and incentivized going forward from that point. They don't lower their expectations for how long they want folks engaged based on the person having started earlier. Non-institutional investors may have the same concerns as institutional investors here and use the same vesting strategy to address them. Primary recognition of the benefits from having had people start earlier or be there longer (so long as it correlates with having gotten more done) is embedded in the valuation (which affects how much founders' shares are diluted in the raise).",
"title": ""
},
{
"docid": "0309fbecb80a3a101cb7c7470f46ecb8",
"text": "\"the way they explain it is this: say you contribute 1 million each month from july 2010 to june 2011, they wait for the 12 million at the end of the year and \"\"start to invest\"\" it at the start of the next financial year (july 2011 to june 2012). so after june 2012, they'll get the profit, subtract admin costs and all, then announce the balance as interest. the interest announced applies to the whole 12 million from 2010-11. i guess the excuse here is that since they announce interest per financial year, they wouldn't have enough time to properly invest money collected towards the end months of apr, may and june, if they were to announce interest in the following july.. so they'd need another year to properly do the investing for that money collected. how else would you handle giving interest for money collected in june? i can see their point but i just feel like there's something off there.\"",
"title": ""
}
] |
fiqa
|
4ce69cfa0d808bf14db974ccee059016
|
How to explain an income discrepancy to the IRS?
|
[
{
"docid": "881acfadb43654b366bba3cfe8ab2237",
"text": "\"The IRS doesn't tax \"\"increased wealth\"\" They tax Revenue -- income. If this money or property came to you as a gift, you would owe no tax on it but the giver probably would owe gift tax. If it came to you as a loan, you would owe no tax on it but the lender would owe tax on any interest you pay (and must charge at least minimal interest, though they could give that to you as a gift and possibly not have it be taxable). But if came as payment for goods or services or investment or anything of that sort, and you aren't demonstrably tax-exempt, it is income and you are responsible for declaring it as such and paying tax on it.\"",
"title": ""
}
] |
[
{
"docid": "0dbe615376361cbe5aee13c01dac142b",
"text": "\"Hearing somewhere is a level or two worse than \"\"my friend told me.\"\" You need to do some planning to forecast your full year income and tax bill. In general, you should be filing a quarterly form and tax payment. You'll still reconcile the year with an April filing, but if you are looking to save up to pay a huge bill next year, you are looking at the potential of a penalty for under-withholding. The instructions and payment coupons are available at the IRS site. At this point I'm required to offer the following advice - If you are making enough money that this even concerns you, you should consider starting to save for the future. A Solo-401(k) or IRA, or both. Read more on these two accounts and ask separate questions, if you'd like.\"",
"title": ""
},
{
"docid": "ce4551055eb15b258cc98bf205b9691d",
"text": "\"Every year, you save your receipts, track your expenses and - when April comes around - pay your taxes. But what if you know of someone who isn't as honest as you are? Someone who skims on their income or misreports information in order to be placed in a lower bracket. The Internal Revenue Service (IRS) estimates that Americans underpay their [taxes](http://www.investopedia.com/articles/taxes/09/reporting-tax-cheats.asp) by about $345 billion every year, according to Barron's, the popular financial news website and magazine. In fiscal 2009, the IRS collected $48.9 billion in enforcement revenue. This process required the employment of thousands of revenue officers, agents and special agents. Unfortunately, this type of enforcement happens every year and often spans to multiple previous years. In the end, there is still a large amount of tax money that goes unpaid. There's definitely a gap between the tax evader and the IRS. Evaders are usually exposed due to a slip-up on their part or a tip from a bystander. If you'd like to help close that gap, you can. But why should you, and how is it done? **Why Help the IRS?** Nobody likes paying more than their fair share of taxes in order to compensate for others who intentionally evade theirs. Why shouldn't tax evaders give up a portion of their incomes to provide things that benefit the general good, like roads and sewers, when you do? Reporting a tax cheat is like reporting a shoplifter - you're just asking them to pay for something they're trying to unfairly get for free. **Gather the Evidence** The IRS is not likely to pursue someone without good reason. If the time and resources are going to be spent, the odds need to be good that the efforts will result in a payoff. Besides determining who, what, where, when and why the person evaded his or her taxes, the IRS will need specific information (type of violation, availability of books or records). Having a hunch without supporting details just isn't good enough. Also ensure that the evasion is financially significant enough. For example, stating that your neighbor failed to report a $50 babysitting earning is not going to interest the IRS. On the other hand, if you work for a large business that you suspect is underreporting its income, the IRS will likely be very interested. **Blowing the Whistle on a Tax Cheat** The IRS may pay awards in exchange for valuable information that leads to the collection of \"\"taxes, penalties, interest or other amounts from the noncompliant taxpayer,\"\" according to the agency's website. There are various types of awards granted, depending on the evader's income level and classification (business or individual). The IRS likely chooses to focus its efforts on these larger cases because they have a higher payoff. It has also been suggested that higher income individuals have been found to cheat more frequently and for higher sums of money, mostly because they tend to earn more self-reported income. **Cover Your Assets** Fabricating a complaint in order to spite an undesirable neighbor who does, in fact, pay taxes is not a good way to get revenge. When you sign off on the IRS form providing your report, you are stating, \"\"I declare under penalty of perjury that I have examined this application, my accompanying statement and supporting documentation, and aver that such application is true, correct, and complete to the best of my knowledge.\"\" You don't want to be found guilty of perjury. **Keep It Legal** Breaking into the CFO's office at work to get evidence to support your claim is not a good idea. The IRS doesn't want you to break the law to help find a tax cheat. However, if you are the bookkeeper for a company that is cheating on its taxes and part of your job involves working with documents that prove the company is cheating, that paperwork would be acceptable to submit to the IRS. While the IRS wants to maintain your privacy, if the case against the person you report ends up going to trial, you could be asked to be a witness. If you're comfortable with that possibility, go ahead and put your name on the report. **Reasons Not to Report a Cheat** If your \"\"information\"\" is really just speculation, it's probably best to keep it to yourself. As explained earlier in this article, the IRS does not have the resources to pursue your hunch. If you, yourself, are a tax cheat, it might be best to stay in the clear. There's nothing that says that people who submit claims of cheating by others will have their own tax returns examined more carefully. Still, it stands to reason that you wouldn't want to do anything to call IRS attention to yourself if you're not in compliance with its rules. If you helped plan or initiate the cheating of the person you are reporting, it might be smart to think twice. If you decide to report a crime in which you took part, be prepared for the consequences, and definitely don't expect to receive a reward. As with many government processes, there's a lot of red tape to cut through. Therefore, if you're looking for fast cash, you might want to look elsewhere. It can take several years to complete an investigation of tax evasion – and if there is no conviction, there is no award. Not only does the IRS have to determine guilt, it has to actually collect the amount owed before paying you. What's more, if the IRS determines that your tip did not \"\"substantially contributed to the Service's detection and recovery of tax,\"\" you will not receive an award. It's also important to note that, under some circumstances, like attorney-client confidentiality, you may not be able to report tax cheating. **Other Considerations** If you earn a whistle blower award, it will need to be reported when you file your taxes. If you're blowing the whistle on your employer and you're not planning to change jobs, an IRS audit could make your work situation extremely unpleasant. This isn't to say that you shouldn't report someone who is cheating, but it is something to consider. **What's Next** If you decide to report the person or business you suspect of cheating, use IRS form3949-A. This form asks for basic information on the tax evader you are reporting, the types of violations you believe to be committed, the details of the violation and how you learned about it. If you do not want to fill out this form, you can also simply write the IRS a letter. If you are providing your name and want the possibility of receiving an award, also submit IRS Form 211 which is an application for the award. **The Bottom Line** Underpayment of federal income taxes (and, subsequently, state income taxes) is a serious problem. The IRS encourages people to submit tips by allowing anonymous submissions and offering generous rewards for informants who are willing to identify themselves. If you can substantiate your claims and are willing to accept the potential consequences of squealing, reporting a tax cheat can be lucrative not only for the government, but also for you. **Take Control of Your Money** Whether you’re buying a home, consolidating debt or Planning a Yearly Budget, Investopedia has the guide to overhauling your personal spending, saving and investing. [Click here](http://www.investopedia.com/accounts/signupnewsletter/?list=pf) to start managing your money like the pros.\"",
"title": ""
},
{
"docid": "e83feba157f0c90f26f199964255ef39",
"text": "\"That $200 extra that your employer withheld may already have been sent on to the IRS. Depending on the size of the employer, withholdings from payroll taxes (plus employer's share of Social Security and Medicare taxes) might be deposited in the US Treasury within days of being withheld. So, asking the employer to reimburse you, \"\"out of petty cash\"\" so to speak, might not work at all. As JoeTaxpayer says, you could ask that $200 less be withheld as income tax from your pay for the next pay period (is your Federal income tax withholding at least $200 per pay period?), and one way of \"\"forcing\"\" the employer to withhold less is to file a new W-4 form with Human Resources/Payroll, increasing the number of exemptions to more than you are entitled to, and then filing a new W-4 changing your exemptions back to what they are right now once when you have had $200 less withheld. But be careful. Claims for more exemptions than you are entitled to can be problematic, and the IRS might come looking if you suddenly \"\"discover\"\" several extra children for whom you are entitled to claim exemptions.\"",
"title": ""
},
{
"docid": "cc19c3b889381641da182664b604fcf3",
"text": "This is a lie. He owed back taxes and his lawyers filed a petition to postpone the due date on the back taxes saying he was not liquid, was coming up on a large liquidity event, and the taxes would be paid immoderately after. So I doubt the IRS is just waiting around so he can look super rich.",
"title": ""
},
{
"docid": "3d7833f48df0b9d829546e90aeb990ef",
"text": "\"I have a related issue, since I have some income which is large enough to matter and hard to predict. Start with a best guess. Check what tax bracket you were in last year and withhold that percentage of the expected non-withheld income. Adjust upward a bit, if desired, to reflect the fact that you're getting paid more at the new job. Adjust again, either up or down, to reflect whether you were over-withheld or under-withheld last year (whether the IRS owed you a refund or you had to send a check with your return). Repeat that process next year after next tax season, when you see how well your guess worked out. (You could try pre-calculating the entire tax return based on your expected income and then divide any underpayment into per-paycheck additional withholding... but I don't think it's worth the effort.) I don't worry about trying to get this exactly correct. I don't stress about lost interest if I've over-withheld a bit, and as long as your withholding was reasonably close and you have the cash float available to send them a check for the rest when it comes due, the IRS generally doesn't grumble if your withholding was a bit low. (It would be really nice if the IRS paid us interest on over-withholding, to mirror the fact that they charge us interest if we're late in returning our forms. Oh well.) Despite all the stories, the IRS really is fairly reasonable; if you aren't deliberately trying to get away with something, the process is annoying but shouldn't be scary. The one time they mail-audited me, it was several thousand dollars in my favor; I'd forgotten to claim some investment losses, and their computers noticed the error. Though I still say the motto of the next revolution will be \"\"No taxation without proper instructions!\"\"\"",
"title": ""
},
{
"docid": "740b46fcfa2d48a21f2b88ec87547131",
"text": "The best thing you can do here is work with the IRS to the best of your ability. You can attempt to call them, attempt to go to one of their local branches in your area, or just hire an accountant to solve the problem. Just be mentally prepared to write a check. You could attempt to figure this all our yourself, but then a lot of tax law is open to interpretation. This is why I would recommend seeking the IRS's help if you DIY. Once you have addressed the issue to the satisfaction of the IRS agent, this will no longer be a problem. Provided you have a good attitude (which you express in your question) and are honest, I have found them very easy to work with. You will be a refreshing change of pace to the actual tax cheats. While I understand that you are not seeking advice on what got you your situation, I would like to offer some encouragement. Good for you for learning from, and addressing your mistakes. Doing this will serve you well in the future.",
"title": ""
},
{
"docid": "3a1b087d8f4cd8b95e057b73b76b3d8f",
"text": "I have a very hard time believing you pay 60% of gross. Otherwise, I believe you're right in the way this works: Suppose you make $100k and pay 25% of that in taxes. 100,000 * .25 = 25,000 But if you spend $1,000 pretax, then it's as if you were paid $99,000 99,000 * .25 = $24,750 So the difference is $250. Which is the same as that $1,000 * .25.",
"title": ""
},
{
"docid": "2a80ff6faa12fae41974ec90a221bfef",
"text": "Aside from the fact that probably nobody is ever going to come and ask for that proof unless your amounts get five digits (or you're unlucky), if you never before reimbursed yourself, your old tax declarations would clearly show that. You can't prove a negative, so the only potential is that you had reimbursements before, and an audit might ask you to prove that the new ones are not duplicates of those. In this case, if you have other receipts / proof for all those other reimbursements, they are obviously not duplicates.",
"title": ""
},
{
"docid": "7d94ca59c18ce40480d5dafc986e824b",
"text": "I am not an expert in mattes of amending returns, but from what I heard you are allowed to go back four or five years and amend your returns (we are talking the American IRS here, right?). If they realized all this after that much time, it seems strange. I am wondering if something was left out of the story...",
"title": ""
},
{
"docid": "b28cb9a3b4e58993ea23f5b610229cd3",
"text": "You're asking three different questions... Q1: What's to stop people not reporting income earned in this manner? A: Nothing. Absolutely nothing. The IRS doesn't have the means to keep track of your cash flow and your reported taxes on the fly. Q2: How could the IRS possibly keep track of that? A: When you get audited. If it ever did come up that things didn't balance you would end up owing back taxes, with interest and possibly fines. Q3: Moral obligations aside... why report? A: Since you've dismissed 'doing your duty as a citizen' as a moral obligation, the only other real one is that it's a pain in the butt to get audited and it is expensive if you lie and get caught.",
"title": ""
},
{
"docid": "65c68a828b7a4907e8704f5296b345ee",
"text": "If you're under audit - you should get a proper representation. I.e.: EA or CPA licensed in California and experienced with the FTB audit representation. There's a penalty on failure to file form 1099, but it is with the IRS, not the FTB. If I remember correctly, it's something like $50 or $100 per instance. Technically they can disqualify deductions claiming you paid under the table and no taxes were paid on the other side, however I doubt they'd do it in a case of simple omission of filing 1099 forms. Check with your licensed tax adviser. Keep in mind that for the IRS 2011 is now closed, since the 3-year statute of limitations has passed. For California the statute is 4 years, and you're almost at the end of it. However since you're already under audit they may ask you to agree to extend it.",
"title": ""
},
{
"docid": "b9dca32b8177f2bddd8208506c0d1b84",
"text": "You proceed with a proper legal advice. You should not ignore IRS letters. You should have taken your chances in trying to reach a compromise with them, but that ship has likely sailed already. You might want to consider bankruptcy. Ask your parents for a couple of hundreds of dollars to pay for a legal consultation with a lawyer and a CPA and proceed from there.",
"title": ""
},
{
"docid": "e7e811dc686db34ea83ccc6787d733ca",
"text": "\"The short answer is that the IRS knows this is an issue, so they are prepared to deal with the \"\"discrepancies.\"\" The filer does not need to something special to call it to their attention. Keep good records and consistently report according to your accounting processes. Exactly how the IRS resolves / flags this, I don't know. Maybe someone else can answer, but you can imagine that if they track you for multiple years they should have some idea of how many dollars are rolling over and whether you might have \"\"forgotten\"\" to report something from a few years ago that happened at a year-end break.\"",
"title": ""
},
{
"docid": "b7a8e8f10967a66de5c695b9dd44f91c",
"text": "You should probably talk to a professional tax adviser. This doesn't seem to be a common situation. From the top of my head, without being a lawyer or a tax professional, I think of it like this: The income is for year 200..., and should have been taxed then. You constructively received it then, and not claimed it. You probably had withholding from this salary that should have been reported to you then on W2 (you can get a copy from the IRS). I'd say you're to amend the return for year 200... with the new income, if it wasn't reported then. Although if more than 3 years passed (6, if its 25% or more of your gross income for that year), its beyond statute. However, as I said, I'm not a lawyer and not a professional tax adviser, so you cannot in any way rely on my opinion for anything that would result in not paying any taxes or penalties you should have. You should talk to a licensed tax professional (EA/CPA/Lawyer licensed in your State).",
"title": ""
},
{
"docid": "7af6de2300ef6bb4adbd025f53c0dfad",
"text": "\"Do you have other income that you are not considering? Interest and dividends would be an example, but there are all sorts of options. Also with your witholding is it set up such that your employers have any idea of your tax bracket ultimately based on your combined incomes? Usually what they do is take out money assuming you will be in the tax bracket of any given paycheck spread out over the course of a year. For example, for federal I had an option to select (in an online form that fills out my W4 for me) \"\"married: withold at higher single rate\"\" and did to try and cover this fact. Eventually I may end up having to calculate my own witholding to fix a too-low problem like yours.\"",
"title": ""
}
] |
fiqa
|
3ecdfec97c35849808799aaacd27556b
|
How do I look for private limited partnership investment opportunities? (Or should I?)
|
[
{
"docid": "45f75f318140ab32ba09e27eb9b885aa",
"text": "\"Investing in an existing company is almost like buying a house, or even becoming an \"\"Angel investor\"\" in a start-up. Before you start the process, decide how much you want to be involved in the day-to-day and which industries you would feel most comfortable in. The latter is an important consideration since you would have to know sufficient about the industry in order to evaluate the quality of your prospective investment. Searching for a suitable business is a time-consuming process: The guidance for evaluating any company has been answered in another question, so I'll simply link. Most business owners are looking to their businesses to provide them a pension, so they often look to sell around retirement age. Buying such a business is tricky - you may be assisting the next generation to finance the purchase which can have it's own struggles. Ideally you'll be looking for a young(ish) company with proven sales and which is looking to finance growth in an optimal way. Such a company may have many options for raising capital so you'll be competing to invest. As to whether or not it's a good idea... KFC only became a household name and global franchise after Pete Harman joined Harland Sanders as a partner. Richard and Maurice McDonald may have founded McDonald's but it was Ray Kroc who made it a success. New partners bring in new ideas and fresh energy which the original entrepreneurs may have lost during the difficulties of starting out. But that goes back to my first query; just how much do you want to get involved?\"",
"title": ""
}
] |
[
{
"docid": "7fb2ffdbc44f0f39716c4966623450b3",
"text": "\"First, you mentioned your brother-in-law has \"\"$100,000 in stock options (fully vested)\"\". Do you mean his exercise cost would be $100,000, i.e. what he'd need to pay to buy the shares? If so, then what might be the estimated value of the shares acquired? Options having vested doesn't necessarily mean they possess value, merely that they may be exercised. Or did you mean the estimated intrinsic value of those options (estimated value less exercise cost) is $100,000? Speaking from my own experience, I'd like to address just the first part of your question: Have you treated this as you would a serious investment in any other company? That is, have you or your brother-in-law reviewed the company's financial statements for the last few years? Other than hearing from people with a vested interest (quite literally!) to pump up the stock with talk around the office, how do you know the company is: BTW, as an option holder only, your brother-in-law's rights to financial information may be limited. Will the company share these details anyway? Or, if he exercised at least one option to become a bona-fide shareholder, I believe he'd have rights to request the financial statements – but company bylaws vary, and different jurisdictions say different things about what can be restricted. Beyond the financial statements, here are some more things to consider: The worst-case risk you'd need to accept is zero liquidity and complete loss: If there's no eventual buy-out or IPO, the shares may (effectively) be worthless. Even if there is a private market, willing buyers may quickly dry up if company fortunes decline. Contrast this to public stock markets, where there's usually an opportunity to witness deterioration, exit at a loss, and preserve some capital. Of course, with great risk may come great reward. Do your own due diligence and convince yourself through a rigorous analysis — not hopes & dreams — that the investment might be worth the risk.\"",
"title": ""
},
{
"docid": "2b1a8a2a609b0f853660a8786305f123",
"text": "just pick a good bond and invest all your money there (since they're fairly low risk) No. That is basically throwing away your money and why would you do that. And who told you they are low risk. That is a very wrong premise. What factors should I consider in picking a bond and how would they weigh against each other? Quite a number of them to say, assuming these aren't government bonds(US, UK etc) How safe is the institution issuing the bond. Their income, business they are in, their past performance business wise and the bonds issued by them, if any. Check for the bond ratings issued by the rating agencies. Read the prospectus and check for any specific conditions i.e. bonds are callable, bonds can be retired under certain conditions, what happens if they default and what order will you be reimbursed(senior debt take priority). Where are interest rates heading, which will decide the price you are paying for the bond. And also the yield you will derive from the bond. How do you intend to invest the income, coupon, you will derive from the bonds. What is your time horizon to invest in bonds and similarly the bond's life. I have invested in stocks previously but realized that it isn't for me Bonds are much more difficult than equities. Stick to government bonds if you can, but they don't generate much income, considering the low interest rates environment. Now that QE is over you might expect interest rates to rise, but you can only wait. Or go for bonds from stable companies i.e. GE, Walmart. And no I am not saying you buy their bonds in any imaginable way.",
"title": ""
},
{
"docid": "38209351c883c0ccdec99ec8f3586956",
"text": "\"I agree that you should CONSIDER a shares based dividend income SIPP, however unless you've done self executed trading before, enough to understand and be comfortable with it and know what you're getting into, I would strongly suggest that as you are now near retirement, you have to appreciate that as well as the usual risks associated with markets and their constituent stocks and shares going down as well as up, there is an additional risk that you will achieve sub optimal performance because you are new to the game. I took up self executed trading in 2008 (oh yes, what a great time to learn) and whilst I might have chosen a better time to get into it, and despite being quite successful over all, I have to say it's the hardest thing I've ever done! The biggest reason it'll be hard is emotionally, because this pension pot is all the money you've got to live off until you die right? So, even though you may choose safe quality stocks, when the world economy goes wrong it goes wrong, and your pension pot will still plummet, somewhat at least. Unless you \"\"beat the market\"\", something you should not expect to do if you haven't done it before, taking the rather abysmal FTSE100 as a benchmark (all quality stocks, right? LOL) from last Aprils highs to this months lows, and projecting that performance forwards to the end of March, assuming you get reasonable dividends and draw out £1000 per month, your pot could be worth £164K after one year. Where as with normal / stable / long term market performance (i.e. no horrible devaluation of the market) it could be worth £198K! Going forwards from those 2 hypothetical positions, assuming total market stability for the rest of your life and the same reasonable dividend payouts, this one year of devaluation at the start of your pensions life is enough to reduce the time your pension pot can afford to pay out £1000 per month from 36 years to 24 years. Even if every year after that devaluation is an extra 1% higher return it could still only improve to 30 years. Normally of course, any stocks and shares investment is a long term investment and long term the income should be good, but pensions usually diversify into less and less risky investments as they get close to maturity, holding a certain amount of cash and bonds as well, so in my view a SIPP with stocks and shares should be AT MOST just a part of your strategy, and if you can't watch your pension pot payout term shrink from 26 years to 24 years hold your nerve, then maybe a SIPP with stocks and shares should be a smaller part! When you're dependent on your SIPP for income a market crash could cause you to make bad decisions and lose even more income. All that said now, even with all the new taxes and loss of tax deductible costs, etc, I think your property idea might not be a bad one. It's just diversification at the end of the day, and that's rarely a bad thing. I really DON'T think you should consider it to be a magic bullet though, it's not impossible to get a 10% yield from a property, but usually you won't. I assume you've never done buy to let before, so I would encourage you to set up a spread sheet and model it carefully. If you are realistic then you should find that you have to find really REALLY exceptional properties to get that sort of return, and you won't find them all the time. When you do your spread sheet, make sure you take into account all the one off buying costs, build a ledger effectively, so that you can plot all your costs, income and on going balance, and then see what payouts your model can afford over a reasonable number of years (say 10). Take the sum of those payouts and compare them against the sum you put in to find the whole thing. You must include budget for periodic minor and less frequent larger renovations (your tenants WON'T respect your property like you would, I promise you), land lord insurance (don't omit it unless you maintain capability to access a decent reserve (at least 10-20K say, I mean it, it's happened to me, it cost me 10K once to fix up a place after the damage and negligence of a tenant, and it definitely could have been worse) but I don't really recommend you insuring yourself like this, and taking on the inherent risk), budget for plumber and electrician call out, or for appropriate schemes which include boiler maintenance, etc (basically more insurance). Also consider estate agent fees, which will be either finders fees and/or 10% management fees if you don't manage them yourself. If you manage it yourself, fine, but consider the possibility that at some point someone might have to do that for you... either temporarily or permanently. Budget for a couple of months of vacancy every couple of years is probably prudent. Don't forget you have to pay utilities and council tax when its vacant. For leaseholds don't forget ground rent. You can get a better return on investment by taking out a mortgage (because you make money out of the underlying ROI and the mortgage APR) (this is usually the only way you can approach 10% yield) but don't forget to include the cost of mortgage fees, valuation fees, legal fees, etc, every 2 years (or however long)... and repeat your model to make sure it is viable when interest rates go up a few percent.\"",
"title": ""
},
{
"docid": "d0255b03e9b26ac7886bc7db1ca7075a",
"text": "\"I agree with Joe Taxpayer that a lot of details are missing to really evaluate it as an investment... for context, I own a few investment properties including a 'small' 10+ unit apartment complex. My answer might be more than you really want/need, (it kind of turned into Real Estate Investing 101), but to be fair you're really asking 3 different questions here: your headline asks \"\"how effective are Condo/Hotel developments as investments?\"\" An answer to that is... sometimes, very. These are a way for you-the investor-to get higher rents per sq. ft. as an owner, and for the hotel to limit its risks and access additional development funding. By your description, it sounds like this particular company is taking a substantial cut of rents. I don't know this property segment specifically, but I can give you my insight for longer-term apartment rentals... the numbers are the same at heart. The other two questions you're implying are \"\"How effective is THIS condo/hotel development?\"\" and \"\"Should you buy into it?\"\" If you have the funds and the financial wherewithal to honestly consider this, then I am sure that you don't need your hand held for the investment pros/cons warnings of the last question. But let me give you some of my insight as far as the way to evaluate an investment property, and a few other questions you might ask yourself before you make the decision to buy or perhaps to invest somewhere else. The finance side of real estate can be simple, or complicated. It sounds like you have a good start evaluating it, but here's what I would do: Start with figuring out how much revenue you will actually 'see': Gross Potential Income: 365 days x Average Rent for the Room = GPI (minus) Vacancy... you'll have to figure this out... you'll actually do the math as (Vacancy Rate %) x GPI (equals) Effective Potential Income = EPI Then find out how much you will actually pocket at the end of the day as operating income: Take EPI (minus) Operating expenses ... Utilities ... Maintenace ... HOA ... Marketing if you do this yourself (minus) Management Expenses ... 40% of EPI ... any other 'fees' they may charge if you manage it yourself. ... Extra tax help? (minus) Debt Service ... Mortgage payment ... include Insurances (property, PMI, etc) == Net Operating Income (NOI) Now NOI (minus) Taxes == Net Income Net Income (add back) Depreciation (add back) sometimes Mortgage Interest == After-tax Cash Flows There are two \"\"quickie\"\" numbers real estate investors can spout off. One is the NOI, the other is the Cap Rate. In order to answer \"\"How effective is THIS development?\"\" you'll have to run the numbers yourself and decide. The NOI will be based on any assumptions you choose to make for vacancy rates, actual revenue from hotel room bookings, etc. But it will show you how much you should bring in before taxes each year. If you divide the NOI by the asking price of your unit (and then multiply by 100), you'll get the \"\"Cap Rate\"\". This is a rough estimate of the rate of return you can expect for your unit... if you buy in. If you come back and say \"\"well I found out it has a XX% cap rate\"\", we won't really be qualified to help you out. Well established mega investment properties (think shopping centers, office buildings, etc.) can be as low as 3-5 cap rates, and as high as 10-12. The more risky the property, the higher your return should be. But if it's something you like, and the chance to make a 6% return feels right, then that's your choice. Or if you have something like a 15% cap rate... that's not necessarily outstanding given the level of risk (uncertain vacancies) involved in a hotel. Some other questions you should ask yourself include: How much competition is there in the area for short-term lodging? This could drive vacancies up or down... and rents up or down as well How 'liquid' will the property (room) be as an asset? If you can just break even on operating expense, then it might still make sense as an investment if you think that it might appreciate in value AND you would be able to sell the unit to someone else. How much experience does this property management company have... (a) in general, (b) running hotels, and (c) running these kinds of condo-hotel combination projects? I would be especially interested in what exactly you're getting in return for paying them 40% of every booking. Seasonality? This will play into Joe Taxpayer's question about Vacancy Rates. Your profile says you're from TX... which hints that you probably aren't looking at a condo on ski slopes or anything, but if you're looking at something that's a spring break-esque destination, then you might still have a great run of high o during March/April/May/June, but be nearly empty during October/November/December. I hope that helps. There is plenty of room to make a more \"\"exact\"\" model of what your cash flows might look like, but that will be based on assumptions and research you're probably not making at this time.\"",
"title": ""
},
{
"docid": "27f9a983c9f3d7c33a93dfd9dbe49aef",
"text": "It depends on the firm. I was interviewing with a few PE firms a few months ago, and the structure can vary. Some were definitely just LBO shops where the bulk of the staff were focused just on the deal. I remember a couple, however, that placed a lot of emphasis on getting in-house after the deal and performing what ultimately amounted to long term management consulting. These firms tended to hold companies for like 10+ years iirc. It sounds like there might be options out there in line with your passions, you just need to be pretty picky with the firm you join. I only remember one firm's name off the top of my head, but I'd be happy to pm it to you if you want to do some more research yourself.",
"title": ""
},
{
"docid": "b721bf929645a32770ca5320a4f2b5b7",
"text": "There are a couple of ways to buy into a private company. First, the company can use equity crowd funding (approved under the JOBS act, you don't need to be an accredited investor for this). The offering can be within one state (i.e. Intrastate offerings) which don't have the same SEC regulations but will be governed by state law. Small companies (small assets, under $1 million) can be made under Regulation D, Rule 504. For assets under $5 million, there is Rule 505, which allows a limited number of non-accredited investors. Unfortunately, there aren't a lot of 504 and 505 issues. Rule 506 issues are common, and it does allow a few non-accredited investors (I think 35), but non-accredited investors have to be given lots of disclosure, so often companies use a Rule 506 issue but only for accredited investors.",
"title": ""
},
{
"docid": "0b4d041501b889e30080b61b2a31216c",
"text": "You could certainly look at the holdings of index funds and choose index funds that meet your qualifications. Funds allow you to see their holdings, and in most cases you can tell from the description whether certain companies would qualify for their fund or not based on that description - particularly if you have a small set of companies that would be problems. You could also pick a fund category that is industry-specific. I invest in part in a Healthcare-focused fund, for example. Pick a few industries that are relatively diverse from each other in terms of topics, but are still specific in terms of industry - a healthcare fund, a commodities fund, an REIT fund. Then you could be confident that they weren't investing in defense contractors or big banks or whatever you object to. However, if you don't feel like you know enough to filter on your own, and want the diversity from non-industry-specific funds, your best option is likely a 'socially screened' fund like VFTSX is likely your best option; given there are many similar funds in that area, you might simply pick the one that is most similar to you in philosophy.",
"title": ""
},
{
"docid": "f4e52de00689799d0a38c9951bef61de",
"text": "You can find out the general types of investments by reading the public corporation 10-Q report that is filed with the SEC it can be accessed via the EDGAR system. It will not tell you what securities they have, but it does identify the short term and long term investments categories and their value.",
"title": ""
},
{
"docid": "e0011d1c9d452a858e46b0056fe52fcd",
"text": "I mean some VCs focus on technology companies, that's a sector focus, but a very broad one. Are you saying you don't want to be limited to one sector? Also keep in mind that series B investments are much more expensive then A rounds, just because there is more proof and less risk. I know of some angel investors that invest by size rather than industry, maybe you could partner up with them. All depends on how much capital you have/ how much involvement you want to have with the company.",
"title": ""
},
{
"docid": "d356e065a65de9c35e9d108e23d322f2",
"text": "2 + 20 isn't really a investment style, more of a management style. As CTA I don't have specific experience in the Hedge Fund industry but they are similar. For tech stuff, you may want to check out Interactive Brokers. As for legal stuff, with a CTA you need to have power of attorney form, disclosure documents, risk documents, fees, performance, etc. You basically want to cover your butt and make sure clients understand everything. For regulatory compliance and rules, you would have to consult your apporiate regulatory body. For a CTA its the NFA/CFTC. You should look at getting licensed to provide crediabilty. For a CTA it would be the series 3 license at the very least and I can provide you with a resource for study guides and practice test taking for ALL licenses. I can provide a brief step by step guide later on.",
"title": ""
},
{
"docid": "22d57b67ca815daf49301d978bbff5b9",
"text": "\"You may want to look into robo-investors like Wealthfront and Betterment. There are many others, just search for \"\"robo investor\"\".\"",
"title": ""
},
{
"docid": "f4169e685a12d264278d31530c50068e",
"text": "Here is a nice overview from Vanguard on some options for a small business owner to offer retirement accounts. https://investor.vanguard.com/what-we-offer/small-business/compare-plans I would look over the chart and decide which avenue is best for you and then call around to investment companies (Vanguard, Fidelity, etc. etc.) asking for pricing information.",
"title": ""
},
{
"docid": "84684ca8001220b80db21a461e7b2e21",
"text": "You won't be able to know the trading activity in a timely, actionable method in most cases. The exception is if the investor (individual, fund, holding company, non-profit foundation, etc) is a large shareholder of a specific company and therefore required to file their intentions to buy or sell with the SEC. The threshold for this is usually if they own 5% or greater of the outstanding shares. You can, however, get a sense of the holdings for some of the entities you mention with some sleuthing. Publicly-Traded Holding Companies Since you mention Warren Buffett, Berkshire Hathaway is an example of this. Publicly traded companies (that are traded on a US-based exchange) have to file numerous reports with the SEC. Of these, you should review their Annual Report and monitor all filings on the SEC's website. Here's the link to the Berkshire Hathaway profile. Private Foundations Harvard and Yale have private, non-profit foundations. The first place to look would be at the Form 990 filings each is required to file with the IRS. Two sources for these filings are GuideStar.org and the FoundationCenter.org. Keep in mind that if the private foundation is a large enough shareholder in a specific company, they, too, will be required to file their intentions to buy or sell shares in that company. Private Individuals Unless the individual publicly releases their current holdings, the only insight you may get is what they say publicly or have to disclose — again, if they are a major shareholder.",
"title": ""
},
{
"docid": "35ed04b2dace3b1397574bc03dc60917",
"text": "\"As for the letting the \"\"wise\"\" people only make the decisions, I guess that would be a bit odd in the long run. Especially when you get more experienced or when you don't agree with their decision. What you could do, is make an agreement that always 3/4 (+/-) of the partners must agree with an investment. This promotes your involvement in the investments and it will also make the debate about where to invest more alive, fun and educational). As for the taxes I can't give you any good advice as I don't know how tax / business stuff works in the US. Here in The Netherlands we have several business forms that each have their own tax savings. The savings mostly depend on the amount of money that is involved. Some forms are better for small earnings (80k or less), other forms only get interesting with large amounts of money (100k or more). Apart from the tax savings, there could also be some legal / technical reasons to choose a specific form. Again, I don't know the situation in your country, so maybe some other folks can help. A final tip if your also doing this for fun, try to use this investment company to learn from. This might come in handy later.\"",
"title": ""
},
{
"docid": "b1e05f0c1f8a91df35f4a20898dda67e",
"text": "Shorts are difficult because you have to find someone to lend the stock to you. In contrast, put options don't require that. They also have some nice properties like you're only out the contract price. The options chain for BSFT will give you an idea of where the market is. Keep in mind that BSFT only IPO'd last year and announced blowout earnings recently. Make sure the P:E you're looking at is using recent earnings reports!",
"title": ""
}
] |
fiqa
|
0eda6ad84218ed45e1a054efe1a881ba
|
If earning as freelancer, is it better to be a Sole Trader or Limited Company?
|
[
{
"docid": "3ac188863937de2106c8c20b17e1bbb7",
"text": "As I understand it (please correct me if i'm wrong, i've looked at this before and i've been a sole trader briefly but I've never formed a LTD company) there are pros and cons to forming a limited company. Pros Cons",
"title": ""
},
{
"docid": "2a8096fb4a4696fa026ea16948b8af0f",
"text": "Source Sole trader If you start working for yourself, you’re classed as a self-employed sole trader - even if you’ve not yet told HM Revenue and Customs (HMRC). As a sole trader, you run your own business as an individual. You can keep all your business’s profits after you’ve paid tax on them. You can employ staff. ‘Sole trader’ means you’re responsible for the business, not that you have to work alone.You’re personally responsible for any losses your business makes. Tax responsibilities You must: You’re personally responsible for any losses your business makes. This is one condition which you would need to have a look. If you do some shoddy work and your client wants to recover the losses they can come after your personal money or property. LLPs have the same probelm too. And you pay NI and income tax on all of your profits. If you have a partner then both can take out the profits of a limited company, if both are directors. The tax hit will be less as compared to a single person.",
"title": ""
}
] |
[
{
"docid": "6f502d2bdee21a91a60a914580f1d61e",
"text": "You can find a lot of information at the HRMC website at http://hmrc.gov.uk. If you don't want to work as an employee, you can register as self-employed (basically a one-man band), which is quite simple, you can start your own company, which is more work but can have tax advantages, or you can find umbrella companies which will officially employ you while in reality you are a freelancer and only do your billing through them. Umbrella companies can be anywhere from totally legal to extremely dodgy. If they promise you that you pay only five percent tax on your income through ingenious tricks, that's only until the tax office finds out and they will make you pay. Between self-employed and your own company, the big difference is whether you are actually working independently or not. If you work like an employee (take someone else's orders) and claim you are a company, the tax office doesn't like that. And if you pay very little taxes, they don't like that either. So self-employed is the safer choice but you will pay more taxes, close to what a normal employee would pay. Obviously you will have to pay tax on your income and NHS insurance. Obviously you are required to tell the government (actually HMRC) about your income. Not doing so would be tax evasion and get you into deep trouble when you are caught. I don't think you have to tell them the source of your income, but not telling them might look very suspicious and might get your accounts checked carefully. And unless you design a website for the mafia, why wouldn't you tell them? The bill payer will try to deduct your bill from their profits anyway, so it's no secret. Most important to remember: When you send out a bill and receive payment, you'll have to pay tax on it. When self employed, as a rule of thumb put one third away into a savings account for your tax bill. Don't spend it all or you will find yourself in deep trouble when your taxes need paying. Plus put some more away for times when you can't find work.",
"title": ""
},
{
"docid": "f377bf8b7f5ca4193644635caed01974",
"text": "Firstly if you've formed a limited company you don't need to register as self-employed. You're an employee and shareholder of the company and your taxes will be handled that way. Registering as self-employed is only necessary if you're operating as a sole trader (i.e. without a company). Secondly you absolutely do want to get set-up correctly with HMRC as soon as possible, whether you're a company or a sole trader. Ignoring the legal question your worry about paying taxes when you have no income is groundless - if you're not making any money there won't be any tax to pay. Furthermore it seems likely that the business is currently losing money. Those losses, if correctly recorded, can be carried forward and offset against future profits so not only do you not have to pay tax now, but you can reduce the tax you pay later when the money does start rolling in.",
"title": ""
},
{
"docid": "59c7fd30c8303ec146bf06020749ffcb",
"text": "The major reason to start an LLC for side work is if you want the additional personal liability protection afforded by one. If you're operating as a sole proprietor, you may be exposing yourself to liability: debts and judgments against your business can put your personal assets at risk! So, if you're intending to continue and grow your side work in the future, you ought to consider the LLC sooner than later. It's also an important legal decision and you should consider seeking a professional opinion. The Wall Street Journal has a brief guide titled How to Form an LLC. Here are some notable excerpts: A limited liability company, or LLC, is similar to a partnership but has the legal protections of personal assets that a corporation offers without the burdensome formalities, paperwork and fees. [...] Some states charge annual fees and taxes that can diminish the economic advantage of choosing to become an LLC. Among LLC advantages: pass-through taxation – meaning the profits and losses “pass through” the business to the individuals owning the business who report this information on their own personal tax returns. The result can be paying less in taxes, since profits are not taxed at both the business level and the personal level. Another plus: Owners aren’t usually responsible for the company’s debts and liabilities. [...] Also check out onstartups.com's Startup 101: Should You Form An Inc. or An LLC? Here are some additional articles that discuss the advantages / disadvantages of forming an LLC:",
"title": ""
},
{
"docid": "14473f2ac55ef0a59cf823be7856e1de",
"text": "You will need to register as self-employed aka sole trader (that's the whole point: pay taxes on income that you're not getting as wages from an employer, who would arrange PAYE/NI contributions), or set up a limited company (in the last case you would have the option of either getting paid as wages or as dividends — which one is better is a complex issue which varies from year to year). You'll find lots of advice on the HMRC website.",
"title": ""
},
{
"docid": "fcea0195c525dd15d0979228c8159f02",
"text": "Use a limited company. Use the HMRC website for help on limited companies and get a good accountant for doing your taxes. Mixing your website income and personal income may make you pay a higher tax rate. You can take out expenses from the limited company, which are tax deductible. But if you group it in personal income it wouldn't be tax deductible. In a personal capacity you are 100% liable if your business goes bust and you owe debt. But for a limited company you are only liable for what you own i.e %age of shares. You can take on an investor if your business booms and it is easier if you do it through a limited company rather than through a personal endeavour.",
"title": ""
},
{
"docid": "fcaf54599e1643faabf88cf789396fb3",
"text": "I guess you are making quite a bit of assumptions without clarifying what you are trying to achieve. As a non-resident you cannot incorporate a sole proprietorship in Singapore. You have to be citizen. Alternatively you can register a company that has its own norms like minimum number of directors and some being Singapore national, etc. As you are paying dividend and not salary to yourself, the company will be required to pay taxes on gains. So all consulting money is gain as there is no expense. The balance when you transfer to Spain would potentially get taxed as income to you subject to DTAA",
"title": ""
},
{
"docid": "2b20f947365127fa9960e94eccba69e3",
"text": "\"In simple terms, it is a business operation when it becomes a profit-making enterprise. It is a grey area, but there is a difference between selling occasional personal items on eBay and selling for profit. I would imagine the sort of considerations HM Revenue & Customs would take into account are the size of your turnover, the extent to which you are both buying and selling, and whether you are clearly specialising in one particular commodity as opposed of disposing of unwanted presents or clearing the loft. http://www.ebay.co.uk/gds/When-does-eBay-selling-become-taxable-/10000000004494855/g.html I don't believe that you selling your personal camera gear will be taxable, but as the link says, it is a grey area. They also recommend to do this It's far better than having to deal with an investigation a few years down the line. When it comes to completing your tax return, there is a section which is headed \"\"other income\"\", and it is here where you will enter the net earnings from the web business. \"\"Net\"\" here means your additional income, less all expenses associated with it. If you are still worried I would always encourage people to take a cautious approach and discuss their position with HMRC via its helpline on 08454 915 4515.\"",
"title": ""
},
{
"docid": "83f92b50ccebdd89ecdfa9794d4be2f5",
"text": "I'm hearing that I should maybe wait and see how things go at first as it is only a very small operation. But if I moved into a side of the trade where I require staff, vehicles, and the likes then I would need to registed as a limited company.",
"title": ""
},
{
"docid": "29bee6cf3c5e3539af8867ea50a27cef",
"text": "It is a bit of work and expense to form a LLC. In the long run it is the best approach because it shields your personal assets from business liability. In the short run, you can form as a sole proprietor and operate that way, and later convert to a LLC.",
"title": ""
},
{
"docid": "0e48693bde300c48d90869879df069e1",
"text": "\"I don't think it really matters, my understanding is that as a sole trader there is no distinction between your personal and business tax affairs. The distinction between your personal and business account is mainly for your own personal benefit to make it easier to differentiate between \"\"wages\"\" and retained earnings. If you want to maintain this distinction with regard to tax then you need to somehow differentiate between tax paid on your \"\"wage\"\" and tax paid on retained earnings. You could then either make two payments, or pay from either and transfer the difference from the other. Either way, it's just a matter of perspective rather than something with a physical difference.\"",
"title": ""
},
{
"docid": "235931fe0d75e0b8eb16414243603e3a",
"text": "\"Here's a brief rundown: 1. You're not going to need a lot of capital or debt 2. You aren't in a high-liability or high (MM+) revenue industry unless you're making children's toys out of reclaimed dynamite or something 3. You are operating by yourself The first fact rules out S or C corp. The second fact dings LLC, and the third one rules out a LLP or GP by default, although you can always convert later if you get a partner. Benefits of sole proprietorship include very simple taxes! As a pass-through entity, the business's income is considered your own, and business expenses are tax deductible. You don't need separate tax returns for both. Additionally, if it's just your name, you might not even need a license depending on your state and municipality (figure this out). If you want a different name, you usually need to register \"\"doing business as [name]\"\" with your state or municipality. Lastly, you don't need to use business income in any special way, since you have no additional tax liability or general liability shield. With an LLC, there are a lot of rules and restrictions. Let me know if you have any specific questions.\"",
"title": ""
},
{
"docid": "e4d9f1267819d3b2b983b80baa1d1671",
"text": "You will be categorized as self employed. Will I have to register myself as a company or can go on unregistered and work You can register a company or can use an umbrella company or work as a sole trader. Remember as a sole trader you are legally responsible for you company's activities, an if a company sues you for your work he can take compensation from your personal assets. As a company your liability ends with the company, if your company is sued. Your personal assets are outside the purview of the lawsuit, but the court can attach that also but those are rare. This doesn't matter if you use an umbrella company. If you intend to be doing this for a short time(maybe a year or so), go for an umbrella company. Else register a company. will take you 5 minutes to form one. Depending on your earning you might need to register for VAT too. A comprehensive guide for self employed on HMRC. what would i need to be sound in uk and to be fit to work online as a freelancer? The same as above. Will it include paying any tax or paying any insurance Yes you have register for National Insurance(NI), before you can pay yourself a salary. The benefit of a company is you pay yourself a minimum salary, below the limit above which you have to contribute for NI, and take the rest as dividends. And pay no tax on it, till you don't exceed the limits. When the money comes in my account, will i be accountable to government of uk, to tell the source of income? If you are operating through a company, yes you would need to show your income(including source) and expenditure when you do your annual returns. What should i be knowing, like health insurance and things that are necessities in uk for a freelancer ? No health insurance as NHS exists. You can take out health insurance if you don't want to get into queues in NHS.",
"title": ""
},
{
"docid": "ceefd9186fbe63a649c1b841cd61d71d",
"text": "It makes no difference for tax purposes. If you are 1099, you will pay the same amount of taxes as if you formed a corporation and then paid yourself (essentially you are doing this as a 1099 contractor, just not formally). Legally, I don't know the answer. I would assume you have some legal protections by forming an LLC but practically I think this won't make any difference if you get sued.",
"title": ""
},
{
"docid": "a279ca195fb059cdc40775cca8a0e5d3",
"text": "As an LLC you are required to have a separate bank account (so you can't have one account and mix personal and business finances together as you could if you were a sole trader) - but there's no requirement for it to be a business bank account. However, the terms and conditions of most high street bank personal current accounts specifically exclude business banking, so unless you could find one that would allow it, you'd have to open a business bank account.",
"title": ""
},
{
"docid": "3dc6474959e9d1c1a8874382d455188c",
"text": "From my experience it is much easier to start as a self-employed rather than a limited company. You almost have no paperwork and self assessment can be done online in as little as 20 minutes (from personal experience). On the other hand having a limited company grants you a pile of papers to fill in from the start and almost certainly needing an accountant to do your taxes. Regarding the income tax - if you have no profits, you will pay no tax. And that will leave you only with national insurance that is only about £70 for 3 month (better check with HMRC for the exact figure). So if you don't have a good enough reason to do a Ltd, start as a self-employed, you can always change to limited company later.",
"title": ""
}
] |
fiqa
|
5dafb9f9b39f2d55b1369fa6777da4d8
|
Can I register for VAT to claim back VAT without selling VAT applicable goods? (UK)
|
[
{
"docid": "390033140caf6afd5b6091dd66fc7e81",
"text": "\"As far as I know any business can register for VAT regardless of the nature of the business. If all the goods you sell (or services you provide) are VAT-exempt or zero-rated then you will get refunds from HMRC on VAT your business pays. Any business whose non-VAT exempt turnover (which would include zero-rated goods and services provided) exceeds the registration threshold must register, again even if that means they are \"\"forced\"\" to claim refunds. So the only question would be whether your rather nebulous activities were enough to qualify you as a business or organisation to which the VAT regime applies at all. The one-liner answer to that is generally, if goods or services are provided in return for a charge, there’s a business activity for VAT purposes Inevitably there's a much bigger body of statute and case law and it won't always be obvious whether the one-liner answer applies or not to a particular activity so it may be necessary to seek specialist advice.\"",
"title": ""
},
{
"docid": "21d4e1e1342a71f70549aee9c0eb3e5b",
"text": "IANAL, I have not been VAT registered myself but this is what I have picked up from various sources. You might want to confirm things with your solicitor or accountant. As I understand it there is a critical difference between supplying zero-rated goods/services and supplying exempt goods/services. If the goods/services are zero-rated then the normal VAT rules apply, you charge VAT on your outputs (at a rate of 0%) and can claim back VAT on your inputs (at whatever rate it was charged at, depending on the type of goods.. If the goods/services are exempt you don't charge and VAT on your outputs and can't claim back any VAT on your inputs. (Things get complicated if you have a mixture of exempt and non-exempt outputs) According to http://oko.uk/blog/adsense-vat-explained adsense income is a buisness to buisness transaction with a company in another EU country and so from a supplier point of view (you are the supplier, google is the customer) it counts as a zero-rated transaction.",
"title": ""
},
{
"docid": "a254f084d7f18a44be22b255ec156e46",
"text": "\"You cannot \"\"claim back\"\" VAT. What happens is that if you sell goods with VAT and charge customers VAT, you would have to send that VAT straight to HMRC, but if your business itself paid VAT, then you already paid VAT, so you have to send less. As an example, if you send an invoice for £10,000 plus £2,000 VAT, and you paid yourself £500 VAT on business related expenses, then you need to send £2,000 - £500 = £1,500 to HMRC. But if you don't send invoices including VAT, then you owe HMRC £0. Any VAT you paid on business related expenses is lost; HMRC won't pay you money. BTW. Only VAT on business related expenses can be deducted. So if you want to be \"\"smart\"\", register for VAT and get the VAT on your weekly shopping bill refunded, forget it.\"",
"title": ""
}
] |
[
{
"docid": "f6596d074e54060305ee4274ca92893b",
"text": "\"Going by the information from Goods and Services Tax (GST) on the Australian Government website, there seem to be a number of possibilities. Note: First I am neither a tax expert nor a lawyer; this is simply my interpretation of the rules on the page linked above. Second, this interpretation is based on the assumption that \"\"resells a service\"\" means you (at least technically) buy the service from another company and sell it on to the users of your app. Depending on the nature of the service, and possibly factors such as whether you are deemed to \"\"take possession\"\" during the transaction, it might be that different rules apply. Your Turnover is Under A$75,000 (Providing you're not reselling taxi services!) You won't need to register for GST, should not charge it, and your invoices should show that GST was not included in the price. However, if the turnover of the company whose services you are reselling is registered for GST, they will be charging you GST that you will not be able to claim back, so you would need to factor this into the price you charge your users (before any promotional discount). For example: Your Turnover is Over A$75,000 If your turnover is above the limit, you would need to charge GST on the final sale amount and pay this amount (one eleventh of the price your customer paid) to the Australian Government. You also have to send out properly-formatted tax invoices. However, it's probably safe to say the company you are buying the original service from will also be over the GST threshold, so you should be able to reclaim the GST that was charged to you by them. For example: Here, your overall profit/loss is helped by the fact that you can reclaim the GST you were charged, and can under some circumstances result in an overall rebate. These figures assume you add 10% to your selling price to cover the GST you have to pay the Government. However, this may make your offering uncompetitive, so you may have to absorb some/all of the GST yourself.\"",
"title": ""
},
{
"docid": "72b1e6985173d4f438917c27830348c5",
"text": "Not doing this would defeat the entire purpose of a VAT. The reason for a VAT rather than a simple sales tax is that it's harder to evade. Having a simple sales tax with the type of rates that VAT taxes typically are is unworkable because evasion is too easy. Imagine I'm a retailer. I buy products from a wholesaler and sell them to consumers. With a sales tax, if I don't charge the customer sales tax, the customer is happy and I don't care (assuming I don't get caught). And if I keep the sales tax but don't report the sale, I make a lot of money. Now, imagine a VAT. If I don't charge the customer the VAT, I lose money since I paid the VAT on the wholesale products. And if I don't report the sale, how do I claim my VAT refund?",
"title": ""
},
{
"docid": "7384ba26029dc697a612316e7d27c1e7",
"text": "You are either VAT registered or you are not VAT registered. If you are not VAT registered, then you are not allowed to charge customers VAT, and you cannot reclaim VAT that you are paying. You are however allowed to deduct the cost of goods including VAT from your expenses. So if you buy a computer for £1000 + £200 VAT, and you can deduct the computer as an expense to reduce your profits that you pay income tax for, then the expense is £1,200 and not just £1,000. If you are VAT registered, then you MUST charge every customer 20% VAT. Business customers don't mind at all, but private customers will be happier if you don't charge VAT because your bills will be a lot lower. You take all the VAT that you received, then subtract all the VAT that you paid for business expenses and that you have invoices for, and send the remainder to HMRC four times a year. (The reason that businesses don't mind paying VAT is because they can in turn deduct the VAT they pay you from the VAT that they received and for every pound they give you, they give one pound less to HMRC). Note that when you have expenses that are deductible from your profits, you can now only deduct the cost excluding VAT. On the other hand, the VAT you receive doesn't count as income and doesn't lead to profits that you need to pay income tax for. It's your decision whether you want to be VAT registered or not, unless your revenue exceeds some limit (somewhere between £70,000 and £80,000 per year) where you must register for VAT.",
"title": ""
},
{
"docid": "9757bb5c63f8eaefdd7cb9c62f6da0b4",
"text": "\"The HMRC has a dedicated self-help/learning site that is helpful here: It's important to tell HMRC that you are self-employed as soon as possible. If you don't, you may have to pay a penalty. You don't want to pay more to HMRC than you have to as it is a waste of your money. Your business has started when you start to advertise or you have a customer to buy your goods or services. It is at this point that your business is 'trading'. You cannot register before you start trading. For example, if you advertise your business in the local newspaper on 15 January but do not get your first customer until 29 March; in this case, you have been trading since 15 January. You must tell HMRC within six months of the end of the tax year in which you start self-employment. You must therefore register by 5 October. But it's best to register well before this so that you do not forget to do so. The HMRC also has a YouTube channel with help videos, and \"\"Am I Trading or Not?\"\" might be of particular interest to you. Most of the registration is based around the concept of starting to work with the intent to make a profit. By the letter of law and regulations, you should register within six months of the end of the tax year you started to avoid any potential penalty. However note that the situation is different based upon your intent. If you begin making/putting up videos online as a hobby with the hope that you can make something to help you defray the basic costs involved, and the total amount you make is relatively small (say, less than 500 pounds), you will not be classified as \"\"trading\"\" and likely have no need to register with HMRC. As soon as you begin to get in regular payments, maybe a single payment of a significant size, or multiple payments for a similar service/item, you are vastly more likely to need to register. From my reading you would likely be safe to begin putting up videos without registration, but if you begin spending a large portion of your time over an extended period (multiple months) and/or begin getting payments of any notable size then you should likely register with the appropriate services (HMRC, etc). As is the case in both the USA and UK, simple registration is pretty cheap and the costs of little/no income are usually pretty minor. Also note that the HMRC trading and self-employment regulations are unusual compared to many US laws/institutions, in that you are explicitly permitted to begin doing something and only register later. So if you start doing videos for an entire tax year + 5 months and make nothing significant, you'd seemingly be fine to never register at all.\"",
"title": ""
},
{
"docid": "7a0f5ae5d21bde5bfb381e841ac88197",
"text": "Most US states have rules that go something like this: You will almost certainly have to pay some registration fees, as noted above. Depending on how you organize, you may or may not need to file a separate tax return for the business. (If you're sole proprietor for tax purposes, then you file on Schedule C on your personal Form 1040.) Whether or not you pay taxes depends on whether you have net income. It's possible that some losses might also be deductible. (Note that you may have to file a return even if you don't have net income - Filing and needing to pay are not the same since your return may indicate no tax due.) In addition, at the state level, you may have to pay additional fees or taxes beyond income tax depending on what you sell and how you sell it. (Sales tax, for example, might come into play as might franchise taxes.) You'll need to check your own state law for that. As always, it could be wise to get professional tax and accounting advice that's tailored to your situation and your state. This is just an outline of some things that you'll need to consider.",
"title": ""
},
{
"docid": "3af1d7a148fad877b7f7b63019357b09",
"text": "The plumber will apply for and receive a refund of the amount of VAT he paid on the purchase amount. That's the cornerstone of how VAT works, as opposed to a sales tax. So for example: (Rounded approximate amounts for simplicity) Now, at each point, the amount between (original cost VAT) and (new VAT) is refunded. So by the end, a total of £3 VAT is paid on the pipe (not £6.2); and at each point the business 'adding value' at that stage pays that much. The material company adds £1 value; the producer adds £4 value; the supplier adds £5 value; the plumber adds £5 value. Each pays some amount of VAT on that amount, typically 20% unless it's zero/reduced rated. So the pipe supplier pays £1 but gets a £0.2 refund, so truly pays £0.8. The plumber pays £3 (from your payment) but gets a £2 refund. So at each level somebody paid a bit, and then that bit is then refunded to the next person up the ladder, with the final person in the chain paying the full amount. The £0.2 is refunded to the producer, the £1 is refunded to the supplier, the £2 is refunded to the plumber.",
"title": ""
},
{
"docid": "8c2160b3fe80479769675a4fc398c663",
"text": "If you are providing VAT-liable services (you probablly are) and you register normally for VAT then you will be able to reclaim VAT on your buisness purchases but you will have to charge VAT to your clients. So the question really comes down to will your clients regard you adding VAT to their invoices as a price increase or not. That is likely to depend on whether your clients are in a position to claim-back the VAT you charged them. If you are working mostly for VAT registered buisnesses who perform primerally vat-liable (including zero-rated) activities then registering for VAT is likely in your financial interests (though it does mean more paperwork). The flat-rate scheme may be better still. If you are working mostly for private individuals, non VAT registered buisnesses or buisnesses which primerally perform VAT exempt* activities then registering for VAT when you don't have to is most likely not in your financial interests. * Note: VAT exempt and zero rated for VAT are very different things even though they look similar to the customer.",
"title": ""
},
{
"docid": "d294dd6438dfaa3a54557e2c33f1d5ae",
"text": "You don't have to register for corporation tax until you start doing business: After you’ve registered your company with Companies House, you’ll need to register it for Corporation Tax. You’ll need to do this within 3 months of starting to do business. Since you haven't needed to do that yet, there also shouldn't be any need to tell HMRC you've stopped trading. So it should just be a question of telling Companies House - I guess it's possible they'll first want you to provide the missing accounts.",
"title": ""
},
{
"docid": "eee3787af4484907157a31db91c64902",
"text": "You need to register as self-employed with HMRC (it is perfectly fine to be self-employed and employed by an employer at the same time, in exactly your kind of situation). Then, when the income arrives you will need to declare it on your yearly tax return. HMRC information about registering for self-employment and declaring the income is here: https://www.gov.uk/working-for-yourself/overview There's a few extra hoops if your clients are outside the UK; the detail depends on whether they are in the EU or not. More details about this are here: https://www.gov.uk/online-and-distance-selling-for-businesses/selling-overseas .",
"title": ""
},
{
"docid": "8332285867ed963bb8650fb213379aca",
"text": "Source on GOV.UK You may be able to get tax back for some of the bills you have to pay because you have to work at home on a regular basis. You can only claim for things to do with your work, eg business telephone calls or the extra cost of gas and electricity for your work area. You can’t claim for things that you use for both private and business use, eg rent or broadband access. You don’t need to provide records for claims of up to £4 per week (£18 per month). For claims over £4 per week you’ll need to provide evidence of what you’ve spent. Claims up to £2,500 You must claim using a Self Assessment tax return if you already fill one in. If you don’t already fill in a Self Assessment tax return, and your allowable expenses are under £2,500 for the tax year, fill in form P87 and send it to the address on the form. If you’ve made a successful claim in a previous tax year and your expenses are less than £1,000 (or £2,500 for professional fees and subscriptions), you may be able to make your claim by phone. Claims over £2,500 You must claim using a Self Assessment tax return.",
"title": ""
},
{
"docid": "f0e35b50511df8a0a78fcdf833adddd5",
"text": "Compliance issues vary from country to country and, in the US, state to state as well. There'll be a number of levels, though: Bear in mind that it is not that these taxes and responsibilities don't apply to sole traders or unregistered businesses, it's just that being registered signals your existence and introduces the bureaucracy to you all at once. Update: Your accountant should manage your company and consumer tax calculations and submissions on your behalf (and a good one will complete all the paperwork on time plus let you know well in advance what your liability is, as well as offer advice on reducing and restructuring these liabilities). You're probably on your own for local taxes unless your accountant deals with these and is local to even know what they are.",
"title": ""
},
{
"docid": "ba9c7a098b91c3adfcde14646cd9d9e2",
"text": "Is the VAT scam still on the go? I was under the impression that amazon have to pay vat according to the country the items are shipped to, not shipped from? It will be a complete fuck up on the part of our politicians if this loophole has not been closed yet.",
"title": ""
},
{
"docid": "e6c0ce6d855e23a095166cf2c36b03e8",
"text": "Your answer will need loads of information and clarification, so I will ask you to visit the VAT and have a peruse. 1) Obligation is for you to find out the correct rate of VAT, charge and pay tax accordingly. You can call up the HMRC VAT helpline for help, which they will be happy to oblige. Normally everybody pays VAT every 3 months or you can pay once in a year. 2) Depends on your annual turnover, including VAT. Less than £150000 you join the Flat rate scheme. There are schemes for cultural activities. Might be good to check here on GOV.UK. 3) If you pay VAT in EU countries, you can reclaim VAT in UK. You need to reclaim VAT while filing in your VAT returns. But be careful about your receipts, which can be checked to verify you are not defrauding HMRC. The basic rule is that B2B services are, as the name suggests, supplies from one business to another. And, subject to some exceptions, are treated as made where the customer belongs. No VAT is chargeable on B2B supplies to an overseas customer. But where you make a B2C supply, VAT depends on where your customer is located: 1) if they are outside the EU, you don’t need to charge VAT 2) if they are located in an EU country, then you must charge VAT. Source All in all keep all records of VAT charged and paid to satisfy the taxman. If the rules get complicated, get an accountant to help you out. Don' take chances of interpreting the law yourself, the fines you might pay for wrong interpretation might be a deal breaker.",
"title": ""
},
{
"docid": "ebb92bdb06c45cd6b5e611c8ca35c2db",
"text": "If you do business under your name, you don't need to register your business. Your business will be treated as a sole proprietorship. If your revenue exceeds 30,000 (or wish to collect GST for the government) then you will have to register with the CRA for a GST account, but that is free.",
"title": ""
},
{
"docid": "4cdfa5eb579e2b1f99667e415dc13ca6",
"text": "An order is not a transaction. It is a request to make a transaction. If the transaction never occurs (e.g. because you cancel the order), then no fees should be charged. will I get the stamp duty back (the 0.5% tax I paid on the shares purchase) when I sell the shares? I'm not a UK tax expert, but accorging to this page is seems like you only pay stamp tax when you buy shares, and don't get it back when you sell (but may be responsible for capital gains taxes). That makes sense, because there's always a buyer and a seller, so if you got the tax back when you sold, the tax would effectively be transferred from the buyer to the seller, and the government would never collect anything.",
"title": ""
}
] |
fiqa
|
0a0d785d559cc04a233ab1a30d6a6115
|
Automatic transaction on credit card to stay active
|
[
{
"docid": "c994e56fbf8994af3ecd8cec6f6ab0b7",
"text": "Put one of your monthly bills on it. (Utility bill, Netflix, monthly donation to charity, etc.) I have several automatic, recurring monthly charges on my credit card. If you don't have any current monthly bills that you want to switch, contact the Red Cross, or a charity of your choice. They would be very happy to charge your credit card once a month. Alternatively, it might be okay to let it close.",
"title": ""
},
{
"docid": "ecad50d0648a674b4523a69676b615e9",
"text": "credit cards are almost never closed for inactivity. i have had dozens of cards innactive for years on end, and only one was ever closed on me for inactivity. i would bet a single 1$ transaction per calendar year would keep all your cards open. as such, you could forget automating the process and just spend 20 minutes a year making manual 1$ payments (e.g. to your isp, utility company, google play, etc.). alternatively, many charities will let you set up an automatic monthly donation for any amount (e.g. 1$ to wikipedia). or perhaps you could treat yourself to an mp3 once a month (arguably a charitable donation in the age of file sharing). side note: i use both of these strategies to get the 12 debit card transactions per month required by my kasasa checking account.",
"title": ""
},
{
"docid": "30d55c1e0d1dd8e52071f99a9f67d620",
"text": "\"I agree with the rest of the answers -- you're probably better off just using it for some predictable flat-rate recurring monthly service like NetFlix, or making a charitable donation if you're into that sort of thing. But since that wasn't what you asked, I'll try to provide an answer: If you don't mind throwing away money, send money to yourself using PayPal. Here's how: Set up a PayPal Business Account, and use your personal PayPal account to send funds to it by setting up a PayPal subscription. PayPal says \"\"You can have one Consumer account and one Business account.\"\" A PayPal Payments Standard business account has no monthly fee -- only transaction fees. According to PayPal, \"\"in order to set up a repeating payment, [you] would need to create a Subscription or Recurring Payments button from the Merchant Services tab\"\" (in the Business Account). You would then click the link/button to set up the subscription from your personal PayPal account, to make it send money to your Business account on an automatic schedule. You can then, at your own leisure, send the money back to your personal account without paying a second transaction fee, then finally send it back to your bank account. Or, if your bank account is not yet tied to your personal account, you can tie it to the business account instead, and deposit the funds into your bank account. Unfortunately, this step can't be automated. Again, to reiterate, you're much better off just using it for something recurring.\"",
"title": ""
},
{
"docid": "4b771389811e460bb373e4008ecb2256",
"text": "Putting money into your Amazon gift card balance is also a very convenient option, but I like these recurring Red Cross and Wikipedia ideas also.",
"title": ""
}
] |
[
{
"docid": "46b26494beacf4d3c775ea55659accb4",
"text": "\"If you enter the transactions as you execute them (and categorize them then), Quicken will attempt to Match downloaded transactions with ones already in the register. \"\"Memorized transactions\"\" with known parties can also help. My credit card downloads actually come with a rough categorization provided by the vendor; that may or may not be accurate enough to save you some work.\"",
"title": ""
},
{
"docid": "580d7128f24e08befbe78bf7c0f80f29",
"text": "Essentially speaking, when you purchase goods worth $100 using your card, the store has to pay about $2 for the transaction to the company that operates that stores' credit card terminal. If you withdraw cash from an ATM, you might be charged a fee for such a transaction. However, the ATM operator doesn't pay the credit processor such a transaction fee - thus, it is classified as a cash transaction. Additionally, performing cash advances off a CC is a rather good indicator of a bad financial health of the user, which increase the risk of default, and in some institutions is a factor contributing to their internal creditworthiness assessment.",
"title": ""
},
{
"docid": "768d911368643c7cf2504b6ef63a28b4",
"text": "The technical feature exists to (1)block all ACH activity, (2)block all ACH credits, or (3)block all ACH debits attempting to post to the deposit account. The large financial institutions will not deviate from their company policies and won't offer something like this for a personal account. The smaller institutions and credit unions are much more willing to discuss options. Especially if you maintain a large deposit balance or have many products with the institution, you might convince them this feature is very important and insist they block all ACH activity on your account. This feature is used frequently on controlled asset accounts where the balance must be frozen for a variety of reasons.",
"title": ""
},
{
"docid": "73851022abdb3f0a43549072dcdda4a5",
"text": "This really should be a comment, but I can't yet. The question desperately needs a location tag. In at least some countries(New Zealand), the default action on all insufficient funds transactions is to refuse the transaction. Credit cards are the only common exception. Every bank operating in NZ that I know of acts this way. Sometimes there is a fee for bouncing a transaction, sometimes not, that depends on the bank. Any other option must be explicitly arranged in writing with the bank. Personally, coming from a country where declining transactions is the default, I'd be shocked and angry to be stuck with an automatic transfer from another account. Angry enough to change banks if they won't immediately cease and desist.",
"title": ""
},
{
"docid": "de2025b241f8fe7e14defc87ce78a3fd",
"text": "\"One key point that other answers haven't covered is that many credit cards have a provision where if you pay it off every month, you get a grace period on the interest. Interest doesn't accrue at all unless you rollover a non-zero balance. But if you do, you pay interest on the average balance, not the rolled-over balance, for the entire month. You have to ask yourself what you are trying to accomplish with your credit history? Are you trying to maximize your \"\"buying power\"\" (really, leverage)? Or are you trying to make sure that you get the best terms on a moderately sized loan (house mortgage, car note)? As JohnFx and losthorse already noted, it's in the banker's best interest to maximize the profit they make off of you. Of course, that is not in your best interest. Keeping a credit card balance from month to month definitely feeds the greedy nature of the financing beast. And makes them willing to take more risks, because the returns are also higher. But those returns cost you. If you are planning to get sensible loans in the future, that you can comfortably afford, you won't need a maxed credit score. You won't get the largest loan amounts, but because you are doing the sensible thing and making a large down payment, the risk is also very low and you'll find lenders willing to give you a low interest rate. Because even though the reward is lower than the compulsive purchaser who pays an order of magnitude more in financing fees, the return/risk ratio is still very favorable to the bank. Don't play the game that maximizes their return. That happens when you have a loan of maximum size, high interest rate, and struggle to make payments, end up missing a couple and paying late fees, or request forbearance which compounds the interest. Play to minimize risk.\"",
"title": ""
},
{
"docid": "b251bd183b378842ff6da7ed601a96b7",
"text": "\"In the US, if your monthly statement was issued by the credit card company on January 1 and it showed a balance of $1000, then a payment must be made towards that balance by January 25 or so, not February 1 as you say, to keep the card in good standing. The minimum payment required to keep the card in good standing is specified in your monthly statement, and failure to meet this requirement can trigger various consequences such as an increase in the interest rate charged by the credit card company. With regard to interest charges, whether your purchase of $2000 on January 3 is charged interest or not depends entirely on what happened the previous two months. If you had paid both your monthly statements dated November 1 and December 1 of the previous year in full by the their respective due dates of November 25 and December 25, and the $1000 balance on the January 1 statement is entirely due to purchases (no cash advances) made in December, then you will not be charged interest on your January purchase of $2000 as long as you pay it off in full by February 25 (the charge will appear on your February 1 statement). But, if you had not paid your December 1 statement in full by December 25, then that $1000 billed to you on January 1 will include purchases made during December finance charges on the unpaid balance from the previous month plus finance charges on the purchases made during December. The finance charges will continue to accumulate during January until such time as you pay off the bill in full (these charges will appear on your February 1 statement), hopefully by the due date of January 25. But even if you pay off that $1000 in full on January 25, your charge of $2000 on January 3 will start to accumulate finance charges as of the day it hits the account and these finance charges will appear on your February 1 statement. If you paid off that $1000 on January 10, say, then maybe there will be no further finance charges on the $2000 purchase on January 3 after January 10 but now we are getting into the real fine print of what your credit card agreement says. Ditto for the case when you pay off that $1000 on January 2 and made the $2000 charge on January 3. You most likely will not be charged interest on that $2000 charge but again it depends on the fine print. For example, it might say that you will be charged interest on the average of the daily balances for January, but will not be charged interest on purchases during the February cycle (unless you miss the February 25 payment and the whole cycle starts all over again). As a general rule, it takes two monthly cycles of payment in full by the due date before one gets into the state of no finance charges for new purchases and effectively an \"\"interest-free\"\" loan of $2000 from January 3 (date of purchase) till February 25 (due date of payment). Matters become more complicated when cash advances are taken from a credit card which are charged interest from the day they are taken but don't trigger finance charges on new purchases or the so-called \"\"zero percent balance transfer offers\"\" are accepted.\"",
"title": ""
},
{
"docid": "41738846c29b227d7c9af116f730c97e",
"text": "Ok so Arbitrage? I was looking specifically at the people who took this deal to the extreme taking the $5k and using the $10 giftcards to buy prepaid credit cards. Would the better term would be positive-feedback loop, since the only constraint would be time and energy to the people exploit this deal. Is there a financial term that fits this better?",
"title": ""
},
{
"docid": "7644dd12efd99f9946a2a08c0327b5e1",
"text": "Automated Clearing House transactions are used in the US for direct deposit of pay checks and direct debit of many payments for accounts such as mortgages, credit cards, car loans, insurance premiums, etc. The reason they take one or more business days to clear is that the transactions are accumulated by each processor in the network during the day and processed as a batch at the end of each business day. The ACH network processes 20+ billion transactions per year worth $40 trillion, (estimates based on 2012 figures).",
"title": ""
},
{
"docid": "9ce484d7657417c8078f20d1c5295f04",
"text": "Since the POS machines are tied into the register it would be rather difficult to overcharge with an attentive patron. They would have to add an additional item onto the purchase in order to increase the total before running the card (very few system allow cashback to be requested from the teller side), and most machines have audible cues every time an item is added. If you are paying attention to the teller and not talking/playing on your phone (or other distracting things) then I would say the feasibility is probably very low. Except for rare exceptions while traveling I only shop at locations where I can see the total on the register, and make sure it looks correct before handing my card over.",
"title": ""
},
{
"docid": "777609ebf107f439f7d88abfd8f47406",
"text": "\"In the end, all these fees hurt the average consumer, since the merchant ultimately passes cost to consumer. Savvy consumers can stay at par or get ahead, if they put in the effort. It's a pain, but I rotate between 4 cards depending on time of year and type of purchase, to optimize cash back. My cards are: 1. 5% rewards card on certain categories, rotates each quarter 2. 2% travel/dining card (fee card, but I travel a bunch so it's worth it, no foreign transaction fees) 3. 1.5% rewards card for everything else 4. Debit card (swiped as a CC) for small purchases (i.e. lunches) at credit union for \"\"enhanced\"\" high interest checking account, requiring certain # swipes/month. This alone returns to me ~$800/yr.\"",
"title": ""
},
{
"docid": "9c94d24ea670df4c1baf45394ac352fa",
"text": "some of that article is misleading, some of it is just plain wrong. Very wrong... like you end up drawing an incorrect conclusion type wrong. Corporate transaction accounts, whose balances are up recently due to TAG (expires 12/31), are subject to reserve requirements. When you purchase something with a credit card, the bank's asset of your credit increases and the bank's asset of cash decreases (it goes wherever you purchased). There is no change to your deposit account and no change to reserves. The incoming bank's cash account and liability account associated with that business transaction account increase, and it is trivial to transfer the % of cash necessary to reach minimum reserve requirements to the Fed. Secondly, anyone with a smidgen of accounting can tell that his balance sheet won't balance.",
"title": ""
},
{
"docid": "ed46c50e9037426f041b572817397ecf",
"text": "I believe there are electronic exchanges that run continuously, but the older ones don't want to change their practices since some people may have strategies which (claim they) are based on this behavior so there would be a lot of unhappy people if it was altered. The pause doesn't seem to do any harm. There are alternatives if you dislike it. Don't try to fix what isn't broken.",
"title": ""
},
{
"docid": "f931ffbcca461114ddcc1a06355f63b4",
"text": "No, they do this to change behavior by providing a disincentive (the stick) - $2 fee - on something they want their customers to do less of. In this case, they want everyone to sign up for automatic billing via CC or bank transfer. Their mistake was to not combine this with a positive incentive (the carrot) on the behavior they want more of. In this case, they should have promised a $2 monthly discount for the first year for customers who switch to automatic billing.",
"title": ""
},
{
"docid": "59c250a05c383c5e3f9f3bceaaa60434",
"text": "\"In 2010, the Restore Online Shoppers' Confidence Act was passed, which prohibited certain activities, most of which had to do with online sites sharing your CC info with third parties. However, the final part of the act deals with \"\"negative option\"\" marketing, which is basically what you're describing - \"\"We will charge you unless you say no\"\". It requires three components to allow a negative option: If you did not explicitly enroll in automatic payment, and made the initial purchase online (or made your most recent purchase online, I suspect) then it sounds like this was a violation of this act. On the other hand, the act isn't terribly careful about defining terms, and is really quite vague in a lot of places, so it's possible they would argue they are not using a 'negative option' scheme but instead simply charging your bill similar to how your phone company might use autopay. If it was not online, then this probably doesn't apply. Instead, the FTC's rule on Negative Option with regard to sale of goods applies. Title 16 Part 425 covers this; this law is much less limiting as to what the marketer can do.\"",
"title": ""
},
{
"docid": "c4c73d42a968f194ea662dec8eeda100",
"text": "The main risk I see to this plan is with a late payment to your credit card. For a variety of reasons, some outside your control, you could end up with a late payment on the CC and a +18% interest rate making your arbitrage attempts unprofitable. You sense that this is risky, and it derives from placing short-term risk on a long term asset. Your interest rate is high for the current market. What kind of things can you do reduce that rate? What kind of things can you do to reduce your principle? Those kind of things represent far less risk and accomplish the same goal.",
"title": ""
}
] |
fiqa
|
7a10c24f58e88c125bc689905ccd34e9
|
Are stores that offer military discounts compensated by the government?
|
[
{
"docid": "5419b5d99a25ab6ee6fa2ee99b2fda05",
"text": "Company X located outside a military base offer discounts to military as a form of marketing. They want to encourage a group of potential customers to use their store/service. In some cases they are competing with subsidized store on the base. In other cases their only competition is other stores outside the base. The smart ones also understand the pay structure of military pay to make it easier for enlisted to stretch their money for the entire month. The government doesn't offer compensation to the business near bases. The businesses see their offer and discount as advertising expenses, and are figured into the prices they have to charge all customers. You will also see these types of discounts offered by some businesses in college towns. They are competing with the services on the campus and with other off-campus businesses. Some also allow the use of campus dollars to make it easier for the student to spend money.",
"title": ""
},
{
"docid": "3ea4c5bd8120958f2633315894b70acd",
"text": "Nope, only base commissaries or BX/PX's are subsidized. The rest is just done for goodwill/marketing purposes.",
"title": ""
},
{
"docid": "3cc88a19828747e9b42f464be2179a3d",
"text": "This story is about military grocery stores - i.e.: grocery stores for military personnel on military bases. There are no discounts for military personnel in a regular grocery store. But they may have subsidised prices in grocery stores located inside a military installation, and these are those stores that the story is talking about.",
"title": ""
}
] |
[
{
"docid": "3b36305cf5bd1204e47a99690160c354",
"text": "The vendor needs to do this using apportionment, according to the VAT rules for mixed supplies: If you make mixed supplies and the individual supplies are not liable to VAT at the same rate then you need to work out the tax value of each supply in order to calculate how much tax is due. If the tax value is based on the total price you charge (see paragraph 7.3) you do this by splitting that price between the supplies. This is called an apportionment ... There is no special method of apportionment ... However, your calculations must be fair and you must be able to justify them. It is usually best to use one of the methods shown in section 32. The section 32 referred to really relates to apportioning use between business and non-business purposes, but it implies that splitting up the total price in proportion to the original prices would probably be fair. So in your example the vendor might split the £5 discount equally between the spoon and the carrycot as they had the same gross cost, and pay VAT as if each had cost £7.50 gross. The vendor could also do it in proportion to their net (pre-VAT) prices and thus apportion a bit more of the discount to the carrycot than the spoon, but as this would lead to them paying slightly more tax overall they probably wouldn't choose to. However, none of this is likely to be too relevant to a consumer, since in the UK prices must be presented as the gross (VAT-inclusive) amounts and so the discounts will also apply to those amounts. It will of course affect how much of the purchase price the vendor ends up paying on to the government and thus might indirectly affect what discounts the vendor is willing to offer.",
"title": ""
},
{
"docid": "27c36d33072f1f3c03abebb2b95e40c9",
"text": "\"Yes. \"\"There is, ...no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.\"\" Taken from the US Department of the Treasury.\"",
"title": ""
},
{
"docid": "587515473167c699e207b1b0223ac9a7",
"text": "Some companies offer discounts for shareholders. I believe Disney used to do so, for example; if your family was doing the Disneyland-every-year routine that could be a significant benefit.",
"title": ""
},
{
"docid": "c31a3227567e200c6833277d01c6a8c5",
"text": "Yeah, that's the problem fuck-0. Walmart makes tons of money in profit and their employees are using state benefits. This isn't a problem for you? The government is subsidizing walmarts employee benefits. In other words we are socializing walmarts losses and walmart is privatizing their gains.",
"title": ""
},
{
"docid": "e6d424c1dc7a5cfa5ecc510e1fd6c9c9",
"text": "\"Welcome to America! This country is not meant to be a free ride. I personally (single, \"\"native\"\" male) pay a significant amount each year to Uncle Sam and receive no benefits at all. Where do \"\"natives\"\" sign up for the free stuff?!\"",
"title": ""
},
{
"docid": "90753069d6f5cf4ef352e28770c22fca",
"text": "I applaud all forms of tax evasion. Considering that taxation is nesesary for on-going war, it's highly immoral to pay your taxes. It will only lead to death. However, it sounds like they're paying lots of taxes. 46 + 11.7 = 57.7% How is that a loophole? Sounds like they're getting shellacked.",
"title": ""
},
{
"docid": "aca17aa68b38ca7ef1beabd9752cf44b",
"text": "Maybe but would it be ruined if that 10% was merely moved from DoD money to funding local businesses or something? The downside of defense funding is that even if it provides jobs, it's not self sustainable, whereas if you used that money to fund startups/local businesses, those things could potentially eventually grow or at least not require additional funding. Then your city would not require outside funding to survive which is even better no?",
"title": ""
},
{
"docid": "fcbf762f2bd16440bc83a5320a6dfc65",
"text": "Lots of places in the US do it. Although the way that they usually phrase it is 'prices reflect a x.x% discount for cash' since most of the credit card companies have an agreement that says you cannot charge a surcharge if someone is using a credit card. So they get around it by giving a discount for cash. effect is the same, but it skirts the letter of the agreement",
"title": ""
},
{
"docid": "0e151c1cbf2497a78b250d5bf908a283",
"text": "Stupid article. People on government assistance typically don't have a great deal of money to begin with, and there aren't exactly many items on Amazon that are at 'dollar store' level prices..and unless one is house-bound level of disabled, you really can't fill a whole grocery list by shopping at Amazon as you could running down to Walmart or Save a Lot.",
"title": ""
},
{
"docid": "189af17bb561308c0e9af7c8c6b7990a",
"text": "\"Wireless capabilities see Nikola tesla every type of communication outside of the walkie talkie really was created without the government. So the fact that i was born here against my own free will automatically gives the government the right to seize the fruits of my labor? This is where this bullshit statist logic falls apart because the only rebuttal you have is \"\"well just leave then!\"\" Which is fucking stupid and in pretty sure I already gave you 1 way but I'll say it again cuz it's clear you're incapable of following along, federal sales tax. With federal sales tax there are no deductions or coercion. Also the more money individuals have in their pocket (disposable income) the more likely they are to spend and grow the economy. That's why you see countries like Sweden with insane tax rates seeing limited growth and in a lot of cases on the verge of an economic collapse. So if people have more disposable income causing them to have more purchasing power a federal sales tax would probably do better than an income tax and the people would receive something tangible instead of just losing 25% of their pay check. Btw don't ever say my income tax pays for roads because they don't that's what a gas tax is for. A majority of our infrastructure is paid for with revenue from other taxes not income. Income taxes pay mostly into military budget and social programs ie social security\"",
"title": ""
},
{
"docid": "4238d8bca80b3137bfbbcc64c2c502c3",
"text": "So, the point of the article is that the taxpayers are making up for what Walmart isn't paying. But, walmart pays way more than what it's employees are using. Employees use government programs, Walmartpays more than double of the cost of those programs, so no cost at all is passed to the taxpayers. Walmart WOULD be evil if they didn't pay taxes. But they do. The article is nonsense. We get it. You don't like big business.",
"title": ""
},
{
"docid": "0895722089cb5cba4791e7a5430c58cc",
"text": "Sony has been doing this for years and nobody complains. But I do see the point, it keeps companies like WalMart and Best Buy from destroying small businesses. Ohio does the same thing with beer and cigarrette prices.",
"title": ""
},
{
"docid": "b85c369867a2a52513878d8ffb159c5c",
"text": "Most people have no problem paying for schools, millitary, or other socially optimizing externalities. People do have a problem with paying for free rides for others, where only the person receiving the benefits gains anything and everyone else has to pay the bill.",
"title": ""
},
{
"docid": "b77d828f6613f0ab429d1616150c616f",
"text": "They are entitled to a benefit for things for survival, This is not a UBI. If they have enough food to be giving it away, the system isn't working properly. You think because they're (the abusers of the system) are being a useless member of society that they are entitled to have these benefits, which legally they are, but this should not be a long term solution for millions of people, which it is. Are we talking about a small amount of people, from what google says its a pretty big issue. We have a military, start your own rant thread about that if you want to talk about that or better yet, go join the military and fix it from the inside out.",
"title": ""
},
{
"docid": "2b5c54ff120afef635a7ccc6d9a68fda",
"text": "\"I think often times the personality traits that make founders so successful are the same traits that keep them from giving up control. By the time you've made it to the top of the mountain you've proven everyone who ever said \"\"do this\"\" wrong. So people saying \"\"step aside\"\" isn't going to do anything but convince you that you can prove them wrong again. It's easy to say \"\"put your ego to the side\"\" but when your stubbornness and smarts helped get you where you are, it's not easy to look inside yourself and say \"\"I'm not the best guy for this.\"\"\"",
"title": ""
}
] |
fiqa
|
af8dcb3e3ec29b019b5fe0d35395fc1c
|
Can I claim a tax deduction for working from home as an employee? I work there 90% of the time
|
[
{
"docid": "af94bde04c5e56fce68e17efd75ae0cc",
"text": "The short answer is yes you probably can take the deduction for a home office because the space is used exclusively and you are working there for the convenience of your employer if you don't have a desk at your employers office. The long answer is that it may not be worth it to take the home office deduction as an employee. You're deduction is subject to a 2% AGI floor. You can only deduct a percentage of your rent or the depreciation on your home. A quick and dirty example if you make $75k/year, rent a 1200 sqft 2 bedroom apartment for $1000/month and use one bedroom (120 sqft) regularly and exclusively for your employer. You can deduct 10% (120sqft/1200sqft) of the $12000 ($1000*12 months (assumes your situation didn't change)) in rent or $1200. However because you are an employee you are subject to the 2% AGI floor so you can deduct $1200-$1500 (75000*.02 (salary * 2% floor)) = -300 so in order to deduct the first dollar you need an additional $300 worth of deductible expenses. Depending on your situation it may or may not be worth it to take the home office deduction even if you qualify for it.",
"title": ""
},
{
"docid": "f20fdd823286eba26d5f938c45710cd2",
"text": "Talk to a tax professional. The IRS really doesn't like the deduction, and it's a concept (like independent contractors) that is often not done properly. You need to, at a minimum, have records, including timestamped photographs, proving that: Remember, documentation is key, and must be filed and accessible for a number of years. Poor record keeping will cost you dearly, and the cost of keeping those records is something that you need to weigh against the benefit.",
"title": ""
},
{
"docid": "067252b5ff9ca4e62bf6ff506f4bd7cb",
"text": "The general rule is: Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly: Exclusively seems to be the toughest standard and I do not know exactly how strict the IRS's interpretation is. Working in your living room where you regularly watch TV and have people over on the weekends would seem to fail that test. A separate room with your computer in it would pass it. If it was your only computer and you regularly played online games with it, that would seem to be a grey area. The IRA booklet covering this area is here http://www.irs.gov/pub/irs-pdf/p587.pdf I know people that have rented rooms in other places or made use of rental offices for this purpose.",
"title": ""
},
{
"docid": "bb00d5b05640be0a5d62991982d1123f",
"text": "\"90% sounds like \"\"principal place of business\"\" but check these IRS resources to make sure.\"",
"title": ""
}
] |
[
{
"docid": "0a788c0d227d60e290dc71775c247243",
"text": "Yes, you've summarized it well. You may be able to depreciate your computer, expense some software licenses and may be home office if you qualify, but at this scale of earning - it will probably not cover for the loss of the money you need to pay for the additional SE tax (the employer part of the FICA taxes for W2 employees) and benefits (subsidized health insurance, bonuses you get from your employer, insurances, etc). Don't forget the additional expense of business licenses, liability insurances etc. While relatively small amounts and deductible - still money out of your pocket. That said... Good luck earning $96K on ODesk.",
"title": ""
},
{
"docid": "039519230ab375aea3fdd45fc09a3a49",
"text": "\"The short answer is yes you can, but you have to make sure you do it correctly. If you are employed by a tech company that does contract work at a separate location and you don't get reimbursed by your employer for travel expenses, you can claim the mileage between your home and location B as a business expense, but there's a catch - you have to subtract the mileage between your home and location A (your employer). So if it's 20 miles from your house to your employer (location A), and 30 miles from your house to the business you're contracting at (location B), you can only claim 10 miles each way (so 20 miles total). Obviously if the distance to location B is closer than your employer (location A), you're out of luck. You will have to itemize to take this deduction, by filling out a Schedule A for itemized deductions and Form 2106 to calculate how much of a deduction for travel expenses you can take. Google \"\"should i itemize\"\", if you're unsure whether to take the Standard Deduction or Itemize. Sources:\"",
"title": ""
},
{
"docid": "f4dba2c23b145778cc2cb1c1b0f88da9",
"text": "\"About deducting mortgage interest: No, you can not deduct it unless it is qualified mortgage interest. \"\"Qualified mortgage interest is interest and points you pay on a loan secured by your main home or a second home.\"\" (Tax Topic 505). According to the IRS, \"\"if you rent out the residence, you must use it for more than 14 days or more than 10% of the number of days you rent it out, whichever is longer.\"\" Regarding being taxed on income received from the property, if you claim the foreign tax credit you will not be double taxed. According to the IRS, \"\"The foreign tax credit intends to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the United States and the foreign country from which the income is derived.\"\" (from IRS Topic 856 - Foreign Tax Credit) About property taxes: From my understanding, these cannot be claimed for the foreign tax credit but can be deducted as business expenses. There are various exceptions and stipulations based on your circumstance, so you need to read the official publications and get professional tax advice. Here's an excerpt from Publication 856 - Foreign Tax Credit for Individuals: \"\"In most cases, only foreign income taxes qualify for the foreign tax credit. Other taxes, such as foreign real and personal property taxes, do not qualify. But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of income. However, you can deduct foreign real property taxes that are not trade or business expenses as an itemized deduction on Schedule A (Form 1040).\"\" Note and disclaimer: Sources: IRS Tax Topic 505 Interest Expense, IRS Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses) , IRS Topic 514 Foreign Tax Credit , and Publication 856 Foreign Tax Credit for Individuals\"",
"title": ""
},
{
"docid": "967d750f818153d0e8c46e28e5bd0ae7",
"text": "Any deductable expense will reduce your taxable income not your tax payable. Your Example 1 above is correct and gives you 100% deduction. It is like having a business where your sales are $100,000 and your expenses in making the sales is $40,000. The expenses are your tax deductions and reduce your profits on which you pay tax on to $60,000. If your Example 2 was correct then the situation above would change that you would pay say $30,000 tax on $100,000 sales, then apply your deductions (or expenses) of $40,000 so that you would pay no tax at all and in fact get $10,000 back in your return. In this case the government would not be collecting any taxes but paying out returns to everyone. Your Example 2 is absolutly incorrect.",
"title": ""
},
{
"docid": "a57851d680f06d0d027cbc370f7c762e",
"text": "I contacted Stephen Fishman, J.D., the author of Home Business Tax Deductions, to let him know that this question was missing from his book. He was kind enough to send a reply. My original phrasing of the question: If your car is used for both business and personal use, and you deduct via the actual expense method, do trips to the mechanic, gas station, and auto parts store to service or repair the car count as business miles, personal miles, or part-business-part-personal miles? What about driving the newly-purchased car home from the dealership? And his response: Good question. I can find nothing about this in IRS publication or elsewhere. However, common sense would tell us that the cost of driving to make car repairs should be deductible. If you use your car for business, it is a business expense, just like transporting any other piece of business equipment for repairs is a business expense. This should be so whether you use the standard mileage rate or actual expense method. You should probably reduce the amount of your deduction by the percentage of personal use of the car during the year. The same goes for driving a car home from the dealer.",
"title": ""
},
{
"docid": "3896f5c8a977bf07584f1f0f1d93cbd6",
"text": "\"Yes and no. You can not claim the maid service cleaning your \"\"home\"\" but you can cleaning your \"\"office\"\" or your office's facilities. For example, If you have a mother-in-law suite in the back that you converted to an office, AND you have a maid service cleaning just that, THEN you should be able to claim the expense. Another example would be if you have a room in your house set aside as an office (careful here) AND your maid services charges $20 per room, you should be able to claim that $20. Another example; if you have a maid service that charges you $100 to clean your house, AND you have a dedicated office in that house, THEN you may be claim a portion of your expenses as a business expense. HOWEVER!!!! This can be very subject to your situation. For example, your much more likely to meet the criteria if you have clients in your office. Much less likely if your the only person using the office. Also you need to be aware that what the IRS allows you to call an office is not as clear cut as it seems. Your best bet is to ask a tax consultant.\"",
"title": ""
},
{
"docid": "15a68028202202a61ad5b69ba02c6f16",
"text": "Yes, you can deduct from your taxable profits (almost) any expenses incurred in the course of your business. See here for HMRC's detailed advice on the subject. The fact that you have salaried PAYE employment as well makes no difference.",
"title": ""
},
{
"docid": "5fb1034e13a97b1e3a37becc28ec0b0b",
"text": "No, it's not possible. Even if you had no deduction or credits, your federal tax on $16,604 would be: $9075 @ 10% = $907.50 + $7529 @ 15% = $1129.35 = $2036.85 That assumes you are filing as single. There must be more to the story. Typo in your income numbers? Also, what do you mean by a self-employment tax deduction? Maybe update your question to include a breakdown of everything you entered? Edit: As noted in Loren's answer, it seems that it is indeed possible in at least one case (self-employment taxes).",
"title": ""
},
{
"docid": "f06119600d3aea07f3eb0978ad02434e",
"text": "You would report it as business income on Schedule C. You may be able to take deductions against that income as well (home office, your computer, an android device, any advertising or promotional expenses, etc.) but you'll want to consult an accountant about that. Generally you can only take those kinds of deductions if you use the space or equipment exclusively for business use (not likely if it's just a hobby). The IRS is pretty picky about that stuff.",
"title": ""
},
{
"docid": "ce475229839fec15efb664cd7ad7ac50",
"text": "Your home doesn't belong to the partnership, it belongs to you. So you can (if qualified) deduct home office usage as a business expense on your individual tax return. Same goes to your partner. Similarly any other unreimbursed expense.",
"title": ""
},
{
"docid": "3a6c8b85bac2aa40c815d4671c636b1d",
"text": "Another thing to consider, however, is the deductibility of business expenses. Let's assume that the employer can legitimately hire you as a 1099 contractor. (Would you be able to telecommute? Would you have a high degree of control over when you worked and when you didn't? These factors also affect whether you're a true independent 1099 contractor or not.) As a legit 1099 contractor, you're able to deduct certain business expenses directly from your income. (You can find a list of the rules at irs.gov.) As a W2 employee, by contrast, can deduct only business expenses that exceed 2% of the your AGI (adjusted gross income). So, you also have to consider your personal circumstances in making the calculus and comparing whether a legitimate 1099 contractor job is or is not good for you. It's not just a comparison of what they'd pay W2 employees versus what they'd pay 1099 contractors.",
"title": ""
},
{
"docid": "c0ef4d13dfaa846438737e60324406ab",
"text": "Yes you can claim your business deductions if you are not making any income yet. But first you should decide what structure you want to have for your business. Either a Company structure or a Sole Trader or Partnership. Company Structure If you choose a Company Structure (which is more expensive to set up) you would claim your deductions but no income. So you would be making a loss, and continue making losses until your income from the business exceed your expenses. So these losses will remain inside the Company and can be carried forward to future income years when you are making profits to offset these profits. Refer to ATO - Company tax losses for more information. Sole Trader of Partnership Structure If you choose to be a Sole Trader or a Partnership and your business makes a loss you must check the non-commercial loss rules to see if you can offset the loss against your income from other sources, such as wages. In order to offset your business losses against your other income your business must pass one of these tests: If you don't pass any of these tests, which being a start-up you most likely won't, you must carry forward your business losses until an income year in which you do pass one of the tests, then you can offset it against your other income. This is what differentiates a legitimate business from someone having a hobby, because unless you start making at least $20,000 in sales income (the easiest test to pass) you cannot use your business losses against your other income. Refer to ATO - Non-commercial losses for more information.",
"title": ""
},
{
"docid": "be257fcb0ae0253e58681c0f96f3d63a",
"text": "\"The answer is \"\"Yes\"\", You can deduct them. As long as you showed that you put in effort to make a profit then you can deduct business expenses.\"",
"title": ""
},
{
"docid": "b7e451ff517411ed28490bc8763abde4",
"text": "This is essentially a reimbursement of your expense. Since you can deduct the expense, the fact that the reimbursement is taxable doesn't affect you much. You deduct your home office expenses on your annual tax return using form 8829. See the IRS site for more details. If you're asking about the UK tax, there may be some other considerations, but from the US tax perspective it is (nearly) a wash.",
"title": ""
},
{
"docid": "0493d4f827147a296d9f105fe8748726",
"text": "They might be concerned with having to charge sales tax in California if they have a single employee in California, creating a nexus situation with CA. If that's the case, or even if there is some other issue, you might be able to switch from being a W2 employee to being a 1099 independent contractor. There's a host of additional issues this could cause, but it alleviate the nexus problem (if THAT is the problem). Here's a terrible solution you can bring up, but shouldn't do under any circumstances: offer to set up a mailing address in an allowed State, and give your company plausible deniability with regards to your legal residence. Obviously, this is a terrible idea, but exploring that option with your employer would help you suss out what the actual objection is. Ultimately, anything said here about the reason is just conjecture. You need to talk to the decision maker(s) about the real reason behind the denial. Then you can talk through solutions. Also - don't forget that you can get another job. If you are serious about a future with your girlfriend, you should put that relationship ahead of your current employment comfort and security. If you are willing to walk away from your position, you are in a much better situation to negotiate.",
"title": ""
}
] |
fiqa
|
23c46620b2142e4f1032014729b1273f
|
Do I need to pay Income Tax if i am running a escrow service in India
|
[
{
"docid": "0ddf5935ce37f66c96defd0182a0c28d",
"text": "\"This may be closed as not quite PF, but really \"\"startup\"\" as it's a business question. In general, you should talk to a professional if you have this type of question, specifics like this regarding your tax code. I would expect that as a business, you will use a proper paper trail to show that money, say 1000 units of currency, came in and 900 went out. This is a service, no goods involved. The transaction nets you 100, and you track all of this. In the end you have the gross profit, and then business expenses. The gross amount, 1000, should not be the amount taxed, only the final profit.\"",
"title": ""
},
{
"docid": "547c7695b77b8fca33f9c4f66557eee8",
"text": "As JoeTaxpayer has mentioned, please consult a lawyer and CA. In general you would have to pay tax on the profit you make, in the example on this 10% you make less of any expenses to run the business. depending on how you are incorporating the business, there would be an element of service tax apart from corporate tax or income tax.",
"title": ""
},
{
"docid": "d1b39d67d9cec66db7ad2e0a47af369c",
"text": "Income Tax would only be levied on the 10% commission that you earn and not on the total amount kept in the Escrow Account.",
"title": ""
}
] |
[
{
"docid": "4972d02c5cb0088e316851b3f20b2dee",
"text": "Tax is due in India as you offered services from India. So whether the International Client pays via Credit Card, Bank Transfer, Paypal or any other means is not relevant. Even if the International Client pays you in a account outside India; it is still taxable in India.",
"title": ""
},
{
"docid": "c2fe5a2fd10180b48792906009b272fc",
"text": "I am a freelancer based in Europe and I want to tell you: - if you are a freelancer, then you INVOICE your Swizzerland based client The word salary is improper. - So your client will DEDUCE the invoice from its taxes, and NOT pay income tax on top of that invoice. Because invoice = expense. So, ONLY YOU pay income tax in India. Your client pays no tax at all, not in India, not in Swizzerland. As you are a freelancer and not employee, the company has no obligation to pay employer taxes for you. A company has financial benefits from working with a freelancer.",
"title": ""
},
{
"docid": "9ef174b33606cc48292303fe2a920126",
"text": "This is a complicated question that relies on the US-India Tax Treaty to determine whether the income is taxable to the US or to India. The relevant provision is likely Article 15 on Personal Services. http://www.irs.gov/pub/irs-trty/india.pdf It seems plausible that your business is personal services, but that's a fact-driven question based on your business model. If the online training is 'personal services' provided by you from India, then it is likely foreign source income under the treaty. The 'fixed base' and '90 days' provisions in Article 15 would not apply to an India resident working solely outside the US. The question is whether your US LLC was a US taxpayer. If the LLC was a taxpayer, then it has an obligation to pay US tax on any worldwide income and it also arguably disqualifies you from Article 15 (which applies to individuals and firms of individuals, but not companies). If you were the sole owner of the US LLC, and you did not make a Form 8832 election to be treated as subject to entity taxation, then the LLC was a disregarded entity. If you had other owners, and did not make an election, then you are a partnership and I suspect but cannot conclude that the treaty analysis is still valid. So this is fact-dependent, but you may be exempt from US tax under the tax treaty. However, you may have still had an obligation to file Forms 1099 for your worker. You can also late-file Forms 1099 reporting the nonemployee compensation paid to your worker. Note that this may have tax consequences on the worker if the worker failed to report the income in those years.",
"title": ""
},
{
"docid": "692b3a6e94da9825253cac3d88d26304",
"text": "\"Taxability depends on residential status when the $ were earned. If it was earned during his status as \"\"Non-Resident\"\" in India, then its tax free. If the money was earned when his tax status was resident in India, then its taxable as per the tax bracket. Edit: Taxability does not depend on whether to transfer the money into India, or keep it out of India or bring it as Cash or Electronically. It only depends on NRI status. Of course transferring the funds into NRE makes the paperwork simpler in case there is a scrutiny.\"",
"title": ""
},
{
"docid": "78d14bc8caa8db04ea078cca3001630b",
"text": "You only need to report INCOME to the IRS. Money which you are paying to a landlord on behalf of someone else is not income.",
"title": ""
},
{
"docid": "8d031287980a46fd870886fd6610e129",
"text": "Yes. You must register for GST as well, if you will be making over the threshold (currently $60,000). That's probably a bonus for you, as your home office expenses will mostly include GST, but your income will most likely be zero-rated. Check with an accountant or with the IRD directly. Just be certain to put aside enough money from each payment to cover income tax, GST and ACC. You will get a very large bill in your second year of business.",
"title": ""
},
{
"docid": "f377bf8b7f5ca4193644635caed01974",
"text": "Firstly if you've formed a limited company you don't need to register as self-employed. You're an employee and shareholder of the company and your taxes will be handled that way. Registering as self-employed is only necessary if you're operating as a sole trader (i.e. without a company). Secondly you absolutely do want to get set-up correctly with HMRC as soon as possible, whether you're a company or a sole trader. Ignoring the legal question your worry about paying taxes when you have no income is groundless - if you're not making any money there won't be any tax to pay. Furthermore it seems likely that the business is currently losing money. Those losses, if correctly recorded, can be carried forward and offset against future profits so not only do you not have to pay tax now, but you can reduce the tax you pay later when the money does start rolling in.",
"title": ""
},
{
"docid": "82d2d4a07821a9bb5dad39c545650d9a",
"text": "Assuming you have registered your activities as partnership and receiving this money as Individual, you need to show this under Schedule OS, 1d [other income]. this will be under the ITR-2 [tab CG-OS] XLS tax preparation utility given by Tax Department. The XLS can be found at https://incometaxindiaefiling.gov.in/portal/individual_huf.do If the funds you are receiving are large [more than say Rs 500,000] then suggest you incorporate a partnership firm or company, there are quite a few exceptions you can claim lowering you tax outgo. The fact that you are transferring funds to your partners can be an issue incase you get audited. You would need to have sufficient evidence to show that the money paid was for services rendered directly and not your income. It would be easier if you create a partnership or have the client directly pay to them. Again if the sum is small its fine, as the sum becomes large, it would get noticed by the tax authorities.",
"title": ""
},
{
"docid": "70772d40b7d6a28b23290a08fa72a915",
"text": "This is taxable in India. You need to declare the income and pay taxes accordingly",
"title": ""
},
{
"docid": "d6a98d3d7c90ccb8fe872ecdb9013ed4",
"text": "According to the New York State Department of Taxation and Finance, your service would appear to be exempt from taxes. However, if you are charging for tangible items, those would incur a sales tax.",
"title": ""
},
{
"docid": "823b2906fd183883e78f1d088118234d",
"text": "1.If the compensation that I receive is over 10 lakhs, how much would be deducted as tax No tax will be deducted by the company. You have to calculate the tax and pay in Advance by yourself. There are quite a few Banks that give you online facility to pay your tax. There is no service tax. Otherwise the tax slabs are right. The current budget has slightly revised the tax brackets. 2.So are these the right taxes and % that Need to be paid? If not do let me know the correct deductions. Yes. Revised brackets for financial year 2014-2015 are NIL for first 2.5 lakhs. Other brackets are unchanged. 4.What others legal options I have to decrease the tax liability? As an employee of my ex company I had once taken an FD (that reduced my tax) The options are same as salaried, i.e. you can claim exemption under 80C or on interest of housing loan, etc. As a consultant certain expenses can also be deducted. You should also talk to a CA who can help you with this as there will be some paperwork involved.",
"title": ""
},
{
"docid": "1a47af56d5b794e7f58cdb39117264bd",
"text": "\"TL;DR - my understanding of the rules is that if you are required to register for GST (earning more than $75k per annum), you would be required to pay GST on these items. To clarify firstly: taxable income, and goods and services tax, are two different things. Any income you receive needs to be considered for income tax purposes - whether or not it ends up being taxable income would be too much to go into here, but generally you would take your expenses, and any deductions, away from your income to arrive at what would generally be the taxable amount. An accountant will help you do this. Income tax is paid by anyone who earns income over the tax free threshold. By contrast, goods and services tax is a tax paid by business (of which you are running one). Of course, this is passed on to the consumer, but it's the business that remits the payment to the tax office. However, GST isn't required to be charged and paid in all cases: The key in your situation is first determining whether you need to register for GST (or whether indeed you already have). If you earn less than $75,000 per year - no need to register. If you do earn more than that through your business, or you have registered anyway, then the next question is whether your items are GST-free. The ATO says that \"\"some education courses [and] course materials\"\" are GST-free. Whether this applies to you or not I'm obviously not going to be able to comment on, so I would advise getting an accountant's advice on this (or at the very least, call the ATO or browse their legal database). Thirdly, are your sales connected with Australia? The ATO says that \"\"A sale of something other than goods or property is connected with Australia if ... the thing is done in Australia [or] the seller makes the sale through a business they carry on in Australia\"\". Both of these appear to be true in your case. So in summary: if you are required to register for GST, you would be required to pay GST on these items. I am not a financial advisor or a tax accountant and this is not financial advice.\"",
"title": ""
},
{
"docid": "b0e89d948d1a3eeeb4332ed2e5712a2a",
"text": "Tax Deducted at source is applicable to Employee / Employer [contract employee] relations ... it was also made applicable for cases where an Indian company pays for software products [like MS Word etc] as the product is not sold, but is licensed and is treated as Royalty [unlike sale of a consumer product, that you have, say car] ... Hence it depends on how your contract is worded with your India clients, best is have it as a service agreement. Although services are also taxed, however your contract should clearly specify that any tax in India would be borne by your Indian Client ... Cross Country taxation is an advanced area, you will not find good advice free :)",
"title": ""
},
{
"docid": "d0924928f7f5f7194bd15333e140dbae",
"text": "\"In 2014 the IRS announced that it published guidance in Notice 2014-21. In that notice, the answer to the first question describes the general tax treatment of virtual currency: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. As it's property like any other, capital gains if and when you sell are taxed. As with any capital gains, you're taxed on the \"\"profit\"\" you made, that is the \"\"proceeds\"\" (how much you got when you sold) minus your \"\"basis\"\" (how much you paid to get the property that you sold). Until you sell, it's just an asset (like a house, or a share of stock, or a rare collectible card) that doesn't require any reporting. If your initial cryptocurrency acquisition was through mining, then this section of that Notice applies: Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities? A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income. That is to say, when it was mined the market value of the amount generated should have been included in income (probably on either Line 21 Other Income, or on Schedule C if it's from your own business). At that point, the market value would also qualify as your basis. Though I doubt there'd be a whole lot of enforcement action for not amending your 2011 return to include $0.75. (Technically if you find a dollar bill on the street it should be included in income, but usually the government cares about bigger fish than that.) It sounds like your basis is close enough to zero that it's not worth trying to calculate a more accurate value. Since your basis couldn't be less than zero, there's no way that using zero as your basis would cause you to pay less tax than you ought, so the government won't have any objections to it. One thing to be careful of is to document that your holdings qualify for long-term capital gains treatment (held longer than a year) if applicable. Also, as you're trading in multiple cryptocurrencies, each transaction may count as a \"\"sale\"\" of one kind followed by a \"\"purchase\"\" of the other kind, much like if you traded your Apple stock for Google stock. It's possible that \"\"1031 like kind exchange\"\" rules apply, and in June 2016 the American Institute of CPAs sent a letter asking about it (among other things), but as far as I know there's been no official IRS guidance on the matter. There are also some related questions here; see \"\"Do altcoin trades count as like-kind exchanges?\"\" and \"\"Assuming 1031 Doesn't Apply To Cryptocurrency Trading\"\". But if in fact those exchange rules do not apply and it is just considered a sale followed by a purchase, then you would need to report each exchange as a sale with that asset's basis (probably $0 for the initial one), and proceeds of the fair market value at the time, and then that same value would be the basis of the new asset you're purchasing. Using a $0 basis is how I treat my bitcoin sales, though I haven't dealt with other cryptocurrencies. As long as all the USD income is being reported when you get USD, I find it unlikely you'll run into a lot of trouble, even if you technically were supposed to report the individual transactions when they happened. Though, I'm not in charge of IRS enforcement, and I'm not aware of any high-profile cases, so it's hard to know anything for sure. Obviously, if there's a lot of money involved, you may want to involve a professional rather than random strangers on the Internet. You could also try contacting the IRS directly, as believe-it-or-not, their job is in fact helping you to comply with the tax laws correctly. Also, there are phone numbers at the end of Notice 2014-21 of people which might be able to provide further guidance, including this statement: The principal author of this notice is Keith A. Aqui of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information about income tax issues addressed in this notice, please contact Mr. Aqui at (202) 317-4718\"",
"title": ""
},
{
"docid": "04b97a83bcb4ed2eba9355dafbdea597",
"text": "The tax is depended upon state where you are registered and the salary paid. More here If you employ contract you need not pay tax.",
"title": ""
}
] |
fiqa
|
454dfc10cdb8876e567f36971188a50e
|
Do I need to pay quarterly 1040 ES and 941 (payroll)?
|
[
{
"docid": "12145f28caf8629f91f0f822a8de3b2c",
"text": "Don't overthink it. As an employee, whether of your own corporation or of someone else, you get a salary and there are deductions taken out. As the owner of a business you get (hopefully) business profits as well. And, in general, you often have other sources of income from investments, etc. Your estimated tax payments are based on the difference between what was withheld from your salary and what you will owe, based on salary, business income, and other sources. So, in essence, you just add up all the income you expect, estimate what the tax bill will be, and subtract what's been withheld. That's your estimated tax payment.",
"title": ""
},
{
"docid": "a3536cc618e291ed7fa8cd499d035587",
"text": "I'm not sure why you're confusing the two unrelated things. 1040ES is your estimated tax payments. 941 is your corporation's payroll tax report. They have nothing to do with each other. You being the corporation's employee is accidental, and can only help you to avoid 1040ES and use the W2 withholding instead - like any other employee. From the IRS standpoint you're not running a LLC - you're running a corporation, and you're that corporation's employee. While technically you're self-employed, from tax perspective - you're not (to the extent of your corporate salary, at least).",
"title": ""
},
{
"docid": "3888310130e7db43d4af9b3324cf9def",
"text": "I think I may have figured this out but if someone could double check my reasoning I'd appreciate it. So if my company makes $75000 and I decide to pay myself a $30000 salary, then the quarterly payment break down would be like this: 1040ES: Would pay income tax on non salary dividend ($45000) 941: Would pay income tax, SS, medicare on salary ($30000) (I'm the only person on payroll) So I think this answers my question in that after switching from filing as LLC to S-corp, I won't have to pay as much on 1040ES because some of it will now be covered on payroll.",
"title": ""
}
] |
[
{
"docid": "cf9d3194a23f0e9f668052dac979fcc2",
"text": "If you have non-salary income, you might be required to file 1040ES estimated tax for the next year on a quarterly basis. You can instead pay some or all in advance from your previous year's refund. In theory, you lose the interest you might have made by holding that money for a few months. In practice it might be worth it to avoid needing to send forms and checks every quarter. For instance if you had a $1000 estimated tax requirement and the alternative was to get 1% taxable savings account interest for six months, you'd make about $3 from holding it for the year. I would choose to just pay in advance. If you had a very large estimation, or you could pay off a high-rate debt and get a different effective rate of return, the tradeoff may be different.",
"title": ""
},
{
"docid": "011fde1f94f514677efa1a3f3709b0eb",
"text": "\"The annualized method allows you to take a look at each quarter independently and pay the tax in the quarter that you earned it. -- According to Linda Durand, a certified public accountant with Drolet & Associates PLLC in Washington, D.C., from the Bankrate article \"\"Paying quarterly estimated taxes\"\" And after paying annualized quarterly estimates, you can still owe up to $1000 at tax time without penalty.\"",
"title": ""
},
{
"docid": "cecc860897423d6c529366fcac3bc914",
"text": "\"You need to hire a tax professional and have them sort it out for you properly and advise you on how to proceed next. Don't do it yourself, you're way past the stage when you could. You're out of compliance, and you're right - there are penalties that a professional might know how to mitigate, and maybe even negotiate a waiver with the IRS, depending on the circumstances of the case. Be careful of answers like \"\"you don't need to pay anything\"\" that are based on nothing of facts. Based on what you said in the question and in the comments, it actually sounds like you do have to pay something, and you're in trouble with the IRS already. It might be that you misunderstood something in the past (e.g.: you said the business had filed taxes before, but in fact that might never happened and you're confusing \"\"business filed taxes\"\" with \"\"I filed schedule C\"\") or it might be the actual factual representation of things (you did in fact filed a tax return for your business with the IRS, either form 1120 of some kind or 1065). In any case a good licensed (CPA or EA) professional will help you sort it out and educate you on what you need to do in the future.\"",
"title": ""
},
{
"docid": "90ac357b1ab65e33ccc03a8fbdc10b0f",
"text": "Yes, you can send in a 2012 1040-ES form with a check to cover your tax liability. However, you will likely have to pay penalties for not paying tax in timely fashion as well as interest on the late payment. You can have the IRS figure the penalty and bill you for it, or you can complete Form 2210 (on which these matters are figured out) yourself and file it with your Form 1040. The long version of Form 2210 often results in the smallest extra amount due but is considerably more time-consuming to complete correctly. Alternatively, if you or your wife have one or more paychecks coming before the end of 2012, it might be possible to file a new W-4 form with the HR Department with a request to withhold additional amounts as Federal income tax. I say might because if the last paycheck of the year will be issued in just a few days' time, it might already have been sent for processing, and HR might tell you it is too late. But, depending on the take-home pay, it might be possible to have the entire $2000 withheld as additional income tax instead of sending in a 1040-ES. The advantage of doing it through withholding is that you are allowed to treat the entire withholding for 2012 as satisfying the timely filing requirements. So, no penalty for late payment even though you had a much bigger chunk withheld in December, and no interest due either. If you do use this approach, remember that Form W-4 applies until it is replaced with another, and so HR will continue to withhold the extra amount on your January paychecks as well. So, file a new W-4 in January to get back to normal withholding. (Fix the extra exemption too so the problem does not recur in 2013).",
"title": ""
},
{
"docid": "6ef443450b7a2e0334cec2673e52f06d",
"text": "\"You would put your earnings (and expenses, don't forget) on Schedule C, and then do a Schedule SE for self-employment tax. http://www.irs.gov/businesses/small/article/0,,id=98846,00.html 1040ES isn't used to compute taxes, it's used to pay taxes. Generally you are supposed to pay taxes as you go, rather than when you file. There are exceptions where you won't be penalized for paying when you file, \"\"most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller\"\" from http://www.irs.gov/taxtopics/tc306.html i.e. there's a safe harbor as long as you pay as much as you owed the year before. If you owe a lot at the end of the year a second time in a row, then you get penalized.\"",
"title": ""
},
{
"docid": "b6302253c06243087d1f4e543d757815",
"text": "Ultimately, you are the one that is responsible for your tax filings and your payments (It's all linked to your SSN, after all). If this fee/interest is the result of a filing error, and you went through a preparing company which assumes liability for their own errors, then you should speak to them. They will likely correct this and pay the fees. On the other hand, if this is the result of not making quarterly payments, then you are responsible for it. (Source: Comptroller of Maryland Site) If you [...] do not have Maryland income taxes withheld by an employer, you can make quarterly estimated tax payments as part of a pay-as-you-go plan. If your employer does withhold Maryland taxes from your pay, you may still be required to make quarterly estimated income tax payments if you develop a tax liability that exceeds the amount withheld by your employer by more than $500. From this watered-down public-facing resource, it seems like you'll get hit with fees for not making quarterly payments if your tax liability exceeds $500 beyond what is withheld (currently: $0).",
"title": ""
},
{
"docid": "eebfd26667517727702aaec038ea12a4",
"text": "\"You file taxes as usual. W2 is a form given to you, you don't need to fill it. Similarly, 1099. Both report moneys paid to you by your employers. W2 is for actual employer (the one where you're on the payroll), 1099 is for contractors (where you invoice the entity you provide services to and get paid per contract). You need to look at form 1040 and its instructions as to how exactly to fill it. That would be the annual tax return. It has various schedules (A, B, C, D, E, F, H, etc) which you should familiarize yourself with, and various additional forms that you attach to it. If you're self employed, you're expected to make quarterly estimate payments, but if you're a salaried employee you can instruct your employer to withhold the amounts you expect to owe for taxes from your salary, instead. If you're using a tax preparation software (like TurboTax or TaxAct), it will \"\"interview\"\" you to get all the needed information and provide you with the forms filled accordingly. Alternatively you can pay someone to prepare the tax return for you.\"",
"title": ""
},
{
"docid": "b785bcf974c97d43b0f71c871e9a9f2a",
"text": "No, even businesses pay taxes quarterly. So if you formed Nathan, LLC, or otherwise became self employed, you'd still have to file quarterly estimates and make tax payments. This would cause taxes to be a much more high touch part of your life. However, you should ensure that you're claiming the proper exemptions etc to avoid excessive withholding.",
"title": ""
},
{
"docid": "2f73770a2da33ab40245475e5bc5ee82",
"text": "\"You may want, or at least be thinking of, the annualized method described in Pub 505 http://www.irs.gov/publications/p505/ch02.html#en_US_2015_publink1000194669 (also downloadable in PDF) and referred to in Why are estimated taxes due \"\"early\"\" for the 2nd and 3rd quarters only? . This doesn't prorate your payments as such; instead you use your income and deductions etc for each of the 3,2,3,4-month \"\"quarters\"\" to compute a prorated tax for the partial year, and pay the excess over the amount already paid. If your income etc amounts are (nearly) the same each month, then this computation will result in payments that are 3,2,3,4/12ths of 90% of your whole-year tax, but not if your amounts vary over the year. If you do use this method (and benefit from it) you MUST file form 2210 schedule AI with your return next filing season to demonstrate that your quarterly computations, and payments, met the requirements. You need to keep good per-period (or per-month) records of all tax-relevant amounts, and don't even try to do this form by hand, it'll drive you nuts; use software or a professional preparer (who also uses software), but I'd expect someone in your situation probably needs to do one of those anyway. But partnership puts a wrinkle on this. As a partner, your taxable income and expense is not necessarily the cash you receive or pay; it is your allocated share of the partnership's income and expenses, whether or not they are distributed to you. A partnership to operate a business (like lawyers, as opposed to an investment partnership) probably distributes the allocated amounts, at least approximately, rather than holding them in the partnership; I expect this is your year-end draw (technically a draw can be any allowed amount, not necessarily the allocated amount). In other words, your husband does earn this money during the year, he just receives it at the end. If the year-end distribution (or allocation if different) is significant (say more than 5% of your total income) and the partnership is not tracking and reporting these amounts (promptly!) for the IRS quarters -- and I suspect that's what they were telling you \"\"affects other partners\"\" -- you won't have the data to correctly compute your \"\"quarterly\"\" taxes, and may thus subject yourself to penalty for not timely paying enough. If the amount is reasonably predictable you can probably get away with using a conservative (high-side) guess to compute your payments, and then divide the actual full-year amounts on your K-1 over 12 months for 2210-AI; this won't be exactly correct, but unless the partnership business is highly seasonal or volatile it will be close enough the IRS won't waste its time on you. PS- the \"\"quarters\"\" are much closer to 13,9,13,17 weeks. But it's months that matter.\"",
"title": ""
},
{
"docid": "3d1e1dcc1720a7572a82eaa13e92c8cb",
"text": "\"Your employer can require a W8-BEN or W-9 if you are a contractor, and in some special cases. I believe this bank managing your stock options can as well; it's to prove you don't have \"\"foreign status\"\". See the IRS's W-9 instructions for details.\"",
"title": ""
},
{
"docid": "c7b3e7692fed18720326764c41804733",
"text": "I'm assuming your talking USA. There are two ways to look. If you know you should pay on the cap gains, the best way to handle that separately from your salary is to file a quarterly tax payment. That, I understand, is what the self-employed have to do. I'm in the situation where at some point, probably this year, the company that employs me will be bought out, and I will owe capital gains taxes on my shares gobbled up in the buy-out. It's a cash-for-stock transaction. So, in my case, I've just adjusted my W-4 to take advantage of the safe-harbor provision related to taxes I payed in 2016 and my salary. The details vary depending on your situation, but in my case, I've calculated what it will take in W-4 allowances to make sure I pay 110% of my 2016 tax payment (after refund). I'm not worrying about what the actual taxes on those shares of company stock will be, because I've met the rules for safe-harbor. Safe harbor just means that they can't penalize you for under-withholding or underpayment. It doesn't mean I won't have to write a check on april 15.",
"title": ""
},
{
"docid": "904dbe1fdaa1a1fc7f4f79339bfd05a6",
"text": "My understanding (I've never filed one myself) is that the 1040ES is intended to allow you to file quarterly and report unpredictable income, and to pay estimated taxes on that income. I was in the same sort of boat for 2016 -- I had a big unexpected income source in 2015, and this took away my Safe Harbor for 2016. I adjusted my w-2 to zero exemptions (eventually) and will be getting a refund of about 1% of our income. So lets say you make 10000 in STG in March, and another 15000 in STG in April. File a quarterly 1040-ES between March 31 and April 15. Report the income, and pay some tax. You should be able to calculate the STCG Tax for 10k pretty easily. Just assume that it comes off the top and doesn't add at all to your deductions. Then for April, do the same by June 15. Just like your W-2 is used to estimate how much your employer should withhold, the 1040ES is designed to estimate how much extra you need to pay to the IRS to avoid penalties. It'll all get resolved after you file your final 1040 for the 2017 calendar year.",
"title": ""
},
{
"docid": "734867313a623f2f57edf5c18acbae18",
"text": "Yes, you need to include income from your freelance work on your tax return. In the eyes of the IRS, this is self-employment income from your sole-proprietorship business. The reason you don't see it mentioned in the 1040EZ instructions is that you can't use the 1040EZ form if you have self-employment income. You'll need to use the full 1040 form. Your business income and expenses will be reported on a Schedule C or Schedule C-EZ, and the result will end up on Line 12 of the 1040. Take a look at the requirements at the top of the C-EZ form; you probably meet them and can use it instead of the more complicated C form. If you have any deductible business expenses related to your freelance business, this would be done on Schedule C or C-EZ. If your freelance income was more than $400, you'll also need to pay self-employment tax. To do this, you file Schedule SE, and the tax from that schedule lands on form 1040 Line 57.",
"title": ""
},
{
"docid": "077e69dfbbb8d8112c446114db179a4c",
"text": "As a nonresident sole proprietor or partnership You are not a sole proprietor or a member of a legal partnership. You are an employee for a corporation. Does the nature of your work require you to be present in New York regularly? If you are in New York for personal reasons, you are simply telecommuting. You must pay taxes personally for your W-2 income, but your business entity never moved from Wyoming. If this were not true, companies would have to pay corporate income tax to every state in which they have a telecommuter. For example, I live in Florida but telecommute to a company in Michigan. Does my employer pay Florida business tax? Of course not. Your business would only owe New York if the nature of the business requires a consistent and regular business presence in New York, such as maintaining an office for a portion of every year so clients could see you.",
"title": ""
},
{
"docid": "979150f0ed4d6e0a2bded0486e3ed0a7",
"text": "\"They aren't actually. It appears to be a low interest rate, but it doesn't cover their true cost of capital. It is a sales tactic where they are raising the sticker price/principal of the car, which is subsidizing the true cost of the loan, likely 4% or higher. It would be hard to believe that the true cost of a car loan would be less than for a mortgage, as with a mortgage the bank can reclaim an asset that tends to rise in value, compared to a used car, which will have fallen in value. This is one reason why you can generally get a better price with cash, because there is a margin built in, in addition to the fact that with cash they get all their profit today versus a discount of future cash flows from a loan by dealing with a bank or other lending company. So if you could see the entire transaction from the \"\"inside\"\", the car company would not actually be making money. The government rate is also so low that it often barely covers inflation, much less operating costs and profit. This is why any time you see \"\"0% Financing!\"\", it is generally a sales tactic designed to get your attention. A company cannot actually acquire capital at 0% to lend to you at 0%, because even if the nominal interest rate were 0%, there is an opportunity cost, as you have observed. A portion of the sticker price is covering the real cost, and subsidizing the monthly payment.\"",
"title": ""
}
] |
fiqa
|
6b2d7599e07217c9cf9ad7570ee46321
|
Theoretically, if I bought more than 50% of a company's stocks, will I own the company?
|
[
{
"docid": "52ab18a2a7ca03e479b2e9b8ed29d002",
"text": "You'll own whatever fraction you bought. To own the company (as in, boolean - yes or no) you need to buy 100% of the outstanding stock. RE controlling the company, in general the answer is yes - although the mechanism for this might not be so straight forward (ie. you may have to appoint board members and may only be able to do so at pre-set intervals) and there may be conditions in the company charter designed to stop this happening. Depending on your jurisdiction certain ownership percentages can also trigger the need to do certain things so you may not be able to just buy 50% - in Australia when you reach 20% ownership you have to launch a formal takeover bid.",
"title": ""
},
{
"docid": "00d21b3746e0c66b39ff8538ccd42fcd",
"text": "\"Owning more than 50% of a company's stock normally gives you the right to elect a majority, or even all of a company's (board of) directors. Once you have your directors in place, you can tell them who to hire and fire among managers. There are some things that may stand in the way of your doing this. First, there may be a company bylaw that says that the directors can be replaced only one \"\"class\"\" at a time, with three or four \"\"classes.\"\" Then it could take you two or three years to get control of the company. Second, there may be different classes of shares with different voting rights, so if e.g. \"\"A\"\" shares controlled by the founding family gives them ten votes, and \"\"B\"\" shares owned by the other shareholders, you may have a majority of total shares and be outvoted by the \"\"A\"\" shares.\"",
"title": ""
},
{
"docid": "8f27920a96da3bee8da7e7f98c9a00d8",
"text": "\"I believe Tom Au answered your key question. Let me just add in response to, \"\"What if someone was just simply rich to buy > 50%, but does not know how to handle the company?\"\" This happens all the time. Bob Senior is a brilliant business man, he starts a company, it is wildly successful, then he dies and Bob Junior inherits the company. (If it's a privately owned company he may inherit it directly; if it's a corporation he inherits a controlling interest in the stock.) Bob Junior knows nothing about how to run a business. And so he mismanages the company, runs it into the ground, and eventually it goes bankrupt. Stock holders lose their investment, employees lose their jobs, and in general everyone is very unhappy. I suppose it also happens that someone gets rich doing thing A and then decides that he's going to buy a business that does thing B. He has no idea how to run a business doing thing B and he destroys the company. I can't think of any specific examples of this off the top of my head, but I've heard of it happening with people who make a ton of money as actors or professional athletes and then decide to start a business.\"",
"title": ""
},
{
"docid": "11e1ebe3d71db1e3366bbc19928f5024",
"text": "\"The usual pattern is that shareholders don't run companies in a practical sense, so \"\"if someone was just simply rich to buy > 50%, but does not know how to handle the company\"\" doesn't change anything. In large companies, the involvement of shareholders is limited to a few votes on key issues such as allocating profit (how much to keep in company vs pay in dividends) and choosing board members. And board members also don't run the company - they oversee how the company is being run, and choose executives who will actually run the company. If a rich person simply buys 50% and doesn't desire to get personally involved, then they just vote for whatever board members seem apropriate and forget about it.\"",
"title": ""
},
{
"docid": "0781346fa724fd4cdd54d85a61f25b62",
"text": "I almost agree. I am not completely sure about the ownership of stock, but to have the majority ownership of any company you must own more than 50% of a company's outstanding shares. Although a board in majority, could out vote a majority shareholder in most cases depending on the company policy regarding shareholders and the general law of the country, and to how the company is managed.",
"title": ""
},
{
"docid": "928598067c978d7ba6b404631e154c70",
"text": "The person holding the majority of shares can influence the decisions of the company. Even though the shareholder holds majority of the shares,the Board of Directors appointed by the shareholders in the Annual General Meeting will run the company. As said in the characteristics of the company,the owners and the administrators of the company are different. The shareholder holding majority of the shares can influence the business decisions like appointing the auditor,director etc. and any other business decisions(not taken in the ordinary business) that are taken in the Annual General Meeting.",
"title": ""
},
{
"docid": "12693d5ab42b95c35af04f25645e47be",
"text": "It is also worth noting that one of the character defining features of a publicly traded company is that the management that is responsible for the day to day operations of the stands independent of those who have ownership. Shareholder of a public company typically don't have influence over the day to day running of the company.",
"title": ""
},
{
"docid": "fe6bc779bbc88c442ac003d44cff045a",
"text": "You guys seem to have forgotten the most important part of this equation ... i work for a bank and I can tell u this as a painful fact ... every business is governed by its paperwork ... articles bylaws operating agreements amendments and minutes .. if a companys paperwork says that the 51% owner can fire everyone and move to Alaska and that paperwork is proper (signed and binding) it is with minimal excavation law... case in point every company is different .. and it is formed and governed by its paperwork.",
"title": ""
}
] |
[
{
"docid": "ac087fe705c43712747a7c55daaad272",
"text": "A lot of these answers are strong, but at the end of the day this question really boils down to: Do you want to own things? Duh, yes. It means you have: By this logic, you would expect aggregate stock prices to increase indefinitely. Whether the price you pay for that ownership claim is worth it at any given point in time is a completely different question entirely.",
"title": ""
},
{
"docid": "8fc999cb123d1fab5d8a6d8bcfd798b5",
"text": "I believe you can easily make tresholds for what constitute a partial owner. If I work for GE and buy a share, I'm not exactly a partial owner. Anything under 10% for companies making, I don't know, less than 50 Mil in revenue, you're an employee. Larger companies, 5%. That's just an idea, could be refined but, yeah...",
"title": ""
},
{
"docid": "3eba0ee9b9ecd19532789be1d9146812",
"text": "\"I find the question interesting, but it's beyond an intelligent answer. Say what you will about Jim Cramer, his advice to spend \"\"an hour per month on each stock\"\" you own appears good to me. But it also limits the number of stocks you can own. Given that most of us have day jobs in other fields, you need to decide how much time and education you can put in. That said, there's a certain pleasure in picking stocks, buying a company that's out of favor, but your instinct tells you otherwise. For us, individual stocks are about 10% of total portfolio. The rest is indexed. The amount that \"\"should be\"\" in individual stocks? None. One can invest in low cost funds, never own shares of individual stocks, and do quite well.\"",
"title": ""
},
{
"docid": "f89d2a641744984e2edbf16e4a5d12d4",
"text": "Regardless of whether a stock is owned by a retail investor or an institutional investor, it is subject to the same rules. For example, say that as part of the buyout, 1 share of Company B is equivalent to 0.75 shares of Company A and any fractional shares will be paid out in cash. This rule will apply to both the retail investor who holds 500 shares of Company B, as well as the asset manager or hedge fund holding 5,000,000 shares of Company B.",
"title": ""
},
{
"docid": "fd094d8b9bc86136ff451df39877fe4a",
"text": "There is a fundemental misunderstanding: the business and the owner are not the same entity. You said: I give the business $25,000 and take 50% of the business. No you can give the owner of the business 25K, and now he has 25K and 50% of a 50K business. That 25K sits in Mr. Smith's bank account, not Acme Widget's account. A more simple example is when you buy a car. The money goes to the car dealership, it does not get put into the car's glove box. You may be thinking of an investor in a business. He could pump $$ into the business as operating capital for a share of the business. In that case, it would be a bit unfair to get 50% of the business for a 25K. However, the owner may be interested in doing such a deal because value of the investor can add more than just $$ to the business. Having a celebrity investor might do more good for the business than the actual dollars. Another situation is that the owner might be desperate. Without a influx of cash the whole business might end. There are guidelines to business evaluation, but valuing them is not an easy thing.",
"title": ""
},
{
"docid": "e44598dada0a8ebf91496f7b40fd3b2c",
"text": "Shares are partial ownership of the company. A company can issue (not create) more of the shares it owns at any time, to anyone, at any price -- subject to antitrust and similar regulations. If they wanted to, for example, flat-out give 10% of their retained interest to charity, they could do so. It shouldn't substantially affect the stock's trading for others unless there's a completely irrational demand for shares.",
"title": ""
},
{
"docid": "184e33992f587192ee5f6cbe68a089b5",
"text": "Depends on the structure of the company and what shares are outstanding. If the pink sheet stock has no voting power then buying all that stock doesn't get you any control at all. On the other hand, if the outstanding shares only represent 20% of the company's overall shares, then buying all the shares isn't likely enough to have a controlling interest. Thus, you'll have to dig into the details. If you want an example of where I'd have my doubts, look at Nestle's stock which has the ticker of NSRGY. There can be companies that are structured with stock on multiple exchanges that can also be a challenge at times. There is also something to be said if you own enough stock in a company that this has to be disclosed to the SEC when you buy more.",
"title": ""
},
{
"docid": "d05dee1feed3d605a45f0576e8a43dbd",
"text": "\"It works if after the price has halved and you buy more the price then rises, however if you are attempting to do this you are basing you \"\"doubling down\"\" on hope, and if you are basing a purchase on hope you are gambling. In many cases if the price has halved it could be because there is something very wrong with the company, so the price could easly half again. In that case it hasn't worked. You are better off waiting to see if the company makes a turn around and starts improving. Wait for confirmation that the stock price is heading back up before buying.\"",
"title": ""
},
{
"docid": "a90aba0d9207276fd2fe9e3902a3e306",
"text": "\"Check how long you have to hold the stock after buying it. If you can sell reasonably soon and your company is reasonably stable, you're unlikely to lose and/or be taxed and/or pay enough in fees to lose more than the 30% \"\"free money\"\" they're giving you. Whether you hold it longer than the minimum time depends partly on whether you think you can better invest the money elsewhere, and partly on how you feel about having both your salary and (part of) your investments tied to the company's success? The company would like you to \"\"double down\"\" that way, in the theory that it may make you mors motivated... but some investment councelors would advise keeping that a relatively small part of your total investments, basically for the same reasons you are always advised to diversify.\"",
"title": ""
},
{
"docid": "b32701eca361387d32f57d1bcda9f2b7",
"text": "I believe, I could be wrong, it has been a long day. By exercising this right you have the right to purchase the equivalent of their current share. Eg. Someone owns 50 of 100 shares. and the company does a rights offering and is expanding the shares to 200. That person has first right to purchase 50 more shares to keep his share from being diluted.",
"title": ""
},
{
"docid": "d1a7b146aee22e84eaa261388f7d56b0",
"text": "\"As a TL;DR version of JAGAnalyst's excellent answer: the buying company doesn't need every last share; all they need is to get 51% of the voting bloc to agree to the merger, and to vote that way at a shareholder meeting. Or, if they can get a supermajority (90% in the US), they don't even need a vote. Usually, a buying company's first option is a \"\"friendly merger\"\"; they approach the board of directors (or the direct owners of a private company) and make a \"\"tender offer\"\" to buy the company by purchasing their controlling interest. The board, if they find the offer attractive enough, will agree, and usually their support (or the outright sale of shares) will get the company the 51% they need. Failing the first option, the buying company's next strategy is to make the same tender offer on the open market. This must be a public declaration and there must be time for the market to absorb the news before the company can begin purchasing shares on the open market. The goal is to acquire 51% of the total shares in existence. Not 51% of market cap; that's the number (or value) of shares offered for public trading. You could buy 100% of Facebook's market cap and not be anywhere close to a majority holding (Zuckerberg himself owns 51% of the company, and other VCs still have closely-held shares not available for public trading). That means that a company that doesn't have 51% of its shares on the open market is pretty much un-buyable without getting at least some of those private shareholders to cash out. But, that's actually pretty rare; some of your larger multinationals may have as little as 10% of their equity in the hands of the upper management who would be trying to resist such a takeover. At this point, the company being bought is probably treating this as a \"\"hostile takeover\"\". They have options, such as: However, for companies that are at risk of a takeover, unless management still controls enough of the company that an overruling public stockholder decision would have to be unanimous, the shareholder voting body will often reject efforts to activate these measures, because the takeover is often viewed as a good thing for them; if the company's vulnerable, that's usually because it has under-performing profits (or losses), which depresses its stock prices, and the buying company will typically make a tender offer well above the current stock value. Should the buying company succeed in approving the merger, any \"\"holdouts\"\" who did not want the merger to occur and did not sell their stock are \"\"squeezed out\"\"; their shares are forcibly purchased at the tender price, or exchanged for equivalent stock in the buying company (nobody deals in paper certificates anymore, and as of the dissolution of the purchased company's AOI such certs would be worthless), and they either move forward as shareholders in the new company or take their cash and go home.\"",
"title": ""
},
{
"docid": "6b204b1ac56d47235c85b96f0a5a43c4",
"text": "Does Coke count as one of his operating businesses though? He's the biggest shareholder but wikipedia says it's around 26%. There are some other huge cash cows in there as well; BNSF Railroad's earnings were like $3.5 billion last year, and Berkshire own 100% of the business.",
"title": ""
},
{
"docid": "764546861d56bdb5f695573a8b26477b",
"text": "When you own a share, you also own a vote (in most cases). That vote is your means of controlling the assets and management of the company. If you had enough votes and wanted to trade a share for an iPhone or liquidate the company entirely, you could do it. The only thing that prevents you from doing that is that companies are not set up to handle the transaction that way. Stock holders are usually trying to buy investments, not iPhones. There are companies that have more cash in the bank than the market cap (total value) of their stock. They usually don't remain as public companies for long in that case. An investor or group of investors buy them up and split the cash. If you had enough shares of Apple, you could do that to; or, just trade one for an iPhone.",
"title": ""
},
{
"docid": "75423c42d7f054dc33f42d982df55afc",
"text": "Only if you sell the stock in question, and use the proceeds to buy other stock. (You should probably never feel bad about selling your company stock, even if it goes up a lot later, because from a risk-exposure basis you are already exposed to your company's performance through your career. Unless you have a lot of other savings, you should diversify.)",
"title": ""
},
{
"docid": "b690c669a900ba8cb6e625b06c76349b",
"text": "I do not know for sure so do not quote me on this. But I would assume that you will get paid out to what the value of the buyout is. Example if your company has 100 private shares and you own 1 share (1%), and the company sells for $1,000,000. Your share will be worth 1% of the $1 million.",
"title": ""
}
] |
fiqa
|
468edc5395eb0b4b8c58f70c24f6c03e
|
Using a self-directed IRA to buy vacation condo, rent it out to an LLC for $1
|
[
{
"docid": "979881b8e14f0b7ad3e0320c744d9129",
"text": "\"Self directed IRAs have rules to prevent self-dealing of this sort called \"\"prohibited transactions\"\". You can't buy or sell or lease assets or obtain services from anyone closely linked to you or any beneficiaries of the IRA. You can't loan yourself money from the IRA, and you can't deliberately take the proceeds that should be going to your self directed IRA and give them to another account that you own.\"",
"title": ""
},
{
"docid": "6717866315a55e750928ea6245ad3f8b",
"text": "I don't quite understand your thought process here. First, in a tax-advantaged retirement account you are NOT allowed to engage in a transaction with yourself. If you just want to run a business and be able to write off expenses, how is using the self-directed IRA relevant? You can either buy the condo using your tax-advantaged account and rent it out to regular tenants. Or you buy the condo yourself using your own money and then operate your business so you can deduct business expenses from doing so. 401k's allow you to take a loan out of it, so you can look into that as well.",
"title": ""
}
] |
[
{
"docid": "fb4538721131cc3f19655a02ffa66286",
"text": "\"If you start an LLC with you as the sole member it will be considered a disregarded entity. This basically means that you have the protection of being a company, but all your revenues will go on your personal tax return and be taxed at whatever rate your personal rate calculates to based on your situation. Now here is the good stuff. If you file Form 2553 you can change your sole member LLC to file as an S Corp. Once you have done this it changes the game on how you can pay out what your company makes. You will need to employ yourself and give a \"\"reasonable\"\" salary. This will be reported to the IRS and you will file your normal tax returns and they will be taxed based on your situation. Now as the sole member you can then pay yourself \"\"distribution to share holders\"\" from your account and this money is not subject to normal fica and social security tax (check with your tax guy) and MAKE SURE to document correctly. The other thing is that on that same form you can elect to have a different fiscal year than the standard calendar IRS tax year. This means that you could then take part of profits in one tax year and part in another so that you don't bump yourself into another tax bracket. Example: You cut a deal and the company makes 100,000 in profit that you want to take as a distribution. If you wrote yourself a check for all of it then it could put you into another tax bracket. If your fiscal year were to end say on sept 30 and you cut the deal before that date then you could write say 50,000 this year and then on jan 1 write the other check.\"",
"title": ""
},
{
"docid": "49af7aa1976b53feba7306586aa787c1",
"text": "You may be able to, depending on what state you're in, but it is going to be 10x more complicated than just forming a new LLC. I don't see an advantage to this approach - if you're imagining it will be cheaper, you are imagining wrong.",
"title": ""
},
{
"docid": "18a41c6e82cb828cc6beeb5ccba6f277",
"text": "\"With a healthy income its quite possible to contribute too much into 401Ks/IRAs. For example, if your retired today and had 3 million or so, how much more would you need? Would an extra million materially change your life? Would it make you happier if you invested that extra in some rental properties or perhaps a business like a sandwich or ice cream shop where you have more direct control? This kind of discussion is possible as you indicate that you have taken care of your life financially. It seems at odds with the negative press describing the woefully condition of the standard person's finances. These articles ignore a very simple fact: its because of bad behavior. You, on the contrary, have behaved well and are in the process of reaping rewards. This is where I feel your \"\"mental gymnastics\"\" originates. Looking to engage in the rental market is no different then buying a franchise. You are opening a business of your own. You'll have to educate yourself and are likely to make a few mistakes that will cause you to write checks to solve. Your goal is to minimize those mistakes. After all, what do you know about the rental home business? I am guessing not much. Educate yourself. Read and spend some money on taking knowledgeable people out for coffee. In the end you should understand that although a poor decision may cost you money you cannot really make a bad decision. Lets say you do buy a rental property, things go south, you sell for a loss, etc.... In the end the \"\"butchers bill\"\" is 50K or so. Will that materially change your life? Probably not. The worst case is perhaps you have to work a year or two beyond the anticipated retirement age to make up that money. No big deal.\"",
"title": ""
},
{
"docid": "5768adeca0219e72d67ccb5dbb924ded",
"text": "Immediately move your Roth IRA out of Edward Jones and into a discount broker like Scottrade, Ameritrade, Fidelity, Vanguard, Schwab, or E-Trade. Edward Jones will be charging you a large fraction of your money (probably at least 1% explicitly and maybe another 1% in hidden-ish fees like the 12b-1). Don't give away several percent of your savings every year when you can have an account for free. Places like Edward Jones are appropriate only for people who are unwilling to learn about personal finance and happy to pay dearly as a result. Move your money by contacting the new broker, then requesting that they get your money out of Edward Jones. They will be happy to do so the right way. Don't try and get the money out yourself. Continue to contribute to your Roth as long as your tax bracket is low. Saving on taxes is a critically important part of being financially wise. You can spend your contributions (not gains) out of your Roth for any reason without penalty if you want/need to. When your tax bracket is higher, look at traditional IRA's instead to minimize your current tax burden. For more accessible ways of saving, open a regular (non-tax-advantaged) brokerage account. Invest in diversified and low-cost funds. Look at the expense ratios and minimize your portfolio's total expense. Higher fee funds generally do not earn the money they take from you. Avoid all funds that have a nonzero 12b-1 fee. Generally speaking your best bet is buying index funds from Fidelity, Vanguard, Schwab, or their close competitors. Or buying cheap ETF's. Any discount brokerage will allow you to do this in both your Roth and regular accounts. Remember, the reason you buy funds is to get instant diversification, not because you are willing to gamble that your mutual funds will outperform the market. Head to the bogleheads forum for more specific advice about 3 fund portfolios and similar suggested investment strategies like the lazy portfolios. The folks in the forums there like to give specific advice that's not appropriate here. If you use a non-tax-advantaged account for investing, buy and sell in a tax-smart way. At the end of the year, sell your poor performing stocks or funds and use the loss as a tax write-off. Then rebalance back to a good portfolio. Or if your tax bracket is very low, sell the winners and lock in the gains at low tax rates. Try to hold things more than a year so you are taxed at the long-term capital gains rate, rather than the short-term. Only when you have several million dollars, then look at making individual investments, rather than funds. In a non-tax-advantaged account owning the assets directly will help you write off losses against your taxes. But either way, it takes several million dollars to make the transactions costs of maintaining a portfolio lower than the fees a cheap mutual/index fund will charge.",
"title": ""
},
{
"docid": "31c5ac8c41c0019f73a79c19208dd61e",
"text": "Have you considered a self-directed IRA to invest, rather than the stock market or publicly traded assets? Your IRA can actually own direct title to real estate, loan money via secured or unsecured promissory notes much like a hard money loan or invest into shares of an entity that invests in real estate. The only nuance is that the IRA holder is responsible for finding and deciding upon the investment vehicle. Just an option outside of the normal parameters, if you have an existing IRA or old 401(k) or other qualified plan, this might be an option for you.",
"title": ""
},
{
"docid": "a11b3faa4f2d442093ab3f4f0a497ccc",
"text": "\"If your meaning of \"\"asset protection\"\" is buying gold and canned food in the name of a Nevada LLC because some radio guy said so, bad idea. For a person, if you have assets, buy appropriate liability limits with your homeowner/renter insurance policy or purchase an \"\"umbrella\"\" liability policy. This type of insurance is cheap. If you don't have assets, it may not be worth the cost of insuring yourself beyond the default limits on your renter's or homeowner's policy. If you have a business, you need to talk to your insurance agent about what coverage is appropriate for the business as a whole vs. you personally. You also need to talk to your attorney about how to conduct yourself so that your business interests are separated from your personal interests.\"",
"title": ""
},
{
"docid": "9a56cf08aa0055bd8866c3a1cc7284ba",
"text": "Our company does a lot of research on the self-directed IRA industry. We also provide financial advice in this area. In short, we have seen a lot in this industry. You mentioned custodian fees. This can be a sore spot for many investors. However, not all custodians are expensive, you should do your research before choosing the best one. Here is a list of custodians to help with your research Here are some of the more common pros and cons that we see. Pros: 1) You can invest in virtually anything that is considered an investment. This is great if your expertise is in an area that cannot be easily invested in with traditional securities, such as horses, private company stock, tax liens and more. 2) Control- you have greater control over your investments. If you invest in GE, it is likely that you will not have much say in the running of their business. However, if you invest in a rental property, you will have a lot of control over how the investment should operate. 3) Invest in what you know. Peter lynch was fond of saying this phrase. Not everyone wants to invest in the stock market. Many people won't touch it because they are not familiar with it. Self-directed IRAs allow you to invest in assets like real estate that you know well. Cons: 1) many alternative investments are illiquid. This can present a problem if you need to access your capital for withdrawals. 2) Prohibited transactions- This is a new area for many investors who are unfamiliar with how self-directed IRAs work 3) Higher fees- in many cases, the fees associated with self-directed IRA custodians and administrators can be higher. 4) questionable investment sponsors tend to target self-directed IRA owners for fraudulent investments. The SEC put out a good PDF about the risks of fraud with self-directed IRAs. Self Directed IRAs are not the right solution for everyone, but they can help certain investors focus on the areas they know well.",
"title": ""
},
{
"docid": "698111cd921bcfd014d15bcf5d87ae5c",
"text": "Many states have a simple method for assessing income tax on nonresidents. If you have $X income in State A where you claim nonresident status and $Y income overall, then you owe State A a fraction (X/Y) of the income tax that would have been due on $Y income had you been a resident of State A. In other words, compute the state income tax on $Y as per State A rules, and send us (X/Y) of that amount. If you are a resident of State B, then State B will tax you on $Y but give you some credit for taxes paid to State A. Thus, you might be required to file a State A income tax return regardless of how small $X is. As a practical matter, many commercial real-estate investments are set up as limited partnerships in which most of the annual taxable income is a small amount of portfolio income (usually interest income that you report on Schedule B of Form 1040), and the annual bottom line is lots of passive losses which the limited partners report (but do not get to deduct) on the Federal return. As a result, State A is unlikely to come after you for the tax on, say, $100 of interest income each year because it will cost them more to go after you than they will recover from you. But, when the real estate is sold, there will (hopefully) be a big capital gain, most of which will be sheltered from Federal tax since the passive losses finally get to be deducted. At this point, State A is not only owed a lot of money (it knows nothing of your passive losses etc) but, after it processes the income tax return that you filed for that year, it will likely demand that you file income tax returns for previous years as well.",
"title": ""
},
{
"docid": "740d8e0a2249a2c05d5a40d2d206cf3c",
"text": "I don't know if it's legal but your talking about arbitraging the rates between a personal savings account and a business account. I also don't know those rates but will venture to guess that they are not materially different, after taking into account the cost of setting up and registering an LLC, for it to be worth the time and effort.",
"title": ""
},
{
"docid": "85000bed497e6334aa780dbb0d8bbd83",
"text": "Annuities, like life insurance, are sold rather than bought. Once upon a time, IRAs inherited from a non-spouse required the beneficiary to (a) take all the money out within 5 years, or (b) choose to receive the value of the IRA at the time of the IRA owner's death in equal installments over the expected lifetime of the beneficiary. If the latter option was chosen, the IRA custodian issued the fixed-term annuity in return for the IRA assets. If the IRA was invested in (say) 15000 shares of IBM stock, that stock would then belong to the IRA custodian who was obligated to pay $x per year to the beneficiary for the next 23 years (say). There was no investment any more that could be transferred to another broker, or be sold and the proceeds invested in Facebook stock (say). Nor was the custodian under any obligation to do anything except pay $x per year to the beneficiary for the 23 years. Financial planners loved to get at this money under the old IRA rules by suggesting that if all the IRA money were taken out and invested in stocks or mutual funds through their company, the company would pay a guaranteed $y per year, would pay more than $y in each year that the investments did well, would continue payment until the beneficiary died (or till the death of the beneficiary or beneficiary's spouse - whoever died later), and would return the entire sum invested (less payouts already made, of course) in case of premature death. $y typically would be a little larger than $x too, because it factored in some earnings of the investment over the years. So what was not to like? Of course, the commissions earned by the planner and the lousy mutual funds and the huge surrender charges were always glossed over.",
"title": ""
},
{
"docid": "7d32f67dee90c90b21760138c97c9086",
"text": "\"especially considering it has a mortgage on it (technically a home equity loan on my primary residence). I'm not following. Does it have a mortgage on it, or your primary residence (a different property) was used as a security for the loan? If it is HELOC from a different property - then it is really your business what to do with it. You can spend it all on casinos in Vegas for all that the bank cares. Is this a complicated transaction? Any gotchas I should be aware of before embarking on it? Obviously you should talk to an attorney and a tax adviser. But here's my two cents: Don't fall for the \"\"incorporate in Nevada/Delaware/Wyoming/Some other lie\"\" trap. You must register in the State where you live, and in the State where the property is. Incorporating in any other State will just add complexity and costs, and will not save you anything whatsoever. 2.1 State Taxes - some States tax LLCs. For example, in California you'll pay at least $800 a year just for the right of doing business. If you live in California or the property is in California - you will pay this if you decide to set up an LLC. 2.2 Income taxes - make sure to not elect to tax your LLC as a corporation. The default for LLC is \"\"disregarded\"\" status and it will be taxed for income tax purposes as your person. I.e.: IRS doesn't care and doesn't know about it (and most States, as well). If you actively select to tax it as a corporation (there's such an option) - it will cost you very dearly. So don't, and if someone suggest such a thing to you - run away from that person as fast as you can. Mortgages - it is very hard to get a mortgage when the property is under the LLC. If you already have a mortgage on that property (the property is the one securing the loan) - it may get called once you transfer it into LLC, since from bank's perspective that would be transferring ownership. Local taxes - transferring into LLC may trigger a new tax assessment. If you just bought the property - that will probably not matter much. If it appreciated - you may get hit with higher property taxes. There are also many little things - once you're a LLC and not individual you'll have to open a business bank account, will probably need a new insurance policy, etc etc. These don't add much to costs and are more of an occasional nuisance.\"",
"title": ""
},
{
"docid": "1d16f98c97eefb83c854f00d4257ee0b",
"text": "\"I'd be curious to understand where you live, with a condo costing nearly 3X the average home price in the US. That said, if you are hell bent on this, money is loosening up. I am a real estate agent, and part of my distaste for the industry is the fact that it is the near opposite of financial fiduciary. I am responsible to be truthful and act in the best interest of my client. I am specifically not allowed to offer tax or financial advice. A client that told me she had a prequalification, only later shared that she's using a 3% down, FHA mortgage, and from what I see, getting in over her head. In your case, look at the requirements for an FHA loan. I recommend 20% down, and the payment be less than 28% (Principal, interest, property tax) of monthly gross. The FHA allows as little as 3% down, with payment as high as 31%. In your case, $15K is 3%, and, depending on the other expenses for the house, the payment should be manageable. If your 401(k) accounts offer matching, I'd deposit the amount to capture the match, no more, no less. Let me illustrate the power of matching - say the match is on your first $10,000 total, between the 2 of you. $10,000 deposited, is $20,000 in your retirement account, and you are just out of pocket $7500, as that's your net after tax. Now, the $20K in the account allows you to borrow half, $10,000 at a favorable rate for a 10 year payback. So, to your question of raiding your retirement accounts, I'd advise the opposite. A $10K withdrawal will cost $2500 in tax and $1000 penalty. Net $6500. Better to take the IRA, transfer it to the 401(k), and borrow 50%. Your $40K across the accounts will let you borrow $20K and keep the retirement savings going. Last - I respect the answers that say \"\"don't,\"\" they are actually the right answers. Mine only applies if you won't listen to them. In effect, you've asked where to buy rope, and I'm just letting you know where the store is. It's the banks who are happy to sell you the rope to hang yourself.\"",
"title": ""
},
{
"docid": "8459f004f4e0af10ecbb3300600c0704",
"text": "\"First - for anyone else reading - An IRA that has no beneficiary listed on the account itself passes through the will, and this eliminates the opportunity to take withdrawals over the beneficiaries' lifetimes. There's a five year distribution requirement. Also, with a proper beneficiary set up on the IRA account the will does not apply to the IRA. An IRA with me as sole beneficiary regardless of the will saying \"\"all my assets I leave to the ASPCA.\"\" This is also a warning to keep that beneficiary current. It's possible that one's ex-spouse is still on IRA or 401(k) accounts as beneficiary and new spouse is in for a surprise when hubby/wife passes. Sorry for the tangent, but this is all important to know. The funneling of a beneficiary IRA through a trust is not for amateurs. If set up incorrectly, the trust will not allow the stretch/lifetime withdrawals, but will result in a broken IRA. Trusts are not cheap, nor would I have any faith in any attorney setting it up. I would only use an attorney who specializes in Trusts and Estate planning. As littleadv suggested, they don't have to be minors. It turns out that the expense to set up the trust ($1K-2K depending on location) can help keep your adult child from blowing through a huge IRA quickly. I'd suggest that the trust distribute the RMDs in early years, and a higher amount, say 10% in years to follow, unless you want it to go just RMD for its entire life. Or greater flexibility releasing larger amounts based on life events. The tough part of that is you need a trustee who is willing to handle this and will do it at a low cost. If you go with Child's name only, I don't know many 18/21 year old kids who would either understand the RMD rules on IRAs or be willing to use the money over decades instead of blowing it. Edit - A WSJ article Inherited IRAs: a Sweet Deal and my own On my Death, Please, Take a Breath, an article that suggests for even an adult, education on how RMDs work is a great idea.\"",
"title": ""
},
{
"docid": "d85a63af069d155338adc34e9ca37a60",
"text": "\"You're conflating LLC with Corporation. They're different animals. LLC does not have \"\"S\"\" or \"\"C\"\" designations, those are just for corporations. I think what you're thinking about is electing pass through status with the IRS. This is the easiest way to go. The company can pay you at irregular intervals in irregular amounts. The IRS doesn't care about these payments. The company will show profit or loss at the end of the year (those payments to you aren't expenses and don't reduce your profit). You report this on your schedule C and pay tax on that amount. (Your state tax authority will have its own rules about how this works.) Alternatively you can elect to have the LLC taxed as a corporation. I don't know of a good reason why someone in your situation would do this, but I'm not an accountant so there may be reasons out there. My recommendation is to get an accountant to prepare your taxes. At least once -- if your situation is the same next year you can use the previous year's forms to figure out what you need to fill in. The investment of a couple hundred dollars is worthwhile. On the question of buying a home in the next couple of years... yes, it does affect things. (Pass through status? Probably doesn't affect much.) If all of your income is coming from self-employment, be prepared for hassles when you are shopping for a mortgage. You can ask around, maybe you have a friendly loan officer at your credit union who knows your history. But in general they will want to see at least two years of self-employment tax returns. You can plan for this in advance: talk to a couple of loan officers now to see what the requirements will be. That way you can plan to be ready when the time comes.\"",
"title": ""
},
{
"docid": "64074a801b0f088a5d1880b455f1d083",
"text": "There are reward points that you have already mentioned. Some banks also give reward points for netbanking transfer, although very few and less than debit card. On a fraudulent site, debit card adds a layer, if compromised, easy to change. i.e just hot list the card, get a new card issued. Netbanking quite a few banks have incorrect implementation and difficult to change the login ID / User ID. The dispute resolution mechanism is well established as there is master or visa network involved. The ease of doing transaction is with netbanking as for card one has to remember 16 digits, expiry, cvv. The entire process of card usage is multiparty, on slow connection if something goes wrong, it takes 3 days to figure out. In netbanking it is instantaneous. You just login to bank and see if the debit has gone through.",
"title": ""
}
] |
fiqa
|
e080702d21157f5985c6ea1dff990a0b
|
Will I have to pay taxes for Australia if I have an Australian bank account?
|
[
{
"docid": "208e8e6f82fcd8cd2d8e45af2e8a510e",
"text": "Because you actually reside in New Zealand, your income taxes will be paid in New Zealand. However, as a non-resident of Australia you will have tax withholding on all of the interest you earn in an Australian bank account. Obviously, because that tax is paid to Australia, that will not be counted against your New Zealand income taxes due to the taxation agreement between those countries. You should still discuss this with an accountant in New Zealand and consider acting as a sole trader. Since you are doing freelance work, that seems like the most logical setup anyway.",
"title": ""
},
{
"docid": "4cfc70b4667e02ce27c384e0cdedacca",
"text": "\"After reviewing the tax treaty between New Zealand and Australia, I think the issue is whether or not you have an interest in a \"\"permanent establishment\"\" in Australia where you do business. The bank is not relevant as it is merely the vehicle by which you collect payment and would only come into the picture if you had an income bearing account (which you have indicated you do not). Even if you work out of the offices of the Australian company, you do not have a financial interest in their offices and as such, would pay taxes on the income in New Zealand (see documentation below). https://www.ato.gov.au/business/international-tax-for-business/foreign-residents-doing-business-in-australia/tax-on-income-and-capital-gains/#permanentestablishment\"",
"title": ""
},
{
"docid": "120fcc189300a5059e3e367bf3ac54bb",
"text": "\"If you are a resident of New Zealand for tax purposes, you will be taxed in New Zealand on all of your \"\"worldwide income\"\". This is income derived from New Zealand as well as income derived from all other countries Source: http://www.ird.govt.nz/international/nzwithos/income/overseas-income-index.html Another link that will be of use is this: https://www.ato.gov.au/individuals/international-tax-for-individuals/work-out-your-tax-residency/ This is Australia's rules on if you qualify as a resident for tax purposes. I am not an accountant or a lawyer but my reading of this is you actually have to reside in Australia to be considered a resident - whether or not you have a bank account there doesn't appear to play into it. Additionally, Australia and NZ have a \"\"double taxation agreement\"\", explained here: http://www.ird.govt.nz/yoursituation-nonres/double-tax/ So this should prevent you from being taxed in both places.\"",
"title": ""
}
] |
[
{
"docid": "2148f54cd790ae6431fc9768685838ae",
"text": "This person must pay taxes in both the overseas country and in the U.S. This is unusual; generally, only the U.S. demands this. Depending on the specific country, he would likely not be taxed twice as the U.S. generally recognises tax paid in a different country. Note there are some gotchas, though. For example, although Canada has a generally higher tax scheme than the U.S., you may still end up owing tax if you use the Tax-Free Savings Account system in Canada, as that is not recognised in the U.S. As to whether or not this person should form a company, that is far too broad a question. It's going to depend in large part on the tax situations of the countries involved. This person needs to consult an accountant specialising in this situation. That is, on personal versus business tax and on tax involving U.S. citizens. Yes, this person can and indeed must file and pay taxes in the U.S., from outside the U.S.",
"title": ""
},
{
"docid": "1612c66234ab9b4f19b31a9a740465c8",
"text": "\"A very interesting topic, as I am moving to the US in a month. I realise this thread is old but its been helpful to me. My observations from my home country \"\"Before we judge anyone who doesn't use direct deposit or who prefers to be paid in cold hard cash, consider that direct deposit is a luxury of stability. Steady job, home, etc. Direct deposit doesn't make sense for a contractor or day labourer who expect to work for a different person each day or week\"\" --- well here a contractor would still be paid by a direct deposit, even if he was working for many different people. On the invoice the contractor provides Bank account details, and customer logs onto their internet banking and pays electronically. It is a a very simple process and is the preferred method of payment by most businesses even small contractors. Many accounting software programs are linked to bank accounts and can quickly reconcile accounts for small business. Many businesses will not accept a cheque in Australia anymore as they are considered to be a higher risk. I started work in 1994 and have never received any payment except via direct deposit.\"",
"title": ""
},
{
"docid": "fe4d51ea49dc69c61e96c23aedb34e51",
"text": "Normally, yes, you would have to pay. If you are in the US, or a citizen of the US, then IRC Sec. 61 would levy tax on all income. Even if you find money on the ground, that will generally be taxable income (the treasure trove doctrine). If you are paying foreign income taxes, the US may allow credit.",
"title": ""
},
{
"docid": "eb125c96f620e4c9f504cb2ff32448c2",
"text": "\"Be mindful of your reporting requirements. Besides checking the box on Schedule B of your 1040 that you have a foreign bank account, you also need to file a TD F 90-22.1 FBAR report for any year that the total of all foreign bank accounts reaches a value of $10,000 at any time during the year. This is filed separately from your 1040 by June 30 of the following year. Penalties for violating this reporting requirement are draconian, in some cases exceeding the amount of money in the foreign bank account. This penalty has been levied on people who have been reporting and paying tax on the interest on their foreign bank accounts, and merely neglected this separate report filing. Article on the \"\"shoot the jaywalker\"\" punitive enforcement policy. http://www.rothcpa.com/archives/006866.php Mariette IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law. EDITED TO ADD\"",
"title": ""
},
{
"docid": "1a47af56d5b794e7f58cdb39117264bd",
"text": "\"TL;DR - my understanding of the rules is that if you are required to register for GST (earning more than $75k per annum), you would be required to pay GST on these items. To clarify firstly: taxable income, and goods and services tax, are two different things. Any income you receive needs to be considered for income tax purposes - whether or not it ends up being taxable income would be too much to go into here, but generally you would take your expenses, and any deductions, away from your income to arrive at what would generally be the taxable amount. An accountant will help you do this. Income tax is paid by anyone who earns income over the tax free threshold. By contrast, goods and services tax is a tax paid by business (of which you are running one). Of course, this is passed on to the consumer, but it's the business that remits the payment to the tax office. However, GST isn't required to be charged and paid in all cases: The key in your situation is first determining whether you need to register for GST (or whether indeed you already have). If you earn less than $75,000 per year - no need to register. If you do earn more than that through your business, or you have registered anyway, then the next question is whether your items are GST-free. The ATO says that \"\"some education courses [and] course materials\"\" are GST-free. Whether this applies to you or not I'm obviously not going to be able to comment on, so I would advise getting an accountant's advice on this (or at the very least, call the ATO or browse their legal database). Thirdly, are your sales connected with Australia? The ATO says that \"\"A sale of something other than goods or property is connected with Australia if ... the thing is done in Australia [or] the seller makes the sale through a business they carry on in Australia\"\". Both of these appear to be true in your case. So in summary: if you are required to register for GST, you would be required to pay GST on these items. I am not a financial advisor or a tax accountant and this is not financial advice.\"",
"title": ""
},
{
"docid": "0fd538fc159c43b2f4b4b2970fd86ad4",
"text": "Basically, all the same reasons you might not want to keep piles of your own country's cash, plus or minus the exchange rate question. Banks exist for good reasons. You probably want to use them unless you are explicitly playing the exchange rate game -- And if that's what you want, there are probably better ways to do it. If you need help not touching the money, CDs or other term accounts might give you enough disincentive. Or might not.",
"title": ""
},
{
"docid": "70a52b4c0f3fde7f782b50da8799b4a9",
"text": "\"If a country had a genuine completely flat income tax system, then it wouldn't matter who paid the tax since it doesn't depend on the employee's other income. Since not many countries run this, it doesn't really make sense for the employee to \"\"take the burden\"\" of the tax, as opposed to merely doing the administration and paying the (probable) amount of tax at payroll, leaving the employee to use their personal tax calculation to correct the payment if necessary. Your prospective employer is probably saying that your tax calculation in Singapore is so simple they can do it for you. They may or may not need to know a lot of information about you in order to do this calculation, depending what the Singapore tax authorities say. If you're not a Singapore national, they may or may not be relying on bilateral tax agreements with your country to assert that you won't have to pay any further tax on the income in your own country. It's possible they're merely asserting that you won't owe anything else in Singapore, and in fact you will have taxes to report (even if it's just reporting to your home tax authority that you've already paid the tax). Still, for a foreign worker a guarantee you won't have to deal with the local tax authority is a good thing to have even if that's all it is. Since there doesn't appear to be any specific allowance for \"\"tax free money\"\" in the Singapore tax system, it looks like what you have here is \"\"just\"\" the employer agreeing to do something that will normally result in the correct tax being paid in your behalf. This isn't uncommon, but it's also not exactly what you asked for. And in particular if you have two jobs in Singapore then they can't both be doing this, since tax is not flat. The example calculation includes varying tax rates for the first X amount of income that (I assume without checking) are per person, not per employment. Joe's answer has the link. In practice in the UK (for example), there are plenty of UK nationals working in the UK who don't need to do a full tax return and whose tax is collected entirely at source (between PAYE and deductions on bank interest and suchlike). In this sense the employer is required by law to take the responsibility for doing the admin and making the tax payments to HMRC. Note that a UK employer doesn't need to know your circumstances in detail to make the correct payroll deductions: all they need is a so-called \"\"tax code\"\", which is calculated by HMRC and communicated to the employer, and which basically encodes how much they can pay you at zero rate before the various tax rate tiers kick in. That's all the employer needs to know here for the typical employee: they don't need to know precisely what credits and liabilities resulted in the figure. However, these employers still don't offer empoyees a net salary (that is, they don't take on the tax burden), because different employees will have different tax codes, which the employer would in effect be cancelling out by offering to pay two people the same net salary regardless of their individual circumstances. The indications seem to be that the same applies in Singapore: this offer is really a net salary subject to certain assumptions (the main one being that you have no other tax liabilities in Singapore). If you're a Singapore millionaire taking that job for fun, you might find that the employer doesn't/can't take on your non-standard tax liability on this marginal income.\"",
"title": ""
},
{
"docid": "2e2e6106a973d42de10c86d789345266",
"text": "Yes you do. You're under the jurisdiction of at least one country where you're resident, or where you're citizen. You may be under jurisdiction of more than one country. Each country has its own laws about what and how should be taxed and countries have treaties between them to resolve jurisdiction issues and double taxation situations, so you should talk to a tax accountant licensed to provide you with an advice.",
"title": ""
},
{
"docid": "4a9478eb389207bfb7d974ef114821da",
"text": "Note: I am in the UK. I don't know specifically about australia but I expect the general principles will be much the same everywhere. What banks want is to be reasonablly confident that you have a steady income stream that will continue to pay the mortgate until it completes. In general employed are fairly easy to assess. Most employed people will have a steady basic pay that increases through their career. Payslips will usually seperate-out basic pay, overtime and bonuses. There is little opertunity to cook the books. The self-employed are harder to assess. Income can be bursty and there are far more opertunities for cooking the books to make it look like you are earning more than you really are. So banks are likely to be far more careful about lending to the self-employed, they will likely want to see multiple years of buisness records so that any bursts, whether natural due to the ebbs and flows of buisness or deliberatly created to cook the books average out and they can see the overall pattern. A large deposit will help because it reduces the risk to the bank in the event of a default. Similarly not being anywhere near your limit of affordability will help.",
"title": ""
},
{
"docid": "cfba3a2275740efec2439917b82fbad6",
"text": "This page and this page on the ATO website provide some information on tax rates. They're rather lengthy and there's a few exceptions, but essentially, your entire foreign income, even if held overseas, is taxable. Australians are taxed worldwide.",
"title": ""
},
{
"docid": "e8b29d1d8d203cca384029d4d16bc1f8",
"text": "Generally it is a taxable transaction. Basic principle of taxation everywhere is that the mean of payment doesn't matter. If the income is taxable - it is taxable regardless of the unit of currency you used. It can be a strawberry, a bitcoin, a gold nugget, or a dollar, it doesn't change a thing about how it is taxed. If you look at the United States tax code definition of taxable income, for example, you will find no mention whatsoever of any currency. Similarly with other tax laws I'm familiar with. I'm sure there's no such limitation in Australia.",
"title": ""
},
{
"docid": "55a87eedad4ce03ccbaaf80c43cd3869",
"text": "Yes, you still need to pay income tax on your capital gain regardless of whether you converted your USD proceeds back into CAD. When you calculate your gains for tax purposes, you'll need to convert all of your gains to Canadian dollars. Generally speaking, CRA will expect you to use a historical USD to CAD exchange rate published by the Bank of Canada. At that page, notice the remark at right: Are the Exchange Rates Shown Here Accepted by Canada Revenue Agency? Yes. The Agency accepts Bank of Canada exchange rates as the basis for calculations involving income and expenses that are denominated in foreign currencies.",
"title": ""
},
{
"docid": "c43f778629b7a4480d5674d0cd5ff366",
"text": "Before this agreement, every country had laws on tax-ability of income [including Global incomes]. Quite a few individuals would get away and did not report such income and pay tax if due. In fact quite a few Multi National banks actively created products that helped US Citizens to move money outside and skip reporting. U.S. in order to step up this effort enacted FATCA; essentially as a compliance mechanism, it started with US Head quartered banks operating globally and made reporting mandatory. It stepped up efforts with other countries to ensure foreign banks also enhance reporting of US nationals. See the benefits, quite a few countries joined up together and as part of OECD, came up with CRS. Thus going forward it will enable tax authorities in member countries to exchange financials impacting taxes. The scope is also for Companies / Organization as quite a few Companies hide away income outside the domiciled country. I have heard a rumor that due to the upcoming Common Reporting Standard the details of bank accounts, including all transactions, will be reported all around the industrialized world and want to know if this is true. Yes this is true and it is not a rumor. The exact amount of data and type of data will be agreed between member countries. However a broad framework exists on what needs to be shared. Is it really true that the Common Reporting Standard is going to cause things like this to happen? It is very important to note; There is no new Tax Legislation. Even without FATCA/CRS, a honest tax payer was bound to pay legitimate tax due as per the existing tax provisions of the country along with the provisions of DTAA [Dual Tax Avoidance Agreements]. The CRS only enables monitoring and compliance. So if one was already tax compliant, there is nothing to worry. If one was exploiting the loop hole; how will authorities know ... well this will be curbed going forward. As a note, Canada and Australia will start CRS reporting from 2018.",
"title": ""
},
{
"docid": "1696e133d9048ca93a8b41f2129658b7",
"text": "https://www.ato.gov.au/Business/GST/ Some of the costs are indeed related to the conversion rate, which, as we all know,changes daily. You don't say whether you're using a credit card. If so, some cards do charge foreign transaction fees; some do not. However, Australia, like many European countries, does use a VAT system. Therefore your charges will be increased. Please be aware that these taxes are built into the economic system. In many cases, you van apply for and receive a waiver to be reimbursed if the purchase is made through a duty free store.",
"title": ""
},
{
"docid": "5624d284f2d14f8e932fc4406555d98f",
"text": "\"VAT = Value Added Tax (as an Aussie think \"\"GST\"\") This is applicable in Britain. Basically, if you were in Britain, and if you could claim VAT as a deduction, that invoice is not sufficient proof to make the claim. But you're in Oz so it doesn't apply to you in any case. For work-related deductions like book purchases, see http://www.ato.gov.au/individuals/content.asp?doc=/content/00216829.htm&pc=001/002/068/001/002&mnu=&mfp=&st=&cy=1 Issues such as the books being second hand or purchased online are not cited in the instructions as relevant/limiting factors. In fact, if you really want to get into the nitty gritty, you could claim the work-related proportion of your internet access fees as a deduction (question D5 instructions, above, cover that as well).\"",
"title": ""
}
] |
fiqa
|
6fac76636692a27d9c4dd95c96a0ce59
|
Are PINs always needed for paying with card?
|
[
{
"docid": "2ba2c626ca84ace787e7a478a3acbf83",
"text": "There generally isn't much in the way of real identity verification, at least in the US and online. The protection you get is that with most credit cards you can report your card stolen (within some amount of time) and the fraudulent charges dropped. The merchant is the one that usually ends up paying for it if it gets charged back so it's usually in the merchant's best interest to do verification. However the cost of doing so (inconvenience to the customer, or if it's an impulse buy, giving them more time to change their mind, etc) is often greater than the occasional fraudulent charge so they usually don't do too much about it unless they're in a business where it's a frequent problem.",
"title": ""
},
{
"docid": "1a6966cd2d8bb981a70c85519d33c330",
"text": "As far as I'm aware, PINs are only used for in-person transactions, not 'remote' (over the Internet or phone).",
"title": ""
},
{
"docid": "3b2b90d6c9662e5c131d48ac4f2501de",
"text": "\"For the first part of your question; Refer to related question Why do some online stores not ask for the 3-digit code on the back of my credit card? The other case of Airport ticket machines, requires the physical presence of card. The assumption is that if you had the card before and after the transaction, it was you who used it for transaction. As the amounts are small its really easy by anyone [merchant, Banks] to write this off. The only way to misuse would be if you lost the card and someone used it. Also these ticket machines would have built in feature where by you cannot buy more than \"\"X\"\" tickets for the day. Ensuring max loss on a stolen card is limited to a small amount.\"",
"title": ""
},
{
"docid": "58798764a5f701a63768787f72841c06",
"text": "Chip and Pin cards are popular in Europe, however in the US we don't have them. Visa/MC and Amex can issue chip and pin cards but no merchants or machines are set up here to take them. Only certain countries in Europe use them and since you could possibly have a US visitor or a non-chip and pin person using your machine or eating at your restaurant they usually allow you to sign or just omit the pin if the card doesn't have a chip. It is definitely less secure, but the entire credit card industry in the US is running right now without it, so I don't think the major credit card companies care too much (they just pass the fraud on to the merchants anyway).",
"title": ""
},
{
"docid": "99560b2878dc01ae12ee6c5764a9c92b",
"text": "Security in the merchant services system is mainly handled in two ways: 1) Before transactions are done, the business itself must go through an application process similar (but not identical) to getting a loan. Some high risk businesses must pay higher fees due to the increased likelihood of customer complaints. 2) When a customer disputes a transaction, that's a mark against the business. Get too many of these disputes, and your priviledge of accepting credit cards will be revoked, meaning you won't be able to again. It's in the merchant's best interest to verify customer's identity, because disputes cost them money directly. It's in the servicer's best interest to verify the businesses integrity, because fraud drives up the cost for everyone else. As a whole, it's quite a reactionary system, yet in practice it works remarkably well.",
"title": ""
},
{
"docid": "3da1291762d8a2d0cae24144a0b1e1a0",
"text": "Like email and spam, fighting creditcard fraud is a cat and mouse game, with technology and processes constantly being developed to reduce fraud. The CVV on the back of the card is just one more layer of security. Requiring the CVV generally requires you to physically have access to the card. CVV should not be stored by any merchant. This frustrates card skimming fraud as the CVV is not present in the track data and fraud caused by database compromises. You should never use your PIN online. MC/VISA both have implementations of 3D-Secure (SecureCode for MC and Verified by VISA) which require a password / code to confirm card ownership. Depends on both Issuer and Merchant implementing the standard. Regarding not needing a PIN at the airport, some low value transactions no longer need PINs, depending on the Issuer and Scheme (VISA/MC). MasterCard PayPass or VISA PayWave enable low value contactless transactions without PIN. In Australia, the maximum value for a contactless transactions is $100 AUD. At some merchants (McDonalds for example) a PIN is not required for for meals purchased with VISA (at least, for the cheeseburger I bought there as a test). This makes sense - if you don't need a PIN for a contactless purchase, why do you need it for a chip based purchase? So - why allow PIN free transactions? On average customers report stolen credit cards / wallet very quickly and the losses are correspondingly small. As card issuers are always online, cards can be cancelled very quickly after being reported lost / stolen. Finally, by performing transactions for just a few cents or pennies, the merchant (Spotify) can likely validate you are the owner of the card as you'd need access to your online bank to confirm the transactions. PayPal do this with bank account to confirm ownership. (Unless I've misunderstood your statement).",
"title": ""
}
] |
[
{
"docid": "cc42d8ae9f3c8806be1440b68ecf5bb5",
"text": "If your goal is to make it harder for you to use to make impulse purchases then YES. Having to always have cash for purchases will make you less likely to make impulse purchases you don't really need.",
"title": ""
},
{
"docid": "159d80d9fb5bf7b40cedf825039575a4",
"text": "\"Interesting; England went \"\"chip & PIN\"\" years ago and Australia went \"\"chip & PIN\"\" today but I've never heard of EMV. I had to look it up to know what it was. The point of the switch is to reduce fraudulent transactions. The chip can't be copied as easily as the strip. That's all I know. Rally I just replied because I had not heard of EMV.\"",
"title": ""
},
{
"docid": "1a6eca859a7f7153d84029bc32cdfaff",
"text": "There are numerous reasons that go beyond the immediate requirement for access to credit. Many people just plain don't like carrying cash. Before electronic debit cards became mainstream about the only way to pay for online services was with a credit card. This has now changed just about everywhere except a large number of airlines which still only sell online tickets via a credit card payment. And then there are all those countries where governments (and some banks) have decided to charge merchants more when customers use debit cards. If you don't like carrying cash then you may find that the only card you can use is a credit card. These concerns are gradually disappearing and at some stage someone is likely to offer a combined debit-credit card. At which point you'll probably get credit whether you like it or not.",
"title": ""
},
{
"docid": "c35962088635faf13f84983276ec6936",
"text": "I haven't had a credit card in fifteen years. I use nothing but my debit card. (I find the whole idea of credit on a micro scale loathsome.) I have yet to encounter a single problem doing so, other than a lower than usual credit score for not keeping 23(!!!) revolving lines of credit open, or that's the number CreditKarma tells me I need in order to be an optimal consumer. In an nutshell, no, you don't NEED one. There are reasons to have them, but no.",
"title": ""
},
{
"docid": "366e3713d404bb192fe60b4e61ac3ea2",
"text": "Payment processors get a fee when you make a payment through their system. So by encouraging you to use their cards more, they make more money. In the specific case of contactless cards, they see an opportunity to grow their market by displacing cash payments. So they're advertising it heavily to help that along.",
"title": ""
},
{
"docid": "b0288ad4861488073b702208da13fa2b",
"text": "ACH, Paypal, Amazon Pay are all other options that can be used. ACH is cheapest for the merchant but it is a bit of a pain for the customer to setup (aka adds friction to our sales process, which is *very* bad). Paypal and Amazon Pay both cost a bit more than regular credit cards for the merchant. Google Wallet is free but not available unless you are a sole proprietor or an individual, which is is useless for businesses. So yeah, other options are either difficult or more expensive.",
"title": ""
},
{
"docid": "84e3f83747e9425fbb4ce4c49fd01fcf",
"text": "I've never forgotten mine either, but it's a constant fear for me. Couple of friends of mine have. I honestly don't know which machines beep and which don't, but I've heard of people forgetting their cards in ATMs, cigarette vending machines, train ticket machines, McDonald's express order machines and some others I can't remember. The screen of these machines always reminds you, and I think it's hard to forget it, but evidently it does happen. I still use my cards, it's not like I have a crippling fear every time I use it, I just made a habit of always carrying cash and using it for small stuff. I live in Germany, cash is (still?) Accepted everywhere.",
"title": ""
},
{
"docid": "a86781b481e27f434338b7e0bd423ee6",
"text": "Update, 2013: this product is no longer available. As of December 1, 2010, Travelex announced a product, the Travelex Cash Passport, which is chip-and-pin protected. You can buy it in the US and then load it up with either Euros or British Pounds. There are a few things to know about this: Right now, it is not available online at the Travelex website. You must purchase it in person at participating Travelex retail locations. I bought mine right downstairs from the Stack Overflow world headquarters! The fees that Travelex charges for foreign currency transactions will take your breath away. I purchased a £300 card for $547.15, which comes out to a 15% service charge. Travelex will give you better rates if you purchase larger amounts. There is a further 3% fee if you use a credit card (I used a debit card to avoid this). Think long and hard about whether to load it with Pounds or Euros. They charged me 5.5% above the interbank exchange rate to spend my Pound card in Euros. You get two cards, which is very convenient. You can refill the card on the web. Due to the high fees, the Chip and PIN Cash Passport is not a good idea for everyday transactions, for getting cash from an ATM, and certainly not for paying for big-ticket items like hotels. You're going to want to reserve it for purchasing things from those automated kiosks in Europe (especially gas stations, ticket machines in train stations, and toll booths) that will not work with a standard magnetic stripe card. The card worked perfectly buying tickets on the tube in London. I haven't had a chance to check it out in other countries.",
"title": ""
},
{
"docid": "8b41ecd0a3595eea53f235b87e169056",
"text": "Yes, retail stores will let you use multiple cards to make a purchase. Just be sure to know the exact balance on each one and tell the cashier how much you'd like to put on each card. If you don't know the balance and try to charge more than what is available, your card will be declined.",
"title": ""
},
{
"docid": "40853e4dfaf1a2a3ce25732cd544dd0a",
"text": "While in the UK and travelling to Europe, I heard of the FairFX euro card from the website Money Supermarket (affiliate link which waives the sign-up fee). The link also includes many other alternative prepaid euro cards which may be better suited for your uses. The FairFX card is available in both GBP and EUR, and both products come with chip and pin. They also charge relatively little as compared to most bank cards (no currency conversion on use, $2~ withdrawal charges from ATM). I generally had a good experience with this card, and was able to purchase items both in person as well as online using it.",
"title": ""
},
{
"docid": "3884d8045ae2d4c7950e7bd887f9b506",
"text": "It depends on your bank and your terms of service, but using the card one way or the other may affect things such as how long it takes to process, what buyer protections you have, etc. It also affects the store as I believe they are charged differently for debit vs credit transactions.",
"title": ""
},
{
"docid": "11f790046399809b908728f0d9f14a7c",
"text": "I use cash exclusively. I go to the cash machine once a week and withdraw the money I want to spend in one week (so I have to plan if I want to buy something expensive). Otherwise I leave the card at home. As bonus you get anonymity, i.e. big brother cannot track you.",
"title": ""
},
{
"docid": "f9ecbd20ba2f2a878ed7134224091f9b",
"text": "\"When using a debit card in a \"\"credit\"\" way, you don't need to enter your PIN, which protects you from skimmers and similar nastiness. Also, assuming it's a Visa or Mastercard debit card, you now have access to all of the fraud protection and other things that you would get with a credit card. The downside for the merchant is that credit card transaction fees are typically higher than debit card transaction fees. I'm less familiar with using a credit card in a \"\"debit\"\" way, so don't have anything to offer on that part of your question.\"",
"title": ""
},
{
"docid": "f472d86bd1eb1c5c60c5e4aa2368c75b",
"text": ">> Hey! Do you mind giving your credit card to the waiter... > I'm not especially fond of that, but it's easy to report fraud to the bank and most of the time the bank will reverse the charges. No kidding! Of course, even I give credit cards to waiters. What do I care? **As you said, you are not liable to any fraud on your credit card.** None at all!!!! It's only Merchant, not the credit card company, that pay the price for fraud... **and you pay higher prices to cover for losses from fraud.** > The PIN situation is different because a mugging is life-threatening. Nonsense! Mugging at the ATM is so rare, each ATM has a camera. **In any case, I am not talking about using PIN to withdraw money!** I am talking about PIN to authorize charges on a credit card or ATM card. >> We already determined that nobody even care about signatures or check them. > You can't use a stolen card at an ATM with a signature. Huh? You totally got it wrong what I said, or, you argue for the sake of argument. **I am saying that cards that require you to enter a PIN cannot be used used when stolen or copied. Yes or no?** **On the other hand, cards that require signature can be used when stolen or copied because signature is a worthless method to validate the charge. Yes or no?** LASTLY, my Costco credit card has a picture of me on it. **Question for you, since for some reason you argue so much against PINs: Wouldn't a picture on the card better than a signature?** Yes or no? Do you see? There are so many ways to make this system so much more secure and fraud proof... but, ON PURPOSE, the credit card companies don't want that... because they are not liable for fraud. Simple as that.",
"title": ""
},
{
"docid": "f8bc2a2e89f6bf5d6bd19a149dc6e597",
"text": "Yes, there are a bunch. I have used Paypal and it worked quite nicely. I see endless ads these days for Square, a tiny card reader that you plug into a smartphone that lets you swipe the card. (With Paypal you have to type in the credit card number.)",
"title": ""
}
] |
fiqa
|
d4acf24da44b1bdc5c4f2ff21d281994
|
Do I make money in the stock market from other people losing money?
|
[
{
"docid": "bb0c5c46cfaa2d01754b7181fb667bda",
"text": "\"Do I make money in the stock market from other people losing money? Not normally.* The stock market as a whole, on average, increases in value over time. So if we make the claim that the market is a zero-sum game, and you only make money if other people lose money, that idea is not sustainable. There aren't that many people that would keep investing in something only to continue to lose money to the \"\"winners.\"\" The stock market, and the companies inside it, grow in value as the economy grows. And the economy grows as workers add value with their work. Here's an analogy: I can buy a tree seed for very little and plant it in the ground. If I do nothing more, it probably won't grow, and it will be worth nothing. However, by taking the time to water it, fertilize it, weed it, prune it, and harvest it, I can sell the produce for much more than I purchased that seed for. No one lost money when I sell it; I increased the value by adding my effort. If I sell that tree to a sawmill, they can cut the tree into usable lumber, and sell that lumber at a profit. They added their efforts and increased the value. A carpenter can increase the value even further by making something useful (a door, for example). A retail store can make that door more useful by transporting it to a location with a buyer, and a builder can make it even more useful by installing it on a house. No one lost any money in any of these transactions. They bought something valuable, and made it more valuable by adding their effort. Companies in the stock market grow in value the same way. A company will grow in value as its employees produce things. An investor provides capital that the company uses to be able to produce things**, and as the company grows, it increases in value. As the population increases and more workers and customers are born, and as more useful things are invented, the economy will continue to grow as a whole. * Certainly, it is possible, even common, to profit from someone else's loss. People lose money in the stock market all the time. But it doesn't have to be this way. The stock market goes up, on average, over the long term, and so long term investors can continue to make money in the market even without profiting from others' failures. ** An investor that purchases a share from another investor does not directly provide capital to the company. However, this second investor is rewarding the first investor who did provide capital to the company. This is the reason that the first investor purchased in the first place; without the second investor, the first would have had no reason to invest and provide the capital. Relating it to our tree analogy: Did the builder who installed the door help out the tree farmer? After all, the tree farmer already sold the tree to the sawmill and doesn't care what happens to it after that. However, if the builder had not needed a door, the sawmill would have had no reason to buy the tree.\"",
"title": ""
},
{
"docid": "9b93344044b6216beaa023228a7c575e",
"text": "There's really not a simple yes/no answer. It depends on whether you're doing short term trading or long term investing. In the short term, it's not much different from sports betting (and would be almost an exact match if the bettors also got a percentage of the team's ticket sales), In the long term, though, your profit mostly comes from the growth of the company. As a company - Apple, say, or Tesla - increases sales of iPhones or electric cars, it either pays out some of the income as dividends, or invests them in growing the company, so it becomes more valuable. If you bought shares cheaply way back when, you profit from this increase when you sell them. The person buying it doesn't lose, as s/he buys at today's market value in anticipation of continued growth. Of course there's a risk that the value will go down in the future instead of up. Of course, there are also psychological factors, say when people buy Apple or Tesla because they're popular, instead of at a rational valuation. Or when people start panic-selling, as in the '08 crash. So then their loss is your gain - assuming you didn't panic, of course :-)",
"title": ""
},
{
"docid": "6828c8aac1235a11ea839878bf006177",
"text": "\"Because I feel the answers given do not wholely represent the answer you are expecting, I'd like to re-iterate but include more information. When you own stock in a company, you OWN some of that company. When that company makes profit, you usually receive a dividend of those profits. If you owned 1% of the company stock, you (should) recieve 1% of the profits. If your company is doing well, someone might ask to buy your stock. The price of that stock is (supposed) to be worth a value representative of the expected yield or how much of a dividend you'd be getting. The \"\"worth\"\" of that, is what you're betting on when you buy the stock, if you buy $100 worth of coca cola stock and they paid $10 as dividend, you'd be pretty happy with a 10% growth in your wealth. Especially if the banks are only playing 3%. So maybe some other guy sees your 10% increase and thinks, heck.. 10% is better than 3%, if I buy your stocks, even as much as 6% more than they are worth ($106) I'm still going to be better off by that extra 1% than I would be if I left it in the bank.. so he offers you $106.. and you think.. awesome.. I can sell my $100 of cola shares now, make a $6 profit and buy $100 worth of some other share I think will pay a good dividend. Then cola publicises their profits, and they only made 2% profit, that guy that bought your shares for $106, only got a dividend of $2 (since their 'worth' is still $100, and effectively he lost $4 as a result. He bet on a better than 10% profit, and lost out when it didn't hit that. Now, (IMHO) while the stock market was supposed to be about buying shares, and getting dividends, people (brokers) discovered that you could make far more money buying and selling shares for 'perceived value' rather than waiting for dividends to show actual value, especially if you were not the one doing the buying and selling (and risk), but instead making a 0.4% cut off the difference between each purchase (broker fees). So, TL;DR, Many people have lost money in the market to those who made money from them. But only the traders and gamblers.\"",
"title": ""
},
{
"docid": "50a1ec0c43de99a3a1f96176f3529abe",
"text": "The stock market is no different in this respect to anything that's bought or sold. The price of a stock like many other things reflects what the seller is prepared to sell it at and what the buyer is prepared to offer for it. If those things match then a transaction can take place. The seller loses money but gains stocks they feel represent equivalent value, the reverse happens for the buyer. Take buying a house for example, did the buyer lose money when they bought a house, sure they did but they gained a house. The seller gained money but lost a house. New money is created in the sense that companies can and do make profits, those profits, together with the expected profits from future years increase the value that is put on the company. If we take something simple like a mining company then its value represents a lot of things: and numerous other lesser things too. The value of shares in the mining company will reflect all of these things. It likely rises and falls in line with the price of the raw materials it mines and those change based on the overall supply and demand for those raw materials. Stocks do have an inherent value, they are ownership of a part of a company. You own part of the asset value, profits and losses made by that company. Betting on things is different in that you've no ownership of the thing you bet on, you're only dependent on the outcome of the bet.",
"title": ""
},
{
"docid": "a71675b9836aa15aa4c731de5b111055",
"text": "Just because your slice of pie gets bigger doesn't necessarily mean someone else's becomes smaller. In a lot of cases it's the entire pie that gets bigger. Why is the pie bigger? More investors (savers turn investors; foreign investments, etc.), more money printed (QE anyone?), Market sentiment changes (stock is priced by perceptions) And it can certainly get smaller.",
"title": ""
},
{
"docid": "f07ac4680194626215deef6479418a33",
"text": "\"The answer is partly and sometimes, but you cannot know when or how. Most clearly, you do not take somebody else's money if you buy shares in a start-up company. You are putting your money at risk in exchange for a share in the rewards. Later, if the company thrives, you can sell your shares for whatever somebody else will pay for your current share in the thriving company's earnings. Or, you lose your money, when the company fails. (Much of it has then ended up in the company's employees' pockets, much of the rest with the government as taxes that the company paid). If the stockmarket did not exist, people would be far less willing to put their money into a new company, because selling shares would be far harder. This in turn would mean that fewer new things were tried out, and less progress would be made. Communists insist that central state planning would make better decisions than random people linked by a market. I suggest that the historical record proves otherwise. Historically, limited liability companies came first, then dividing them up into larger numbers of \"\"bearer\"\" shares, and finally creating markets where such shares were traded. On the other hand if you trade in the short or medium term, you are betting that your opinion that XYZ shares are undervalued against other investors who think otherwise. But there again, you may be buying from a person who has some other reason for selling. Maybe he just needs some cash for a new car or his child's marriage, and will buy back into XYZ once he has earned some more money. You can't tell who you are buying from, and the seller can only tell if his decision to sell was good with the benefit of a good few years of hindsight. I bought shares hand over fist immediately after the Brexit vote. I was putting my money where my vote went, and I've now made a decent profit. I don't feel that I harmed the people who sold out in expectation of the UK economy cratering. They got the peace of mind of cash (which they might then reinvest in Euro stocks or gold or whatever). Time will tell whether my selling out of these purchases more recently was a good decision (short term, not my best, but a profit is a profit ...) I never trade using borrowed money and I'm not sure whether city institutions should be allowed to do so (or more reasonably, to what extent this should be allowed). In a certain size and shortness of holding time, they cease to contribute to an orderly market and become a destabilizing force. This showed up in the financial crisis when certain banks were \"\"too big to fail\"\" and had to be bailed out at the taxpayer's expense. \"\"Heads we win, tails you lose\"\", rather than trading with us small guys as equals! Likewise it's hard to see any justification for high-frequency trading, where stocks are held for mere milliseconds, and the speed of light between the trader's and the market's computers is significant.\"",
"title": ""
},
{
"docid": "35d418477f6f1ff8bf0e3e14b2082fe6",
"text": "Day traders see a dip, buy stocks, then sell them 4 mins later when the value climbed to a small peak. What value is created? Is the company better off from that trade? The stocks were already outside of company hands, so the trade doesn't affect them at all. You've just received money from others for no contribution to society. A common scenario is a younger business having a great idea but not enough capital funds to actually get the business going. So, investors buy shares which they can sell later on at a higher value. The investor gets value from the shares increasing over time, but the business also gets value of receiving money to build the business.",
"title": ""
},
{
"docid": "39a848a90a40001a3be0c299807ab126",
"text": "\"In gambling, the house also takes a cut, so the total money in the game is shrinking by 2-10 percent. So if you gain $100, it's because other people lost $105, and you do this for dozens of plays, so it stacks up. The market owns companies who are trying to create economic value - take nothing and make it something. They usually succeed, and this adds to the total pot and makes all players richer regardless of trades. Gambling is transactional, there's a \"\"pull\"\" or a \"\"roll\"\" or a \"\"hand\"\", and when it's over you must do new transactions to continue playing. Investing parks your money indefinitely, you can be 30 years in a stock and that's one transaction. And given the long time, virtually all your gains will be new economic value created, at no one else's expense, i.e. Nobody loses. Now it's possible to trade in and out of stocks very rapidly, causing them to be transactional like gambling: the extreme example is day-trading. When you're not in a stock long enough for the company to create any value (paid in dividends or the market appreciating the value), then yes, for someone to gain, someone else must lose. And the house takes a cut (e.g. Etrade's $10 trading fee in and out). In that case both players are trying to win, and one just had better info on average. Another case is when the market drops. For instance right after Brexit I dumped half my domestic stocks and bought Euro index funds. I gambled Euro stocks would rebound better than US stocks would continue to perform. Obviously, others were counterbetting that American stocks will still grow more than Euro will rebound. Who won that gamble? Certainly we will all do better long-term, but some of us will do better-er. And that's what it's all about.\"",
"title": ""
},
{
"docid": "df968b0dad2a0f72bf0e625b8d5e3fa0",
"text": "\"There is one other factor that I haven't seen mentioned here. It's easy to assume that if you buy a stock, then someone else (another stock owner) must have sold it to you. This is not true however, because there are people called \"\"market makers\"\" whose basic job is to always be available to buy shares from those who wish to sell, and sell shares to those who wish to buy. They could be selling you shares they just bought from someone else, but they also could simply be issuing shares from the company itself, that have never been bought before. This is a super oversimplified explanation, but hopefully it illustrates my point.\"",
"title": ""
},
{
"docid": "e4c6e5916ea50d892d8f3e18ae1777d2",
"text": "Do I make money in the stock market from other people losing money? Sometimes. If the market goes down, and someone sells -- on a panic, perhaps, or nervousness -- at a loss, if you have extra cash then you can buy that stock on the hope/expectation that its value will rise.",
"title": ""
}
] |
[
{
"docid": "7885461d2f4f9593513df4f245d4d883",
"text": "\"I understand you make money by buying low and selling high. You can also make money by buying high and selling higher, short selling high and buying back low, short selling low and buying back even lower. An important technique followed by many technical traders and investors is to alway trade with the trend - so if the shares are trending up you go long (buy to open and sell to close); if the shares are trending down you go short (sell to open and buy to close). \"\"But even if the stock price goes up, why are we guaranteed that there is some demand for it?\"\" There is never any guarantees in investing or trading. The only guarantee in life is death, but that's a different subject. There is always some demand for a share or else the share price would be zero or it would never sell, i.e zero liquidity. There are many reasons why there could be demand for a rising share price - fundamental analysis could indicated that the shares are valued much higher than the current price; technical analysis could indicate that the trend will continue; greed could get the better of peoples' emotion where they think all my freinds are making money from this stock so I should buy it too (just to name a few). \"\"After all, it's more expensive now.\"\" What determines if a stock is expensive? As Joe mentioned, was Apple expensive at $100? People who bought it at $50 might think so, but people who bought at $600+ would think $100 is very cheap. On the other hand a penny stock may be expensive at $0.20. \"\"It would make sense if we can sell the stock back into the company for our share of the earnings, but why would other investors want it when the price has gone up?\"\" You don't sell your stocks back to the company for a share of the earnings (unless the company has a share-buy-back arrangement in place), you get a share of the earnings by getting the dividends the company distributes to shareholders. Other investor would want to buy the stock when the price has gone up because they think it will go up further and they can make some money out of it. Some of the reasons for this are explained above.\"",
"title": ""
},
{
"docid": "62d2660987fbf0ed6676574ce9a3287c",
"text": "There are indeed various strategies to make money from this. As Ben correctly said, the stock price drops correspondingly on the dividend date, so the straightforward way doesn't work. What does work are schemes that involve dividend taxation based on nationality, and schemes based on American Options where people can use market rules to their advantage if some options are not exercised.",
"title": ""
},
{
"docid": "c0a22865d3c92a8476bba9a888093840",
"text": "No, the stock market and investing in general is not a zero sum game. Some types of trades are zero sum because of the nature of the trade. But someone isn't necessarily losing when you gain in the sale of a stock or other security. I'm not going to type out a technical thesis for your question. But the main failure of the idea that investing is zero sum is the fact the a company does not participate in the transacting of its stock in the secondary market nor does it set the price. This is materially different from the trading of options contracts. Options contracts are the trading of risk, one side of the contract wins and one side of the contract loses. If you want to run down the economic theory that if Jenny bought her shares from Bob someone else is missing out on Jenny's money you're free to do that. But that would mean that literally every transaction in the entire economy is part of a zero sum game (and really misses the definition of zero sum game). Poker is a zero sum game. All players bet in to the game in equal amounts, one player takes all the money. And hell, I've played poker and lost but still sometimes feel that received value in the form of entertainment.",
"title": ""
},
{
"docid": "a26e032ec69dd475378513b87584923a",
"text": "The core issue is to understand what 'selling a share' means. There is no special person or company that takes the share from you; you are selling on the open market. So your question is effectively 'can I find a guy on the street that buys a 10$-bill for 11$ ?' - Well, maybe someone is dumb enough, but chances are slim.",
"title": ""
},
{
"docid": "695d3dba315747ed2556b43f997f5e25",
"text": "You can make money via stocks in two primary ways: Note that there's no guarantee of either. So it may very well not make you money.",
"title": ""
},
{
"docid": "fd619dbf12a5842646b8f3a2a387df3e",
"text": "\"The stock market is not a zero-sum game. Some parts are (forex, some option trading), but plain old stock trading is not zero sum. That is to say, if you were to invest \"\"at random\"\", you would on average make money. That's because the market as a whole makes money - it goes up over time (6-10% annually, averaged over time). That's because you're not just gambling when you buy a stock; you're actually contributing money to a company (directly or indirectly), which it uses to fund activities that (on average) make money. When you buy Caterpillar stock, you're indirectly funding Caterpillar building tractors, which they then sell for a profit, and thus your stock appreciates in value. While not every company makes a profit, and thus not every stock appreciates in true value, the average one does. To some extent, buying index funds is pretty close to \"\"investing at random\"\". It has a far lower risk quotient, of course, since you're not buying a few stocks at random but instead are buying all stocks in an index; but buying stocks from the S&P 500 at random would on average give the same return as VOO (with way more volatility). So for one, you definitely could do worse than 50/50; if you simply sold the market short (sold random stocks short), you would lose money over time on average, above and beyond the transaction cost, since the market will go up over time on average. Secondly, there is the consideration of limited and unlimited gains or losses. Some trades, specifically some option trades, have limited potential gains, and unlimited potential losses. Take for example, a simple call option. If you sell a naked call option - meaning you sell a call option but don't own the stock - for $100, at a strike price of $20, for 100 shares, you make money as long as the price of that stock is under $21. You have a potential to make $100, because that's what you sold it for; if the price is under $20, it's not exercised, and you just get that $100, free. But, on the other hand, if the stock goes up, you could potentially be out any amount of money. If the stock trades at $24, you're out $400-100 = $300, right? (Plus transaction costs.) But what if it trades at $60? Or $100? Or $10000? You're still out 100 * that amount, so in the latter case, $1 million. It's not likely to trade at that point, but it could. If you were to trade \"\"at random\"\", you'd probably run into one of those types of situations. That's because there are lots of potential trades out there that nobody expects anyone to take - but that doesn't mean that people wouldn't be happy to take your money if you offered it to them. That's the reason your 16.66 vs 83.33 argument is faulty: you're absolutely right that if there were a consistently losing line, that the consistently winning line would exist, but that requires someone that is willing to take the losing line. Trades require two actors, one on each side; if you're willing to be the patsy, there's always someone happy to take advantage of you, but you might not get a patsy.\"",
"title": ""
},
{
"docid": "cd0b25899dfe8a0d7965310d6cfc769b",
"text": "Playing the markets is simple...always look for the sucker in the room and outsmart him. Of course if you can't tell who that sucker is it's probably you. If the strategy you described could make you rich, cnbc staff would all be billionaires. There are no shortcuts, do your research and decide on a strategy then stick to it in all weather or until you find a better one.",
"title": ""
},
{
"docid": "47924d77851cc791bfe47086512ad691",
"text": "The earlier answers answered the question on how a more practical trader can lose money. Here I'd like to mention some obtuse ways Using debt to buy stocks. If one is borrowing at a higher rate than they are getting back, from an economics prospective their stocks are losing money even if the value of those stocks are going up. Using debt to buy stocks. I'll simplify the nightmare situation. I know someone who has Y dollars of cash. Their broker will loan them X. With their X+Y money, they purchase some equities through the broker. The agreement of the loan is that if the value of those equities drops below a certain percentage of the outstanding debt (ex 150%), the broker will automatically and without notification, sell some equities indiscriminately to reduce the outstanding debt. Being in high-interest debt but buying stocks. There are millions of people who are paying 15+% interest rates on consumer debt while investing and getting 5% returns or less on average. Similar to an earlier point, from an economics prospective the choice to buy equities is a profit losing choice.",
"title": ""
},
{
"docid": "cc5eee7dc69b5b6abe644a127fc97e84",
"text": "I think the simple answer to your question is: Yes, when you sell, that drives down the price. But it's not like you sell, and THEN the price goes down. The price goes down when you sell. You get the lower price. Others have discussed the mechanics of this, but I think the relevant point for your question is that when you offer shares for sale, buyers now have more choices of where to buy from. If without you, there were 10 people willing to sell for $100 and 10 people willing to buy for $100, then there will be 10 sales at $100. But if you now offer to sell, there are 11 people selling for $100 and 10 people buying for $100. The buyers have a choice, and for a seller to get them to pick him, he has to drop his price a little. In real life, the market is stable when one of those sellers drops his price enough that an 11th buyer decides that he now wants to buy at the lower price, or until one of the other 10 buyers decides that the price has gone too low and he's no longer interested in selling. If the next day you bought the stock back, you are now returning the market to where it was before you sold. Assuming that everything else in the market was unchanged, you would have to pay the same price to buy the stock back that you got when you sold it. Your net profit would be zero. Actually you'd have a loss because you'd have to pay the broker's commission on both transactions. Of course in real life the chances that everything else in the market is unchanged are very small. So if you're a typical small-fry kind of person like me, someone who might be buying and selling a few hundred or a few thousand dollars worth of a company that is worth hundreds of millions, other factors in the market will totally swamp the effect of your little transaction. So when you went to buy back the next day, you might find that the price had gone down, you can buy your shares back for less than you sold them, and pocket the difference. Or the price might have gone up and you take a loss.",
"title": ""
},
{
"docid": "e44598dada0a8ebf91496f7b40fd3b2c",
"text": "Shares are partial ownership of the company. A company can issue (not create) more of the shares it owns at any time, to anyone, at any price -- subject to antitrust and similar regulations. If they wanted to, for example, flat-out give 10% of their retained interest to charity, they could do so. It shouldn't substantially affect the stock's trading for others unless there's a completely irrational demand for shares.",
"title": ""
},
{
"docid": "32a0d87b28f8b8554b0c9302b8b5f6ff",
"text": "\"No, an entrepreneur actually adds value, whereas stock ownership does not. Buying stocks is akin to gambling, except with different rules and an average positive return over time, whereas normal casino gambling always has a net negative result on average. To put it shortly: If it doesn't make a difference whether its you or John from across the corner doing the action, then its basically a speculation with \"\"investment\"\" as an alias. You're merely the purse. If you are involved in the running of the project, taking decisions, organizing, putting your time and creativity in, then you're an entrepreneur. In this case, its clear to see that different persons will have different results, so they matter as persons and not just as purses. Note that if you buy enough stock to actually have a say in the running of the company, then you're crossing the threshold there.\"",
"title": ""
},
{
"docid": "31a82b7ed7528351a9da8c523b16833e",
"text": "\"Surprising that you have a \"\"finance background,\"\" but don't know what a cold-calling broker does - he calls people he's never met and tries to bullshit them into buying stock or making some other trade. You can call people from contact lists obtained from marketing firms, people who hopefully fit a certain income and age bracket best suited to investing. For some people it's ok, for others it's complete hell. If you fall into the latter category, your salary being based on how much trading you generate every month can make it even worse. If you want an idea of cold-calling, call 100 people today at random from the phonebook and try to convince them that they need to buy something.\"",
"title": ""
},
{
"docid": "766ba9a0a0e7c1d6325b6344da388fe8",
"text": "If you buy a stock and it goes up, you can sell it and make money. But if you buy a stock and it goes down, you can lose money.",
"title": ""
},
{
"docid": "5660775a39f180ceab7a8dbd3255f8b4",
"text": "Fake stock market trading may teach you about trading, which isn't necessarily the same thing as investing. I think you need to understand how things work and how to read financial news and statistics before you start trading. Otherwise, you're just going to get frustrated when you mysteriously win and lose funny money. I'd suggest a few things: Also, don't get into individual stocks until you have at least $5k to invest -- focus on saving and use ETFs or mutual funds. You should always invest in around a half dozen diversified stocks at a time, and doing that with less than $1,000 a stock will make it impossible to trade and make money -- If a $100 stock position goes up 20%, you haven't cleared enough to pay your brokerage fees.",
"title": ""
},
{
"docid": "3965ebcc47d710ff6853b5136b318382",
"text": "\"The seriousness of your situation depends on whether your girlfriend was owed a refund for each tax return she failed to file, or whether she owed additional money. If she owed money on one or more of the tax returns she failed to file, stop! It is time to consult a lawyer. At the very least, you need to contact an accountant who specialises in this sort of thing. She will owe interest and penalties, and may be liable for criminal prosecution. There are options available and lawyers who specialise in this sort of thing (e.g. this one, from a simple google search). If she is in this position, you need professional help and you need it soon, so you can make a voluntary disclosure and head off criminal prosecution. Assuming the taxes are fairly simple, you are likely looking at a few thousand dollars, but probably less than $7,500, for professional help. There will be substantial penalties assessed as well, for any taxes owing. If you wait until the CRA starts proceedings, you are most likely looking at $10,000 to $50,000, assuming the matter is not too complicated, and would be facing the possibility of a jail term not exceeding five years. If she was due a refund on every single one of the tax returns she failed to file, or at least if she did not owe additional money, you are probably in a situation you can deal with yourself. She will want to file all of the tax returns as soon as possible, but will not be assessed a penalty. I have personally filed taxes several months late a number of times, when I was owed a refund. You may still want to consider professional help, but it is probably not necessary. Under no circumstances should she allow her father near her finances again, ever. You should also be careful to trust any responses to this question, including my response, because we are unlikely to be professional accountants (I certainly am not). You are well outside the abilities of an H&R Block \"\"accountant\"\" in this matter and need a real certified accountant and/or a lawyer who specialises in Failure To File cases.\"",
"title": ""
}
] |
fiqa
|
85e8f940ae1becfc90e973c64f3b020d
|
Joining a company being acquired
|
[
{
"docid": "641bd43f251dadbdf5ca1d0a1a7a0552",
"text": "\"Is there anything I need to ask or consider during my negotiation process based on the fact that they probably will soon be own by another company? Very tricky situation. You are being hired by one company, and one hiring manager. But you already know that there are big changes ahead. What you don't know is how all those changes will actually play out. You will at least end up working for a different company. I've worked for several companies in the past that were acquired, and some that acquired other companies. After each acquisition, the nature of the company changed significantly. Some teams were let go completely (often \"\"overhead\"\" departments like accounting, marketing, etc, that were handled at the corporate level), some teams were moved to a different location, others stayed the same. Sometimes management changed. In one case I was working for a new boss who worked out of the home office in another state. The time frame for these changes ranged from immediately, to several years after the acquisition. For me at least, some of the things that made the job appealing earlier typically were gone. Try as best you can to ask questions about the acquisition, and about the nature of the acquiring company. If they are allowed to tell you the name of the company that is acquiring them, do some searching. See if you can find out how the company typically deals with acquisitions - do they immediately let almost everyone go (keeping only the \"\"essential\"\" few), or do they run new acquisitions as separate divisions and leave them alone for at least a while? Try to find out from your hiring manager what their expectations are for your specific team post-acquisition. Try to find out if anything within your offer is subject to change, post-acquisition. Are you being hired under the old, pre-acquisition rules? Or under the new, post-acquisition rules? The fact that you even know the company is being acquired is good. Often, companies cannot even divulge that fact until very near the end. On the other hand your use of the phrase \"\"probably will soon\"\", makes me wonder how much is definite here. Here's something you might wish to read: https://workplace.stackexchange.com/questions/20357/a-coworker-beat-me-to-resignation-how-can-i-resign-in-a-professional-manner\"",
"title": ""
},
{
"docid": "50e54234a4e99e7bc7dca661b03ebffd",
"text": "The best answer I can give is - be prepared for change. There's no perfect question you can ask or assurance you can get prior to accepting the offer that will give you any particularly perfect security or sense of stability here. The company itself is going through a change of identity that can change how it will do business and even what the business is and how revenue is acquired. In the time of the acquisition your role within the company could change radically for better or worse, it could even be eliminated entirely. If that type of uncertainty doesn't appeal to you - don't take the position. If you are absolutely psyched about this job, the best thing you can do is to learn more about the business itself and see if you can make any educated bets about how your role will play into the changes in business strategy that will come with the acquisition.",
"title": ""
}
] |
[
{
"docid": "28ec486934904404fe18e53cf843ce76",
"text": "\"Here is one \"\"other consideration\"\": don't, don't, don't sell based on insider information. Insider trading can land you in jail. And it's not restricted to top executives. Even overhearing a discussion about the current status of the acquisition talks can mean that you have insider information that you legally cannot act on in many jurisdictions. If you are just a regular employee, the SEC will likely not subject your dealings to special scrutiny, especially since lots of your colleagues will likely trade your company's shares at this point in time. And if you definitely hold insider info (for example, if you are intimately involved with the acquisition talks), you will likely have had a very serious warning about insider trading and know what you can and what you cannot do. Nevertheless, it's better to be careful here.\"",
"title": ""
},
{
"docid": "6c0f4d3144474b9d0a1a7381620979cc",
"text": "It depends on the timing of the events. Sometimes the buying company announces their intention but the other company doesn't like the deal. It can go back and forth several times, before the deal is finalized. The specifics of the deal determine what happens to the stock: The deal will specify when the cutoff is. Some people want the cash, others want the shares. Some will speculate once the initial offer is announced where the final offer (if there is one) will end up. This can cause a spike in volume, and the price could go up or down. Regarding this particular deal I did find the following: http://www.prnewswire.com/news-releases/expedia-to-acquire-orbitz-worldwide-for-12-per-share-in-cash-300035187.html Additional Information and Where to Find It Orbitz intends to file with the SEC a proxy statement as well as other relevant documents in connection with the proposed transaction with Expedia. The definitive proxy statement will be sent or given to the stockholders of Orbitz and will contain important information about the proposed transaction and related matters. SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The proxy statement and other relevant materials (when they become available), and any other documents filed by Expedia or Orbitz with the SEC, may be obtained free of charge at the SEC's website, at www.sec.gov. In addition, security holders will be able to obtain free copies of the proxy statement from Orbitz by contacting Investor Relations by mail at ATTN: Corporate Secretary, Orbitz Worldwide, Inc., 500 W. Madison Street, Suite 1000, Chicago, Illinois 60661.",
"title": ""
},
{
"docid": "a3f2365912ad92fdb6806f5009bb20a8",
"text": "As far as I know, the AMT implications are the same for a privately held company as for one that is publicly traded. When I was given my ISO package, it came with a big package of articles on AMT to encourage me to exercise as close to the strike price as possible. Remember that the further the actual price at the time of purchase is from the strike price, the more the likely liability for AMT. That is an argument for buying early. Your company should have a common metric for determining the price of the stock that is vetted by outside sources and stable from year to year that is used in a similar way to the publicly traded value when determining AMT liability. During acquisitions stock options often, from what I know of my industry, at least, become options in the new company's stock. This won't always happen, but its possible that your options will simply translate. This can be valuable, because the price of stock during acquisition may triple or quadruple (unless the acquisition is helping out a very troubled company). As long as you are confident that the company will one day be acquired rather than fold and you are able to hold the stock until that one day comes, or you'll be able to sell it back at a likely gain, other than tying up the money I don't see much of a downside to investing now.",
"title": ""
},
{
"docid": "d64cc61d51f6e72fa565a083d8f3bf26",
"text": "MattMcA definitely gave you excellent advice and said a lot of what I would say to you. Most databases that are going to give you the most comprehensive information, but in a well formatted way, are going to require subscriptions or a fee. You should try to visit a library, especially one at a university, because they may likely have free access for you. At my alma mater the preferred database among students was LexisNexis Corporate Affiliations. http://www.corporateaffiliations.com/ With this company directory, you get public and private company profiles. You can use Corporate Affiliation’s MergerTrak™ and get full coverage on current and past mergers and acquisitions. I definitely think this is a business database you should look into. You have nothing to lose seeing as they have a free trial. Just to add, there’s always a business news feed on the homepage. As I just checked now, this one caught my interest: For Marvel Comics, A Renewed Digital Mission.",
"title": ""
},
{
"docid": "ec2cecd148f5a36061685e5c592c6bf3",
"text": "I found the following on a stock to mutual conversion for insurance firms for Ohio. Pulling from that link, Any domestic stock life insurance corporation, incorporated under a general law, may become a mutual life insurance corporation, and to that end may carry out a plan for the acquisition of shares of its capital stock, provided such plan: (A) Has been adopted by a vote of a majority of the directors of such corporation; (B) Has been approved by a vote of stockholders representing a majority of the capital stock then outstanding at a meeting of stockholders called for the purpose; (C) Has been approved by a majority of the policyholders voting at a meeting of policyholders called for the purpose, each of whom is insured in a sum of at least one thousand dollars and whose insurance shall then be in force and shall have been in force for at least one year prior to such meeting. and Any stockholder who has assented to the plan or who has been concluded by the vote of the assenting stockholders, and any stockholder who has objected and made demand in writing for the fair cash value of his shares subsequent to which an agreement has been reached fixing such fair cash value, but who fails to surrender his certificates for cancellation upon payment of the amount to which he is entitled, may be ordered to do so by a decree of the court of common pleas for the county in which the principal office of such corporation is located after notice and hearing in an action instituted by the corporation for that purpose, and such decree may provide that, upon the failure of the stockholder to surrender such certificates for cancellation, the decree shall stand in lieu of such surrender and cancellation. Since they successfully became a mutual insurance company, I would guess that those stocks were acquired back by the company, and are leftover from the conversion. They would not represent an ownership in the company, but might have value to a collector.",
"title": ""
},
{
"docid": "915e6ec3c328a2e4c2e8506fe7bc97cb",
"text": "\"This is several questions wrapped together: How can I diplomatically see the company's financial information? How strong a claim does a stockholder or warrantholder have to see the company's financials? What information do I need to know about the company financials before deciding to buy in? I'll start with the easier second question (which is quasi implicit). Stockholders typically have inspection rights. For example, Delaware General Corporate Law § 220 gives stockholders the right to inspect and copy company financial information, subject to certain restrictions. Check the laws and corporate code of your company's state of incorporation to find the specific inspection right. If it is an LLC or partnership, then the operating agreement usually controls and there may be no inspection rights. If you have no corporate stock, then of course you have no statutory inspection rights. My (admittedly incomplete) understanding is that warrantholders generally have no inspection rights unless somehow contracted for. So if you vest as a corporate stockholder, it'll be your right to see the financials—which may make even a small purchase valuable to you as a continuing employee with the right to see the financials. Until then, this is probably a courtesy and not their obligation. The first question is not easy to answer, except to say that it's variable and highly personal for small companies. Some people interpret it as prying or accusatory, the implication being that the founders are either hiding something or that you need to examine really closely the mouth of their beautiful gift horse. Other people may be much cooler about the question, understanding that small companies are risky and you're being methodical. And in some smaller companies, they may believe giving you the expenses could make office life awkward. If you approach it professionally, directly, and briefly (do not over-explain yourself) with the responsible accountant or HR person (if any), then I imagine it should not be a problem for them to give some information. Conversely, you may feel comfortable enough to review a high-level summary sheet with a founder, or to find some other way of tactfully reviewing the right information. In any case, I would keep the request vague, simple, and direct, and see what information they show you. If your request is too specific, then you risk pushing them to show information A, which they refuse to do, but a vague request would've prompted them to show you information B. A too-specific request might get you information X when a vague request could have garnered XYZ. Vague requests are also less aggressive and may raise fewer objections. The third question is difficult to say. My personal understanding is some perspective of how venture capitalists look at the investment opportunity (you didn't say how new this startup is or what series/stage they are on, so I'll try to stay vague). The actual financials are less relevant for startups than they are for other investments because the situation will definitely change. Most venture capital firms like to look at the burn rate or amount of cash spent, usually at a monthly rate. A high burn rate relative to infusions of cash suggests the company is growing rapidly but may have a risk of toppling (i.e. failing before exit). Burn rate can change drastically during the early life of the startup. Of course burn rate needs the context of revenues and reserves (and latest valuation is helpful as a benchmark, but you may be able to calculate that from the restricted share offer made to you). High burn rate might not be bad, if the company is booming along towards a successful exit. You might also want to look at some sort of business plan or info sheet, rather than financials alone. You want to gauge the size of the market (most startups like to claim 9- or 10-figure markets, so even a few percentage points of market share will hit revenue into the 8-figures). You'll also have to have a sense for the business plan and model and whether it's a good investment or a ridiculous rehash (\"\"it's Twitter for dogs meets Match.com for Russian Orthodox singles!\"\"). In other words, appraise it like an investor or VC and figure out whether it's a prospect for decent return. Typical things like competition, customer acquisition costs, manufacturing costs are relevant depending on the type of business activity. Of course, I wouldn't ignore psychology (note that economists and finance people don't generally condone the following sort of emotional thinking). If you don't invest in the company and it goes big, you'll kick yourself. If it goes really big, other people will either assume you are rich or feel sad for you if you say you didn't get rich. If you invest but lose money, it may not be so painful as not investing and losing out the opportunity. So if you consider the emotional aspect of personal finance, it may be wise to invest at least a little, and hedge against \"\"woulda-shoulda\"\" syndrome. That's more like emotional advice than hard-nosed financial advice. So much of the answer really depends on your particular circumstances. Obviously you have other considerations like whether you can afford the investment, which will be on you to decide. And of course, the § 83(b) election is almost always recommended in these situations (which seems to be what you are saying) to convert ordinary income into capital gain. You may also need cash to pay any up-front taxes on the § 83(b) equity, depending on your circumstances.\"",
"title": ""
},
{
"docid": "27f9a983c9f3d7c33a93dfd9dbe49aef",
"text": "It depends on the firm. I was interviewing with a few PE firms a few months ago, and the structure can vary. Some were definitely just LBO shops where the bulk of the staff were focused just on the deal. I remember a couple, however, that placed a lot of emphasis on getting in-house after the deal and performing what ultimately amounted to long term management consulting. These firms tended to hold companies for like 10+ years iirc. It sounds like there might be options out there in line with your passions, you just need to be pretty picky with the firm you join. I only remember one firm's name off the top of my head, but I'd be happy to pm it to you if you want to do some more research yourself.",
"title": ""
},
{
"docid": "e11be041a4602cb98ea6178e945d96c5",
"text": "\"I think the best advice you could get would be to find a lawyer. If that foreign company has any presence in the US, they should be the ones signing off as the successor, otherwise you may find yourself in a limbo that would require some legal assistance. Generally, in most States a Corporation cannot be dissolved without resolving issues like this, which is probably why they told you \"\"the plan is terminating\"\". Someone asked them to terminate it. You need to find that someone.\"",
"title": ""
},
{
"docid": "cb01897442967732700188d70b1e2d55",
"text": "This is only one of a series of questions your friend needs to understand. They will also need to know what happens to: vacation balances; the vacation earning schedule; retirement fund matching; the pension program; all the costs and rules regarding health, dental and vision;life insurance amounts. Some of these can be changed immediately. Some will not be changed this year because of IRS regulations. Everything can be changed by the next year. But there is no way to know if they will change a little a possible or as much a possible. It will depend on if they are buying the company, or if the company is going out of business and the new company is buying the remnants. They may also be essentially terminating the employees at the old place, and giving them the first opportunity for interviews. If they are essentially quitting they will not have to continue paying into the plan. The bad news is that their last day of work is also probably their last day to incur expenses that they can pay for with the flexible plan. If They are being purchased or absorbed the company will likely make no changes to the current plan, and fold them into the plan next year. I have been involved with company purchases and company splits, and this is how it was handled.",
"title": ""
},
{
"docid": "94ca522ac3e692fc40a81e334445cace",
"text": "\"Many companies (particularly tech companies like Atlassian) grant their employees \"\"share options\"\" as part of their compensation. A share option is the right to buy a share in the company at a \"\"strike price\"\" specified when the option is granted. Typically these \"\"vest\"\" after 1-4 years so long as the employee stays with the company. Once they do vest, the employee can exercise them by paying the strike price - typically they'd do that if the shares are now more valuable. The amount they pay to exercise the option goes to the company and will show up in the $2.3 million quoted in the question.\"",
"title": ""
},
{
"docid": "23cee925ddbb4a7e32c9671b6bf45718",
"text": "It depends. If you accept the offer, then your stock will cease existing. If you reject the offer, then you will become a minority shareholder. Depending on the circumstances, you could be in the case where it becomes illegal to trade your shares. That can happen if the firm ceases to be a public company. In that case, you would discount the cash flows of future dividends to determine worth because there would be no market for it. If the firm remained public and also was listed for trading, then you could sell your shares although the terms and conditions in the market would depend on how the controlling firm managed the original firm.",
"title": ""
},
{
"docid": "e97dd86a3520192f5e14722856c990a9",
"text": "\"It is not a \"\"riskless\"\" transaction, as you put it. Whenever you own shares in a company that is acquiring or being acquired, you should read the details behind the deal. Don't make assumptions just based on what the press has written or what the talking heads are saying. There are always conditions on a deal, and there's always the possibility (however remote) that something could happen to torpedo it. I found the details of the tender offer you're referring to. Quote: Terms of the Transaction [...] The transaction is subject to certain closing conditions, including the valid tender of sufficient shares, which, when added to shares owned by Men’s Wearhouse and its affiliates, constitute a majority of the total number of common shares outstanding on a fully-diluted basis. Any shares not tendered in the offer will be acquired in a second step merger at the same cash price as in the tender offer. [...] Financing and Approvals [...] The transaction, which is expected to close by the third quarter of 2014, is subject to satisfaction of customary closing conditions, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Act. Both Men’s Wearhouse and Jos. A. Bank are working cooperatively with the Federal Trade Commission to obtain approval of the transaction as soon as possible. [...] Essentially, there remains a small chance that one of these \"\"subject to...\"\" conditions fails and the merger is off. The chance of failure is likely perceived as small because the market price is trading close to the deal price. When the deal vs. market price gap is wider, the market would be less sure about the deal taking place. Note that when you tender your shares, you have not directly sold them when they are taken out of your account. Rather, your shares are being set aside, deposited elsewhere so you can no longer trade them, and later, should the conditions be satisfied, then you will be paid for your shares the deal price. But, should the deal fall apart, you are likely to get your shares deposited back into your account, and by that time their market value may have dropped because the price had been supported by the high likelihood of the transaction being completed. I speculated once on what I thought was a \"\"sure deal\"\": a large and popular Canadian company that was going to be taken private in a leveraged buyout by some large institutional investors with the support of major banks. Then the Global Financial Crisis happened and the banks were let off the hook by a solvency opinion. Read the details here, and here. What looked like a sure thing wasn't. The shares fell considerably when the deal fell apart, and took about four years to get back to the deal price.\"",
"title": ""
},
{
"docid": "302c61b590ca3faf629e6dea9041552a",
"text": "isn't it still a dilution of existing share holder stock value ? Whether this is dilution or benefit, only time will tell. The Existing value of Facebook is P, the anticipated value after Watsapp is P+Q ... it may go up or go down depending on whether it turns out to be the right decision. Plus if Facebook hadn't bought Watsapp and someone else may have bought and Facebook itself would have got diluted, just like Google Shadowed Microsoft and Facebook shadowed Google ... There are regulations in place to ensure that there is no diversion of funds and shady deals where only the management profits and others are at loss. Edit to littleadv's comments: If a company A is owned by 10 people for $ 10 with total value $100, each has 10% of the share in the said company. Now if a Company B is acquired again 10 ea with total value 100. In percentage terms everyone now owns 5% of the new combined company C. He still owns $10 worth. Just after this acquisition or some time later ...",
"title": ""
},
{
"docid": "16d613be361973044b4f7d4185a95491",
"text": "Obviously, there's some due diligence and quantitative analysis. However, it's mostly just what they can secure, for how much and how quickly. For instance, if you had a bakery that was netting 200,000/yr and needed 750,000 to open a new location. The bank will give you the loan over 10 years at 1.1%. Well, it's probably a good idea to take on debt. That's 6938 a month (I think). Edit: Or issue debt yourself. However, let's say you're merging with someone in the same industry. They have a market cap of 10 billion. Your company has a market cap of 62 billion and revenue of 11.8 billion a year. It's probably a good idea to secure with equity. Especially because you believe the merger will help you expand.",
"title": ""
},
{
"docid": "b54284dec28913e221731174dbe2fe02",
"text": "Seems a little early. Here's my advice: if you don't feel ready, you're probably not completely ready. In that case, it would probably be best if you worked as the assistant to the president of your business for a while to learn the ins and outs. Even if you are confident, keep the current president around to help. Maybe they can occupy the vice president position while you take over ownership. You'll want somebody there who knows what's up when shit hits the fan.",
"title": ""
}
] |
fiqa
|
44b0eb78eb8c072351a7cdf032648cc6
|
How should I record invoices in foreign currency in GNUCash?
|
[
{
"docid": "bc6e266b59ecc292bde5266b4226db53",
"text": "\"The solution I've come up with is to keep income in CAD, and Accounts Receivable in USD. Every time I post an invoice it prompts for the exchange rate. I don't know if this is \"\"correct\"\" but it seems to be preserving all of the information about the transactions and it makes sense to me. I'm a programmer, not an accountant though so I'd still appreciate an answer from someone more familiar with this topic.\"",
"title": ""
},
{
"docid": "10578bd9fa925722e0c08f957486637d",
"text": "It depends upon in how many currencies your business is denominated. If your business is solely dependent upon this one payer, it's best to start up a new set of books in USD. All accounts should be translated from CAD from a date preceding the USD activity. The CAD books should be closed, and all should be done with the new USD books. If your business will continue to use both USD & CAD, it's best to have two sets of books, one for USD and one for CAD. Multi-currency books are a nightmare and should be avoided at all costs. Also, with the way you describe your situation, it appears as if you're also blending your household and business books. This should also be avoided for best practices.",
"title": ""
}
] |
[
{
"docid": "72b452624646db70ff1533aa27000710",
"text": "I haven't seen this answer, and I do not know the legality of it, as it could raise red flags as to money laundering, but about the only way to get around the exchange rate spreads and fees is to enter into transactions with a private acquaintance who has Euros and needs Dollars. The problem here is that you are taking on the settlement risk in the sense that you have to trust that they will deposit the euros into your French account when you deposit dollars into their US account. If you work this out with a relative or very close friend, then the risk should be minimal, however a more casual acquaintance may be more apt to walk away from the transaction and disappear with your Euros and your Dollars. Really the only other option would be to be compensated for services rendered in Euros, but that would have tax implications and the fees of an international tax attorney would probably outstrip any savings from Forex spreads and fees not paid.",
"title": ""
},
{
"docid": "d843bca1e943e85e1b0348c3812e7a6c",
"text": "\"GNUCash won't show 'Credit Card' type accounts in \"\"Process Payment\"\", as of v.2.6.1. A workaround is to create another account of type A/Payable. Then, transfer the operations you want to pay via \"\"Process Payment\"\" to this new account. It should be visible now. A drawback is that you have split your current Credit Card debt, which makes it harder to track. Alternatively you may wish to only use this new account for all your credit card related expenses. Another alternative is processing payments for these purchases manually to keep the 'credit card' accounts consistent.\"",
"title": ""
},
{
"docid": "ea5c5652e7b5488b676fca707598ad9b",
"text": "This started as a comment but then really go too long so I am posting an answer: @yarun, I am also using GnuCash just like you as a non-accountant. But I think it really pays off to get to know more about accounting via GnuCash; it is so useful and you learn a lot about this hundreds of years old double entry system that all accountants know. So start learning about 5 main accounts and debits and credits, imho. It is far easier than one can think. Now the answer: even without balancing amounts exactly program is very useful as you still can track your monthly outgoings very well. Just make/adjust some reports and save their configurations (so you can re-run quickly when new data comes in) after you have classified your transactions properly. If I still did not know what some transactions were (happens a lot at first import) - I just put them under Expenses:Unaccounted Expenses - thus you will be able to see how much money went who knows where. If later you learn what those transactions were - you still can move them to the right account and you will be pleased that your reports show less unaccounted money. How many transactions to import at first - for me half a year or a year is quite enough; once you start tracking regularly you accumulate more date and this becomes a non-issue. Reflecting that personal finance is more about behaviour than maths and that it is more for the future where your overview of money is useful. Gnucash wil learn from import to import what transactions go where - so you could import say 1 or 3 month intervals to start with instead of a while year. No matter what - I still glance at every transaction on import and still sometimes petrol expense lands in grocery (because of the same seller). But to spot things like that you use reports and if one month is abnormal you can drill down to transactions and learn/correct things. Note that reports are easy to modify and you can save the report configurations with names you can remember. They are saved on the machine you do the accounting - not within the gnucash file. So if you open the file (or mysql database) on another computer you will miss your custom reports. You can transfer them, but it is a bit fiddly. Hence it makes sense to use gnucash on your laptop as that you probably will have around most often. Once you start entering transactions into GnuCash on the day or the week you incur the expense, you are getting more control and it is perhaps then you would need the balance to match the bank's balance. Then you can adjust the Equity:Opening Balances to manipulate the starting sums so that current balances match those of your bank. This is easy. When you have entered transactions proactively (on the day or the week) and then later do an import from bank statement the transactions are matched automatically and then they are said to be reconciled (i.e. your manual entry gets matched by the entry from your statement.) So for beginning it is something like that. If any questions, feel free to ask. IMHO this is a process rather a one-off thing; I began once - got bored, but started again and now I find it immensely useful.",
"title": ""
},
{
"docid": "8b2553ca379034c58a9b65547529cb50",
"text": "\"Amount is the closest single word. \"\"Amount in dollars\"\" would be the easiest way to specify information you are requesting. \"\"Amount and currency\"\" if you ware in an area using multiple currencies. An accountant might be able to give you a more technical term, but it would be accountancy jargon. Amount due, credit amount, debit amount, amount deposited, amount credited, amount withdrawn, or amount included. If you're writing instructions and want to specify that the person following the instructions needs to indicate the currency, you'll probably have to simply state that requirement. Based on US centric thinking, inside the US, money is dollars, dollars is money. For US citizens outside the country, we would always tack on the currency. 100 dollars, or 100 Euro. There is a segment of Americans who do not understand geography, and that other countries exist, and that they use different currencies, might not realize that other countries have currencies named dollars, and that USD means US Dollars. So for U.S. citizens, be specific and clear. Bottom line, if this is written for US residents, and they need to specify the currency, you need to explicitly require them to \"\"List the amount and currency.\"\"\"",
"title": ""
},
{
"docid": "c673ccd11ad9d1f7ff188d2f48f926e3",
"text": "How can I correctly account for having money in different currencies, without currency transfers or currency fluctuations ending up as gains or losses? In my view, your spreadsheet should be in multiple currencies. i.e. if you have gained some in specific currency, make a note of it in that specific currency. If you have spent something in a specific currency, then make a note accordingly. You can use an additional column for reporting this in a neutral currency say GBP. If you are transferring the money from account of one currency to account of another; change the balances as appropriate with the actual conversion rate. If you need this record keeping for tax purposes, then get a proper advise from accountant.",
"title": ""
},
{
"docid": "97793b3a30e5346c88a4c290d48d8e81",
"text": "\"That's Imbalance-USD (or whatever your default currency is). This is the default \"\"uncategorized\"\" account. My question is, is it possible to get the \"\"unbalanced\"\" account to zero and eliminate it? Yes, it's possible to get this down to zero, and in fact desirable. Any transactions in there should be reviewed and fixed. You can delete it once you've emptied it, but it will be recreated the next time an unbalanced transaction is entered. Ideally, I figure it should autohide unless there's something in it, but it's a minor annoyance. Presumably you've imported a lot of data into what's known as a transaction account like checking, and it's all going to Imbalance, because it's double entry and it has to go somewhere. Open up the checking account and you'll see they're all going to Imbalance. You'll need to start creating expense, liability and income accounts to direct these into. Once you've got your history all classified, data entry will be easier. Autocomplete will suggest transactions, and online transaction pull will try to guess which account a given transaction should match with based on that data.\"",
"title": ""
},
{
"docid": "1f08ad36b6bbbb7fc99e5aa9a06f0376",
"text": "\"I'm no accountant, but I think the way I'd want to approach this kind of thing in Gnucash would be to track it as an Asset, since it is. It sounds like your actual concern is that your tracked asset value isn't reflecting its current \"\"market\"\" value. Presumably because it's risky it's also illiquid, so you're not sure how much value it should have on your books. Your approach suggested here of having it as just as expense gives it a 0 value as an asset, but without tracking that there's something that you own. The two main approaches to tracking an investment in Gnucash are: Of course, both of these approaches do assume that you have some notion of your investment's \"\"current value\"\", which is what you're tracking. As the section on Estimating Valuation of the concepts guide says of valuing illiquid assets, \"\"There is no hard rule on this, and in fact different accountants may prefer to do this differently.\"\" If you really think that the investment isn't worth anything at the moment, then I suppose you should track it at 0, but presumably you think it's worth something or you wouldn't have bought it, right? Even if it's just for your personal records, part of a regular (maybe annual?) review of your investments should include coming up with what you currently value that investment at (perhaps your best guess of what you could sell it for, assuming that you could find a willing buyer), and updating your records accordingly. Of course, if you need a valuation for a bank or for tax purposes or the like, they have more specific rules about how they are tracking what things are worth, but presumably you're trying to track your personal assets for your own reasons to get a handle on what you currently own. So, do that! Take the time to get a handle on the worth of what you currently own. And don't worry about getting the value wrong, just take your best guess, since you can always update it later when you learn new information about what your investment is worth.\"",
"title": ""
},
{
"docid": "7c12efadd7fee350ffa0bd773c7bcd8f",
"text": "Unfortunately, there is no facility to do bulk transaction edits in GnuCash, so you are out of luck for your existing hundred. (I don't know whether there is a way to initially import a transaction as split.) However, once you have entered this split once, it can be used as a template for new transactions, using autocomplete or by entering it in the Scheduled Transaction Editor.",
"title": ""
},
{
"docid": "3bbda03f837541c501058d5c2e9831a5",
"text": "Given your needs, GNUcash will do swimmingly. I've used it for the past 3 years and while it's a gradual learning process, it's been able to resolve most stuff I've thrown at it. Schedule bills and deposits in the calendar view so I can keep an eye on cash flow. GNUcash has scheduled payments and receipts and reconcilation, should you need them. I prefer to keep enough float to cover monthly expenses in accounts rather than monitor potential shortfalls. Track all my stock and mutual fund investments across numerous accounts. It pulls stock, mutual and bond quotes from lots of places, domestic and foreign. It can also pull transaction data from your brokers, if they support that. I manually enter all my transactions so I can keep control of them. I just reconcile what I entered into Quicken based on the statements sent to me. I do not use Quicken's bill pay There's a reconciliation mode, but I don't use it personally. The purpose of reconcilation is less about catching bank errors and more about agreeing on the truth so that you don't incur bank fees. When I was doing this by hand I found I had a terrible data entry error rate, but on the other hand, the bayesian importer likes to mark gasoline purchases from the local grocery store as groceries rather than gas. I categorize all my expenditures for help come tax time. GNUcash has accounts, and you can mark expense accounts as tax related. It also generates certain tax forms for you if you need that. Not sure what all you're categorizing that's helpful at tax time though. I use numerous reports including. Net Worth tracking, Cash not is retirement funds and total retirement savings. Tons of reports, and the newest version supports SQL backends if you prefer that vs their reports.",
"title": ""
},
{
"docid": "0e1634b86dc0379488255eb75820baf2",
"text": "\"I recently needed to compute a better balance that let us pick and choose what to include in the computed sum without losing information, so I revisited this topic and I'm pleased to say that I've found a solution that works (at least for our data - you may have transactions that this code doesn't recognize, but you can always modify it to match). My solution was written natively for MS SQL Server 2008 or later, it uses a scalar UDF, a VIEW, and a windowed aggregate (SUM OVER (ORDER BY ...) which means it should be almost-syntax compatible with PostgreSQL. MySQL does not support OVER but you can perform a running-sum using a variable with arithmetic addition directly in the SELECT clause. Create a database table with this schema (feel free to exclude columns you're not interested in, such as Option1Name): Create a UNIQUE index on TxnId - you could use it as a primary-key, I suppose. You might be tempted to create a Foreign-Key relationship between ReferenceTxnId and TxnId, however this will fail if you enforce it: we have many transactions where ReferenceTxnId points to a Transaction that doesn't exist. This is usually in the case of [Type] = 'Web Accept Payment Received' AND [Status] = 'Canceled'. We also have some TransactionId values longer than 17 characters: some TransactionIds start with \"\"U-\"\" - all pending money requests, I suspect this indicates the transaction is \"\"unfinished\"\". Re-download your entire PayPal History CSV files so that you have the latest retroactive updates. Import these CSV files into this PayPalHistory table. Do a simple test to see how bad PayPal's default data is: To find out where the differences are coming from, run this query: (The ORDER BY (...), RowId is to ensure consistent ordering when multiple transactions share the same timestamp) As you scroll through the results, you'll see how the naive SUM is thrown-off from the official PayPal-computed Balance column. So as you can see, the Net column value cannot always be trusted - what we need is to generate our own \"\"EffectiveNet\"\" value which is accurate - that is, the value is 0.00 for rows which do not affect the balance, instead of being what they are right now. The problem is, given a single row of data (such as any single row from the example table in my original Question) we have no way of inherently knowing what its \"\"EffectiveNet\"\" is. I have devised two functions to help solve this problem, the first function only looks at the ReferenceTxnId, Type and Status column values and generates accurate values for the vast majority of rows - indeed, in our dataset we only had one row for which this approach did not work. I recommend you try this one first and compare the running-sum value to ensure it works for your data: You can use this function in the query like so below, hopefully it should give you an accurate running-sum and balance figure at the end: 8. And here's the view that ties it all together: Used like so: I hope this helps anyone else wanting to do accurate bookkeeping with PayPal Transaction History files!\"",
"title": ""
},
{
"docid": "500aba91d79281094dbadba775df5b7a",
"text": "I'm using iBank on my Mac here and that definitely supports different currencies and is also supposed to be able to track investments (I haven't used it to track investments yet, hence the 'supposed to' caveat).",
"title": ""
},
{
"docid": "0f8bff4246bf5e8c9e8ded7affa5caa8",
"text": "\"Gnucash is first and foremost just a general ledger system. It tracks money in accounts, and lets you make transactions to transfer money between the accounts, but it has no inherent concept of things like taxes. This gives you a large amount of flexibility to organize your account hierarchy the way you want, but also means that it sometimes can take a while to figure out what account hierarchy you want. The idea is that you keep track of where you get money from (the Income accounts), what you have as a result (the Asset accounts), and then track what you spent the money on (the Expense accounts). It sounds like you primarily think of expenses as each being for a particular property, so I think you want to use that as the basis of your hierarchy. You probably want something like this (obviously I'm making up the specifics): Now, when running transaction reports or income/expense reports, you can filter to the accounts (and subaccounts) of each property to get a report specific to that property. You mention that you also sometimes want to run a report on \"\"all gas expenses, regardless of property\"\", and that's a bit more annoying to do. You can run the report, and when selecting accounts you have to select all the Gas accounts individually. It sounds like you're really looking for a way to have each transaction classified in some kind of two-axis system, but the way a general ledger works is that it's just a tree, so you need to pick just one \"\"primary\"\" axis to organize your accounts by.\"",
"title": ""
},
{
"docid": "4911f9a1e0f23dca3556083c61350494",
"text": "\"Since you did not treat the house as a QBU, you have to use USD as your functional currency. To calculate capital gains, you need to calculate the USD value at the time of purchase using the exchange rate at the time of purchase and the USD value at the time of sale using the exchange rate at the time of sale. The capital gain / loss is then the difference between the two. This link describes it in more detail and provides some references: http://www.maximadvisors.com/2013/06/foreign-residence/ That link also discusses additional potential complications if you have a mortgage on the house. This link gives more detail on the court case referenced in the above link: http://www.uniset.ca/other/cs5/93F3d26.html The court cases references Rev. Rul 54-105. This link from the IRS has some details from that (https://www.irs.gov/pub/irs-wd/0303021.pdf): Rev. Rul. 54-105, 1954-1 C.B. 12, states that for purposes of determining gain, the basis and selling price of property acquired by a U.S. citizen living in a foreign country should be expressed in United States dollars at the rates of exchange prevailing as of the dates of purchase and sale of the property, respectively. The text of this implies it is for U.S. citizen is living in a foreign country, but the court case makes it clear that it also applies in your scenario (house purchased while living abroad but now residing in the US): Appellants agree that the 453,374 pounds received for their residence should be translated into U.S. dollars at the $1.82 exchange rate prevailing at the date of sale. They argue, however, that the 343,147 pound adjusted cost basis of the residence, consisting of the 297,500 pound purchase price and the 45,647 pounds paid for capital improvements, likewise should be expressed in U.S. dollar terms as of the date of the sale. Appellants correctly state that, viewed “in the foreign currency in which it was transacted,” the purchase generated a 110,227 pound gain as of the date of the sale, which translates to approximately $200,000 at the $1.82 per pound exchange rate. ... However fair and reasonable their argument may be, it amounts to an untenable attempt to convert their “functional currency” from the U.S. dollar to the pound sterling. ... Under I.R.C. § 985(b)(1), use of a functional currency other than the U.S. dollar is restricted to qualified business units (\"\"QBU\"\"s). ... appellants correctly assert that their residence was purchased “for a pound-denominated value” while they were “living and working in a pound-denominated economy,” ... And since appellants concede that the purchase and sale of their residence was not carried out by a QBU, the district court properly rejected their plea to treat the pound as their functional currency.\"",
"title": ""
},
{
"docid": "1577e21bf4ad3391c4631197ed104014",
"text": "I would say when starting with Gnucash to start with the level of granularity you are comfortable with while sticking to the double entry bookkeeping practices. So going through each one: Refund for Parking Pass. Assuming you treat the Parking Pass as a sunk cost, i.e. an Expense account, its just a negative entry in the Expense account which turns into a positive one in your Bank account. Yes it may look weird, and if you don't like it you can always 'pay from Equity' the prior month, or your Bank Account if you're backfilling old statements. Selling physical items. If you sold it on eBay and the value is high enough you'll get tax forms indicating you've earned x. Even if its small or not done via eBay, treat it the same way and create a 'Personal Items/Goods' Income account to track all of it. So the money you get in your Bank account would have come from there. Found jacket money would be an Equity entry, either Opening Balances into Cash or Bank account. Remember you are treating Equity / Opening Balances as the state before you started recording every transaction so both the value going into Assets (Banks,Stock,Mutual Funds) and Liabilities (Mortgage, Student Debt, Credit Card Debt) originate from there.",
"title": ""
},
{
"docid": "007befd38bcc226a277d23049f749057",
"text": "At every moving/yard/garage sale I have ever seen only cash is accepted. While the use of electronic payments is growing the big problem is that it is hard to verify the exchange at the time the goods are changing hands. Unless you have a card reader attached to your phone, you can't use a credit or debit card. Unless you can verify that they did transfer the money electronically why would you let them walk away with your stuff? If you knew them you could accept a check, but there are risks with the checks bouncing.",
"title": ""
}
] |
fiqa
|
cee9ee78350c3cfb72013295bead42be
|
Any tax advantage for registering a residential house as a business? (I want to apply legal pressure to my landlord)
|
[
{
"docid": "fab868581152d6464183e52963bacff7",
"text": "\"To the best of my knowledge, in California there's no such thing as registering a place as a business. There's zoning (residential/commercial/mixed/etc), and there's \"\"a business registered at a place\"\". But there's no \"\"place registered as a business\"\". So you better clarify what it is that you think your landlord did. It may be that the place is used for short term rentals, in which case the landlord may have to have registered a business of short term rentals there, depending on the local municipal or county rules. Specifically regarding the deposit, however, there's a very clear treatment in the California law. The landlord must provide itemized receipt for the amounts out of the deposit that were used, and the prices should be reasonable and based on the actual charges by the actual vendors. If you didn't get such a receipt, or the amounts are bogus and unsubstantiated - you have protection under the CA law.\"",
"title": ""
}
] |
[
{
"docid": "c02c01c6ca9bab6e0eeb104dac733e3e",
"text": "\"This article on the landlord website Property118.com shows a simple example, demonstrating that a private landlord with a mortgage could see a huge jump in their effective tax rate (in this case, from 18% to 67% by 2020), while a corporate landlord will see no change at all. There's also a link in that article to a detailed report which is highly critical of the tax changes. The government obviously take a different view! (See here for more worked examples of how the tax changes will be applied). More information can be found on this on various landlord sites. A key phrase to look for is \"\"section 24\"\", referring to the section of the Finance (No. 2) Act 2015 which implements the change. Note that this change only applies to private landlords (i.e. those who own a property personally, rather than through a company), and who have a mortgage on the property, and who (after the new calculations) are higher or additional rate taxpayers.\"",
"title": ""
},
{
"docid": "1584cb99081b2ef42a3fe5096f88876e",
"text": "Typically you can only claim as business deductions those expenses which strictly relate to your business. In some cases, if you have a dedicated home office in your house, you can specify that expenses related to this space (furniture, etc.) are business expenses because it is a dedicated space. For example, I know of someone in sports broadcasting who claimed several TVs as a business expense, but these are for a room in his house that he uses only for watching games related to his work responsibilities, and never for entertaining, having friends over, etc. I think it will be difficult for you to count any portion of this type of installation as a business expense as it would relate to both your business as well as your residence. If you intend to try to get this deducted, I would strongly recommend consulting a CPA or tax attorney first. I think it will be difficult to prove that the only benefit is to your LLC if your electricity bills/credits are co-mingled with those for your residence. Best of luck!",
"title": ""
},
{
"docid": "b716bade03dd6b48d556e5f54e846855",
"text": "It depends on the structure of your business. Are you a sole proprietor filing Schedule C on your 1040, or an S-corp, or part of a partnership? The treatment of a home office will differ depending on business entity.",
"title": ""
},
{
"docid": "0d5db709426ecd7f9d7fbe0d9e7ed547",
"text": "They believe that it reduces the risk that Revenue Canada will deem you to be an employee and make them pay a whole pile of tax, EI, CPP and so on that should have been paid if you had been hired as an employee. It's my recollection that the employer gets dinged for both the employee and employer share of those withholdings (and generally the employer's share is larger than yours) so they really want to prevent it. There's a Revenue Canada publication about whether you're an employee or not. There's nothing on it about being incorporated, but still employers feel more protected when their contracts are incorporated. We did work as a sole proprietorship at the very beginning, so that we could deduct our losses against employment income earned earlier in the year, before we started the business. You can find clients who will take you on. We incorporated once the losses were over with (basically we had bought the equipment and office supplies we needed to get started.) It's a simple and relatively inexpensive thing to do, and gives clients a sense of protection. It won't protect you from your own poor decisions since you'll be a director of the firm.",
"title": ""
},
{
"docid": "a2449af7ae6b5038bbbe8a7aa1f5f66b",
"text": "If your business name is your name, you are automatically considered a sole-proprietorship and any income you generate and expenses you incur can be calculated on your personal tax return. You can use QuickTax Home & Business tax software to lead you through the steps; you don't even need an accountant. One drawback of a sole-proprietorship in your name is liability. You are personally responsible for the business because you are the business. If you get sued, you can lose everything. To limit that liability you can look into opening a corporation. If the corporation gets sued you are insulated from that; the corporation goes bankrupt, not you. A lawyer and an accountant will be required to give you solid advice on this direction.",
"title": ""
},
{
"docid": "f3c752b7e4060a65536d5e2b969ce60e",
"text": "There are ups and downs to doing this. This isn't a taxable gain, because it's borrowed money that will be repaid. Whether there are restrictions or not depends upon your contract with the seller and your bank. If the concessions are for health & safety related repairs, your bank may require you to complete the work before closing or within a certain period of time. Overall: Upsides Downsides",
"title": ""
},
{
"docid": "ab9f929ea3fa816e309577a582a4c26e",
"text": "The only downside is for the agents, not you. Agents, especially selling agents, prefer the concession over the price reduction for their own interests. They get a commission on a higher purchase price. That, and the recorded sales price for the house is a tad higher, which incrementally increases the comps for the next sales. When we moved, the agent conditioned me to get ready to offer a concession should we decide to sell our previous home. We decided to rent that property, and have someone else manage it. But with regard to your questions, the concessions are applied against your closing costs. When we bought our last house they specified caps on the closing costs, so money will be typically be withheld (or not) contractually. The concessions aren't a taxable gain. Your basis in the property will be higher than if you get a price reduction, but the lower basis (hopefully) means a higher capital gain when you sell.",
"title": ""
},
{
"docid": "ce475229839fec15efb664cd7ad7ac50",
"text": "Your home doesn't belong to the partnership, it belongs to you. So you can (if qualified) deduct home office usage as a business expense on your individual tax return. Same goes to your partner. Similarly any other unreimbursed expense.",
"title": ""
},
{
"docid": "eed532144938a0446170198dc5d2e6cc",
"text": "I don't see anything in this forum on the leverage aspect, so I'll toss that out for discussion. Using generic numbers, say you make a $10k down payment on a $100,000 house. The house appreciates 3% per year. First year, it's $103,000. Second year, $106090, third it's 109,272.70. (Assuming straight line appreciation.) End of three years, you've made $9,272.70 on your initial $10,000 investment, assuming you have managed the property well enough to have a neutral or positive cash flow. You can claim depreciation of the property over those rental years, which could help your tax situation. Of course, if you sell, closing costs will be a big factor. Plus... after three years, the dreaded capital gains tax jumps in as mentioned earlier, unless you do a 1031 exchange to defer it.",
"title": ""
},
{
"docid": "3f18626e4be6df6a17d540cc9d98025c",
"text": "You can register a limited company and leave it dormant, that's no problem. You just need to make sure that later on you notify HMRC within 3 months of any trading activity. As pointed out, you can register a company in a few hours now so I wouldn't worry about that. Your confusion about Private Limited Companies is understandable, it's often not made clear but UK formation services standard packages are always Private Limited by Shares companies. Limited by Guarantee is something else, and normally used by charities or non-profits only. See explanations here. Registering for VAT is optional until you reach the £81,000 turnover threshold but it can make your services more attractive to large companies - especially in your field of business. You should really seek professional advice on whether or not this is the best option for you.",
"title": ""
},
{
"docid": "f0e35b50511df8a0a78fcdf833adddd5",
"text": "Compliance issues vary from country to country and, in the US, state to state as well. There'll be a number of levels, though: Bear in mind that it is not that these taxes and responsibilities don't apply to sole traders or unregistered businesses, it's just that being registered signals your existence and introduces the bureaucracy to you all at once. Update: Your accountant should manage your company and consumer tax calculations and submissions on your behalf (and a good one will complete all the paperwork on time plus let you know well in advance what your liability is, as well as offer advice on reducing and restructuring these liabilities). You're probably on your own for local taxes unless your accountant deals with these and is local to even know what they are.",
"title": ""
},
{
"docid": "8d031287980a46fd870886fd6610e129",
"text": "Yes. You must register for GST as well, if you will be making over the threshold (currently $60,000). That's probably a bonus for you, as your home office expenses will mostly include GST, but your income will most likely be zero-rated. Check with an accountant or with the IRD directly. Just be certain to put aside enough money from each payment to cover income tax, GST and ACC. You will get a very large bill in your second year of business.",
"title": ""
},
{
"docid": "a2e36eedaf3e9d2f52ffb4c0bd75a800",
"text": "(1) Should I register for VAT? – If it is below the threshold amount it is purely voluntary. If you register for VAT, you would have to charge VAT and then do returns every quarter. If you can take up this bit of hassle, it doesn't make much of a difference. One thing you need to consider: you get 1% discount during your first year of registering for VAT. If you want to save this discount for when you really need to pay VAT, it could be helpful. (2) What benefits would registering for VAT include? – Except for reclaiming VAT, where you pay VAT for business expenses, not much. (3) Would I not just hold onto the monies for HMRC ? – You wouldn't hold any money for HMRC. They will send you notifications if you do not file your returns and pay your VAT quarterly. And get everything cleared from your accountant. If your accountant doesn't answer properly, make it clear you need proper answers. Else change your accountant. If you do something wrong and HMRC gets after you, you would be held liable – your accountant can take the slip if you signed on all business documents provided by your accountant.",
"title": ""
},
{
"docid": "c7c01e532e699f91dbf3b441b7b6a50c",
"text": "It may clarify your thinking if you look at this as two transactions: I am an Australian so I cannot comment on US tax laws but this is how the Australian Tax Office would view the transaction. By thinking this way you can allocate the risks correctly, Partnership Tenancy Two things should be clear - you will need a good accountant and a good lawyer. I do not agree that there is a conflict of interest in the lawyer acting for both parties - his role should only be for advice and to document what the two of you agree to. If you end up in dispute, then you need two lawyers.",
"title": ""
},
{
"docid": "f7a99bd88d7c6d97b91a2863f3988886",
"text": "I am not going to argue the merits of investing in real estate (I am a fan I think it is a great idea when done right). I will assume you have done your due diligence and your numbers are correct, so let's go through your questions point by point. What would be the type of taxes I should expect? NONE. You are a real estate investor and the US government loves you. Everything is tax deductible and odds are your investment properties will actually manage to shelter some of your W2(day job) income and you will pay less taxes on that too. Obviously I am exaggerating slightly find a CPA (certified public accountant) that is familiar with real estate, but here are a few examples. I am not a tax professional but hopefully this gives you an idea of what sort of tax benifits you can expect. How is Insurance cost calculated? Best advice I have call a few insurance firms and ask them. You will need landlord insurance make sure you are covered if a tenant gets hurt or burns down your property. You can expect to pay 15%-20% more for landlord insurance than regular insurance (100$/month is not a bad number to just plug in when running numbers its probably high). Also your lease should require tenants to have renters insurance to help protect you. Have a liability conversation with a lawyer and think about LLCs. How is the house price increase going to act as another source of income? Appreciation can be another source of income but it is not really that useful in your scenario. It is not liquid you will not realize it until you sell the property and then you have to pay capital gains and depreciation recapture on it. There are methods to get access to the gains on the property without paying taxes. This is done by leveraging the property, you get the equity but it is not counted as capital gains since you have to pay it back a mortgage or home equity lines of credit (HELOC) are examples of this. I am not recommending these just making sure you are aware of your options. Please let me know if I am calculating anything wrong but my projection for one year is about $8.4k per house (assuming no maintenance is needed) I would say you estimated profit is on the high side. Not being involved in your market it will be a wild guess but I would expect you to realize cash-flow per house per year of closer to $7,000. Maybe even lower given your inexperience. Some Costs you need to remember to account for: Taxes, Insurance, Vacancy, Repairs, CapEx, Property Management, Utilities, Lawn Care, Snow Removal, HOA Fees. All-in-all expect 50% or your rental income to be spent on the property. If you do well you can be pleasantly surprised.",
"title": ""
}
] |
fiqa
|
897cfe7cc6a5015c05517d56dc2084cc
|
Difference between a mortgage and buy-to-let in UK
|
[
{
"docid": "95540cd3cda0fc31266f42621fd93732",
"text": "\"Residential mortgages normally explicitly state that the property cannot be let without explicit permission, whereas BTL mortgages typically require that the property be let. There are other differences. Residential mortgages are regulated, which means that consumers have a degree of protection from mis-selling; most BTLs are not, as landlords are expected to know what they're doing. Affordability of residential mortgages are based on your income, since that is how you are going to pay for them. BTLs are (mostly) assessed based on the property's rental income, since it's that that will fund the mortgage. Finally, residential mortgages are typically done on a repayment basis, so that at the end of the term, you've paid off the entire loan, whereas BTLs are typically interest-only, on the assumption that you'll either sell the property, or remortgage, at the end of the term. (I've used words like \"\"typically\"\" a lot to give an overall picture of the differences. Obviously it's a bit more complicated than that, and there are exceptions to a lot of the above descriptions.)\"",
"title": ""
},
{
"docid": "84884f32ad061129295dd2d49b720dd1",
"text": "In my experience buy-to-let mortgages charge a higher rate of interest than an personal residential mortgage. They are regarded as a business enterprise and presumably the banks calculate that they carry a higher risk. A bank would probably take action if the property on an ordinary mortgage was rented out, as you would be breaking their terms. Policies could be rendered void. The terms on an ordinary mortgage disallow renting out the property.",
"title": ""
},
{
"docid": "df4cbe6da08e11779cd733b91756b314",
"text": "Another factor that makes Buy to let more expensive is the risk involved. With a buy to let you are dependent on finding a tenant that will keep regular payments. if the property is left empty you need to finance the mortgage yourself putting you under financial strain and raising risk. Also as Chis mentioned they are regarded as a business enterprise, If the mortgage was to be taken by a business that would be very high risk for a bank as the business could dissolve leaving the bank out of pocket. Because of this it can be very difficult to get a buy to let through a business unless you are moving from a personal portfolio. For a regular mortgage these risks don't exist so this is reflected in lower interest repayments. It's because of these differences in risk that banks created buy to let so they can better manage those risks.",
"title": ""
}
] |
[
{
"docid": "933d4d77ab71aaf0bdb5e1d198ab6f1b",
"text": "When I bought my own place, mortgage lenders worked on 3 x salary basis. Admittedly that was joint salary - eg you and spouse could sum your salaries. Relaxing this ratio is one of the reasons we are in the mess we are now. You are shrewd (my view) to realise that buying is better than renting. But you also should consider the short term likely movement in house prices. I think this could be down. If prices continue to fall, buying gets easier the longer you wait. When house prices do hit rock bottom, and you are sure they have, then you can afford to take a gamble. Lets face it, if prices are moving up, even if you lose your job and cannot pay, you can sell and you have potentially gained the increase in the period when it went up. Also remember that getting the mortgage is the easy bit. Paying in the longer term is the really hard part of the deal.",
"title": ""
},
{
"docid": "75bc77e9cb4ce0eee8f36c8275bea222",
"text": "Cap rate includes any interest on the mortgage and not the repayments of the mortgage. Cap rate represents the net income which is the gross rent minus all costs, including the interest on the loan. Mortgage repayments form part of your cash flow calculations not your return calculations. ROI is a calculation which works out your net income over the initial investment you made, which is you downpayment plus costs and not the value of the property.",
"title": ""
},
{
"docid": "bffe0c8e40d0f4420e78fcbd9e76bab5",
"text": "\"When you compare the costs of paying your current mortgage with the rental income from the flat, you're not really comparing like with like. Firstly, the mortgage payments are covering both interest and capital repayments, so some of the 8k is money that is adding to your net worth. Secondly, the value of the flat (130k) is much more than the outstanding mortgage (80k) so if you did sell the flat and pay off the mortgage, you'd have 50k left in cash that could be invested to provide an income. The right way to compare the two options is to look at the different costs in each scenario. Let's assume the bigger house will cost 425k as it makes the figures work out nicely. If you buy the bigger house with a bigger mortgage, you will need to borrow 50k more so will end up with a mortgage of 130k, and you will still have the 8k/year from the flat. Depending on your other income, you might have to pay tax on the 8k/year - e.g. at 40% if you're a higher-rate taxpayer, leaving you with 4.8k/year. If you sell the flat, you'll have no mortgage repayments to make and no income from the flat. You'll be able to exactly buy the new house outright with the 50k left over after you repay the mortgage, on top of your old house. You'd also have to pay some costs to sell the flat that you wouldn't have to with the bigger mortgage, but you'd save on the costs of getting a new mortgage. They probably aren't the same, but let's simplify and assume they are. If anything the costs of selling the flat are likely to be higher than the mortgage costs. Viewed like that, you should look at the actual costs to you of having a 130k mortgage, and how much of that would be interest. Given that you'll be remortgaging, at current mortgage rates, I'd expect interest would only be 2-3%, i.e around 2.5k - 4k, so significantly less than the income from the flat even after tax. The total payment would be more because of capital repayment, but you could easily afford the cashflow difference. You can vary the term of the mortgage to control how much the capital repayment is, and you should easily be able to get a 130k mortgage on a 425k house with a very good deal. So if your figure of 8k rent is accurate (considering void periods, costs of upkeep etc), then I think it easily makes sense to get the bigger house with the bigger mortgage. Given the tax impact (which was pointed out in a comment), a third strategy may be even better: keep the flat, but take out a mortgage on it in exchange for a reduced mortgage on your main house. The reason for doing it that way is that you get some tax relief on the mortgage costs on an investment property as long as the income from that property is higher than the costs, whereas you don't on your primary residence. The tax relief used to just be at the same tax rate you were paying on the rental income, i.e. you could subtract the mortgage costs from the rental income when calculating tax. It's gradually being reduced so it's just basic rate tax relief (20%) even if you pay higher-rate tax, but it still could save you some money. You'd need to look at the different mortgage costs carefully, as \"\"buy-to-let\"\" mortgages often have higher interest rates.\"",
"title": ""
},
{
"docid": "5c9153328983fa1321a9672e4bc87dee",
"text": "Of course you don't need to take a mortgage - if you happen to have enough cash (or other assets) to pay your sister her share, or if she is willing to take it in installments over the next years. Mortgages are not needed to buy houses, but to pay for them - subtle difference. If you can pay - in whichever agreed way - without a mortgage, you won't need one.",
"title": ""
},
{
"docid": "993e74f21978e5fdadfd067d7ee9cd47",
"text": "According to my wife who used to work in the industry, since an investment mortgage is more likely to fail (they are just riskier) there are higher loan to value requirements and higher interest rates. They are just different products for different situations.",
"title": ""
},
{
"docid": "cf78976a18395e57a7dca605637a6e0c",
"text": "\"Not sure why the downvote - seems like a fair question to me. Who owns a house and in what proportions can be totally separate from who is named on the mortgage. There are two ways to do this - one way would be for you loan them the money first under a separate contract, which you should have a solicitor draw up; then they buy the house themselves. The contract would state the terms for repayment of the loan, which could be e.g. no repayment due until the sale of the house at which point the original amount is returned plus interest equivalent to the growth in value of the house between purchase and sale (or whatever). You'd need to be clear about what happened if the house lost value or they ended up in a negative equity situation. The other option is where you are directly a party to the purchase of the house and are named as part owners on the deeds. Again the solicitor who is handling the house purchase for them would help with the paperwork. In either case you would need to clear this arrangement with the mortgage company to make sure they were OK with it. To answer your specific questions in order: - Yes, they would still be eligible for the Help To Buy ISAs (assuming that is what you are referring to) even though you would not be - I'm not sure what \"\"penalty\"\" you are referring to. You'd have to pay tax on any income or capital gain you made from the deal. - No-one can say whether this is a good deal for you without knowing a great deal more about your individual circumstances (and even then, any such advice you would get on here is worth as much as you pay for it.... if in doubt, consult an IFA.)\"",
"title": ""
},
{
"docid": "08bddd891e22c3d1673a1357cb9e00c9",
"text": "I am in Australia, but I think the banks in the UK would use similar wrkings. Your options 1 and 2 are basically no. Why would the bank consider your wife to be paying you rent when you live together. These are the type of practices that led to the GFC, and since then practices have been tightened. Regarding option 3, yes banks do take into consideration rent in their analysis of your loan. However, they would not include the full rent in their calculations, but about 70% to 75% of the full rent. This allows for loss of rent during vacant periods and adds a safety factor in their caluclations. But they will not include the rent itself, you would have to have other income as well to support your loan. Saying that, we do have Low Doc Loans in Australia (loans with little documentation required to get a loan). With these loans you basically have to make a declaration that you are telling the truth regarding your income sources and you can only usually borrow a lower LVR as these loans are seen as a bigger risk. These type of loans have also been tightened up since the GFC.",
"title": ""
},
{
"docid": "24d27d57f0294cef060793e5d19c2702",
"text": "NO Even worse, most BTL(buy to let) lenders will not lend if you are going to be living in the property. There are very few lenders that will touch something like this. It is likely you will also need to use bridging for the time the building work takes at something like 1.5% per month! Try posting the question to http://www.propertytribes.com/ as there are a few UK mortgage experts on that site.",
"title": ""
},
{
"docid": "754d533d19a301b87a8dfbc18542f40f",
"text": "Risk. A shorter-term mortgage is less risky than a long-term mortgage - in this case there's half the chance of something bad happening because there's half the time allotted (15 vs 30 years). Bad things include you going bankrupt, massive inflation, or your home being destroyed in a meteor impact that your insurer won't cover. They entice consumers to these less risky mortgages by offering a lower interest rate.",
"title": ""
},
{
"docid": "1ee88fd98cd2abe4b12e83221dbe5fa1",
"text": "One lender's explanation of getting permission to rent out. The implication is that it is straightforward with a 1% extra interest to pay. However, there is no guarantee that permission would be given, so there might be a risk. http://www.nationwide.co.uk/support/support-articles/manage-your-account/letting-your-property/letting-your-property-overview Definitely renting out a property with a residential mortgage is not a good idea.",
"title": ""
},
{
"docid": "4349f07e50115f9f140855eb1f0c47a1",
"text": "The advantage of having a mortgage rather than borrowing money in other ways is that it is cheaper because the loan is secured against the value of the property. If you stop paying then the bank take the house and can sell it keeping what they are owed and returning any excess. If you have enough money to pay it off then you do not need the mortgage. They normally run for 25 years. It is a lovely day when finally you realise that you own the whole house and no longer owe anything to the bank and the charge against the house is removed and the record of it removed from the land registry. When you sell a house with a mortgage the buyer has to check that the bank has been paid off before they accept the property.",
"title": ""
},
{
"docid": "96b9afe5c1b88113bb077334eaeeef56",
"text": "Impossible to say without knowing more about your situation. Most likely you won't be able to secure a loan for money that you're just going to spend - getting a loan for property is easier because the bank owns the thing that you buy until you pay it back.",
"title": ""
},
{
"docid": "8cc2389786fff79f3147cc8c27172e0e",
"text": "Personal loans are typically more expensive (have higher interest) than mortgages, because they are not backed by an immovable asset. So you should reconsider the decision to not want a mortgage; it would be cheaper. Aside from that, once you get a personal loan, you are free to do with it whatever you want; this includes sending it to your parents, buying something, gambling it away in Vegas, or take out cash and burn it. So, yes, you can. Sending money from the UK to other EU countries should be easy and simple, once it is in your account, your bank can help you to make the transfer. I assume you understand that if your parents walk away with the money, you are left holding the bag. You are taking the full risk, and you will have to pay it back.",
"title": ""
},
{
"docid": "81df6a5235dad320c3fa1c7971100e9e",
"text": "\"No. Rural Scotland has exactly the same monetary system, and not the same bubble. Monaco (the other example given) doesn't even have its own monetary system but uses the Euro. Look instead to the common factor: a lot of demand for limited real estate. Turning towards the personal finance part of it, we know from experience that housing bubbles may \"\"burst\"\" and housing prices may drop suddenly by ~30%, sometimes more. This is a financial risk if you must sell. Yet on the other hand, the fundamental force that keeps prices in London higher than average isn't going away. The long-term risk often is manageable. A 30% drop isn't so bad if you own a house for 30 years.\"",
"title": ""
},
{
"docid": "268885bbade6eaf5bbb7e23b4c7c07be",
"text": "You should be aware that many pubs in the London (indeed, the UK as a whole) are sold as a leasehold with a beer tie. This typically means you pay less rent for the building and premises, but must enter a contract with the Pub Company to buy their beer and day-to-day supplies. You have the legal option to instead pay market rent for some (but not all) Pub Cos, under certain conditions. If you go with leasehold, the landlord can usually close your pub at their will. This is becoming a quite common occurrence in the booming real estate market of London. While your interest will be in running a pub, the Pub Co's interest will be in getting change of use planning permission and selling it to a real estate developer.",
"title": ""
}
] |
fiqa
|
fbb611f46f24a70737deb97f99454f4b
|
Could someone place an independent film on the stock market?
|
[
{
"docid": "b1033620e57abedf226a7348b6797f25",
"text": "\"When we say \"\"stock market,\"\" we are usually thinking of the publicly traded stocks, such as the New York Stock Exchange or the NASDAQ. Shares of individual products do not go on these exchanges, only large corporations. You won't see a stock ticker symbol for The Force Awakens or for the iPhone 6s Plus. The reason for this is that when investors buy a stock, they are looking for something that will grow in value theoretically forever. Individual products usually have a limited lifespan. Your movie will (hopefully) generate revenue when it comes out, but after a while sales will slow down after people have seen it. If someone bought a share of stock in a movie on the stock market, they have to realize that eventually the movie will stop making money, and their share of stock won't be worth anything anymore. Instead, people invest in companies that have the potential to make new products, such as Disney or Apple. So if you were envisioning seeing the ticker symbol of your movie going across the screen on CNBC, sorry, that's not going to happen. However, you could theoretically sell shares to individual investors for a percentage of the profit. You figure out how much money you need to create the movie, and estimate how much profit you think the movie will earn. Then you find an investor (or group of investors) that is willing to give you the money you need in exchange for a percentage of the profit. Unlike a stock market investor, these investors won't be looking for the long-term growth potential of the resale value of the stock, but simply a share of the profit.\"",
"title": ""
},
{
"docid": "ff7f5e3e13a45c7f27610ba45e5bad81",
"text": "Stock is a part ownership of a business. First there has to be a business that people want to own part of because they expect to make a profit from that ownership. Nobody is going to be interested if the business isn't worth anything. In other words: sure, you could try to start a movie production house to make this film and others... But unless you are already a major player AND already have a lot of money invested in the studio, forget it. This isn't GoFundMe or Kickstarter. Nobody is going to buy stock because they want a copy of the DVD that you promise will be available in two years' time.",
"title": ""
}
] |
[
{
"docid": "23497b6f874834bdef745b5d043aa47b",
"text": "\"I have an account with ETrade. Earlier this week I got an offer to participate in the IPO proper (at the IPO price). If Charles Schwab doesn't give you the opportunity, that's a shortcoming of them as a brokerage firm; there are definitely ways for retail investors to invest in it, wise investment or no. (Okay, technically it wasn't an offer to participate, it was a notice that participation was possibly available, various securities-law disclaimers etc withstanding. \"\"This Web site is neither an offer to sell nor a solicitation to buy these securities. The offer is by prospectus only. This Web site contains a preliminary prospectus for each offering.\"\" etc etc).\"",
"title": ""
},
{
"docid": "8d62775b79b4fdda675c738fcc1a3ab2",
"text": "\"Assuming that you accept the premise that technical analysis is legitimate and useful, it makes sense that it might not work for a small market, or at the very least that it wouldn't be the same for a small market as it is for a large market. The reason for this is that a large stock market like the U.S. stock market is as close to a perfect market as you will find: Compare this to a small market in a small country. Market information is harder to get, because there are not as many media outlets covering the news. There aren't as many participants. And possibly it might be more expensive to participate in, and there might be more regulatory intervention than with the large market. All of these things can affect the prices. The closer you get to a perfect market, the closer you get to a point where the prices of the stocks reflect the \"\"true value\"\" of the companies, without external forces affecting prices.\"",
"title": ""
},
{
"docid": "405279b2a7eb44babb0ab829e734ed52",
"text": "\"Check your broker's IPO list. Adding a new stock to a stock exchange is called \"\"Initial Public Offering\"\" (IPO), and most brokers have a list of upcoming IPO's in which their clients can participate.\"",
"title": ""
},
{
"docid": "e0ed9ac0958f77d0eea4a9b671ece20a",
"text": "You can contact the french agency for stock regulation and ask them : http://www.amf-france.org/",
"title": ""
},
{
"docid": "f18f367b4b8b041cb81a43befb98db03",
"text": "I'm not aware of any method to own US stocks, but you can trade them as contract for difference, or CFDs as they are commonly known. Since you're hoping to invest around $1000 this might be a better option since you can use leverage.",
"title": ""
},
{
"docid": "fcd9990896be0b5c627ec5da25a4af72",
"text": "I think George's answer explains fairly well why the brokerages don't allow this - it's not an exchange rule, it's just that the brokerage has to have the shares to lend, and normally those shares come from people's margin, which is impossible on a non-marginable stock. To address the question of what the alternatives are, on popular stocks like SIRI, a deep In-The-Money put is a fairly accurate emulation of an actual short interest. If you look at the options on SIRI you will see that a $3 (or higher) put has a delta of -$1, which is the same delta as an actual short share. You also don't have to worry about problems like margin calls when buying options. The only thing you have to worry about is the expiration date, which isn't generally a major issue if you're buying in-the-money options... unless you're very wrong about the direction of the stock, in which case you could lose everything, but that's always a risk with penny stocks no matter how you trade them. At least with a put option, the maximum amount you can lose is whatever you spent on the contract. With a short sale, a bull rush on the stock could potentially wipe out your entire margin. That's why, when betting on downward motion in a microcap or penny stock, I actually prefer to use options. Just be aware that option contracts can generally only move in increments of $0.05, and that your brokerage will probably impose a bid-ask spread of up to $0.10, so the share price has to move down at least 10 cents (or 10% on a roughly $1 stock like SIRI) for you to just break even; definitely don't attempt to use this as a day-trading tool and go for longer expirations if you can.",
"title": ""
},
{
"docid": "73b60936102e9fb09b25d90ebf69c27a",
"text": "Thanks for the response - ok so maybe the funds could be partially crowd-sourced and partially funded by an accredited investor? Also yes - having an experienced adviser and a plan in place to replace existing directors sound like good plot devices. There doesn't really have to be a limitation to banks, the idea comes from the protagonists being upset with the status quo of banking practices (foreclosures, fees, investing in weapons/warzones etc.) what would you suggest?",
"title": ""
},
{
"docid": "58508326ca40b024e9d896173d8c4094",
"text": "Take a look at this: http://code.google.com/p/stock-portfolio-manager/ It is an open source project aimed to manage your stock portfolio.",
"title": ""
},
{
"docid": "7e1b383fd0db28de0e0948544e307d5f",
"text": "Yes, add the stocks/mutual funds that you want and then you would just need to add all the transactions that you theoretically would have made. Performing the look up on the price at each date that you would have sold or bought is quite tedious as well as adding each transaction.",
"title": ""
},
{
"docid": "8b97d4bf72e0dd05ddcdc5bb3403b6ae",
"text": "There is no country tag, so I will answer the question generally. Is it possible...? Yes, it's possible and common. Is it wise? Ask Barings Bank whether it's a good idea to allow speculative investing.",
"title": ""
},
{
"docid": "175e9c264dbfa41d9cdaf22b7ba50535",
"text": "\"I guess there are accepted channels for this sort of thing, but I don't really understand why. Couldn't anyone sell them to anyone else at any time in any kind of market? I mean, if I had a friend who was talking the the IPO up, couldn't I have just said, \"\"Hey Fred, I'll sell you a Facebook share in two weeks time for thirty five bucks\"\" and be done with it? Do exchanges provide legal services? Is there a law that says you have to go through them? And even if you *did* have to go through them, why wouldn't multiple exchanges list them instead of just one, and why wouldn't an exchange start listing them from the minute the gun fired (or before)?\"",
"title": ""
},
{
"docid": "c5da3dbbbf01c01fc8c409241323433b",
"text": "\"If you own a stake large enough to do that, you became regulated - under Section 13(d) of the 1934 Act and Regulation (in case of US stock) and you became regulated. Restricting you from \"\"shocking\"\" market. Another thing is that your broker will probably not allow you to execute order like that - directed MKT order for such volume. And market is deeper than anyone could measure - darkpools and HFTs passively waiting for opportunities like that.\"",
"title": ""
},
{
"docid": "9bd6c9487986c28f0e9fc0e9a7a2627c",
"text": "I wouldn't think so. If you read the list of features listed on the page you referred to, notice: Track Stocks It looks like it is restricted to the major U.S. stock markets. No mention of India's NSE.",
"title": ""
},
{
"docid": "d18a0ebdd505f1bbcec3d7ff88ceaf59",
"text": "\"No, assuming by \"\"public company\"\" you mean a corporation. The shareholder's individual liability is limited to their investment. Your shares can go to zero value, but that's the limit. EDIT In regard to the follow-up question in the comments: \"\"Are all companies in the stock market corporations?\"\" the answer is definitely \"\"no.\"\" I cannot say much about other countries, but the US markets have some entities which are known as \"\"master limited partnerships.\"\" These trade shares on the market by the usual rules, but if you buy you become a partner in the company rather than a shareholder. You still have limited liability in this case, but there will be differences, for example, in how you're are taxed.\"",
"title": ""
},
{
"docid": "3aeb419cf864ea9fea1ab97dc09d2669",
"text": "The idea of a stockmarket is multiple people betting on the value of an asset and then getting paid the difference between their bet and the real value of the asset. The goal being to keep the value of the stock as accurate as possible so capital is allocated to companies that will use it most efficiently. The reward for people making these bets is a portion of that capital. What you are suggesting is just a graph of the average happiness. The difficult part of turning this into a market, is being able to assign value to happiness, value that you can gain or lose by choice. Ironically, money is a indicator of happiness. When apple came out with the iPhone, people saw it and decided it would make them happier if they owned it creating demand. Investors noticed that people believed owning an iphone would make them happier so they bid up the price of AAPL stock. People are happier with their iPhones and investors benefitted from this happiness and got cash allowing them to spend money on things to increase their happiness. In order to extract happiness from the stock market a lot of other things come into play. A biotech company curing cancer would be a solution to something that drastically decreases happiness. Increasing alcohol sales might be a result of people trying to offset the sadness in the short term but in the long term it is a depressant and doesn't make you happy. An individual might be happier with an extra $10B but overall 1 million people getting $10k each would increase average happiness much more. But somebody like buffet can invest in companies that can generate way more happiness than just handing out cash. The happiness report is an annual report of happiness. Looking at these results next to the Gini coefficient (income inequality), and industry growth by country might start to give you an idea of what affects happiness. For instance in Africa income inequality could sky rocket while the stock market plummets and happiness could still increase because of public health investments made years ago, causing the infant mortality rate to plummet. If you want to think about this topic I recommend reading the great escape by Angus Deaton.",
"title": ""
}
] |
fiqa
|
4aa72596152bd64dc6836315db7f78a1
|
Company requires me to use my personal cell phone to work. Writeoff?
|
[
{
"docid": "22e3750962b1dcc273e770bbe1ba72f9",
"text": "Not authoritative, but according to TurboTax: If your new cell phone acts as both your business and personal phone, you are only allowed to deduct the portion used for business from your taxable income. It’s important for you to hang on to your itemized phone bill and receipts to ensure that you’re deducting the right amounts and to keep records of your deduction. Since the usage you're describing sounds like a very small amount of the overall usage, it will probably be difficult to justify a business expense deduction.",
"title": ""
}
] |
[
{
"docid": "ced865df0eb2464f46ff31ca887ed471",
"text": "I don't know about the US, but in the UK this is common practice, even required in some situations, and not sketchy at all. It's perfectly legal, saves you tax, and protects you from a legal standpoint. (i.e. what if you break something and your employer wants to sue you?) This is what companies are for, they are legal entities that are separate from an individual. There is no requirement for a company to have more than one employee.",
"title": ""
},
{
"docid": "27f956ceffea10cf1a8713a8abe3f7e1",
"text": "It was a requirement that they call my current employer. It wasn't reference necessarily, but for background check purposes. I'm assuming they're calling to verify I work there and what my salary is. Still gonna put me in an awkward spot. Edit grammar",
"title": ""
},
{
"docid": "dfd9d6222e82856f130a83bc721ee146",
"text": "Employee badges are designed to track your location. If you don't want your activities within a company to be tracked, you wouldn't be able to work for many companies. I don't understand why you think you deserve the same privacy at work that you get at home. My transit card has a microchip. Do you seriously think it does anything other than perform transit transactions?",
"title": ""
},
{
"docid": "d77ab23210a7114e701f2903f115c064",
"text": "This article is misleading in it's universality of its findings. It does have a control group, which is a good start, but the findings are based on call-center employees whose functions are almost perfectly suited for remote work. In a way, we already knew this because of how much call-center work is outsourced and outside of provincial management (in other words, most companies don't bother housing customer service call centers at company headquarters). Let's see them try to replicate those results with other industries. Treating the ability to work from home as a panacea is just as foolish as believing that workers can't ever be remote. The truth is that individual personalities and, more importantly, an individual's work functions are better suited for remote work than others and it takes good management to understand why they take the strategy they take with regards to remote work. All in all, the study might be a good case study for encouraging remote work among call-center employees, but any further extrapolation of that for other industries is going to be a baseless claim influenced by personal agendas.",
"title": ""
},
{
"docid": "775f0b2a72dec76818a9d6dcc47ad895",
"text": "\"IT actually doesn't have the issue with the charg enumber thing because the Manhour allocation charge covers IT support so we don't bill our time out. It is mostly just people who work direct for projects that pull the \"\"give me a charge number\"\" business. Also, it isn't everyone either. Mostly just the douchebags. Additionally, a department policy like you suggest actually sounds like a great Idea. I think I like you. However, in a company our size, it would get abused more than it would be respected. Great programs and policies like that always get bombed in my company because of a a 20% group of dickbags.\"",
"title": ""
},
{
"docid": "b7a3cbe87c7d49cdb8cc02b7f7fdec32",
"text": "\"You're getting paid by the job, not by the hour, so I don't see why you think the employer is obligated to pay you for the drive time. The only way that might be true, as far as I can see, is if he were avoiding paying you minimum wage by structuring your employment this way. It looks like to me you're over the minimum wage based on what you wrote. At maximum \"\"unpaid\"\" drive time (59 min each way) and maximum length of job (4 hours as you stated it), gives your minimum hourly rate of $8.83/hr. The federal minimum wage is currently $7.25/hr, so you're over that. A quick search online suggests that NV does have a higher minimum at $8.25/hr under some conditions, but you're still over that too. The fact that you're required to pick-up the helpers and that you have a company car at home probably does mean that you're \"\"on the clock\"\" from the moment that you leave your house, but, again, you're not actually being paid by the clock. As long as no other law is being broken (and it appears from your telling that there isn't), then the employer can set any policy for how to compute the compensation that he wants. Regarding taxes, the employer probably has no discretion there. You're making what you're making, and the employer needs to tax it in total. Since you're driving a company vehicle from home, I don't think that you're entitled to any reimbursement (vs. wages) that would not be taxed unless maybe you pay for gas yourself. The gas money, if applicable, should be reimbursable as a business expense and that generally would not be taxed.\"",
"title": ""
},
{
"docid": "a57851d680f06d0d027cbc370f7c762e",
"text": "I contacted Stephen Fishman, J.D., the author of Home Business Tax Deductions, to let him know that this question was missing from his book. He was kind enough to send a reply. My original phrasing of the question: If your car is used for both business and personal use, and you deduct via the actual expense method, do trips to the mechanic, gas station, and auto parts store to service or repair the car count as business miles, personal miles, or part-business-part-personal miles? What about driving the newly-purchased car home from the dealership? And his response: Good question. I can find nothing about this in IRS publication or elsewhere. However, common sense would tell us that the cost of driving to make car repairs should be deductible. If you use your car for business, it is a business expense, just like transporting any other piece of business equipment for repairs is a business expense. This should be so whether you use the standard mileage rate or actual expense method. You should probably reduce the amount of your deduction by the percentage of personal use of the car during the year. The same goes for driving a car home from the dealer.",
"title": ""
},
{
"docid": "109c4d456f41fd860526feb85481d9ae",
"text": "\"Can she claim deductions for her driving to and from work? Considering most people use their cars mostly to commute to/from work, there must be limits to what you can consider \"\"claimable\"\" and what you can't, otherwise everyone would claim back 80% of their mileage. No, she can't. But if she's driving from one work site to another, that's deductible whether or not either of the work sites is her home office. Can she claim deductions for her home office? There's a specific set of IRS tests you have to meet. If she meets them, she can. If you're self-employed, reasonably need an office, and have a place in your house dedicated to that purpose, you will likely meet all the tests. Can I claim deductions for my home office, even though I have an official work place that is not in my home? It's very hard to do so. The use of your home office has to benefit your employer, not just you. Can we claim deductions for our home internet service? If the business or home office uses them, they should be a deductible home office expense in some percentage. Usually for generic utilities that benefit the whole house, you deduct at the same percentage as the home office is of the entire house. But you can use other fractions if more appropriate. For example, if you have lots of computers in the home office, you can deduct more of the electricity if you can justify the ratio you use. Run through the rules at the IRS web page.\"",
"title": ""
},
{
"docid": "5ffc053007a9ea1a3cda7308b5c4f0ae",
"text": "Yup. I scrutinize the income statement I receive from my employer every year. What I make vs what the company actually invests in me as an employee is really astounding. Beyond my hourly wage, the company pays for my health insurance premium (all but $10/check), and pays for a medical flex-spending account. On top of this (I know this isn't taxes but it's still an expense and government sanctioned) if I do some dumbass thing to get myself hurt at work, they'd pay all medical bills since it happened on their property. We recently had a bit of a wake-up call this summer, as the board of directors warned everyone that the current medical plan our company provides to us is not sustainable, and will have to undergo changes (we're going to either start paying for our premiums, decrease our flex accounts, or charge smokers additional fees) beginning Jan 1st. Lots of people are complaining about this. I don't think they're aware of the horde of expenses and fees that the company swallows for them in other ways. There's property taxes, business income taxes, excise taxes, customs/duty taxes, state taxes... along with meeting the restrictions and standards of certain governmental agencies (like OSHA). I don't know how a small business owner could ever maintain control over all of this financial mess and be able to help their customers or other employees. There's OSHA, a profit-seeking (through citations) business now, instead of a partner and ally to businesses. A typical 'violation' is $70K, and a 'repeat' violation is $140K. Imagine running a small grocery store, and having to pay this fine because you accidentally had a piece of styrofoam lying on top of a cooler not built to withstand overhead weight. Or because someone wasn't wearing safety shoes in the store. You'd simply go out of business.",
"title": ""
},
{
"docid": "a9f6015acf220676c78c716f3c0cc596",
"text": "Last I checked, all business expenses in regards to * Office Supplies * Stationary * Phone service * Marketing are all tax deductible....so how does cutting those costs save money when you'll get that money back via the corporate tax code?",
"title": ""
},
{
"docid": "1899f1beb3489aaa8ad20620833f72b0",
"text": "\"I am guessing you are being downvoted by people who wish they had two devices. The reason being: When your personal phone is your work phone, you are always on call. Quite frankly, that sucks. Give me two separate phones any day. If people need to contact you during the work day, they call your work line. If people from work need to contact you after work, too bad, that shitty work smartphone \"\"ran out of power\"\" around 5pm ;-)\"",
"title": ""
},
{
"docid": "ad2b983f9544f2d6e14dae0788a9a541",
"text": "Nope sorry guest you are wrong. how can salary and an expense be on the same side of the ledger? Salary 2000 Personal bank 2000 Phone expenses 30 Personal bank 30",
"title": ""
},
{
"docid": "e2f9b8faa0d16414f9b1f39f9b0199f3",
"text": "I think it depends on who is being paid for your app. Do you have a company the is being paid? Or is it you personally? If you have a company then that income will disappear by offsetting it through expenses to get the software developed. If they are paying you personally then you can probably still get the income to disappear by file home-office expenses. I think either way you need to talk to an accountant. If you don't want to mess with it since the amount of income is small then I would think you can file it as additional income (maybe a 1099).",
"title": ""
},
{
"docid": "66a9866d6915d9857107b5c21a99d9c1",
"text": "Yea I'm super confused about why this is being touted as some revenge fantasy on corporate overlords, or something. She was hired to do a job, got paid to do it, and was no longer required to do the job. I don't still get residual paychecks from my first job out of college, and they don't get to call me up and ask me to do a process analysis- I did my job and now I do another one (for someone else). What obligation does an organization have to an employee beyond a paycheck....?",
"title": ""
},
{
"docid": "316710461de83750af605d1897addf25",
"text": "Chris, since you own your own company, nobody can stop you from charging your personal expenses to your business account. IRS is not a huge fan of mixing business and personal expenses and this practice might indicate to them that you are not treating your business seriously, and it should classify your business as a hobby. IRS defines deductible business expense as being both: ordinary AND necessary. Meditation is not an ordinary expense (other S-corps do not incur such expense.) It is not a necessary expense either. Therefore, you cannot deduct this expense. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses",
"title": ""
}
] |
fiqa
|
b7854aef3cea96ae4c014275ba501e26
|
Is an analyst's “price target” assumed to be for 12 months out?
|
[
{
"docid": "f0e97da6a1332f123f9e670ed9c6443e",
"text": "I wouldn't put too much stock in the guidance generically... it's more a measure of confidence in the company. When you listen to the earnings calls and start following a particular analyst, you'll understand where they come from when they kick out a number.",
"title": ""
},
{
"docid": "78befdefe3293d15a9d7b64241702147",
"text": "\"If the time horizon is not indicated, this is just a \"\"fair price\"\". The price of the stock, which corresponds with the fair value of the whole company. The value, which the whole business is worth, taking into consideration its net income, current bonds yield, level of risk of the business, perspective of the business etc.. The analyst thinks the price will sooner or later hit the target level (if the price is high, investors will exit stocks, if the price is cheap, investors will jump in), but no one knows, how much time will it take.\"",
"title": ""
},
{
"docid": "e0986ce939912bb6f607dfae68cc0f55",
"text": "The time horizon applicable to the price target is always specified by the broker or bank which published the research report. You will find this information in the disclaimer, which is present on every research report. Usually it is 12 months, but some firms give 6 months price targets. However, you should never rely on the price target alone and always combine it with the following details (to name a few): Are the analyst's estimate above or below consensus estimates (or company guidance), did the analyst rise or lower its estimates. What is the rating on the stock (Buy, Sell, Hold...), when did he change his rating or price target. Does the firm do business with the company? (which may influence a bullish tone and optimistic price target).",
"title": ""
},
{
"docid": "83cdc3f29e96ce627f0bb5369a48319f",
"text": "I don't think you can always assume a 12-month time horizon. Sometimes, the analyst's comments might provide some color on what kind of a time horizon they're thinking of, but it might be quite vague.",
"title": ""
},
{
"docid": "f3e982ca5500dd5bdf4a1e4e52d5a65a",
"text": "Most commonly, unless you read 'fair value target price,' an analyst's target price is a 12-month target price. Typically, there is a firm wide policy determining which time horizon to use. No analyst would provide an open ended target price, it doesn't make any sense (you discount cash flows to a certain period, adjust for inflation, etc). So there is always a time horizon.",
"title": ""
},
{
"docid": "d1d17cab7820e2dde13a9add87fa3ebb",
"text": "Analysts normally (oxymoron here) gauge their targets on where the stock is currently and more importantly where it has been. Except for in the case of say a Dryships where it was a hundred dollar stock and is now in the single digits, it is safe to assume that Apple for instance was well over $ 700 and is now at $500, and that a price guidance of $ 580 is not that remarkable and a not so difficult level to strike. Kind of like a meteorologist; fifty percent chance of rain. Analysts and weathermen.Hard to lose your job when your never really wrong. Mr Zip, Over and outta here",
"title": ""
}
] |
[
{
"docid": "c189277f36f28c2d2c117dbfbf90c88c",
"text": "\"Systemic and well know patterns in sales are priced in to the security. Typically companies with very cyclical earnings like this will issue guidance of earnings per share within a range. These expected earnings are priced in before the earnings are actually booked. If a company meets these expectations the stock will likely stay relatively flat. If the company misses this expectation, the stock, generally, will get slammed. This kind of Wall Street behavior typically mystifies media outlets when a company's stock declines after reporting a record high level of whatever metric. The record high is irrelevant if it misses the expectation. There is no crystal ball but if something is both well known and expected it's already been \"\"priced in.\"\" If the well known expected event doesn't occur, maybe it's a new normal.\"",
"title": ""
},
{
"docid": "3b9ae35eb128a2fcc6a93a1cd48c9cae",
"text": "The indication is based on the average Buy-Hold-Sell rating of a group of fundamental analysts. The individual analysts provide a Buy, Hold or Sell recommendation based on where the current price of the stock is compared to the perceived value of the stock by the analyst. Note that this perceived value is based on many assumptions by the analyst and their biased view of the stock. That is why different fundamental analysts provide different values and different recommendations on the same stock. So basically if the stock's price is below the analyst's perceived value it will be given a Buy recommendation, if the price is equal with the perceived value it will be given a Hold recommendation and if the price is more than the perceived value it will be given a Sell recommendation. As the others have said this information IMHO is useless.",
"title": ""
},
{
"docid": "1e090411bf34d3e1a21c664640f3d881",
"text": "Graphs are nothing but a representation of data. Every time a trade is made, a point is plotted on the graph. After points are plotted, they are joined in order to represent the data in a graphical format. Think about it this way. 1.) Walmart shuts at 12 AM. 2.)Walmart is selling almonds at $10 a pound. 3.) Walmart says that the price is going to reduce to $9 effective tomorrow. 4.) You are inside the store buying almonds at 11:59 PM. 5.) Till you make your way up to the counter, it is already 12:01 AM, so the store is technically shut. 6.) However, they allow you to purchase the almonds since you were already in there. 7.) You purchase the almonds at $9 since the day has changed. 8.) So you have made a trade and it will reflect as a point on the graph. 9.) When those points are joined, the curves on the graph will be created. 10.) The data source is Walmart's system as it reflects the sale to you. ( In your case the NYSE exchange records this trade made). Buying a stock is just like buying almonds. There has to be a buyer. There has to be a seller. There has to be a price to which both agree. As soon as all these conditions are met, and the trade is made, it is reflected on the graph. The only difference between the graphs from 9 AM-4 PM, and 4 PM-9 AM is the time. The trade has happened regardless and NYSE(Or any other stock exchange) has recorded it! The graph is just made from that data. Cheers.",
"title": ""
},
{
"docid": "27c3de65dd0a09a5e8bfd62482094d7f",
"text": "\"> Forecasting prices to the level of accuracy they purport is a fool's errand. Sell side analysts are there to get you to buy something, not to make you money. > If they truly believed their analysis was significantly better than anyone else's in the market, they would trade on their own analysis. > No one ever got rich by following analyst recommendations. > Don't believe me? Track the buy/sell recommendations in a spreadsheet for 50+ stocks. I would be shocked if you significantly outperformed the market. Only partly right. Sell side price targets are bullshit. Literally everyone knows this. The reason there is value isn't because of their predictions but because of everything else. [Here's another professional's opinion as well:](http://www.reddit.com/r/investing/comments/27dokr/aapl_proves_wall_street_is_nuts/chzy78s?context=3) > If we're talking about sell-side institutional analysts, then this is not necessarily correct. It's just that the retail sector seems to only give a shit about the forecasts/conclusions (\"\"ohhh DB says buy xyz with target of xx.xx!\"\"). This goes to show how ignorant retail is when it comes to what the actual value of sell-side research reports are. > Sell-side research isn't valuable for buy-side because of the recommendations.. those are in fact the most ignored aspect of published research. It's valuable for buy-side because of the content. Sell-side analysts do the bullshit grind in investigating underlying information (such as visits to operational endeavors and clawing together bulk data). Buy side uses this underlying accrued data to formulate their own conclusions.\"",
"title": ""
},
{
"docid": "6910613137c444c85fb4e476e25872dc",
"text": "I have heard of this, but then the broker is short the shares if they weren't selling them out of inventory, so they still want to accumulate the shares or a hedge before EOD most likely - In that case it may not be the client themselves, but that demand is hitting the market at some point if there isn't sufficient selling volume. Whether or not the broker ends up getting all of them below VWAP is a cost of marketing for them, how they expect to reliably get real size below vwap is my question.",
"title": ""
},
{
"docid": "c13c73a337f0b416dd0e626ae4d9b7cf",
"text": "To be fair, the analyst is talking about the book value of the firm. Basically, the value of all the stuff it owns now. There are plenty of companies with negative book value that can justify a positive share price. Ford, for instance, had negative book value but positive future earnings.",
"title": ""
},
{
"docid": "6e565dff7908157a23a049aca8e6aa30",
"text": "No, and using a 37 year old formula in finance that is as simple as: should make it obvious technical analysis is more of a game for retail traders than investment advice. When it comes to currencies, there are a myriad of macroeconomic occurrences that do not follow a predictable timescale. Using indicators like RSI on any time frame will not magically illuminate broad human psychology and give you an edge. It is theoretically possible for a single public stock's price to be driven by a range of technical traders who all buy at RSI 30 and sell at RSI 70, after becoming a favorite stock on social media, but it is infinitely more likely for all market participants to have completely different goals.",
"title": ""
},
{
"docid": "c41e61f063420043ec5dd6378082c882",
"text": "\"As I understand it, Implied Volatility represents the expected gyrations of an options contract over it's lifetime. No, it represents that expected movement of the underlying stock, not the option itself. Yes, the value of the option will move roughly in the same direction the value of the stock, but that's not what IV is measuring. I even tried staring at the math behind the Options pricing model to see if that could make more sense for me but that didn't help. That formula is correct for the Black-Scholes model - and it is not possible (or at least no one has done it yet) to solve for s to create a closed-form equation for implied volatility. What most systems do to calculate implied volatility is plug in different values of s (standard deviation) until a value for the option is found that matches the quoted market value ($12.00 in this example). That's why it's called \"\"implied\"\" volatility - the value is implied from market prices, not calculated directly. The thing that sticks out to me is that the \"\"last\"\" quoted price of $12 is outside of the bid-ask spread of $9.20 to $10.40, which tells me that the underlying stock has dropped significantly since the last actual trade. If the Implied Vol is calculated based on the last executed trade, then whatever algorithm they used to solve for a volatility that match that price couldn't find a solution, which then choose to show as a 0% volatility. In reality, the volatility is somewhere between the two neighbors of 56% and 97%, but with such a short time until expiry, there should be very little chance of the stock dropping below $27.50, and the value of the option should be somewhere around its intrinsic value (strike - stock price) of $9.18.\"",
"title": ""
},
{
"docid": "30eb3402c667559e3f4a8a0ea9a19d2b",
"text": "I don't believe most do it on purpose. Its a function of two things. 1) Markets are relatively efficient, so generating profits off of publicly available information is rare. 2) Analysts cannot ethically nor legally make recommendation based on material non-public information. That leaves them with using public information and building out s model to estimate earnings and therefore share price as best as possible. The problem is that estimating earnings is notoriously difficult. Every model is subject to garbage-in-garbage-out. All analysts start with some of the same basic assumptions and then tweak them based on their best guess. Take enough analysts and you've now replicated roughly what all investors are doing in the marketplace, meaning as a whole analysts won't be more accurate than the market. The only way to generate above market returns is for you to consistently pick the analyst with the right recommendation. If only it were so easy... Furthermore, analysts tend to make similar recommendations due to biases. Their initial model may have said 'buy' for GE, but they realize no other analysts have a buy rating on the stock. They're more likely to go back and revise their guesses to something more inline with their peers - its less risky to be with the crowd! TL;DR Security selection is hard and outperformance without MNP is unlikely over the long term. I am no longer in the industry. After 2.5yrs as an analyst and going through the CFA curriculum I've learned that there are VERY few opportunities for out performance, especially so on a risk adjusted basis.",
"title": ""
},
{
"docid": "a82bece8a7b6c04dce89b387fe72c88e",
"text": "To get the probability of hitting a target price you need a little more math and an assumption about the expected return of your stock. First let's examine the parts of this expression. IV is the implied volatility of the option. That means it's the volatility of the underlying that is associated with the observed option price. As a practical matter, volatility is the standard deviation of returns, expressed in annualized terms. So if the monthly standard deviation is Y, then Y*SQRT(12) is the volatility. From the above you can see that IV*SQRT(DaysToExpire/356) de-annualizes the volatility to get back to a standard deviation. So you get an estimate of the expected standard deviation of the return between now and expiration. If you multiply this by the stock price, then you get what you have called X, which is the standard deviation of the dollars gained or lost between now and expiration. Denote the price change by A (so that the standard deviation of A is X). Note that we seek the expression for the probability of hitting a target level, Q, so mathematically we want 1 - Pr( A < Q - StockPrice) We do 1 minus the probability of being below this threshold because cumulative distribution functions always find the probability of being BELOW a threshold, not above. If you are using excel and assuming a mean of zero for returns, the probability of hitting or exceeding Q at expiration, then, is That's your answer for the probability of exceeding Q. Accuracy is in the eye of the beholder. You'd have to specify a criterion by which to judge it to know the answer. I'm sure more sophisticated methods exist that are more unbiased and have less error, but I think it's a fine first approximation.",
"title": ""
},
{
"docid": "2897001493318a038f0ffc2ddc37a741",
"text": "\"@jlowin's answer has a very good discussion of the types of PE ratio so I will just answer a very specific question from within your question: And who makes these estimates? Is it the market commentators or the company saying \"\"we'd expected to make this much\"\"? Future earnings estimates are made by professional analysts and analytical teams in the market based on a number of factors. If these analysts are within an investment company the investment company will use a frequently updated value of this estimate as the basis for their PE ratio. Some of these numbers for large or liquid firms may essentially be generated every time they want to look at the PE ratio, possibly many times a day. In my experience they take little notice of what the company says they expect to make as those are numbers that the board wants the market to see. Instead analysts use a mixture of economic data and forecasting, surveys of sentiment towards the company and its industry, and various related current events to build up an ongoing model of the company's finances. How sophisticated the model is is dependent upon how big the analytics team is and how much time resource they can devote to the company. For bigger firms with good investor relations teams and high liquidity or small, fast growing firms this can be a huge undertaking as they can see large rewards in putting the extra work in. The At least one analytics team at a large investment bank that I worked closely with even went as far as sending analysts out onto the streets some days to \"\"get a feeling for\"\" some companies' and industries' growth potential. Each analytics team or analyst only seems to make public its estimates a few times a year in spite of their being calculated internally as an ongoing process. The reason why they do this is simple; this analysis is worth a lot to their trading teams, asset managers and paying clients than the PR of releasing the data. Although these projections are \"\"good at time of release\"\" their value diminishes as time goes on, particularly if the firm launches new initiatives etc.. This is why weighting analyst forecasts based on this time variable makes for a better average. Most private individual investors use an average or time weighted average (on time since release) of these analyst estimates as the basis for their forward PE.\"",
"title": ""
},
{
"docid": "b5d4816f3537f902bd6f075b31278133",
"text": "Forecasting prices to the level of accuracy they purport is a fool's errand. Sell side analysts are there to get you to buy something, not to make you money. If they truly believed their analysis was significantly better than anyone else's in the market, they would trade on their own analysis. No one ever got rich by following analyst recommendations. Don't believe me? Track the buy/sell recommendations in a spreadsheet for 50+ stocks. I would be shocked if you significantly outperformed the market.",
"title": ""
},
{
"docid": "0d82c6862e9923c14d6fea3afb7cf9f6",
"text": "\">Your line of reasoning is why you should have a timeline on a prediction. It's been, what, 12 years now of near constant assertions that huge inflation is just right around the corner. How long should we wait for it? Just long enough so that when it happens, you can claim that \"\"Shit! No one could have predicted THAT.\"\" >to keep the inflation, which there is absolutely no sign of whatsoever Wow. The blindness. It HAS to be willful.\"",
"title": ""
},
{
"docid": "4f2a3af6526fd4b4e1134e9c460ed9f6",
"text": "The market can stay irrational longer than you can remain solvent -John Maynard Keynes The stocks could stagnate and trade in a thin range, or decline in value. You assume that your stocks will offer you ANY positive return for every month over 24 months. Just one month of negative returns puts you underwater. Thats whats wrong with it. Even if you identified any stock that has been up every month for a consecutive 24 months in the past, there is nothing that says it will be so in the future, and a broad market selloff will effect both indexes as well as individual stocks. Literally any adverse macroeconomic event in the next two years will put you underwater on your loan, no matter how much research you do on individual stocks.",
"title": ""
},
{
"docid": "c6ec4c6e33b1f072622f1c14cf686071",
"text": "Paytrust seems to be the only game in town. We've changed banks several times over the last 15 years and I can tell you that using a bank's bill pay service locks you in, big time. I loved paytrust because I could make one change if we changed banks. If you're using a bank directly for your bills, the ides of recreating your payee list is daunting.",
"title": ""
}
] |
fiqa
|
fd05c0291e992997b5c2f7ded49b7d16
|
A merchant requests that checks be made out to “Cash”. Should I be suspicious?
|
[
{
"docid": "75923e7b98826c603a28f39e0c475517",
"text": "There are legitimate reasons: I wouldn't jump the gun and assume that this person is avoiding taxes, etc. Barbers are usually licensed professions. Since it's generally a cash business, they tend to get audited more often by the tax authorities. That said, I wouldn't pay her with a check -- you have no idea who is actually cashing the check, and you could run into issues with unknown third parties misusing your account information.",
"title": ""
},
{
"docid": "166d9d8c192fb1848d9c77fa7c96305e",
"text": "\"There are benefits associated with a cash only business (the link states a few). However checks made out to \"\"cash\"\" don't reap those benefits listed. For anyone on SE to say your barber hides revenue from the IRS would just be speculation. With that said there are a great number of disadvantages for a cash only business. And from my experience, a business that goes out of their way to take cash only can be a little suspicious. Luckily you are not committing any crimes or fraud by paying her cash.\"",
"title": ""
},
{
"docid": "51fb633f62e19dd495c87a1636237e4e",
"text": "\"To put a positive spin on the whole thing, maybe it's a small family shop, and having the check made out to \"\"cash\"\" means that your barber can hand it to someone else without the need to countersign. Or maybe his last name is \"\"Cash\"\" - there was a pretty famous singer who fit that description. Either way, it's not your place to nanny his finances.\"",
"title": ""
},
{
"docid": "73b127d58b51f1016763b2b24a668843",
"text": "\"They're hiding income. The IRS is a likely candidate for who they are hiding it from but not the only option. Another possibility that comes to mind is someone who had a judgment against them--a check made out to \"\"cash\"\" could be handled by someone else and thus not ever appear in their bank accounts.\"",
"title": ""
},
{
"docid": "aa06e4d627e110802c4b602838403135",
"text": "If the business owner doesn't want you to pay him directly, the only reason I can think of is breaking a law. It can be because the business doesn't legally exists, or because the barber wants to evade taxes, or because he doesn't pay his child support or doesn't want his income to be apparent to his debtors in a bankruptcy proceedings. Either way, stinks.",
"title": ""
}
] |
[
{
"docid": "a7f53388750c3c3aa69d751131546f00",
"text": "From my reading of the wikipedia page (CRT), this only happens if you deposit or withdraw currency, not checks. The idea behind this is that checks, ACH, etc. leave paper trails that can be tracked. Cash doesn't, so it gets this extra level of scrutiny. If yu get a cashiers check or a money order to pay a bill, I don't think a CRT is created. If you withdraw $15,000 to buy a car in cash (1 stack of $100 bills), then a CRT would be generated. It still isn't a problem, as long as you can show a bill of sale showing where the money went (or came from, if you are the seller). The IRS has a FAQ about this. It says (taken from several spots at that page): Cash is money. It is currency and coins of the United States and any other country. A cashier’s check, bank draft, traveler’s check, or money order with a face amount of more than $10,000 is not treated as cash and a business does not have to file Form 8300 when it receives them. These items are not defined as cash because, if they were bought with currency, the bank or other financial institution that issued them must file a Currency Transaction Report. The exception to this is if you are buying something with a resale value of more than $10k with a check, money order, etc of less than $10k.",
"title": ""
},
{
"docid": "a6a8bc7193252f2ccfec889fe8110dcb",
"text": "No, most check deposits are processed that way. Banks transmit the pictures of the checks between themselves, and allow business customers to deposit scans for quite some time now. I see no reason for you to be concerned of a check being in a dusty drawer, it's been deposited, cannot be deposited again. If you're concerned of forgery - well, nothing new there.",
"title": ""
},
{
"docid": "3c9f34a984c3fc84aa3b8bd0f4abd9af",
"text": "If you are going to put it into a banking system, just deposit it. Why did breaking it up even cross your mind? Like what would that even have accomplished, so you could pretend like you started moonlighting as a club bouncer if you were ever casually asked by a bank teller or federal agent? If you have to ever account for the source of your money, you will have to account for it regardless. You shouldn't worry about things that may trigger higher scrutiny on you, because it is pretty random. The financial institution may file a suspicious activity report any time they feel like it (which they routinely do without the customer's knowledge, for a wide range of reasons), and actually attempting to break it up into smaller deposits would mean the suspicious activity report would escalate into criminal charges. And regarding the IRS, if they ever audited you then you will still have to account for that $25,000 no matter what you did with it.",
"title": ""
},
{
"docid": "8fda556ad6cb96a5357c78be226dbea8",
"text": "In my business (estate planning law practice), probably 60-70% of my income is in the form of checks, with the balance as credit/debit cards. I prefer to get paid by check so I don't have to pay the approx 2.5% merchant fee, but I don't push clients to choose one method over the other. I offer direct deposit to my employees but most of them choose to be paid by check. Also, check processing is becoming more and more electronic - when I get paid by check, I scan the checks in a dedicated desktop scanner, and upload the check images to the bank at the end of the day, and the checks are processed very quickly. I also make deposits to my personal credit union account by scanning checks and uploading the images. So, yes, there's technically a paper check, but I (as the merchant/recipient/depositor) keep the check for a few months to make sure there's no problem with the deposit/payment, then shred them. The bank never sees the actual paper check.",
"title": ""
},
{
"docid": "bf71d5a84316745ad55ad0519e6ee5db",
"text": "\"What does it mean that the bank will \"\"hold you responsible\"\"? Clearly the money won't be credited. Will you be charged a fee like an NSF cheque? Will they try to prosecute you? Is there any way to confirm whether a cashiers cheque is forged? Could you for example tell your bank that you were uncertain of the origin, and ask them to confirm it? Can you call the issuer and verify (from the serial number) that they did in fact issue a cheque for that amount with you as the payee? Even calling the bank might not help. The first verification is that the bank exists, and that the account number and name match and that they did issue a check. But that doesn't cover the situation where the person that sent you the check wasn't who they claimed to be. That is the theft that could take weeks to find.\"",
"title": ""
},
{
"docid": "dce5d31a24c17381a5b1743e3e00d529",
"text": "I gather that, while it is not illegal for a merchant to pass their payment card processing fees on to their customers directly in the form of a surcharge, doing so is a violation of their merchant agreements with the payment card processor (at least for Visa/MC). It's not - surcharging has been permissible since 2013, as a result of a class action lawsuit against Visa and MC. It's still prohibited by state law in 9 states. If you're in one of those 9 states, you can contact your state Attorney General to report it. If you're not, you can check to see if the business is complying with the rules set forth by the card brands (which include signage at the point of sale, a separate line item for the surcharge on the receipt, a surcharge that doesn't exceed 4% of the transaction, etc.) and if they're in violation, contact the card company. However, some of those rules seem to matter to the card companies more than others, and it's entirely possible they won't do anything. In which case, there's nothing you can really do.",
"title": ""
},
{
"docid": "d951bbaa38928391c5551bcad1716fd8",
"text": "This is basically a form of credit card kiting, it's not necessarily illegal but it can be. It is, however, against the TOS in pretty much every merchant agreement (including Paypal and Square), so you'd most likely have your account suspended, and the merchant could pursue legal action if they felt they could prove intent to deceive. It's not practical given actual fee structures, but even if it were, most merchants are quite good at detecting this sort of thing and quick to shut down accounts.",
"title": ""
},
{
"docid": "804a18fc851121a3975fb36daad078b8",
"text": "A bank check is drawn on the bank itself. You gave the bank the funds backing that check at the time you purchased it. You can not get that money back except by returning the check to them. So, yes, effectively that check behaves like cash; the money us already gone from your account, and once you hand it over you can't claim it was forged or otherwise try to cancel the payment.",
"title": ""
},
{
"docid": "1884d09a6e7e4786e5ba73997559dc1b",
"text": "In the united states, they may request a check written by the bank to the other party. I have had to make large payments for home settlements, or buying a car. If the transaction was over a specified limit, they wanted a cashiers check. They wanted to make sure it wouldn't bounce. I have had companies rebate me money, and say the maximum value of the check was some small value. I guess that was to prevent people from altering the check. One thing that has happened to me is that a large check I wanted to deposit was held for a few extra days to make sure it cleared. I wouldn't have access to the funds until the deadline passed.",
"title": ""
},
{
"docid": "a1c74729f1dca762dfb8b1500a304afd",
"text": "I'll assume you are asking about a check for some kind of work or service that you provided them, that they hired your company to do. No large business will do that. In their records they have a contract with your company to provide services. If they write you a personal check it won't match with the contract, and when the auditors see that they will scream blue murder. Whoever wrote the check will have to prove that you are legitimately the same thing as the company (that doesn't mean taking your word for it). They may also have to show they weren't conspiring with you to commit tax fraud ( that wasn't your intention of course, was it?) .",
"title": ""
},
{
"docid": "d7c55f0acbaef0b64df8e7e0a1cda7f8",
"text": "\"Read the check: it says \"\"Pay to the order of ...\"\". It's simply an order from you to your bank to give money to someone. It can be written on anything. Back in the olden days (a hundred years or so ago) it would have simply been a letter to the bank. Those rules haven't changed much with today's automation. What matters is that the order comes from you, which means it must have your signature. If the bank pays a check with a fraudulent signature they're responsible. Granted, banks don't look very carefully at checks any more (I once accidentally swapped two checks when I paid bills, and the phone company simply gave me a $700 credit on my $50-a-month account), but if they screw up it's their problem.\"",
"title": ""
},
{
"docid": "0ab045a99c76a8f6c9dac6c9730b8bab",
"text": "Yes, but it's a matter of paper trail and lifestyle. Your $600K guy may get questioned when he makes the deposit, but would show the record of having that money elsewhere. People buy cars with cash (a check) all the time. The guy filing a tax return claiming little to no income or no return at all, is more likely to get flagged than the $100K+ earning couple who happened to be able to save to buy their $25K car every 10 years with cash. On reading the article, the bank had its own concerns. The guy who was trying to withdraw the money was elderly, and the bank seemed pretty concerned to make sure he wasn't about to be scammed. It may not be spelled out as such, but a custodian of one's money does have an obligation to not be party to a potential scam, and the very request for such a huge sum of money in cash is a red flag.",
"title": ""
},
{
"docid": "bd2b03ed3cd4d1e068eb182200ec4848",
"text": "\"What they are doing is wrong. The IRS and the state might not be happy with what they are doing. One thing you can ask for them to do is to give you a credit card for business and travel expenses. You will still have to submit receipts for expenses, but it will also make it clear to the IRS that these checks are not income. Keep the pay stubs for the year, or the pdf files if they don't give you a physical stub. Pay attention to the YTD numbers on each stub to make sure they aren't sneaking in the expenses as income. If they continue to do this, ask about ownership of the items purchased, since you will be paying the tax shouldn't you own it? You can in the future tell them \"\"I was going to buy X like the customer wanted, but I just bought a new washer at home and their wasn't enough room on the credit card. Maybe next month\"\"\"",
"title": ""
},
{
"docid": "aaa7691ca4e8a234d85989b338da4378",
"text": "\"It can be a money laundering scheme. The stranger gives you cash for free at first, then proposes to give you more but this time asks you to \"\"spend\"\" a fraction of it (like 80%). So on his side the money comes from a legitimate source. So you do it because after all you get to keep the rest of it and it is \"\"free\"\" money. But you are now involved in something illegal. Having money for which you cannot tell the origin is also something highly suspicious. You will not pay tax on it, and the fiscal administration of your country might give you a fine. Customs might also be able to confiscate the money if they suspect it comes from an illegal source.\"",
"title": ""
},
{
"docid": "66ffc7bcaf7543e8dc2c1a71e4e07187",
"text": "I will definitely recommend the following books The above books will open lot of eyes to exactly know what you are doing with your personal finances in a day to day basis.These books will surely be in the top of my list which I will be giving away to my kins in my later stage. The concepts are universally the same, feel free to skip the chapters which were US based. I live in UK and I read most of the above books in late twenties, it surely made lot of changes and also drastically improved my personal finance acumen. I wish I have read these books in my early twenties.",
"title": ""
}
] |
fiqa
|
2ae2a4d2e2c39d6b12548fdf7a623ca4
|
What threshold to move from SEP to Solo401k?
|
[
{
"docid": "601b2c05dbc63338c48d2705602453ef",
"text": "I think this article explains it pretty well: Contributions to a SEP are limited to 20% of your business income (which is business income minus half of your self-employment tax), up to a maximum of $45,000. With a solo 401(k), on the other hand, you can contribute up to $15,500 plus 20% of your business income (defined the same way as above), with a maximum contribution of $45,000 in 2007. You can make an extra $5,000 catch-up contribution if you're 50 or older",
"title": ""
}
] |
[
{
"docid": "441c9c7dbaf65942463e75068c6c32b4",
"text": "I'll offer another answer, using different figures. Let's assume 6% is the rate of return you can expect. You are age 25, and plan to retire at age 65. If you have $0 and want $1M at retirement, you will need to put away $524.20/month, or $6,290.40/year, which is 15% of $41,936. So $41,936 is what you'd need to make per year in order to get to your target. You can calculate your own figures with a financial calculator: 480 months as your term (or, adjust this to your time horizon in months), .486755% as your interest (or, take your assumed interest rate + 1 to the 1/12th power and subtract 1 to convert to a monthly interest rate), 0 as your PV, and $1M as your FV; then solve for PMT.",
"title": ""
},
{
"docid": "58f374b3ac883e18ece5a9fca4e36f9d",
"text": "\"You're getting great wisdom and options. Establishing your actionable path will require the details that only you know, such as how much is actually in each paycheck (and how much tax is withheld), how much do you spend each month (and yearly expenses too), how much spending can you actually cut or replace, how comfortable are you with considering (or not considering) unexpected/emergency spending. You mentioned you were cash-poor, but only you know what your current account balances are, which will affect your actions and priorities. Btw, interestingly, your \"\"increase 401k contributions by 2% each year\"\" will need to end before hitting the $18K contribution limit. I took some time and added the details you posted into a cash-flow program to see your scenario over the next few years. There isn't a \"\"401k loan\"\" activity in this program yet, so I build the scenario from other simple activities. You seem financially minded enough to continue modeling on your own. I'm posting the more difficult one for you (borrow from 401k), but you'll have to input your actual balances, paycheck and spending. My spending assumptions must be low, and I entered $70K as \"\"take-home,\"\" so the model looks like you've got lots of cash. If you choose to play with it, then consider modeling some other scenarios from the advice in the other posts. Here's the \"\"Borrow $6500 from 401k\"\" scenario model at Whatll.Be: https://whatll.be/d1x1ndp26i/2 To me, it's all about trying the scenarios and see which one seems to work with all of the details. The trick is knowing what scenarios to try, and how to model them. Full disclosure: I needed to do similar planning, so I wrote Whatll.Be and I now share it with other people. It's in beta, so I'm testing it with scenarios like yours. (Notice most of the extra activity occurs on 2018-Jan-01)\"",
"title": ""
},
{
"docid": "38209351c883c0ccdec99ec8f3586956",
"text": "\"I agree that you should CONSIDER a shares based dividend income SIPP, however unless you've done self executed trading before, enough to understand and be comfortable with it and know what you're getting into, I would strongly suggest that as you are now near retirement, you have to appreciate that as well as the usual risks associated with markets and their constituent stocks and shares going down as well as up, there is an additional risk that you will achieve sub optimal performance because you are new to the game. I took up self executed trading in 2008 (oh yes, what a great time to learn) and whilst I might have chosen a better time to get into it, and despite being quite successful over all, I have to say it's the hardest thing I've ever done! The biggest reason it'll be hard is emotionally, because this pension pot is all the money you've got to live off until you die right? So, even though you may choose safe quality stocks, when the world economy goes wrong it goes wrong, and your pension pot will still plummet, somewhat at least. Unless you \"\"beat the market\"\", something you should not expect to do if you haven't done it before, taking the rather abysmal FTSE100 as a benchmark (all quality stocks, right? LOL) from last Aprils highs to this months lows, and projecting that performance forwards to the end of March, assuming you get reasonable dividends and draw out £1000 per month, your pot could be worth £164K after one year. Where as with normal / stable / long term market performance (i.e. no horrible devaluation of the market) it could be worth £198K! Going forwards from those 2 hypothetical positions, assuming total market stability for the rest of your life and the same reasonable dividend payouts, this one year of devaluation at the start of your pensions life is enough to reduce the time your pension pot can afford to pay out £1000 per month from 36 years to 24 years. Even if every year after that devaluation is an extra 1% higher return it could still only improve to 30 years. Normally of course, any stocks and shares investment is a long term investment and long term the income should be good, but pensions usually diversify into less and less risky investments as they get close to maturity, holding a certain amount of cash and bonds as well, so in my view a SIPP with stocks and shares should be AT MOST just a part of your strategy, and if you can't watch your pension pot payout term shrink from 26 years to 24 years hold your nerve, then maybe a SIPP with stocks and shares should be a smaller part! When you're dependent on your SIPP for income a market crash could cause you to make bad decisions and lose even more income. All that said now, even with all the new taxes and loss of tax deductible costs, etc, I think your property idea might not be a bad one. It's just diversification at the end of the day, and that's rarely a bad thing. I really DON'T think you should consider it to be a magic bullet though, it's not impossible to get a 10% yield from a property, but usually you won't. I assume you've never done buy to let before, so I would encourage you to set up a spread sheet and model it carefully. If you are realistic then you should find that you have to find really REALLY exceptional properties to get that sort of return, and you won't find them all the time. When you do your spread sheet, make sure you take into account all the one off buying costs, build a ledger effectively, so that you can plot all your costs, income and on going balance, and then see what payouts your model can afford over a reasonable number of years (say 10). Take the sum of those payouts and compare them against the sum you put in to find the whole thing. You must include budget for periodic minor and less frequent larger renovations (your tenants WON'T respect your property like you would, I promise you), land lord insurance (don't omit it unless you maintain capability to access a decent reserve (at least 10-20K say, I mean it, it's happened to me, it cost me 10K once to fix up a place after the damage and negligence of a tenant, and it definitely could have been worse) but I don't really recommend you insuring yourself like this, and taking on the inherent risk), budget for plumber and electrician call out, or for appropriate schemes which include boiler maintenance, etc (basically more insurance). Also consider estate agent fees, which will be either finders fees and/or 10% management fees if you don't manage them yourself. If you manage it yourself, fine, but consider the possibility that at some point someone might have to do that for you... either temporarily or permanently. Budget for a couple of months of vacancy every couple of years is probably prudent. Don't forget you have to pay utilities and council tax when its vacant. For leaseholds don't forget ground rent. You can get a better return on investment by taking out a mortgage (because you make money out of the underlying ROI and the mortgage APR) (this is usually the only way you can approach 10% yield) but don't forget to include the cost of mortgage fees, valuation fees, legal fees, etc, every 2 years (or however long)... and repeat your model to make sure it is viable when interest rates go up a few percent.\"",
"title": ""
},
{
"docid": "65a26dd09ec9bd29d2f0f247226041d3",
"text": "You are correct. The 65 is actually a longer test. The 66 requires you have the 7 first so you don't have strategy or product analysis questions. I have heard some say the 65 is harder because you are registering with the state as an investment advisor so don't need the 7. Regardless the biggest thing is know Uniform Securities Act inside and out.",
"title": ""
},
{
"docid": "a97d9c2308543646c996ddaeecefb95e",
"text": "Well, from what I have heard, the pass is 60%. Evidently, I am going to try to get a lot better but since I am still new to Finance, trying to put all the pieces together can be a bit of a challenge. More studying would help that I assume.",
"title": ""
},
{
"docid": "3200c8e4d60be4560b6965e96b57034b",
"text": "\"Doing what you suggest may actually be helpful. Today, you have wealth of 145k and debt of 140k, for net wealth of 5k. Your interest incurred is $671/month and your interest earned is $211, for a total loss of $460/month, just below the 491 $/month you are saving, so your total saving is $31/month currently. However, even though in total, you have more money each month than the month before, you are getting more debt and thus more interest to pay each month. Your interest earned is increasing much slower. That $31/month you are currently able to save? By the time you hit 51, that has become $0/month and is still dropping. By 60? Your debt has overtaken your retirement savings - that $5 net worth you have now is gone. If you were to withdraw money from your retirement to pay off your debt (with the $32k penalties) you would have wealth of 70k and debt of 97k, for a net wealth of -27k (i.e. net debt). Obviously, the above is not good. However, you reduce your monthly interest paid to $465, while also reducing your interest earned to $102. This is a total loss of $365/month, so you are saving $126/month. Note that in this case, your $491 monthly repayment is higher than the interest you have to pay on the account, this means that each month, your interest payment becomes lower, thus you pay off more and more each month. Your balance would be getting better each month (and at a faster rate each month. Your net wealth would be back in positives and above your wealth on your current trajectory before you hit 62. By 65, you will have $9000 of net wealth if you use your retirement savings now, as opposed to $9000 net debt if you don't. And just adding a few things on to the end 1) This is just the maths of it, and does not take into account your behaviour. If having that debt accruing is helping to motivate you to give up on luxuries, then this analysis does not apply. I am assuming that the $491/month is literally all you can save, and that no matter what changes, you will always deposit that $491. If you do not think you can continue to deposit that $491 if you stop seeing such high interest accruing, then do not do this. 2) I am assuming your interest earned on your IRA is 1.75%. If this is not the case, then please let me know, and I can adjust my numbers accordingly. From http://www.usatoday.com/story/news/politics/2014/01/28/obama-state-of-the-union-myra-savings-plan/4992743/ 3) I'm assuming all numbers you mentioned are accurate, and will stay constant (interest rates may not) 4) This is not professional, financial advice. I am just a person on the internet. 5) This goes without saying (and will probably go down as well as \"\"let them eat cake\"\" did), but saving more money each month will be a more powerful, risk free way to get out of this problem. Work a 2nd job, cut costs however you can. 6) Sorry if you were looking for something more motivational or sugar coated. 7) Best of luck, feel free to ask any questions. Graph below in red is your current trajectory, and blue is if you withdraw from your retirement to pay off your debt.\"",
"title": ""
},
{
"docid": "ae8cfa57ef8ed63fedd0cfc010fa3a0b",
"text": "\"The Roth/Traditional decision is complex, but can be broken down into a set of simple rules. Ideally, you want to choose to tax your money at the lowest possible rate. This specifically refers to your marginal rate, the rate you last $100 was taxed or next $100 of income with be taxed. That, in itself, is another issue, answered with questions here discussing marginal rates. My suggestion has been that if you are in the 15% bracket, use Roth. And continue to do so until you hit 25%. At that point, begin to shift to the traditional, pre-tax 401(k) or IRA. (My article The 15% solution, goes into detail on this, although it references the 2013 tax rates. I need to re-edit). If you are already in the 25% bracket, I'd suggest just going pre-tax. Given the ability to convert, it's not as if there are 2 points in time (deposit and withdrawal) but you can decide every year if your situation changes. It's not uncommon to get married, have a baby, buy a house, and find you just dropped back down to 15% marginal rate when you were solidly 25% prior. Let me explain why you should go 100% pretax if already at 25%. A single person hits the top of the 15% bracket (in 2017) at $37,950 taxable. Add the standard deduction and exemption, and you are at $48,350. The tax on this is $5226, less than 10% average, despite the next $100 being taxed at 25%. It would take over $1M to have an account large enough to withdraw $40K/yr. If you blow through that number, you hit 25%, I agree, but why pay 25% now, for sure, to avoid 'maybe' hitting 25% later? You have decades of opportunities for conversion, and even more when the funds are transferred to IRAs if you have a job change. (And the conversion discussion has multiple layers when the IRA is involved) Say you are 'too' successful. You are hitting $2M before age 55. If you retire post-55, you can withdraw from the 401(k) penalty free. But, you have 15 years before you'd start to take SS benefits. 15 years to use conversions, even if pushing into 25%, to reduce the impact of SS taxation. My advice is not a set-and-forget solution. It's an annual evaluation of the plan for the coming year. Further notes on my choice of \"\"15% Solution\"\" - This is the 2017 tax table for singles - I note that median individual income is ~$30K which puts that median single at ~20K taxable. This is where the analysis begins. This earner might have upward mobility, to reach the 25% bracket and begin to save pre-tax. The goal would be to have a mix of pre/post tax money, so that over the course of their life, the 25% bracket was avoided, perhaps completely. In general, my writing tend towards the second highest quintile, the 60-80% slice of the population. The numbers might appear arbitrary, but, in the end, the discussion has to start someplace. The concept I described here is best implemented by the single or couple who is still at 15%, but soon pushing higher than the 15/25 line. This enables them to start by saving in the Roth, and slowly shifting towards pre-tax. The final mix at retirement depends on that timing as well as their opportunities for conversions along the way. Part of my focus on that line is that the differential is greatest in bracket shifts between 15 and 25%. Much of the benefit in the whole IRA/401 discussion is in that shift, depositing at 25%, yet withdrawing at 15%. The 28% couple might wish to avoid the 33% bracket at retirement, but that level of income impacts far fewer people, and fewer still that are either reading these boards or my other writing.\"",
"title": ""
},
{
"docid": "92ee9cadaa14d9d89f6ca7d5aaa4a99e",
"text": "\"There are some assumptions which can be made in terms of the flexibility you have - I will start with the least flexible assumption and then move to more flexible assumptions. If you must put down a number 1, your go-to for this(\"\"Change the start period to 1\"\"), is pretty good, and it's used frequently for other divide-by-zero calculations like kda in a video game. The problem I have with '1' is that it doesn't allow you to handle various scales. Some problems are dealt with in thousands, some in fractions, and some in hundreds of millions. Therefore, you should change the start period to the smallest significantly measurable number you could reasonably have. Here, that would take your example 0 and 896 and give you an increase of 89,500%. It's not a great result, but it's the best you can hope for if you have to put down a number, and it allows you to keep some of the \"\"meaning in the change.\"\" If you absolutely must put something This is the assumption that most answers have taken - you can put down a symbol, a number with a notation, empty space, etc, but there is going to be a label somewhere called 'Growth' that will exist. I generally agree with what I've seen, particularly the answers from Benjamin Cuninghma and Nath. For the sake of preservation - those answers can be summarized as putting 'N/A' or '-', possibly with a footnote and asterisk. If you can avoid the measurement entirely The root of your question is \"\"What do my manager and investors expect to see?\"\" I think it's valuable to dig even further to \"\"What do my manager and investors really want to know?\"\". They want to know the state of their investment. Growth is often a good measurement of that state, but in cases where you are starting from zero or negative, it just doesn't tell you the right information. In these situations, you should avoid % growth, and instead talk in absolute terms which mention the time frame or starting state. For example:\"",
"title": ""
},
{
"docid": "59682cb6af50a150a5bbb76308efceec",
"text": "the SP500 is all in the US, though. if you plan to buy and hold long index, you will probably be fine. i would recommend to diversify into different assets for a number of reasons. but if you invest without an advisor, you need to stick to a savings and investment plan without question. if you start thinking about what sector you think the next big break is going to be, or if you should be buying in right now, or if now is a good time to sell, it is more likely than not you will be doing yourself a great disservice.",
"title": ""
},
{
"docid": "aaf92fe78bcc576ccc41071daa8b9018",
"text": "Two ways to solve this. Look at the answer. If the answer says 3 months, then using ceiling for similar questions. You have to act according to the exam conventions, not according to own feelings. Whether or not the answer is reasonable and applicable in real life is out of the question. Ask yourself, did the investment double after 14 years 2 months? i.e. FV >= 2PV. Does a person who ran 99.72 meters in a 100-meter dash counted as touching the finish line?",
"title": ""
},
{
"docid": "a5345be7d605b0afce14d92988730fc0",
"text": "Here's the issue with LTC and, really, underwritten insurance in general; no one has a crystal ball. Based on today's available rates where's the sweet spot to buy LTC? Probably right around the mid-60s, because you probably won't pay much in before you start gutting the carrier (assuming you can make it through underwriting in your mid-60s). The issue is, what happens when some life event changes your underwriting status? Would you rather buy prematurely or be excluded entirely? Those are generally your two options when it comes to individual LTC. The underwriting eligibility window on LTC is very narrow. There's a very very small space between the best possible underwriting and being flatly declined. Look for an LTC agent in your area. Likely someone in your circle of friends and family will know a reputable/knowledgeable insurance agent who can run up some quotes at various underwriting classes. Try to avoid looking at quotes for your age + 10 years to see what the quote will look like 10 years from now. 10 years from now the rate tables will be significantly different. Whether or not you should buy LTC now rather than waiting will depend on a whole host of other criteria. Personally, if I was 50 and my biggest health concern was improving my run time and LTC is on my mind, I'd just pick up a policy now while I will likely be in a preferred underwriting class rather than waiting and hoping my health doesn't betray me. Obviously I'm a stranger on the internet and none of this is actual advice. You should find an agent local to you and talk about your options and situation.",
"title": ""
},
{
"docid": "738f4f01cacfac6815ef39b5068ee1ea",
"text": "I don't know too much about the kelly criterion, but going by the other answers it sounds like it could be quite risky depending how you use it. I have been taught the first thing you do in trading is protect your existing capital and any profits you have made, and for this reason I prefer and use Position Sizing (PS). The concept with PS is that you only risk a small % of your capital on every trade, usually not more than 1%, however if you want to be very aggressive then not more than 2%. I use 1% of my capital for every trade. So if you are trading with an account of $40,000 and your risk R on every trade is 1%, then R = $400. As an example, say you decide to buy a stock at $10 and you work out your initial stop to be at $9.50, then our maximum risk R of $400 is divided by the stop distance of $0.50 to get your PS = $400/$0.50 = 800 shares. If the price then drops after your purchase, your maximum loss (subject to no slippage) would be $400. If the price moves up you would raise your stop until your potential loss becomes smaller and smaller and then becomes a gain once your stop moves above your initial purchase price. The aim is to make your gains be larger than your losses. So if your average loss is kept to 1R or less then you should aim to get your average gains to 2R, 3R or more. This would be considered a good trading system where you will make regular profits even with a win ratio of 50%.",
"title": ""
},
{
"docid": "010b9f7f106a63c25ec5dd87c62d07eb",
"text": "I'm NMLS with a bank, won't name it, but you can buy and sell points up to .5 if I remember right. Might be 1% but it's the difference between 1300 and 1700 if I remember right for monthly payments.",
"title": ""
},
{
"docid": "288b322cfb3118e734fc99b28d1c3d1f",
"text": "Thanks! Your earlier comment had me panicked there! I have worked about 1700 question over the last week from the Qbank, and was hoping that it would with a couple mock exams, would be sufficient for level 1.",
"title": ""
},
{
"docid": "6550eb8b1f267dd995068f20e63ae48f",
"text": "My super fund and I would say many other funds give you one free switch of strategies per year. Some suggest you should change from high growth option to a more balance option once you are say about 10 to 15 years from retirement, and then change to a more capital guaranteed option a few years from retirement. This is a more passive approach and has benefits as well as disadvantages. The benefit is that there is not much work involved, you just change your investment option based on your life stage, 2 to 3 times during your lifetime. This allows you to take more risk when you are young to aim for higher returns, take a balanced approach with moderate risk and returns during the middle part of your working life, and take less risk with lower returns (above inflation) during the latter part of your working life. A possible disadvantage of this strategy is you may be in the higher risk/ higher growth option during a market correction and then change to a more balanced option just when the market starts to pick up again. So your funds will be hit with large losses whilst the market is in retreat and just when things look to be getting better you change to a more balanced portfolio and miss out on the big gains. A second more active approach would be to track the market and change investment option as the market changes. One approach which shouldn't take much time is to track the index such as the ASX200 (if you investment option is mainly invested in the Australian stock market) with a 200 day Simple Moving Average (SMA). The concept is that if the index crosses above the 200 day SMA the market is bullish and if it crosses below it is bearish. See the chart below: This strategy will work well when the market is trending up or down but not very well when the market is going sideways, as you will be changing from aggressive to balanced and back too often. Possibly a more appropriate option would be a combination of the two. Use the first passive approach to change investment option from aggressive to balanced to capital guaranteed with your life stages, however use the second active approach to time the change. For example, if you were say in your late 40s now and were looking to change from aggressive to balanced in the near future, you could wait until the ASX200 crosses below the 200 day SMA before making the change. This way you could capture the majority of the uptrend (which could go on for years) before changing from the high growth/aggressive option to the balanced option. If you where after more control over your superannuation assets another option open to you is to start a SMSF, however I would recommend having at least $300K to $400K in assets before starting a SMSF, or else the annual costs would be too high as a percentage of your total super assets.",
"title": ""
}
] |
fiqa
|
27db0e02bf0e42cbcd60a99cbd6d138b
|
Can a shareholder be liable in case of bankruptcy of one of the companies he invested in?
|
[
{
"docid": "5938b4fa65cfd89f3ab79fcaa8841dc8",
"text": "\"No. One of the key ideas behind a corporation is that an investor's liability is limited to the amount he invests, i.e. the amount of stock he buys. This is the primary reason why small businesses become corporations, even though one person owns 100% of the stock. Then if the business goes broke, he won't lose his house, retiretment fund, etc. He'll lose everything he had in the business, but at least there's a limit to it. (In some countries there are other ways to achieve the same results, like creating a \"\"limited liabililty company\"\", but that's another story.)\"",
"title": ""
},
{
"docid": "d18a0ebdd505f1bbcec3d7ff88ceaf59",
"text": "\"No, assuming by \"\"public company\"\" you mean a corporation. The shareholder's individual liability is limited to their investment. Your shares can go to zero value, but that's the limit. EDIT In regard to the follow-up question in the comments: \"\"Are all companies in the stock market corporations?\"\" the answer is definitely \"\"no.\"\" I cannot say much about other countries, but the US markets have some entities which are known as \"\"master limited partnerships.\"\" These trade shares on the market by the usual rules, but if you buy you become a partner in the company rather than a shareholder. You still have limited liability in this case, but there will be differences, for example, in how you're are taxed.\"",
"title": ""
},
{
"docid": "1b000a8ad21e9fee49dcdf5d184e5642",
"text": "The answer depends on whether the company involved has 'limited liability'. Most, but not all public and listed companies and corporations have this, but not all so it is worth checking and understanding what you are getting involved with. The expression 'limited liability' means that the owners (shareholders) of a company have a liability up to the amount of the face value of the shares they hold which they have not yet paid for. The difference is usually minor but basically it means that if you buy $10 of shares you have no liability, but if the company gives you $10 of shares, and you pay them (in cash or kind) $5, then you still have a liability of $5. If the company fails, the debtors can come after you for that liability. An 'unlimited liability' company is a different animal altogether. Lloyds insurance is probably the most famous example. Lloyds worked by putting together consortiums to underwrite risk. If the risk doesn't happen, the consortium keeps the premiums, if it does, they cover the loss. Most of the time they are very profitable but not always. For example, the consortiums which covered asbestos caused the bankruptcies of a great many very wealthy people.",
"title": ""
},
{
"docid": "e7e01f4693da28ecd3ef88fbcc7b66c1",
"text": "\"Not normally, for a limited liability company anyway. In extreme circumstances a court may \"\"lift the veil\"\" of incorporation and treat shareholders as if they were partners. If you are an office bearer or a director that is found to have breached duties/responsibiities then that is another matter. Dim views can be taken of shonky arrangents for companies formed for activites not of a bona fide business nature too.\"",
"title": ""
},
{
"docid": "89806c12767e3ceb53f7abd1658aa490",
"text": "\"I am a tax lawyer and ALL the RESPONSES ABOVE are 1/2 Correct but also 1/2 Wrong and in tax law this means 100% WRONG (BECAUSE ANY PART INCORRECT UNDER TAX LAW will get YOU A HUGE PENALY and/or PRISON TIME by way of the IRS! So in ESSENCE ALL the above answers are WRONG! Let me enlighten you to the correct answer in 5 parts, as people that do not practice tax law may understand (but you still probably will not understand, if you are NOT a Lawyer). 1) All public companies are corporations (shown by Ltd.), 2) only Shareholders of Public companies (ie, traded on the NYSE stock market) are never liable for debts of a bankrupt company, due to the concept of limited liability. 2) now Banks may ask a sole proprietorship (who wants to incorp. for example) to give collateral, such as owners stocks/bonds or his/her house, but then of course the loanee can tell the Bank No Thanks and find a lender that may charge higher interest rates but lend money to his company with little to NO collateral. 3) Of course not all companies are publicly traded and these are called private companies. 4)\"\"limited liability\"\" has nothing to do directly with subsequent shareholders (the above answer is inaccurate!), it RELATES rather to INITIAL OWNERS INVESTMENT in their company, limiting the amount of owner loss if the company goes bankrupt. 5) Share Face-value is usually never related to this as shares are sold at market value in real life instances (above or below face-value), or the most money Investments Banks or owners can fetch for the shares they sell (not what the stock's face-value is set at upon issuance). Never forget, stocks are sold in our Capitalistic System to whomever pays the most, as it is that Buyer who gets to purchase the stock!\"",
"title": ""
},
{
"docid": "994aa81696600e5c80d2c0239d115c77",
"text": "In an open corporation scenario a stock holder may well be found liable. It's a very narrow and uncommon bunch of scenarios but it's well worth sharing. See the paragraph on open corporations in the following document: http://nationalparalegal.edu/public_documents/courseware_asp_files/businessLaw/RightsOfShareholders/LiabilityOfShareholders.asp",
"title": ""
}
] |
[
{
"docid": "7f0b2035b9854c22bee04b280dbc32aa",
"text": "You should double-check what it means to be in [Chapter 11](http://en.wikipedia.org/wiki/Chapter_11,_Title_11,_United_States_Code) Yes, by filing for bankruptcy, the company gets some protection from creditors and some of their investment dries up, but it's the owners who take it on the nose first. Also, individuals can file for Chapter 11, too. It's not just corporations.",
"title": ""
},
{
"docid": "79f21f915d96f4657dbefa524ea5e1e0",
"text": "Strange that they're holding you personally legally liable rather than the company. That's normally a big part of the corporate veil. You need a lawyer, not a stackexchange.",
"title": ""
},
{
"docid": "6f59adcc7b987d2178c95cf63fd19f0e",
"text": "*sigh* So I guess you don't understand why they would care about no risk.... If the sub company fails, but had no debt, then the parent company only loses whatever money they invested in the sub company If the sub company fails and had debt: The parent company is responsible for those debts and must pay them if in the agreement with the bank the parent company is responsible. The parent company is not responsible for those debts if in the agreement with the banks, they did not agree to be collateral if the sub company went bankrupt. Not likely that a bank would agree to this though. They might even try to sue the parent company so they could get some reimbursement.",
"title": ""
},
{
"docid": "871ee400fd4484f5018511b91dcb9298",
"text": "> If the investor is a partner in the company then they're just as responsible for the debts of their business as any other partner. Umm, one of the benefits of creating a corporation is to keep personal money separate from the business. http://www.nolo.com/legal-encyclopedia/corporation-basics-29867.html There are exceptions to that of course. > The registered owners of the company can also be held liable for it's debts if it's a corporation. This is false. Baring in mind that you can prove separation of assets and aren't doing anything illegal. > Or you can always just have them sign as guarantor for your back pay. This is of course one of the exceptions.",
"title": ""
},
{
"docid": "89dda066ba2eec4f675e094aaa531a4e",
"text": "\"First off, the jargon you are looking for is a hedge. A hedge is \"\"an investment position intended to offset potential losses/gains that may be incurred by a companion investment\"\" (http://en.wikipedia.org/wiki/Hedge_(finance)) The other answers which point out that put options are frequently used as a hedge are correct. However there are other hedging instruments used by financial professionals to mitigate risk. For example, suppose you would really prefer that Foo Corporation not go bankrupt -- perhaps because they own you money (because you're a bondholder) or perhaps because you own them (because you're a stockholder), or maybe you have some other reason for wanting Foo Corp to do well. To mitigate the risk of loss due to bankruptcy of Foo Corp you can buy a Credit Default Swap (http://en.wikipedia.org/wiki/Credit_default_swap). A CDS is essentially a bet that pays off if Foo Corp goes bankrupt, just as insurance on your house is a bet that pays off if your house burns down. Finally, don't ever forget that all insurance is not just a bet that the bad thing you're insuring against is going to happen, it is also a bet that the insurer is going to pay you if that happens. If the insurer goes bankrupt at the same time as the thing you are insuring goes bad, you're potentially in big trouble.\"",
"title": ""
},
{
"docid": "977dfe0d410d1c7749d0b38f472c36f9",
"text": "It would depend on the bounds of your hypothetical. If the investor group is blind to cost + has infinite money and the existing management is unwilling to comply at any cost, then management will destroy the company before the investor group can take it over. If the existing management follow rational choice theory; then an investment group with unlimited money could take over, hold a special meeting on it, etc. Shareholders can't force management to do anything per se, as management decisions that violate fiduciary duty aren't criminally liable unless the act itself is a crime. So if an investor group were to try a hostile takeover, and Twitter mgmt said we'll see you in hell; then they could just shut down every data center, sell off twitter.com, terminate all the employees, issue a billion new shares, issue every employee a million $0.01 strike warrants, etc. until there's nothing left to take over just to spite them. Defensive strategies get pretty creative and are highly amusing to watch if you don't have a dog in the fight.",
"title": ""
},
{
"docid": "8268e9706128d119eab6a97dde210f0a",
"text": "IANAL. In the UK, you (as a Director) would have obligations to minimise any tax liabilities under these two clauses: http://www.legislation.gov.uk/ukpga/2006/46/section/172 http://www.legislation.gov.uk/ukpga/2006/46/section/174 Although I can't see the CPS bringing any cases of criminal charge against over-payment of taxes. It wouldn't be unrealistic to have a scenario where shareholders of a failed enterprise sued a Director who was negligent in minimising tax liabilities. That said, I think the Starbucks strategy is flagrantly breaching the intent of the law, if not the letter.",
"title": ""
},
{
"docid": "0ebfb0ff79a08dd8776c2fb71f1a5123",
"text": "In most cases , preferential sharesholders are paid dividends first before common shareholders are paid . In the event of a company bankruptcy , preferential shareholders have the right to be paid first before common shareholders. In exchange for these benefits , preferential shareholders do not have any voting rights. The issuing of preferential shares has no impact on share prices or issuing of bonuses , it is a mere coincidence that the stock price went up",
"title": ""
},
{
"docid": "56f607bca64522b8754268ef2dbe932a",
"text": "Once the business is shut down, you'll need to show that the corporation is in bankruptcy and the amounts are unrecoverable. You can then report it as investment loss. I suggest talking to a tax adviser (EA/CPA licensed in your State), and maybe an attorney, on what the specific technical details are.",
"title": ""
},
{
"docid": "c7238a79b7b4178cf71c34c008b89d9d",
"text": "You can avoid companies that might go bankrupt by not buying the stock of companies with debt. Every quarter, a public company must file financials with the EDGAR system called a 10-Q. This filing includes unaudited financial statements and provides a continuing view of the company's financial position during the year. Any debt the company has acquired will appear on this filing and their annual report. If servicing the debt is costing the company a substantial fraction of their income, then the company is a bankruptcy risk.",
"title": ""
},
{
"docid": "e0622d970d4c45fc8bc60f986f22d96c",
"text": "My understanding was that if a company buys back shares then those shares are 'extinguished' I.e. the rest of the shareholders now own a greater portion of the company. However, if there is only one share left, then the company could not buy it because doing so would extinguish it leaving the company without an owner. That result would run contrary to the requirements for an incorporated company in countries like NZ and Australia.",
"title": ""
},
{
"docid": "0b68acfc83ae9ef8c7430c5cd4ceedc3",
"text": "\"Generally \"\"default\"\" means that the company cannot pay off their debts, and since debt holders get paid before equity holders, their equity would be effectively worthless. That said, companies can emerge from Chapter 11 bankruptcy (reorganization) and retain equity value, but it is rare. Most times, stocks are de-listed or frozen on stock exchanges, and company's reorganization plan will cancel all existing equity shares, instead focusing all of their attention on paying back as much debt as possible. If the company issues new equity after reorganizing, it might provide a way for holders of the original equity to exchange their shares for the new equity, but it is rare, and the value is usually significantly less that the value of the original equity.\"",
"title": ""
},
{
"docid": "ebf7f2ffdd88a794594aa313b48eb2d1",
"text": "yeah but most likely, it's a 1x liquidation preference. The startup isn't going to generate cash flows enough to pay off the initial investment to the investor. Technically it isn't exactly specified as only triggered on a liquidation event because OP didn't specify the real legal language but it seems likely that's the case. Point 2 is exactly what a liquidation preference is. No way the owner of the company is participating in anything until the investor gets his initial investment back.",
"title": ""
},
{
"docid": "6a41f75249c1d9d408263920982a312c",
"text": "\"What drives the stock of bankrupt companies? Such stock is typically considered \"\"distressed assets\"\". Technically, what drives it is what drives every stock - supply and demand. A more interesting question is of course, why would there be demand? First, who exerts the buying pressure on the stock? Typically, three types of entities: The largest ones are financial institutions specializing in distressed assets (frequently, alternatives specialists - hedge funds, private equity firms etc...). Usually, they invest in distressed debt or distressed preferred equity; but sometimes distressed equity as well. Why? We will discuss their motivations separately in this answer. Second one are existing equity holders. Why? Short answer, behavioral psychology and behavioral economics. Many investors - especially non-professionals - insist on holding distressed stocks due to variety of investment fallacies (sunk cost etc...); usually constructing elaborate theories of why and how the company and the stock will recover Sometimes, people who buy into penny stock scams, pump and dump schemes etc... Why? \"\"There's a sucker born every minute.\"\" - P.T. Barnum Let's find out why an investment professional would invest in distressed equity? First, the general process is always the same. Company's assets are used to pay off its liabilities; in accordance with applicable law. There are two ways this can be done - either through selling the company; OR through bankruptcy process. The liabilities are paid according to seniority. The seniority priorities rules are covered by 11 U.S. Code § 507 - Priorities A company in bankruptcy can have one of 2 outcomes: Buyout. Some buyer might decide that the company's assets are worth something to them as a whole; and buy the whole enterprise; rather than risk it being destroyed piecemeal in bankruptcy proceedings. In that case, the proceeds from the sale will be used to fund the liabilities as discussed above. This option is one of the possible reasons people might consider investing in distressed equity. For example, if the company is in bankruptcy because it can't get enough financing right now, but is likely to have good profits in the future. The chances are, some buyer will buy it for a premium that includes those future profits; and that sale amount might possibly exceed the liabilities. Bankruptcy. The assets are sold and liabilities are covered according to priorities. In that case, the investors in distressed equity might be hoping that there are un-obvious assets whose value would also put the total assets above claimed liabilities. Additional possible beneficial factor is that unsecured debtors must file with the court in order to be paid; and the claim must be validated. Some might fail on either count; so total amount of liabilities might lessen once the bankruptcy process goes through. Assets Now, here's where things get interesting. Of course, companies have usual assets. Real estate, inventory, plants, cash, etc... These are all able to be sold to cover liabilities, and at first glance are possibly not enough to cover liabilities, leaving equity holders with nothing (and even that's not a certainty - bankruptcy is simply inability to service debt payments; and while it correlates to assetsliquid assets, not full asset valuation). But some assets are less sure, and are thus rarely included in such calculations. These may include: Chances of winning appeals if specific existing liabilities are results of litigation, e.g. tax appeals, court judgement appeals etc... Clawbacks and lawsuits against former executives, especially in cases where the company's financial distress resulted from executive malfeasance. I was personally involved in one such case as an equity holder, where the company assets were valued at $X; had liabilities of $X*2; but had a real possibility of winning about $X*3 in a lawsuit against former CEO accused of various malfeasance including fraud and insider trading. As such, the best case scenario was literally 100% profit on holding that distressed equity.\"",
"title": ""
},
{
"docid": "4cf93f14c4c9dbe35734cc4af063d42a",
"text": "As others have said, it simply makes you a part owner. Even if you have ethical objections to a company's behavior, I'd argue that investing in it and using the proxy votes to influence the company's decisions might be even more ethical than not investing.",
"title": ""
}
] |
fiqa
|
04bab6584e92a3fc68826e20143d2669
|
Should I deduct or capitalize the cost to replace a water heater in my rental property? (details Below)
|
[
{
"docid": "884ddfb3e4e3765cfb75b301ff9dd45a",
"text": "If you're repairing an existing appliance - its an expense. If you're replacing an existing appliance with a new one - that's disposing of one capital asset and putting in service another. You depreciate the new one and you dispose of the old one (if not fully depreciated - talk to your tax adviser how to handle the remaining value). The additional costs of the fixes that are not related to the installation of the new appliance are regular maintenance expenses, so you have to get an itemized invoice from the plumber to know what to expense and what to capitalize.",
"title": ""
},
{
"docid": "6832d91bbae329fef6eced1aecf5ac9a",
"text": "Pub 527 my friend. It gets depreciated. Table 1-1 on page 5.",
"title": ""
},
{
"docid": "bb65dd7f717ccf993086167319f91fac",
"text": "You may be able to choose. As a small business, you can expense certain depreciable assets (section 179). But by choosing to depreciate the asset, you are also increasing the cost-basis of the property. Are you planning to sell the property in the next couple of years? Do you need a higher basis? Section 179 - Election to expense certain depreciable business assets",
"title": ""
}
] |
[
{
"docid": "2f433e95de68c23d93cf4fae5295ecc2",
"text": "You will need to look at the 27.5 year depreciation table from the IRS. It tells you how you will be able to write off the first year. It depends on which month you had the unit ready to rent. Note that that it might be a different month from when you moved, or when the first tenant moved in. Your list is pretty good. You can also claim some travel expenses or mileage related to the unit. Also keep track of any other expenses such as switching the water bill to the new renter, or postage. If you use Turbo tax, not the least expensive version, it can be a big help to get started and to remember how much to depreciate each year.",
"title": ""
},
{
"docid": "fff2035f2cc2849e6eba49a486a61c8c",
"text": "\"Not sure what you are talking about. The house isn't part of a business so neither of you can deduct half of normal maintenance and repairs. It is just the cost of having a house. The only time this would be untrue is if the thing that you are buying for the house is part of a special deduction or rebate for that tax year. For instance the US has been running rebates and deductions on certain household items that reduce energy - namely insulation, windows, doors, and heating/cooling systems (much more but those are the normal things). And in actuality if your brother is using the entire house as a living quarters you should be charging him some sort of rent. The rent could be up to the current monthly market price of the home minus 50%. If it were my family I would probably charge them what I would pay for a 3% loan on the house minus 50%. Going back to the repairs... Really if these repairs are upgrades and not things caused by using the house and \"\"breaking\"\" or \"\"wearing\"\" things you should be paying half of this, as anything that contributes to the increased property value should be paid for equally if you both are expecting to take home 50% a piece once you sell it.\"",
"title": ""
},
{
"docid": "fd689b6def8ac021d8eadf33bbcd8b36",
"text": "Remember this when you rent. You may get 1,600 back - however, you have to provide insurance on the house still, 10% of that rent goes into a repair fund for things that break. You don't get compensated for months without a renter. You still pay property tax and income tax. If you have someone manage the house, you have to pay their fee (10%+ usually). Lots of variables when renting (I looked into doing the same thing)",
"title": ""
},
{
"docid": "665da3fdf06fdca87eb1d54a26e426fb",
"text": "\"Bad areas are tough to value as a owner-occupied property, because the business model for being a slumlord is to rent apartments in absentia, usually to tenants receiving goverment subsidies such as Section 8 vouchers. The vouchers are based on a prevailing rent, which are often on par with nice suburban apartment complexes due to how that \"\"prevailing\"\" rate is calculated. So the value of the house is really an annuity calculation. You figure out the potential rental cash flow and apply whatever your local market premium is. The point is, doing an apples to apples comparison is going to be tough, and justifying the cost of repairs that aren't remediating health and safety issues probably won't be recoverable from a home valuation standpoint. A buyer would probably rip out your central air conditioner and sell it! If I were in your shoes, I'd look at the time horizon that you think you're going to be there and amortize the cost over that period. Assuming your mortgage is small and you're staying for about 5 years, spending $10k costs you about $170 a month. Your reward is a modern A/C and heating system. Compare that cost to the cost of moving and your desires and see if it's worth it to you.\"",
"title": ""
},
{
"docid": "504db960177f3094e6a274c3880f6531",
"text": "The other thing that you may or may not be considering is the fact that when she moves or otherwise ceases to live in that condo, you could then rent the unit out to others at the inflation adjusted rent price for the area. You could continue to build equity in the property for a fraction of the cost, and it would continue to be a tax write-off once your mother is not living there. While you have more maintenance and repairs cost when renters live there (typically, anyway), if inflation continues to carry on at about 4-5%, then you would be potentially renting the unit out at between $2,500 and $2,850 by the 10th year from now. Obviously, there are other considerations to be made as well, but those are some additional factors that don't seem to have been addressed in any of the above comments.",
"title": ""
},
{
"docid": "9f47d532ee2ff1cd4da42aa86e7f3042",
"text": "Carnegie Mellon University (CMU) and the University of Pittsburgh (Pitt) have different end of term dates but by less than a month. Both have summer sessions, but most students do not stay over the summer. You can rent over the summer, but prices fall by a lot. Thirty to forty thousand students leave over the summer between the two. Only ten to twenty thousand remain throughout the year and not all of those are in Oakland (the neighborhood in Pittsburgh where the universities are located). So many of the landlords in Oakland have the same problem. Your competitors will cut their rates to try to get some rent for the summer months. This also means that you have to handle eight, nine, and three month leases rather than year long and certainly not multiyear leases. You're right that you don't have to buy the latest appliances or the best finishes, but you still have to replace broken windows and doors. Also, the appliances and plumbing need to mostly work. The furnace needs to produce heat and distribute it. If there is mold or mildew, you will have to take care of it. You can't rely on the students doing so. So you have to thoroughly clean the premises between tenants. Students may leave over winter break. If there are problems, the pipes may freeze and burst, etc. Since they're not there, they won't let you know when things break. Students drop out during the term and move out. You probably won't be able to replace them when that happens. If you have three people in two bedrooms, two of them may be in a romantic relationship. Romantic relationships among twenty-year olds end frequently. Your three people drops back to two. Your recourse in that case is to evict the remaining tenants and sue for breach of contract. But if you do that, you may not replace the tenants until a new term starts. Better might be to sue the one who left and accept the lower rent from the other two. But you likely won't get the entire rent amount for the remainder of the lease. Suing an impoverished student is not the road to riches. Pittsburgh is expected to have a 6.1% increase in house prices which almost all of it is going to be pure profit. I don't know specifically about Pittsburgh, but in the national market, housing prices are about where they were in 2004. Prices were flat to increasing from 2004 to 2007 and then fell sharply from 2007 to 2009, were flat to decreasing from 2009 to 2012, and have increased the last few years. Price to rent ratios are as high now as in 2003 and higher than they were the twenty years before that. Maybe prices do increase. Or maybe we hit a new 20% decrease. I would not rely on this for profit. It's great if you get it, but unreliable. I wouldn't rely on estimates for middle class homes to apply to what are essentially slum apartments. A 6% average may be a 15% increase in one place and a 3% decrease in another. The nice homes with the new appliances and the fancy finishes may get the 15% increase. The rundown houses in a block where students party past 2 AM may get no increase. Both the city of Pittsburgh and the county of Allegheny charge property taxes. Schools and libraries charge separate taxes. The city provides a worksheet that estimates $2860 in taxes on a $125,000 property. It doesn't sound like you would be eligible for homestead or senior tax relief. Realtors should be able to tell you the current assessment and taxes on the properties that they are selling you. You should be able to call a local insurance agent to find out what kinds of insurance are available to landlords. There is also renter's insurance which is paid by the tenant. Some landlords require that tenants show proof of insurance before renting. Not sure how common that is in student housing.",
"title": ""
},
{
"docid": "8458e6ebcc66911b291d37d15bc50a86",
"text": "To start, I hope you are aware that the properties' basis gets stepped up to market value on inheritance. The new basis is the start for the depreciation that must be applied each year after being placed in service as rental units. This is not optional. Upon selling the units, depreciation is recaptured whether it's taken each year or not. There is no rule of thumb for such matters. Some owners would simply collect the rent, keep a reserve for expenses or empty units, and pocket the difference. Others would refinance to take cash out and leverage to buy more property. The banker is not your friend, by the way. He is a salesman looking to get his cut. The market has had a good recent run, doubling from its lows. Right now, I'm not rushing to prepay my 3.5% mortgage sooner than it's due, nor am I looking to pull out $500K to throw into the market. Your proposal may very well work if the market sees a return higher than the mortgage rate. On the flip side I'm compelled to ask - if the market drops 40% right after you buy in, will you lose sleep? And a fellow poster (@littleadv) is whispering to me - ask a pro if the tax on a rental mortgage is still deductible when used for other purposes, e.g. a stock purchase unrelated to the properties. Last, there are those who suggest that if you want to keep investing in real estate, leverage is fine as long as the numbers work. From the scenario you described, you plan to leverage into an already pretty high (in terms of PE10) and simply magnifying your risk.",
"title": ""
},
{
"docid": "79150c526f9587a5527db7e2fe6c664b",
"text": "\"I would not classify utilities (including electric) as additional fees. In many cases you interact directly with the utility (not the landlord) and pay for what you use. There are exceptions like when renting a room. The renter's insurance also is not part of the landlord's profit, it is simply there to protect you. In the case of loss, the landlord cannot insure your property. You have to provide your own insurance. Its pretty low costs, typically less than 20 per month. The application fee is typical. The move in fee is something that could be negotiated away and sounds pretty sketchy. You can always \"\"let your fingers do the walking\"\" and find out the fees before you look at the place.\"",
"title": ""
},
{
"docid": "d8aaee2278cffb583d47b047c320b68d",
"text": "First of all, Dilip's answer explains well how the business deductions generally work. For most (big) expenses you depreciate it. However, in some cases you need to capitalize it, which is another accounting method. When you capitalize your expense, it becomes part of the basis of the product you're creating. Since you're an engineer, this might be relevant for you. Talk to your tax adviser. How exactly you deduct/depreciate/capitalize things, and what expense goes which way depends greatly on the laws and jurisdictions. Even in the US, different states have different laws, and the IRS and State laws don't have to conform (unfortunately). For example, the limitations on Sec. 179 deduction in 2010-2011 were 20 times higher on Federal level than in the State of California. This could have lead to cases where you fully deducted your expense on your Federal tax return, but need to continue and depreciate it on your State return (or vice versa). Good tax adviser is crucial to avoid or manage these cases.",
"title": ""
},
{
"docid": "fc0807c84be4f0eee1f29b291d2316d6",
"text": "Either way, (lease or buy), it's likely going to be an expense, not a depreciation. You would expense the entire lease amount - whatever that is in the year it was paid. A $2k-$3k computer probably isn't worth the trouble of recording it as a Fixed Asset and depreciating it yearly. I work for a company that buys thousands of PCs a year for its employees and we have a hard rule: If it's under $3k, it's an expense not an asset. If you were buying $20k-$50k servers, this would be a different conversation both because of the price and the life of the item. Because it's such a small amount (unless you really are buying $20k PCs), it doesn't really matter whether it's your biggest expense or not, it's likely just an expense. Though, no one is preventing you from depreciating it over 5 years if you wanted to. See: https://www.irs.gov/help-resources/tools-faqs/faqs-for-individuals/frequently-asked-tax-questions-answers/sale-or-trade-of-business-depreciation-rentals/depreciation-recapture/depreciation-recapture In summary: I would say your question is more of a business sense question than a tax question. Is it worth it to you to lease instead of buying because you are getting a new PC so often? Btw: every 2 years is not that often. It's average. Whatever your decision, I think the answer for taxes is the same: Expense it all in the year it was incurred unless you really want to spread it out and depreciate.",
"title": ""
},
{
"docid": "b2f4f176d71865e5de83356df202f85d",
"text": "Sticking strictly to the money aspects. I am also assuming United States. The lender will need to know before applying for the loan that the property will be a rental, they may even need to know the scope of the number of renters. Insurance. There are two types you will need to include Income taxes. If you do run a profit you will have taxes. The surprising thing for many first time landlords is that they don't realize that the principal of the loan payment is not considered a deductible expense. Of course there is a benefit to depreciation.",
"title": ""
},
{
"docid": "3796346d54696bfa1a1766980aa57823",
"text": "Both of these terms do refer to your profit; they're just different ways of evaluating it. First, your definition of capitalization rate is flipped. As explained here, it should be: On the other hand, as explained here: So cap rate is like a reverse unit cost approach to comparing two investments. If house A costs $1M and you'll make $50K (profit) from it yearly, and house B costs $1.33M and you'll make $65K (profit) from it yearly, then you can compute cap rates to see that A is a more efficient investment from the point of view of income vs. amount-of-money-you-have-stuck-in-this-investment-and-unavailable-for-use-elsewhere. Profit margin, on the other hand, cares more about your ongoing expenses than about your total investment. If it costs less to maintain property B than it does to maintain property A, then you could have something like: So B is a more efficient investment from the point of view of the fraction of your revenue you actually get to keep each year. Certainly you could think of the property's value as an opportunity cost and factor that into the net profit margin equation to get a more robust estimate of exactly how efficient your investment is. You can keep piling more factors into the equation until you've accounted for every possible facet of your investment. This is what accountants and economists spend their days doing. :-)",
"title": ""
},
{
"docid": "257c70a9f954a96a7657e3761647efee",
"text": "Think carefully about the added expenses. It may still make sense, but it probably won't be as cheap as you are thinking. In addition to the mortgage and property taxes, there is also insurance and building maintenance and repairs. Appliances, carpets, and roofs need to be replaced periodically. Depending on the area of the country there is lawn maintenance and now removal. You need to make sure you can cover the expenses if you are without a tenant for 6 months or longer. When tenants change, there is usually some cleaning and painting that needs to be done. You can deduct the mortgage interest and property taxes on your part of the building. You need to claim any rent as income, but can deduct the other part of the mortgage interest and taxes as an expense. You can also deduct building maintenance and repairs on the rental portion of the building. Some improvements need to be depreciated over time (5-27 years). You also need to depreciate the cost of the rental portion of the building. This basically means that you get a deduction each year, but lower the cost basis of the building so you owe more capital gains taxes when you sell. If you do this, I would get a professional to do your taxes at least the first year. Its not hard once you see it done, but there are a lot of details and complications that you want to get right.",
"title": ""
},
{
"docid": "4f9cb22a348d006122b9c1cb093de2e7",
"text": "You can't compare the different quotes unless they have the same numbers to work with. The big companies should use similar models to come up with values for the contents. In many cases they will assume some standard values for things like appliances. Yes you have a stove, but unless it is commercial grade they won't care when giving you a quote. If you have very expensive items you may need a rider to cover them. There is not relationship between the county assessment and the cost to rebuild. The insurance doesn't cover the land. You have to make sure that all quotes include the same riders: cost to put you in a motel, flood insurance... and the same deductibles. Your state may have an insurance office that can help answer your question. Here is the one for Virginia.",
"title": ""
},
{
"docid": "5decb6a6d267bdd7e47d67861b736515",
"text": "The only card I've seen offer this on credit card purchases is Discover. I think they have a special deal with the stores so that the cash-over amount is not included in the percentage-fee the merchant pays. (The cash part shows up broken-out from the purchase amount on the statement--if this was purely something the store did on its own without some collaboration with Discover that would not happen). The first few times I've seen the offer, I assumed it would be treated like a cash-advance (high APR, immediate interest with no grace period, etc.), but it is not. It is treated like a purchase. You have no interest charge if you pay in full during the grace period, and no transaction fee. Now I very rarely go to the ATM. What is in it for Discover? They have a higher balance to charge you interest on if you ever fail to pay in full before the grace period. And Discover doesn't have any debit/pin option that I know of, so no concern of cannibalizing their other business. And happier customers. What is in it for the grocer? Happier customers, and they need to have the armored car come around less often and spend less time counting drawers internally.",
"title": ""
}
] |
fiqa
|
b6fcaf9cd49078416abea00dcdda39e3
|
What effect does a company's earnings have on the price of its stock?
|
[
{
"docid": "52d826b925842aa604e0b295fcd54608",
"text": "\"No, the stock market is not there for speculation on corporate memorabilia. At its base, it is there for investing in a business, the point of the investment being, of course, to make money. A (successful) business earns money, and that makes it valuable to its owners since that money can be distributed to them. Shares of stock are pieces of business ownership, and so are valuable. If you knew that the business would have profit of $10,000,000 every year, and would distribute that to the owners of each of its 10,000,000 shares each year, you would know to that each share would receive $1 each year. How much would such a share be worth to you? If you could instead put money in a bank and get 5% a year back, to get $1 a year back you would have to put $20 into the bank. So maybe that share of stock is worth about $20 to you. If somebody offers to sell you such a share for $18, you might buy it; for $23, maybe you pass up the offer. But business is uncertain, and how much profit the business will make is uncertain and will vary through time. So how much is a share of a real business worth? This is a much harder call, and people use many different ways to come up with how much they should pay for a share. Some people probably just think something like \"\"Apple is a good company making money, I'll buy a share at whatever price it is being offered at right now.\"\" Others look at every number available, build models of the company and the economy and the risks, all to estimate what a share might be worth, more or less. There is no indisputable value for a share of a successful business. So, what effect does a company's earnings have on the price of its stock? You can only say that for some of the people who might buy or sell shares, higher earnings will, all other thing being equal, have them be willing to spend more to buy it or demand more when selling it. But how much more is not quantifiable but depends on each person's approach to the problem. Higher earnings would tend to raise the price of the stock. Yet there are other factors, such as people who had expected even higher earnings, whose actions would tend to lower the price, and people who are OK with the earnings now, but suspect trouble for the business is appearing on the horizon, whose actions would also tend to lower the price. This is why people say that a stock's price is determined by supply and demand.\"",
"title": ""
},
{
"docid": "7604afb3ccde436812d42a15983537ec",
"text": "A common (and important) measure of a stock's value is the price/earnings ratio, so an increase in earnings will normally cause the stock price to increase. However, the price of the stock is based on a guess of the value of the company some time (6 months?) in the future. So an increase in earnings today probably makes a higher earnings more likely in the future, and puts upward pressure on the price of the stock. There are a lot of other factors in stock prices, such as publicity, dividends, revenue, trends, company stability, and company history. Earnings is a very important factor, but not the only factor determine the value (and so stock price) of a company.",
"title": ""
},
{
"docid": "649ef789d568c6c872bfffbf1b6f17af",
"text": "Your autograph analogy seems relevant to me. But it is not just speculation. In the long run, investing in stocks is like investing in the economy. In the long run, the economy is expected to grow , hence stock prices are expected to go up. Now in theory: the price of any financial instrument is equal to the net present value today of all the future cash flows from the instrument. So if company's earnings improve, shareholders hope that the earnings will trickle down to them either in form of dividends or in form of capital gain. So they buy the stock, creating demand for it. I can try to explain more if this did not make any sense. :)",
"title": ""
},
{
"docid": "cbe185e1d074f6ebf2fe638058bf87b2",
"text": "Market price of a stock typically trades in a range of Price/Earnings Ratio (P/E ratio). Or in other words, price of a stock = Earnings * P/E ratio Because of this direct proportionality of stock price with earnings, stock prices move in tandem with earnings.",
"title": ""
}
] |
[
{
"docid": "3fb7e228563796fa46d65b6918fe1cd1",
"text": "I have heard that people say the greater earning means greater intrinsic value of the company. Then, the stock price is largely based on the intrinsic value. So increasing intrinsic value due to increasing earning will lead to increasing stock price. Does this make sense ? Yes though it may be worth dissecting portions here. As a company generates earnings, it has various choices for what it can do with that money. It can distribute some to shareholders in the form of dividends or re-invest to generate more earnings. What you're discussing in the first part is those earnings that could be used to increase the perceived value of the company. However, there can be more than a few interpretations of how to compute a company's intrinsic value and this is how one can have opinions ranging from companies being overvalued to undervalued overall. Of Mines, Forests, and Impatience would be an article giving examples that make things a bit more complex. Consider how would you evaluate a mine, a forest or a farm where each gives a different structure to the cash flow? This could be useful in running the numbers here.",
"title": ""
},
{
"docid": "c1c2620e960c66a3465df030519f8644",
"text": "\"It is important to first understand that true causation of share price may not relate to historical correlation. Just like with scientific experiments, correlation does not imply causation. But we use stock price correlation to attempt to infer causation, where it is reasonable to do so. And to do that you need to understand that prices change for many reasons; some company specific, some industry specific, some market specific. Companies in the same industry may correlate when that industry goes up or down; companies with the same market may correlate when that market goes up or down. In general, in most industries, it is reasonable to assume that competitor companies have stocks which strongly correlate (positively) with each-other to the extent that they do the same thing. For a simple example, consider three resource companies: \"\"Oil Ltd.\"\" [100% of its assets relate to Oil]; \"\"Oil and Iron Inc.\"\" [50% of its value relates to Oil, 50% to Iron]; and \"\"Iron and Copper Ltd.\"\" [50% of its value relates to Iron, 50% to Copper]. For each of these companies, there are many things which affect value, but one could naively simplify things by saying \"\"value of a resource company is defined by the expected future volume of goods mined/drilled * the expected resource price, less all fixed and variable costs\"\". So, one major thing that impacts resource companies is simply the current & projected price of those resources. This means that if the price of Oil goes up or down, it will partially affect the value of the two Oil companies above - but how much it affects each company will depend on the volume of Oil it drills, and the timeline that it expects to get that Oil. For example, maybe Oil and Iron Ltd. has no currently producing Oil rigs, but it has just made massive investments which expect to drill Oil in 2 years - and the market expects Oil prices to return to a high value in 2 years. In that case, a drop in Oil would impact Oil Inc. severely, but perhaps it wouldn't impact Oil and Iron Ltd. as much. In this case, for the particular share price movement related to the price of Oil, the two companies would not be correlated. Iron and Copper Ltd. would be unaffected by the price of Oil [this is a simplification; Oil prices impact many areas of the economy], and therefore there would be no correlation at all between this company's shares. It is also likely that competitors face similar markets. If consumer spending goes down, then perhaps the stock of most consumer product companies would go down as well. There would be outliers, because specific companies may still succeed in a falling market, but in generally, there would be a lot of correlation between two companies with the same market. In the case that you list, Sony vs Samsung, there would be some factors that correlate positively, and some that correlate negatively. A clean example would be Blackberry stock vs Apple stock - because Apple's success had specifically negative ramifications for Blackberry. And yet, other tech company competitors also succeeded in the same time period, meaning they did not correlate negatively with Apple.\"",
"title": ""
},
{
"docid": "bbc616ead23979dbfb6b2f964398e6d1",
"text": "In order: A seller of the stock (duh!). You don't know who or why this stock was sold. It could be any reason, and is of no concern of yours. It doesn't matter. Investors (pension funds, hedge funds, individual investors, employees, management) sell stock for many reasons: need cash, litigation, differing objectives, sector rotation, etc. To you, this does not matter. Yes, it does affect stock market prices: If you were not willing to buy that amount of shares, and there were no other buyers at that price, the seller would likely choose to lower the price offered. By your purchase, you are supporting the price.",
"title": ""
},
{
"docid": "e0032eafca184fb6973d7d72b2f60f85",
"text": "If you believe in the efficient market hypothesis then the stock price reflects the information known to market participants. Consequently, if the 'market' expected earnings to rise, and they did, then the price won't change. Clearly there are circumstances, especially in the short term and for illiquid stocks, where this isn't true, but a lot of work points to this being the case on average.",
"title": ""
},
{
"docid": "fc1bf4de61c4935ba16ddaa14ac96f2f",
"text": "according to me it's the news about a particular stock which makes people to buy or sell it mostly thus creates a fluctuation in price . It also dependents on the major stock holder.",
"title": ""
},
{
"docid": "c6cb4a956263e8a41ee3791e633b372f",
"text": "Would you consider the owner of a company to be supporting the company? If you buy stock in the company you own a small part of that company. Your purchase also increases the share price, and thus the value of the company. Increased value allows the company to borrow more money to say expand operations. The affect that most individuals might have on share price is very very small. That doesn't mean it isn't the right thing for you to do if it is something you believe in. After all if enough people followed those same convictions it could have an impact on the company.",
"title": ""
},
{
"docid": "bd59a0d6be04b9e7ff8cc04436d98108",
"text": "\"What does it mean in terms of share price? Should the share price increase by 15 cents? No, but you're on the right track. In theory, the price of a share reflects it's \"\"share\"\" of time discounted future earnings. To put it concretely, imagine a company consistently earning 15 cents a share every year and paying it all out as dividends. If you only paid 25 cents for it, you could earn five cents a share by just holding it for two years. If you imagine that stocks are priced assuming a holding period of 20 years or so, so we'd expect the stock to cost less than 3 dollars. More accurately, the share price reflects expected future earnings. If everyone is assuming this company is growing earnings every quarter, an announcement will only confirm information people have already been trading based on. So if this 15 cents announcement is a surprise, then we'd expect the stock price to rise as a function of both the \"\"surprise\"\" in earnings, and how long we expect them to stay at this new profitability level before competition claws their earnings away. Concretely, if 5 cents a share of that announcement were \"\"earnings surprise,\"\" you'd expect it to rise somewhere around a dollar.\"",
"title": ""
},
{
"docid": "2179472f1459f1f7ec70b6aac3a9d3be",
"text": "You are right that Facebook really doesn't get impacted as they got their $38. However it would make it slightly more difficult for Facebook to raise more money in future as large investors would be more cautious. This can keep the price lowers than it actually needs to be. Quite a few companies try to list the IPO at lower price so that it keeps going up and have more positive effect overall there by making it easier for future borrowings. See related question Why would a company care about the price of its own shares in the stock market?",
"title": ""
},
{
"docid": "a025d389c97e33531f1be1392b2444c3",
"text": "\"When you buy a stock, you're really paying for a STREAM of earnings, from now till whenever. The job of an investor is to figure out how large that stream will be in the future. But if the stock price were the same as \"\"earnings\"\" (for one year), it would mean that you would get all future earnings for \"\"free.\"\" That's not likely to happen unless 1) the company is in liquidation,\"\" meaning \"\"no future\"\" and 2) it earned ALL of the money it ever earned in the past year, meaning \"\"no past.\"\" If there are likely to be any earnings in the future, you will have to pay for those future earnings, over and above what was earned in the most recent year.\"",
"title": ""
},
{
"docid": "d5607bef00056a09a17bce283bef755b",
"text": "Here are some significant factors affect the company stock price performance: Usually, profitability is known to the public through the financial statements; it won't be 100% accurate and people would also trade the stock with the price not matching to the true value of the firm. Still there are dozens of other various reasons exist. People are just not behaving as rational as what the textbook describes when they are trading and investing.",
"title": ""
},
{
"docid": "afc87e138f5ad7836364c72b04e864f2",
"text": "News about a company is not the only thing that affects its stock's price. There is also supply and demand. That, of course, is influenced by news, but it is not the only actor. An insider, with a large position in their company's stock, may want to diversify his overall portfolio and thus need to sell a large amount of stock. That may be significant enough to increase supply and likely reduce the stock's price somewhat. That brings me to another influence on stock price: perception. Executives, and other insiders with large positions in their company's stock, have to be careful about how and when they sell some of that stock as to not worry the markets. Many investors watch insider selling to gauge the health of the company. Which brings me to another important point. There are many things that may be considered news which is material to a certain company and its stock. It is not just quarterly filings, earnings reports and such. There is also news related to competitors, news about the economy or a certain sector, news about some weather event that affects a major supplier, news about a major earthquake that will impact the economy of a nation which can then have knock-on effects to other economies, etc... There are also a lot of investors with varying needs which will influence supply and demand. An institutional investor, needing to diversify, may reduce their position in a stock and thus increase supply enough that it impacts the stock's price. Meanwhile, individual investors will make their transactions at varying times during the day. In the aggregate, that may have significant impacts on supply and demand. The overall point being that there are a lot of inputs and a lot of actors in a complicated system. Even if you focus just on news, there are many things that fall into that category. News does not come out at regular intervals and it does not necessarily spread evenly. That alone could make for a highly variable environment.",
"title": ""
},
{
"docid": "0620cbca97d934750faaf78e76922855",
"text": "Aside from the market implications Victor and JB King mention, another possible reason is the dividends they pay. Usually, the dividends a company pays are dependent on the profit the company made. if a company makes less profit, the dividends turn out smaller. This might incite unrest among the shareholders, because this means that they get paid less dividends, which makes that share more likely to be sold, and thus for the price to fall.",
"title": ""
},
{
"docid": "ba22f2742f109ebad589fa5564b85d94",
"text": "1) What's the point of paying a dividend if the stock price automatically decreases? Don't the shareholders just break even? When the company earns cash beyond what is needed for expenses, the value of the firm increases. As a shareholder, you own a piece of that increased value as soon as the company earns it. When the dividend is paid, the value of the firm decreases, but you break even on the dividend transaction. The benefit to you in holding the company's shares is the continually increasing value, whether paid out to you, or retained. Be careful not to confuse the value of the firm with the stock price. The stock price is ever-changing, in the short-term driven mostly by investor emotion. Over the long term, by far the largest effect on stock price is earnings. Take an extreme, and simplistic example. The company never grows or shrinks, earnings are always the same, there is no inflation :) , and they pay everything out in dividends. By the reasoning above, the firm value never changes, so over the long-term the stock price will never change, but you still get your quarterly dividends.",
"title": ""
},
{
"docid": "fcba21aa3c74e9db304b5f7ec2423be7",
"text": "It is unlikely that buying 100 shares will have any effect on a stock's price, unless the stock's average trading volume is incredibly low. That being said, no matter how many share you buy, there's no way to know what the impact on the price will be, because that's only one factor in how shares are priced. If anyone could figure out the answer to your question then they'd be extremely rich, because they'd simply watch for big share trades and then buy those stocks on the way up. The market makers who actually execute the trades are the ones who set the prices, and most stocks have multiple market makers trading the stock, so the bid/ask you see is the highest bid and lowest ask. The market makers set the price based on what the trend of the stock is. If, for instance, there's a large number of sell orders against a stock, the market makers will start dropping the bid prices as they fill execution orders, and as they see buy orders increase, they'll raise ask prices as they fill execution orders. The market makers earn the difference between what they paid to buy someone's stock who was selling and what they get from someone else who buys it. This is a simplified explanation, so pro traders, don't beat me up! (grin) So, basically, it takes quite a bit of share volume in one direction or another to affect a stock's price. I can guarantee a 100-share trade wouldn't even be noticed by market makers. I hope this helps. Good luck!",
"title": ""
},
{
"docid": "ed0f4a15ea7b5f4c0e208feb408df841",
"text": "\"I have some experience with this. I have had fraudulent charges appear on my credit card statement and had to change my card number several times, despite (I believe) no carelessness on my part. Every time that this has happened, I have never lost a penny due to fraud on my credit card. The bank has ultimately removed the fraudulent charges in every instance. Given this, you'd think the consumer doesn't need to worry about this at all. But it seems like credit card companies beg to differ. Yes, because although I have never lost a penny to fraud, the bank (or the merchant) loses money every time it happens. The $0 liability protects you; the card security measures protect the bank. But... why should a consumer ever bother worrying about these in the first place, when he knows he legally can't be held responsible for fraudulent charges? What exactly is this new \"\"peace of mind\"\" that he supposedly gets by (say) using features like virtual account numbers that he doesn't already have? Although you shouldn't end up out any money when this happens, it is an inconvenience. The bank will cancel your card and issue you a new number. It may take a few days for you to receive your new card. If you have another card to use, this isn't a big deal. If you are out of state the day before you need to check out of a hotel and return a rental car with no backup credit card (as I have been), it is a big deal. (In my case, I had to have the credit card company talk to the hotel to give them the new card number, and they were able to overnight me a new credit card so I could get home. I now make sure I carry a backup credit card.) Should a consumer put any effort into worrying about this at all? (Why?) In my opinion, it makes sense to be careful what you do with your credit card number, if only to avoid the inconvenience. Don't type your credit card number into an e-mail message, for example, and only use it on websites that you trust. That having been said, it is not worth it to be paranoid about it, either. No matter how careful you are, eventually you will probably use it at a store that gets hacked, or your card will get skimmed somewhere, and you'll need to get a new credit card number. The best way to protect yourself is to make sure that you go over your credit card statement each month and look for any fraudulent charges that the bank didn't catch.\"",
"title": ""
}
] |
fiqa
|
e344141b9737a0bfd9f734e100733b60
|
What types of receipts do I need to keep for itemized tax deductions?
|
[
{
"docid": "1071e7137d3521bb67f4701cdadd93d3",
"text": "\"I would say to only bother keeping the ones you know you'll use for itemized deductions. This includes any unreimbursed business expenses and vehicle licensing fees. There are a lot of other itemized tax deductions possible, but those are two common ones. Also, keep track of your business mileage (mileage before and after the trip, and commuting doesn't count as \"\"business mileage\"\"). You may also want to keep receipts of all out-of-state purchases if your state is one of those that tries to collect state tax on out-of-state purchases. Ensure your supported charities are 501(c)(3), and they'll give you a receipt at the end of the year. Don't bother keeping fast food or gas receipts (unless they're business expenses).\"",
"title": ""
},
{
"docid": "cab14cff8db3d4a0821bc301a700ba4b",
"text": "I err on the side of saving all of mine for a while. Just toss them in a box at least. A years' worth is about the size of a shoebox. I started doing this because one year, about a week after I tossed my receipts for the year, I realized that I had a fair bit of allotment left on my flexible savings account to use up. I could have used those to substantiate over-the-counter medicines I purchased. Even if you don't use them for tax purposes, you can use them for budget-tracking purposes.",
"title": ""
},
{
"docid": "d69a4e4466093ccea9e763adb6374aa4",
"text": "Businesses are only required to keep receipts over $751. However for individuals, I would throw them all in a shoebox and not worry about organizing them. There's a small chance you'll need to go through them during an audit, and you can worry about reconciling all of them and putting them in order at that point. Just write 2010 on the box and keep it somewhere easy, and at the end of the year throw it in your basement (or get a scanner, and scan and trash the original).",
"title": ""
}
] |
[
{
"docid": "6a1dba7c884abf417ef6c4dc0a2bedd7",
"text": "You need receipts only if you claim deductions in the itemized deductions section based on them. You itemize deductions only if your claims exceed the standard deduction (which for a single person was $5,800 last year). Even then, you need receipts for everything only if you claim sales tax as the deduction (you have to buy really a lot to pass $5K with sales tax...). I would expect people to pay more in state income taxes than sales taxes (you can claim either this or that, not both). For food - there are no taxes (at least here in California), so nothing to deduct anyway. In any case, you can always scan your receipts and keep them in the computer, for just in case, but IMHO it's waste of time, pixels and gigabytes. Here's a question which deals with the same issue, read the answers there as well.",
"title": ""
},
{
"docid": "26934933debfc980c3627ccfc5be78e7",
"text": "\"Worksheets/ Documentation: (From my experience filing my business deductions through several tax preparers.) Keep all your calculations, but only submit the calculations and worksheets requested by the tax form. Most travel deductions are just a category total. If the IRS wants more info, it will ask for it. Information from the book Home Business Tax Deductions (from Nolo) (2012): Traveling with kids: In chapter 9 (\"\"Leaving Town: Business Travel\"\"), in the section \"\"Taking People With You\"\", it specifically discusses your situation. Paraphrasing, it says that you can deduct the amount any eligible expenses would have cost you if you were traveling without your kids. So, you can deduct the cost the smaller hotel room that you and your wife would have normally rented if you were alone. How your side trips affect your business deductions: According to the book, since you spent 50% or more of your time on business activities while traveling in the U.S.: Deducting meals shared with your kids: You can deduct meals as either entertainment or travel expenses. I would recommend you buy one of Nolo's books on deductions, as it goes into much more detail than I do here.\"",
"title": ""
},
{
"docid": "3d256f5131dfbb00d5117bc0e6e9af62",
"text": "You don't need to keep receipts for most things, and if you are not going to itemize your deductions (which as a college student, you probably won't), you need even fewer. Things that you should always keep: If you are itemizing your deductions, you want to keep receipts for anything that you can itemize. Some common things are: Another thing that you should do, but few people do, is keep track of your online purchases, since many states require you to pay sales tax on those purchases. Of course, the state has no way of knowing what you buy online, so it is all done on the honor system.",
"title": ""
},
{
"docid": "fdd6c32e18b0abef55a3c97c273f8daa",
"text": "Scanned or electronic copies of invoices should be sufficient as long as they are accurate and you can deliver them during an audit. Also, if you have an accountant prepare your taxes you would either need to provide them a copy of the invoices or a summary of them with the corresponding amounts to be claimed. Personally I prefer to print out a paper copy and file that away with that quarter's and year's other tax documents. I do my own taxes and find paper copies handy as I can go through each invoice/receipt and make sure I have entered its information by ticking it. I find that when handling a large number of documents that paper copies are more easy to handle than electronic ones. In the end you will need to use a system that you feel comfortable with and are able to use effectively.",
"title": ""
},
{
"docid": "bacbe17f21b09d058f277e0c87cc31a0",
"text": "Keep this rather corny acronym in mind. Business expenses must be CORN: As other posters have already pointed out, certain expenses that are capital items (computers, furniture, etc.) must be depreciated over several years, but you have a certain amount of capital items that you can write off in the current tax year.",
"title": ""
},
{
"docid": "d072016a2ccc2726e7b3018546b815db",
"text": "I'd imagine you want to keep the utility bills around to dispute any historical billing errors or anomalies for perhaps 6 months to a year. Beyond that, you always have the financial records of making the payments -- namely, your bank statements. So what benefit is there in keeping the paper receipts for utility payments around for longer than that? I say shred them, with extreme prejudice -- while wearing black Chuck Norris style.",
"title": ""
},
{
"docid": "3eb73a2ca9245aa95108c276f11d1f16",
"text": "In a nutshell, throwing your taxable income in the trash does not remove it from your taxable income; you still have to report in your tax filing, and pay taxes as needed. Especially as you could at any time request your employer to write you a replacement check. I would expect them to start charging a fee for reprinting if you really annoy them by doing it dozens of times. If you want to avoid taxes on it, donate it to a deductible 501(c)3 organization; then it becomes neutral to your taxes.",
"title": ""
},
{
"docid": "a99219ec5f173dad91f95b2103fdc1f1",
"text": "Get the worker put it in writing, and deduct it in December under constructive receipt rules. The fact that you're getting the actual cash in January isn't significant as long as you've secured the payment. Verify this with a tax adviser, but that's what I would do.",
"title": ""
},
{
"docid": "e5d3f0e0a1b880afa3dcb267594e6ea3",
"text": "Assuming the US, if a human assessor audited you, could you show a future profit motive or will they conclude you are expensing a hobby? If you answer yes, you are likely to only be deducting limited expenses this year, carrying forward losses to your profitable years. See the examples in pub 535: http://www.irs.gov/publications/p535/ch01.html#en_US_2014_publink1000208633",
"title": ""
},
{
"docid": "fe1c89ef591b8aaab74acd45d7d69c0f",
"text": "\"Yes you can add it there. You can also add it to the \"\"gross receipt line\"\". Note that you do not have to list where it came from, just the total.\"",
"title": ""
},
{
"docid": "fd27658674e7d86ccf10bc37cd400f6c",
"text": "\"I can say that I got X dollars from an account like \"\"Income:Benefits\"\"... but where do I credit that money to? \"\"Expenses:Groceries\"\" Yes doesn't feel right, since I never actually spent that money on food, You did, didn't you? You got food. I'm guessing there's an established convention for this already? Doubt it. Established conventions in accounting are for businesses, and more specifically - public companies. So you can find a GAAP, or IFRS guidelines on how to book benefits (hint: salary expense), but it is not something you may find useful in your own household accounting. Do what is most convenient for you. Since it is a double-booking system - you need to have an account on the other side. Expenses:Groceries doesn't feel right? Add Expenses:Groceries:Benefits or Expenses:Benefits or whatever. When you do your expense and cash-flow reports - you can exclude both the income and the expense benefits accounts if you track them separately, so that they don't affect your tracking of the \"\"real\"\" expenses.\"",
"title": ""
},
{
"docid": "b941ec8a64dd8a7efd3690dab33cd768",
"text": "Try the following apps/services: Receipt Bank (paid service, gathers paper receipts, scans them and processes the data), I've tested it, and it recognizing receipts very well, taking picture is very quick and easy, then you can upload the expenses into your accounting software by a click or automatically (e.g. FreeAgent), however the service it's a bit expensive. They've apps for Android and iPhone. Expentory (app and cloud-based service for capturing expense receipts on the move),",
"title": ""
},
{
"docid": "57ecc3cc87544cb382c000d2dd1e6e58",
"text": "One piece of documentation that might help here is a confirmation of your benefit selections through your employer for each year since the expenses in question were incurred, assuming you have a job with eligibility for benefits. If you can prove which accounts you maintained through your/your spouse's (if applicable) employer(s), then it is relatively simple to go back through the records for those specific accounts and see if a specific expense was ever reimbursed. Obviously, you can't prove through documentation that you didn't have accounts that don't exist. This seems like it would be more important for the accounts elected by a significant other, since I believe reimbursements from an account in your name would typically be reported to the IRS on your behalf anyway. Also, keep in mind that the IRS won't care about each line item individually. Their focus will be on whether, for any given snapshot in time, your total reimbursed amount exceeded your total eligible expenses.",
"title": ""
},
{
"docid": "3a00d5959b32ca0bc12b319ae14ed2da",
"text": "IRS pub 521 has all the information you need. Expenses reimbursed. If you are reimbursed for your expenses and you use the cash method of accounting, you can deduct your expenses either in the year you paid them or in the year you received the reimbursement. If you use the cash method of accounting, you can choose to deduct the expenses in the year you are reimbursed even though you paid the expenses in a different year. See Choosing when to deduct, next. If you deduct your expenses and you receive the reimbursement in a later year, you must include the reimbursement in your income on Form 1040, line 21 This is not unusual. Anybody who moves near the end of the year can have this problem. The 39 week time test also can be an issue that span over 2 tax years. I would take the deduction for the expenses as soon a I could, and then count the income in the later year if they pay me back. IF they do so before April 15th, then I would put them on the same tax form to make things easier.",
"title": ""
},
{
"docid": "2ec447312a423d5378550f6d87afb5a5",
"text": "\"To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary. (IRS, Deducting Business Expenses) It seems to me you'd have a hard time convincing an auditor that this is the case. Since business don't commonly own cars for the sole purpose of housing $25 computers, you'd have trouble with the \"\"ordinary\"\" test. And since there are lots of other ways to house a computer other than a car, \"\"necessary\"\" seems problematic also.\"",
"title": ""
}
] |
fiqa
|
3c165a6c5be71f8d1fbb65733ee7de20
|
Are COBRA premiums deductible when self-employed?
|
[
{
"docid": "d01e5ab3e2a2e71647553aba2f36df54",
"text": "\"The basic idea is that the average person can't deduct health care costs unless they're really onerous. But a business can, and as a self-employed person, you can deduct those costs from the businesses earnings... as long as the business is really generating enough profit to cover the health insurance costs. That's why most people get their health insurance from their employer, actually. The relevant IRS rules say: \"\"You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for you, your spouse, and your dependents if you are... A self-employed individual with a net profit reported on Schedule C (Form 1040).\"\" For 2010, thanks to the Small Business Jobs Act of 2010, you can even deduct the premium from your income before deducting the self-employment tax (Source). I'm sure that when you get your tax returns and instructions for 2010 this will all be spelled out.\"",
"title": ""
},
{
"docid": "b29218638d78e9b10227d3fdda3655af",
"text": "\"I am very late to this forum and post - but will just respond that I am a sole proprietor, who was just audited by the IRS for 2009, and this is one of the items that they disallowed. My husband lost his job in 2008, I was unable to get health insurance on my own due to pre-existing ( not) conditions and so we had to stay on the Cobra system. None of the cost was funded by the employer and so I took it as a SE HI deduction on Line 29. It was disallowed and unfortunately, due to AGI limits, I get nothing by taking it on Sch. A. The auditor made it very clear that if the plan was not in my name, or the company's name, I could not take the deduction above the line. In his words, \"\"it's not fair, but it is the law!\"\"\"",
"title": ""
},
{
"docid": "6aef669b02f60c86f1b9516ea890b1e2",
"text": "http://www.ehow.com/about_4625753_cobra-as-selfemployed-health-insurance.html This link makes it clear... it has to be itemized, and is subject to the > than 7.5% AGI rule.",
"title": ""
},
{
"docid": "43d8d5aeef6f0b30ac31ccb5f3b6bdd2",
"text": "When you take the self employed health care deduction on on Line 29 of form 1040 for 2010 it also will lower your self employment tax. See line 3 of Schedule SE. You report your net earnings from self employment less line 29 from 1040.",
"title": ""
},
{
"docid": "f0a4ee5d36563070fdd99129bf077a2e",
"text": "COBRA premiums are not deductible on 1040 line 29; to qualify, the IRS says the insurance plan must be in your name (COBRA is in your former employer's name). H&R Block confirms this.",
"title": ""
},
{
"docid": "8b8d28b5cc468191072149c2e1c9c59f",
"text": "Here is a quote from the IRS website on this topic: You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. The insurance can also cover your child who was under age 27 at the end of 2011, even if the child was not your dependent. A child includes your son, daughter, stepchild, adopted child, or foster child. A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. One of the following statements must be true. You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ (Form 1040), Net Profit From Business; or Schedule F (Form 1040), Profit or Loss From Farming. You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., box 14, code A. You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2, Wage and Tax Statement. The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business. For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual. For partners, a policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business. Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. If you previously filed returns without using Medicare premiums to figure the deduction, you can file timely amended returns to refigure the deduction. For more information, see Form 1040X, Amended U.S. Individual Income Tax Return. Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction. Take the deduction on Form 1040, line 29.",
"title": ""
}
] |
[
{
"docid": "e732da138b264cabdd06ac9aed37229b",
"text": "The answer seems to depend on where you live. Perhaps you already found this, but the summary from the IRS is: The insurance laws in some states do not allow a corporation to purchase group health insurance when the corporation only has one employee. Therefore, if the shareholder was the sole corporate employee, the shareholder had to purchase his health insurance in his own name. The IRS issued Notice 2008-1, which ruled that under certain situations the shareholder would be allowed an above-the-line deduction even if the health insurance policy was purchased in the name of the shareholder. Notice 2008-1 provided four examples, including three examples in which the shareholder purchased the health insurance and one in which the S corporation purchased the health insurance. Notice 2008-1 states that if the shareholder purchased the health insurance in his own name and paid for it with his own funds, the shareholder would not be allowed an above-the-line deduction. On the other hand, if the shareholder purchased the health insurance in his own name but the S corporation either directly paid for the health insurance or reimbursed the shareholder for the health insurance and also included the premium payment in the shareholder’s W-2, the shareholder would be allowed an above-the-line deduction. The bottom line is that in order for a shareholder to claim an above-the-line deduction, the health insurance premiums must ultimately be paid by the S corporation and must be reported as taxable compensation in the shareholder’s W-2. https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/S-Corporation-Compensation-and-Medical-Insurance-Issues I understand this to mean that you can only get the deduction in your case (having purchased it in your own name) if your state does not allow your S-Corp to purchase a group health plan because you only have one employee. (I don't know specifically if Illinois fits that description or not.) In addition, there are rules about reporting health insurance premiums for taxes for S-Corp share members that you should also check. Personally, I think that it's complicated enough that advice from a CPA or other tax advisor specific to your situation would be worth the cost.",
"title": ""
},
{
"docid": "867d8dc36d1c80a61233c54680799899",
"text": "COBRA provides you the option to continue your coverage as you had during your employment, after you leave your job. It is optional, you need to actively elect it. Once you elect, coverage starts from the day your employment coverage ends. So to answer your questions: Yes, it is legal. You elected this yourself, no-one forced you. You cannot get your money back. You did have coverage in June-July-August, since your COBRA election provided coverage from the date you left your job. As to cancellation, from the DOL FAQ: Q12: Can continuation coverage be terminated early for any reason? A group health plan may terminate coverage earlier than the end of the maximum period for any of the following reasons: If continuation coverage is terminated early, the plan must provide the qualified beneficiary with an early termination notice. The notice must be given as soon as practicable after the decision is made, and it must describe the date coverage will terminate, the reason for termination, and any rights the qualified beneficiary may have under the plan or applicable law to elect alternative group or individual coverage. If you decide to terminate your COBRA coverage early, you generally won't be able to get a Marketplace plan outside of the open enrollment period. For more information on alternatives to COBRA coverage, see question 4 above.",
"title": ""
},
{
"docid": "a69c7e92def07fbbe42864b0f06baa28",
"text": "The idea is that the premiums (or costs) associated with the plan are a business expense, you know that already. The distinction here is that employees don't pay premiums, they elect to contribute. The company sponsors a plan, the employees then choose to accept less salary in order to participate in the employer's plan. The idea is that you're foregoing income. Why is the employee not taxed on this cost? One major reason is that the employee has no say in, and often no idea, what the gross costs are (some find out if they ever receive COBRA election paperwork). There are more benefits than strict healthcare that are Section 125 eligible. The government has a vested interest in keeping the population healthy, and when the ERISA laws and Section 125 were written it was (and still is) a pretty low friction way to get health insurance out to more people. At this point, taking away the tax break from the employees would be a huge government take away from most of the population. Try to get a politician to take something away from taxpayers. Why doesn't the deduction exist in kind to people buying individual coverage? Ask your legislators. There are thousands of preferential tax treatment oddities, where some industry will get some sort of benefit or break. I'm not sure what leads you to think there needs to be some supremely logical reason for this oddity to exit.",
"title": ""
},
{
"docid": "36e19fdc2325928f5b1f1e29b9373bd8",
"text": "IRS Publication 529 is the go-to document. Without being a tax professional, I'd say if the dues and subscriptions help you in the running of your business, then they're deductible. You're on your own if you take my advice (or don't). ;)",
"title": ""
},
{
"docid": "b09b1f94fb03bd10155b889cd8f16b08",
"text": "\"To claim medical expenses on your taxes they need to exceed 7.5% of your AGI, and then only the amount over 7.5% is deductible. That's not much. There is no \"\"floor\"\" if you use an FSA as it's all pre-tax. If you're concerned about use or lose, then allot less next year. It's all what you're comfortable with.\"",
"title": ""
},
{
"docid": "d0bba311907cbc65150a7ac3bd06d576",
"text": "No not deductible. But - If you work more than one job, you run the risk of having too much SS withheld. Each employer doesn't know what the others pays you. Tax time reconciles this. And much thanks to Dilip for the following clarification - Not only does each employer not know what the others pays you, but even if you tell him, he will not care. He is required to withhold Social Security tax on the wages he pays you (and send in an equal amount as his contribution) regardless of what anyone else pays you. If the sum of your taxable wages from all employers exceed the maximum wages subject to Social Security, the excess withholding is credited towards the income tax due (and thus reduces the amount to be paid or increases the refund you are owed) but the employer's (excess) contribution that he sent in is not returned to him..... Also, there is no such things as excess Medicare tax having been withheld because there is no maximum wage beyond which Medicare tax does not apply.",
"title": ""
},
{
"docid": "ab60ff3d34ff776f877eb92c0f2a2706",
"text": "\"This is an unfortunate situation for you. You have zero chance at your question number 1, if someone was going to bend this rule for you it would have happened already. The answer to question number 2 is pursue solution number 3. The overriding issue is that the IRS makes these rules, not the employer/plan sponsor or the administrator. You can't talk the plan administrator in to reimbursing you, their system likely doesn't even have a function to do so. FSA timing issues can be complex and I think that's the root of your issue because when an expense can be incurred (date of service versus date of payment) and when a claim must be filed are different things. It's really common to bend the rules on when a claim is submitted, but not when it was incurred. It's really common for an exiting employee to have 30 days to submit expenses for reimbursement. FSA expenses must always be incurred within the specified plan year, or within your dates of employment if you weren't employed for the entire plan year, this is specified by the IRS. It seems like some wires were crossed when you asked this question. You were asking \"\"can I still incur claims\"\" and they were hearing \"\"how long do I have to submit an expense that has already been incurred.\"\" Some plans allow COBRA continuation on FSA which generally does not make sense. Your contributions to the plan would use after tax dollars but for folks who know they have an eligible expense coming it can make sense to continue via COBRA in retain your eligibility under the plan so you can incur a claim after your employment termination. Regarding number 3. This sort of reimbursement would be outside the plan, no precedent is necessary. You've gotten them to claim it was their mistake, they're going to reimburse you for their mistake, it has nothing to do with the FSA. Good luck.\"",
"title": ""
},
{
"docid": "4c90a79aa4eaf29fbb8947a4296a3b5a",
"text": "It depends on the finances involved, but particularly if you're not billing anything right now and may have no revenue this year, it's probably a good idea to bill his company. This is in part because some deductions or other tax treatments are only allowed if you have revenue and/or income. The biggest example I can think of is the Solo 401k - you can only contribute up to your self employed income. If you're planning to contribute to one (and you should, they're amazingly powerful tools for saving for retirement and for reducing your tax burden), you will have to have some revenue in order to have something to pay yourself with. I don't believe you have to charge him, though, if it makes more tax sense not to (for example, if his business is operating at a loss and cannot benefit from expensing it, but you'd then have to pay taxes on your own income from it).",
"title": ""
},
{
"docid": "ed29c570eae7fb018586b19dfcde1b80",
"text": "\"This is really unfortunate. In general you can't back date individual policies. You could have (if it was available to you) elected to extend your employer's coverage via COBRA for the month of May, and possibly June depending on when your application was submitted, then let the individual coverage take over when it became effective. Groups have some latitude to retroactively cover and terminate employees but that's not an option in the world of individual coverage, the carriers are very strict about submission deadlines for specific effective dates. This is one of the very few ways that carriers are able to say \"\"no\"\" within the bounds of the ACA. You submit an application, you are assigned an effective date based on the date your application was received and subsequently approved. It has nothing to do with how much money you send them or whether or not you told them to back date your application. If someone at the New York exchange told you you could have a retroactive effective date they shouldn't have. Many providers have financial hardship programs. You should talk to the ER hospital and see what might be available to you. The insurer is likely out of the equation though if the dates of service occurred before your policy was effective. Regarding your 6th paragraph regarding having paid the premium. In this day and age carriers can only say \"\"no\"\" via administrative means. They set extremely rigid effective dates based on your application date. They will absolutely cancel you if you miss a payment. If you get money to them but it was after the grace period date (even by one minute) they will not reinstate you. If you're cancelled you must submit a new application which will create a new coverage gap. You pay a few hundred dollars each month to insure infinity risk, you absolutely have to cover your administrative bases because it's the only way a carrier can say \"\"no\"\" anymore so they cling to it.\"",
"title": ""
},
{
"docid": "af94bde04c5e56fce68e17efd75ae0cc",
"text": "The short answer is yes you probably can take the deduction for a home office because the space is used exclusively and you are working there for the convenience of your employer if you don't have a desk at your employers office. The long answer is that it may not be worth it to take the home office deduction as an employee. You're deduction is subject to a 2% AGI floor. You can only deduct a percentage of your rent or the depreciation on your home. A quick and dirty example if you make $75k/year, rent a 1200 sqft 2 bedroom apartment for $1000/month and use one bedroom (120 sqft) regularly and exclusively for your employer. You can deduct 10% (120sqft/1200sqft) of the $12000 ($1000*12 months (assumes your situation didn't change)) in rent or $1200. However because you are an employee you are subject to the 2% AGI floor so you can deduct $1200-$1500 (75000*.02 (salary * 2% floor)) = -300 so in order to deduct the first dollar you need an additional $300 worth of deductible expenses. Depending on your situation it may or may not be worth it to take the home office deduction even if you qualify for it.",
"title": ""
},
{
"docid": "3772f20a1d02c1a4ae8fc6aef9e9d331",
"text": "\"You can deduct what you pay for your own and your family's health insurance regardless of whether it is subsidized by your employer or not, as well as all other medical and dental expenses for your family, as an itemized deduction on Schedule A of Form 1040, but only to the extent that the total exceeds 7.5% of your Adjusted Gross Income (AGI) (10% on tax returns for year 2013 onwards). As pointed out in KeithB's comment, you cannot deduct any health insurance premium (or other medical expense) that was paid for out of pre-tax dollars, nor indeed can you deduct any medical expense to the extent that it was paid for by the insurance company directly to hospital or doctor (or reimbursed to you) for a covered expense; e.g. if the insurance company reimbursed you $72 for a claim for a doctor's visit for which you paid $100 to the doctor, only $28 goes on Schedule A to be added to the amount that you will be comparing to the 7.5% of AGI threshold, and the $72 is not income to you that needs to be reported on Form 1040. Depending on other items on Schedule A, your total itemized deductions might not exceed the standard deduction, in which case you will likely choose to use the standard deduction. In this case, you \"\"lose\"\" the deduction for medical expenses as well as all other expenses deductible on Schedule A. Summary of some of the discussions in the comments Health care insurance premiums cannot be paid for from HSA accounts (IRS Pub 969, page 8, column 2, near the bottom) though there are some exceptions. Nor can health care insurance premiums be paid from an FSA account (IRS Pub 969, page 17, column 1, near the top). If you have a business on the side and file a Schedule C as a self-employed person, you can buy medical insurance for that business's employees (and their families too, if you like) as an employment benefit, and pay for it out of the income of the Schedule C business, (thus saving on taxes). But be aware that if you have employees other than yourself in the side business, they would need to be covered by the same policy too. You can even decide to pay all medical expenses of your employees and their families too (no 7.5% limitation there!) as an employment benefit but again, you cannot discriminate against other employees (if any) of the Schedule C business in this matter. Of course, all this money that reduced your Schedule C income does not go on Schedule A at all. If your employer permits your family to be covered under its health insurance plan (for a cost, of course), check whether you are allowed to pay for the insurance with pre-tax dollars. The private (non-Schedule C) insurance would, of course, be paid for with post-tax dollars. I would doubt that you would be able to save enough money on taxes to make up the difference between $1330/month and $600/month, but it might also be that the private insurance policy covers a lot less than your employer's policy does. As a rule of thumb, group insurance through an employer can be expected to offer better coverage than privately purchased insurance. Whether the added coverage is worth the additional cost is a different matter. But while considering this matter, keep in mind that privately purchased insurance is not always guaranteed to be renewable, and a company might decline to renew a policy if there were a large number of claims. A replacement policy might not cover pre-existing conditions for some time (six months? a year?) or maybe even permanently. So, do consider these aspects as well. Of course, an employer can also change health insurance plans or drop them entirely as an employment benefit (or you might quit and go work for a different company), but as long as the employer's health plan is in existence, you (and continuing members of your family) cannot be discriminated against and denied coverage under the employer's plan.\"",
"title": ""
},
{
"docid": "7dd6062187b50f4a03c90963f33a0356",
"text": "That depends on your health insurance. PIP will often cover your missed work as a result of an injury - which isn't a problem if you health insurance also does this but there is a chance it does not. What would you and your wife do for money if you became paralyzed?",
"title": ""
},
{
"docid": "8dbe42ade6202d1a33c8ad6ad410dcf4",
"text": "What you need to do is register as a sole trader. This will automatically register you for self assessment so you don't have to do that separately. For a simple business like you describe that's it. Completing your self assessment will take care of all your income tax and national insurance obligations (although as mentioned in your previous question there shouldn't be any NI to pay if you're only making £600 or so a year).",
"title": ""
},
{
"docid": "109c4d456f41fd860526feb85481d9ae",
"text": "\"Can she claim deductions for her driving to and from work? Considering most people use their cars mostly to commute to/from work, there must be limits to what you can consider \"\"claimable\"\" and what you can't, otherwise everyone would claim back 80% of their mileage. No, she can't. But if she's driving from one work site to another, that's deductible whether or not either of the work sites is her home office. Can she claim deductions for her home office? There's a specific set of IRS tests you have to meet. If she meets them, she can. If you're self-employed, reasonably need an office, and have a place in your house dedicated to that purpose, you will likely meet all the tests. Can I claim deductions for my home office, even though I have an official work place that is not in my home? It's very hard to do so. The use of your home office has to benefit your employer, not just you. Can we claim deductions for our home internet service? If the business or home office uses them, they should be a deductible home office expense in some percentage. Usually for generic utilities that benefit the whole house, you deduct at the same percentage as the home office is of the entire house. But you can use other fractions if more appropriate. For example, if you have lots of computers in the home office, you can deduct more of the electricity if you can justify the ratio you use. Run through the rules at the IRS web page.\"",
"title": ""
},
{
"docid": "ccefdd027aad5948c8d5fcb48923313a",
"text": "\"Income from a hobby is tax exempt under Dutch law. To consider whether it's hobby, a few rules are applied such as: How much time do you spend on the activity? And is the hourly wage low? Obviously, having a boss is a sure sign of it not being a hobby. The typical example is making dolls and selling them on a crafts fair. If you travel the country and sell each weekend on a different fair, that's a lot of time. If you only sell them on the fair in your home town, it's a hobby. Situation 3 is the most difficult. If you just happened to luck out, it's still a hobby. If you spent significant time to improve the value of your holdings, e.g. by trading in-game, then it might be seen as work. In the latter case, you simply file it as \"\"income from other sources, not yet taxed\"\". For the purpose of determining income from a hobby, you may deduct actual expenses. So, in your case they'd look at the net income of $-1000, which is not unusual for a hobby. It wouldn't be any different if you took up horse riding, decided that you didn't like it, and sell your horse at a loss.\"",
"title": ""
}
] |
fiqa
|
4773203adaedb494ffe5b33c046ab4d2
|
What U.S. banks offer two-factor authentication (such as password & token) for online banking?
|
[
{
"docid": "b1ebfc2c86a395f575eb6475a8596391",
"text": "\"StasM, It's taken a while but many banks offer tokens - although they tend to limit the accounts for which they will be issued. All of the following issue tokens, but there are many more: CitiBank JP Morgan Union Bank Wells Fargo Callaway Bank Wachovia Bank of North Dakota The River Bank of Wisconsin Metcalf Bank, Kansas Stonebridge Bank In 2005 federal regulators stipulated that banks needed to get better with security for online banking customers, but they did not endorse a particular technology. Tokens (aka fobs) were endorsed. The news was negatively received by the banks because putting more steps in the way of a customer drives the customer away. See this 2005 report for more info: http://www.usatoday.com/tech/news/computersecurity/2005-11-02-cybercrime-prevention_x.htm My guess is a tipping point was reached since then, where customers became savvy of the risks, and that the \"\"extra steps\"\" became less an issue than the \"\"extra security\"\".\"",
"title": ""
},
{
"docid": "ba2f94e4f4a3b3116dbe2dd98d409f72",
"text": "There are very few banks which offer two-factor authentication. Part of the reason is cost. Providing a token to every account-holder is expensive, not just in the device or system, but in providing support and assistance to the millions of people who won't have the faintest idea how it works and complain that they no longer have access to their accounts. That said, it is sometimes available on request for personal accounts and many banks require it for their business clients. My HSBC Business account comes with two-factor as default and it works extremely well. There is also the pseudo-two-factor security offered by Visa and MasterCard (3-D secure) which performs a similar function.",
"title": ""
},
{
"docid": "6c3c5e2804a3f4ff19c1a1293a007deb",
"text": "E*Trade offers banking services, and will provide you with a security token free if you have sufficient assets there ($50,000). Otherwise they'll charge you a $25 fee.",
"title": ""
},
{
"docid": "a8ec95e7608405e25bee1e62d62ef0dc",
"text": "Bank of America supports two-factor authentication using SMS messages, similar to PayPal. You can enable the feature from Online Banking under Customer Service -> SafePass Settings. Update: Over the weekend of July 28th, 2012, the SafePass control on the authentication page was updated to simple HTML + JavaScript instead of Flash, so that it is now possible to login from Safari on iOS, among others.",
"title": ""
},
{
"docid": "42c72db8ab6854be3d6437c02d71e83a",
"text": "Some credit unions also offer them and support Business banking as well. First Tech Credit Union is a great example. They also have the most security-oriented banking website I've seen to date. https://www.firsttechfed.com/ As a side note I've found that Credit Unions are a MUCH better deal for personal and business banking.",
"title": ""
},
{
"docid": "a41c9f182f2aa4a77e16a1f6c6a69eb4",
"text": "USAA does - that's my bank. Wells Fargo tries to determine whether the online activity is a risk; if it is, they'll require an SMS code or phoned code be entered. You can get a fairly definitive list of online companies at twofactorauth.org.",
"title": ""
}
] |
[
{
"docid": "fcea2b8b571f1859139d2c628ccf500a",
"text": "I have USAA and the home loan process was a nightmare. My account was also compromised but I caught it immediately because they sent me an alert of a large sum of money being transferred to my checking account, so there is that. I just found out that Navy Federal finally accepts Army veterans (it hadn't up until a couple of years ago) so I have an account with them just so I can get different loan options and credit card rates. Navy Federal has minimums for getting ATM refunds while USAA doesn't, so for now I just have a savings account with them.",
"title": ""
},
{
"docid": "31fc9c275253a8a25056530c6bdd76d5",
"text": "I read an article where this website did an interview with them and concluded its very sketchy and possibly illegal. They refused to give out their FDIC number and they got the high interest rate by selling personal customer information to third parties",
"title": ""
},
{
"docid": "807a92ad542d215ad05806d41571e244",
"text": "When I went on vacation to London a few years ago, I looked around at banks with ATM deals with UK banks. I found that B of A had a deal with a UK bank that you could use their ATMs to take out money from your US account for practically no fees. So the week or so before I left, I opened an account at B of A, put a bunch of money in it, and used the B of A debit card during my trip as much as possible.",
"title": ""
},
{
"docid": "fd5a1b84940c079a7c2f75cafa6f8904",
"text": "Buxfer is a personal-finance web app which you might like. It's not open-source. But at least none of your complaints about financeworks.intuit.com apply to Buxfer. Buxfer offers a piece of software you can download to your own PC, called Firebux. This macro-recording software provides automation that helps you download statements and upload them to Buxfer. So you never have to give Buxfer any of your bank or brokerage usernames or passwords. Buxfer and Firebux are both free of charge. Wesabe, another personal-finance web app, also used to offer data-uploader software, but Wesabe has now gone out of business.",
"title": ""
},
{
"docid": "44309cd550236d0b4bb90aa00c1efe11",
"text": "I use online banking and bill pay for all accounts where I can control when and how much is paid, where I push the funds out. The bills from those companies that want to be allowed to reach into my account and pull money automatically (e.g. my Chase mortgage) I simply will not enroll - they get a paper check in the mail. There is no way I am giving these cocksucker criminals *permission* to take money out of my accounts.",
"title": ""
},
{
"docid": "2bcc07d2a1ecf891d4e6b74729d40f57",
"text": "In addition to the other answers, Harris Bank (now owned by BMO) allows Canadians living in Canada to open accounts, perhaps they consider other countries as well. They have excellent customer service.",
"title": ""
},
{
"docid": "7f27667221cca30f0a98511cc22f04d9",
"text": "I'm always hesitant to use local credit unions because I love accessing all atms fee free, having services available 24/7, having robust, safe and audited online services, and having a big enough bank that all major third party tools interface with it. Joe Schmo Local Credit Union has a lot of good services, but audited and secure online banking? No fee nationwide ATMs? Native interfacing to major tools? I just don't see it often. I shudder to think of the security at small bank websites, frankly.",
"title": ""
},
{
"docid": "af1e66be7a0e8c8af69736054273ebf8",
"text": "I'm working on some banking-related research, and have run into a problem: financial data switches between using RSSDIDs and FDIC certs to identify individual banks. I'm looking for an efficient way to convert between ID types or include both, as I am merging large financial data sets that each use different ID types. I have found [this](https://www.ffiec.gov/nicpubweb/nicweb/searchform.aspx), which allows for conversion one-by-one. However, I'm working with a very large set of bank data, and would really appreciate a more efficient way to do this. Does anyone know of a data set that matches certs to RSSDIDs? edit: just in case someone else needs it, the call report bulk downloads on the ffiec site have both the CERTs and RSSDIDs, so you can use those.",
"title": ""
},
{
"docid": "7dc7abd96a4232b1049975ebf8aa602f",
"text": "Capital One 360. No minimums balance, no fees. Everything's online. Make deposits using an app or an image of the check. ATMs are free almost everywhere.",
"title": ""
},
{
"docid": "38a1e558bd7d0f7595a41143e9be2a8f",
"text": "Personal finance startup BillGuard has raised $10 million in second-round financing, and it’s using it to expand its service that helps protect accounts from fraudulent activity, the company said Tuesday. BillGuard protects users by registering their credit and debit cards and keeping an eye out for questionable and fraudulent charges. The company uses a crowdsourced approach to identifying unauthorized charges, by not only providing its own detection but also incorporating users’ billing complaints to track and analyze payments. BillGuard’s big second round of funding comes from a powerhouse group, including Khosla Ventures, Eric Schmidt’s Innovation Endeavors and Peter Thiel’s Founders Fund. “At Khosla Ventures we love entrepreneurs who dare to tackle large problems with disruptive, bottom-up methods,” said Vinod Khosla, founding partner of Khosla Ventures, in a statement. At present, BillGuard is free to use for anyone who wants to sign up. So how is it going to make money? The company is talking to large banks that could act as partners and incorporate BillGuard on a per-customer basis for a small fee. BillGuard is also exploring the idea of a merchant certification program that would let merchants have access to some its data, and follow up with customers who end up with fraudulent or questionable charges. New York-based BillGuard previously raised $3 million in its first round of funding from Bessemer Venture Partners and IA Ventures. BillGuard made its public debut on stage at the TechCrunch Disrupt conference in May 2011.",
"title": ""
},
{
"docid": "fbb67d40032f4f89b5d23f90cb3caa17",
"text": "I've had good experiences with a regional bank. All the perks of Wells but without the bullshit fees (except ATMs unfortunately but I just get cash back in the rare instance that a card / my phone won't cut it).",
"title": ""
},
{
"docid": "35521eafb32f55645fbcfd314a99e5f0",
"text": "While it's wise, easier and safer to check your transactions online a few times a month, I opt to receive and file paper statements as a hard copy back up of account history. Any reconciliation I perform is a quick glance to make sure the numbers sound right. It's probably a small waste of time and space, but it settles some of my paranoia (due to my training as a computer engineer) about failure of electronic banking systems. If someone tampers with bank records or a SAN explodes and wipes out a bunch of account data, then I will have years worth of paper statements to back up my numbers. Having years worth of statements printed on the banks stationary will have better credibility in court than a .pdf or printout thereof that could have been doctored, in case I ever needed to take my bank to court. A little piece of mind for the price of a letter opener, a square foot file box and a couple of minutes a month.",
"title": ""
},
{
"docid": "51fc55d0608b3e0ebf101e5489f185cb",
"text": "\"Much of what you're asking will not be disclosed for obvious security reasons, so don't be surprised when call center people say they \"\"don't know\"\". They may actually not know, but even if they did, they'd be fired if they were to say anything. Nothing could be a touchier subject than online security for the financial institutions. I don't know of reliable sources for the data you're asking about, and I don't know the banks or other firms would release it. For a bank to talk about its incidence rates of fraud would be unusual, because none of these institutions wants to appear \"\"less safe\"\" than their competitors. If there's any information out there then it's going to be pretty vague. None of these institutions wants the \"\"bad guys\"\" to know what their degree of success is against one bank versus any other. I hope that makes sense. The smaller banks usually piggyback their data on the networks of the larger financial institutions, so they are as secure (as a general rule) as the larger banks' networks they're running on. Also, your transactions on your credit cards are not generally handled directly by your bank anyway, unless it's one of the big heavyweights like Chase or Bank of America. All transactions run through merchant processors, who act as intermediaries between merchants and the banks, and those guys are pretty damned good at security. I've met some of the programmers, and they're impressive to me (I've been a programmer for 35 years and can't put a finger on these guys!). Most banks require that you must provide proof of identity when opening an account, and that ID must me the standards of the \"\"USA Real ID Act\"\". Here's an excerpt from the Department of Homeland Security website on what Real ID is: Passed by Congress in 2005, the REAL ID Act enacted the 9/11 Commission’s recommendation that the Federal Government “set standards for the issuance of sources of identification, such as driver's licenses.” The Act established minimum security standards for state-issued driver’s licenses and identification cards and prohibits Federal agencies from accepting for official purposes licenses and identification cards from states that do not meet these standards. States have made considerable progress in meeting this key recommendation of the 9/11 Commission and every state has a more secure driver’s license today than before the passage of the Act. In order for banks to qualify for FDIC protection, they must comply with the Real ID standards when opening accounts. As with any business (especially online), the most effective way to minimize fraud is vigilant monitoring of data. Banks and other online financial entities have become very adept at pattern analysis and simply knowing where and what to look for when dealing with their customers. There are certainly sophisticated measures which are kept carefully out of the public eye for doing this, and obviously they're good at it. They have to be, right? There's no way to completely eliminate fraud -- too much incentive exists for the \"\"bad guys\"\" to not constantly search for new ways to run their schemes, and the good guys will always be at the disadvantage, because there's no way to anticipate everything anyone might come up with. Just look at online viruses and malware. Your antivirus software can only deal with what it knows about, and the bad guys are always coming up with some new variant that gets past the filters until the antivirus maker learns of it and comes up with a way to deal with it. Your question's a good one to ponder, and I wouldn't want to be the chief of internet security for a bank or online institution, because I'd lay awake at night pondering when the call's going to come that we finally ran out of luck! (grin) I hope this was helpful. Good luck!\"",
"title": ""
},
{
"docid": "638947ae1029dd877c240c92506276e6",
"text": "Are there banks where you can open a bank account without being a citizen of that country without having to visit the bank in person? I've done it the other way around, opened a bank account in the UK so I have a way to store GBP. Given that Britain is still in the EU you can basically open an account anywhere. German online banks for instance allow you to administrate anything online, should there be cards issued you would need an address in the country. And for opening an account a passport is sufficient, you can identify yourself in a video chat. Now what's the downside? French banks' online services are in French, German banks' services are in German. If that doesn't put you off, I would name such banks in the comments if asked. Are there any online services for investing money that aren't tied to any particular country? Can you clarify that? You should at least be able to buy into any European or American stock through your broker. That should give you an ease of mind being FCA-regulated. However, those are usually GDRs (global depository receipts) and denominated in GBp (pence) so you'd be visually exposed to currency rates, by which I mean that if the stock goes up 1% but the GBP goes up 1% in the same period then your GDR would show a 0% profit on that day; also, and more annoyingly, dividends are distributed in the foreign currency, then exchanged by the issuer of the GDR on that day and booked into your account, so if you want to be in full control of the cashflows you should get a trading account denominated in the currency (and maybe situated in the country) you're planning to invest in. If you're really serious about it, some brokers/banks offer multi-currency trading accounts (again I will name them if asked) where you can trade a wide range of instruments natively (i.e. on the primary exchanges) and you get to manage everything in one interface. Those accounts typically include access to the foreign exchange markets so you can move cash between your accounts freely (well for a surcharge). Also, typically each subaccount is issued its own IBAN.",
"title": ""
},
{
"docid": "b404a0a65abf25390f0c7079320447eb",
"text": "Australia has a massive housing bubble (one of the last in the world to pop), no productivity growth (lots of investment in mining which hasn't yet payed off, though we'll do well if commodities pick up), and relies on China and India buying lots of coal and steel at historically high prices.",
"title": ""
}
] |
fiqa
|
af963b2b2d6c738ddec993a574171a1f
|
Strategies to guarantee arrival time for transfers between banks
|
[
{
"docid": "a09fd048db24b6c49ff5d6bcaf62ade3",
"text": "Transfers are defined to arrive on a specific number of business days, nearly always one business day (if you submit it before the cutoff time). The exact number of days depends on the receiver bank, but when you try to create a transfer, it will tell you when it will arrive, before you send it out.",
"title": ""
}
] |
[
{
"docid": "384e8f4f9cfd57bcd1d185a8fbc1a6dc",
"text": "Wire transfers normally run through either the Fedwire system or the Clearing House Interbank Payments System (CHIPS). The process generally works like this: You approach a bank or other financial institution and ask to transfer money. You give the bank a certain code, either an international bank account number or one of several other standards, which informs the bank where to send the money. The bank sends a message through a system like Fedwire to the receiving bank, along with settlement instructions. This is where the process can get a bit tricky. For the wire transfer to work, the banks must have reciprocal accounts with each other, or the sending bank must send the money to a bank that does have such an account with the receiver. If the sending bank sends the money to a third-party bank, the transaction is settled between them, and the money is then sent to the receiving bank from the third-party bank. This last transaction may be a wire transfer, ACH transfer, etc. The Federal Reserve fits into this because many banks hold accounts for this purpose with the Federal Reserve. This allows them to use the Fed as the third-party bank referred to above. Interestingly enough, this is one of the significant ways in which the Fed makes a profit, because it, along with every other bank and routing agent in the process, collects a miniscule fee on this process. You'll often find sources that state that Fedwire is only for transferring large transactions; while this is technically correct, it's important to understand that financial institutions don't settle every wire transfer or payment immediately. Although the orders are put in immediately, the financial institutions settle their transactions in bulk at the end of the business day, and even then they normally only settle the difference. So, if Chase owes Bank of America $1M, and Bank of America owes Chase $750K, they don't send these as two transactions; Chase simply credits BAC $250K. You didn't specifically ask about ACH transfers, which as littleadv pointed out, are different from wire transfers, but since ACH transfers can often form a part of the whole process, I'll explain that process too. ACH is a payment processing system that works through the Federal Reserve system, among others. The Federal Reserve (through the Fedline and FedACH systems) is by far the largest payment processor. The physical cash itself isn't transferred; in simple terms, the money is transferred through the ACH system between the accounts each bank maintains at the Federal Reserve. Here is a simple example of how the process works (I'm summarizing the example from Wikipedia). Let's say that Bob has an account with Chase and wants to get his paycheck from his employer, Stack Exchange, directly deposited into this account. Assume that Stack Exchange uses Bank of America as their bank. Bob, the receiver, fills out a direct deposit authorization form and gives it to his employer, called the originator. Once the originator has the authorization, they create an entry with an Originating Depository Financial Institution, which acts as a middleman between a payment processor (like the Federal Reserve) and the originator. The ODFI ensures that the transaction complies with the relevant regulations. In this example, Bank of America is the ODFI. Bank of America (the ODFI) converts the transaction request into an ACH entry and submits it, through an ACH operator, to the Receiving Depository Financial Institution (RDFI), which in this case is Chase bank. Chase credits (deposits) the paycheck in Bob's account. The Federal Reserve fits into all of this in several ways. Through systems like Fedline and FedACH, the Fed acts as an ACH operator, and the banks themselves also maintain accounts at the Federal Reserve, so it's the institution that actually performs the settling of accounts between banks.",
"title": ""
},
{
"docid": "c09c6c548e583d6ef140969061e5176f",
"text": "As per the SIPC website: Most customers can expect to receive their property in one to three months. When the records of the brokerage firm are accurate, deliveries of some securities and cash to customers may begin shortly after the trustee receives the completed claim forms from customers, or even earlier if the trustee can transfer customer accounts to another broker-dealer. Delays of several months usually arise when the failed brokerage firm’s records are not accurate. It also is not uncommon for delays to take place when the troubled brokerage firm or its principals were involved in fraud. Source link: http://www.sipc.org/Who/SIPCQuestions/SIPCQuestion3.aspx",
"title": ""
},
{
"docid": "8ffe50c45e8063c3225e35c4091f31b7",
"text": "\"As mentioned in other answers, you find out by reading the Rulebook for that commodity and exchange. I'll quote a couple of random passages to show how they vary: For CME (Chicago Mercantile Exchange) Random Length Lumber Futures, the delivery is ornate: Seller shall give his Notice of Intent to Deliver to the Clearing House prior to 12:00 noon (on any Business Day after termination of trading in the contract month. 20103.D. Seller's Duties If the buyer's designated destination is east of the western boundaries of North Dakota, South Dakota, Nebraska, Kansas, Texas and Oklahoma, and the western boundary of Manitoba, Canada, the seller shall follow the buyer's shipping instructions within seven (7) Business Days after receipt of such instructions. In addition, the seller shall prepay the actual freight charges and bill the buyer, through the Clearing House, the lowest published freight rate for 73-foot railcars from Prince George, British Columbia to the buyer's destination. If the lowest published freight rate from Prince George, British Columbia to buyer's destination is a rate per one hundred pounds, the seller shall bill the buyer on the weight basis of 1,650 pounds per thousand board feet. The term \"\"lowest published freight rate\"\" refers only to the lowest published \"\"general through rate\"\" and not to rates published in any other rate class. If, however, the buyer’s destination is outside of the aforementioned area, the seller shall follow the same procedures except that the seller shall have the right to change the point of origin and/or originating carrier within 2 Business Days after receipt of buyer’s original shipping instructions. If a change of origin and/or originating carrier is made, the seller shall then follow the buyer's revised instructions within seven (7) Business Days after receipt of such instructions. If the freight rate to the buyer's destination is not published, the freight charge shall be negotiated between the buyer and seller in accordance with industry practice. Any additional freight charges resulting from diversion by the buyer in excess of the actual charges for shipment to the destination specified in the shipping instructions submitted to the Clearing House are the responsibility of the buyer. Any reduction in freight charges that may result from a diversion is not subject to billing adjustment through the Clearing House. Any applicable surcharges noted by the rail carrier shall be considered as part of the freight rate and can be billed to the buyer through the CME Clearing House. If within two (2) Business Days of the receipt of the Notice of Intent the buyer has not designated a destination, or if during that time the buyer and seller fail to agree on a negotiated freight charge, the seller shall treat the destination as Chicago, Illinois. If the buyer does not designate a carrier or routing, the seller shall select same according to normal trade practices. To complete delivery, the seller must deposit with the Clearing House a Delivery Notice, a uniform straight bill of lading (or a copy thereof) and written information specifying grade, a tally of pieces of each length, board feet by sizes and total board feet. The foregoing documents must be received by the Clearing House postmarked within fourteen (14) Business Days of the date of receipt of shipping instructions. In addition, within one (1) Business Day after acceptance by the railroad, the Clearing House must receive information (via a telephone call, facsimile or electronic transmission) from the seller giving the car number, piece count by length, unit size, total board footage and date of acceptance. The date of acceptance by the railroad is the date of the bill of lading, signed and/or stamped by the originating carrier, except when determined otherwise by the Clearing House. For some commodities you can't get physical delivery (for instance, Cheese futures won't deliver piles of cheese to your door, for reasons that may be obvious) 6003.A. Final Settlement There shall be no delivery of cheese in settlement of this contract. All contracts open as of the termination of trading shall be cash settled based upon the USDA monthly weighted average price in the U.S. for cheese. The reported USDA monthly weighted average price for cheese uses both 40 pound cheddar block and 500 pound barrel prices. CME gold futures will deliver to a licensed depository, so you would have to arrange for delivery from the depository (they'll issue you a warrant), assuming you really want a 100 troy oz. bar of gold: CONTRACT SPECIFICATIONS The contract for delivery on futures contracts shall be one hundred (100) troy ounces of gold with a weight tolerance of 5% either higher or lower. Gold delivered under this contract shall assay to a minimum of 995 fineness and must be a brand approved by the Exchange. Gold meeting all of the following specifications shall be deliverable in satisfaction of futures contract delivery obligations under this rule: Either one (1) 100 troy ounce bar, or three (3) one (1) kilo bars. Gold must consist of one or more of the Exchange’s Brand marks, as provided in Chapter 7, current at the date of the delivery of contract. Each bar of Eligible gold must have the weight, fineness, bar number, and brand mark clearly incised on the bar. The weight may be in troy ounces or grams. If the weight is in grams, it must be converted to troy ounces for documentation purposes by dividing the weight in grams by 31.1035 and rounding to the nearest one hundredth of a troy ounce. All documentation must illustrate the weight in troy ounces. Each Warrant issued by a Depository shall reference the serial number and name of the Producer of each bar. Each assay certificate issued by an Assayer shall certify that each bar of gold in the lot assays no less than 995 fineness and weight of each bar and the name of the Producer that produced each bar. Gold must be delivered to a Depository by a Carrier as follows: a. directly from a Producer; b. directly from an Assayer, provided that such gold is accompanied by an assay certificate of such Assayer; or c. directly from another Depository; provided, that such gold was placed in such other Depository pursuant to paragraphs (a) or (b) above.\"",
"title": ""
},
{
"docid": "7be1da953541e9ce40e4598da9a824e4",
"text": "\"Debit Cards have a certain processing delay, \"\"lag time\"\", before the transaction from the vendor completes with your bank. In the US it's typically 3 business days but I have seen even a 15 day lag from Panera Bread. I guess in the UK, payment processors have similar processing delays. A business is not obliged to run its payment processing in realtime, as that's very expensive. Whatever be the lag time, your bank is supposed to cover the payment you promised through your card. Now if you don't have agreements in place (for example, overdraft) with your bank, they will likely have to turn down payments that exceed your available balance. Here is the raw deal: In the end, the responsibility to ensure that your available balance is enough is upon you (and whether you have agreements in place to handle such situations) So what happened is very much legal, a business is not obliged to run its payment processing in realtime and no ethics are at stake. To ensure such things do not happen to me, I used to use a sub-account from which my debit card used to get paid. I have since moved to credit cards as the hassle of not overdrawing was too much (and overdraft fees from banks in the US are disastrous, especially for people who actually need such a facility)\"",
"title": ""
},
{
"docid": "94d2490c97d88ed2dc63b9efb26711fb",
"text": "\"You are right, if by \"\"a lot of time\"\" you mean a lot of occasions lasting a few milliseconds each. This is one of the oldest arbitrages in the book, and there's plenty of people constantly on the lookout for such situations, hence they are rare and don't last very long. Most of the time the relationship is satisfied to within the accuracy set by the bid-ask spread. What you write as an equality should actually be a set of inequalities. Continuing with your example, suppose 1 GBP ~ 2 USD, where the market price to buy GBP (the offer) is $2.01 and to sell GBP (the bid) is $1.99. Suppose further that 1 USD ~ 2 EUR, and the market price to buy USD is EUR2.01 and to sell USD is EUR1.99. Then converting your GBP to EUR in this way requires selling for USD (receive $1.99), then sell the USD for EUR (receive EUR3.9601). Going the other way, converting EUR to GBP, it will cost you EUR4.0401 to buy 1 GBP. Hence, so long as the posted prices for direct conversion are within these bounds, there is no arbitrage.\"",
"title": ""
},
{
"docid": "ac39145c842a2f524bf52e9ad797b4ec",
"text": "\"Quite a few Bank in India allow Funds Transfer via ATM. One has to first register the beneficiary account and wait for 24 hrs before transacting. However it looks like \"\"Indian Bank\"\" currently does not offer this service. You can call up Indian Bank and ask if they provide this service. Alternativly use the Internet Banking to transfer funds to CitiBank or any other Bank in India.\"",
"title": ""
},
{
"docid": "fc17bf0c8d9eecdcd412998741cfc8f4",
"text": "Short answer: No. Some of those 'automatic' payments you've agreed to (presumably by signing a PAD form) are initiated in batch by the company whom you're buying from (phone company, cable company etc). So no, the bank has no indication from one day to the next what is coming through. And the request goes from say, your cable company to THEIR merchant bank to YOUR bank. Typically you have a monthly bill date which is fixed, and they should have terms established when it is due. If a payment comes back NSF they can retry once - but only for the same amount and I believe it is 14 days from the initial payment attempt. It makes it predictable, and you'd figure banks would clue in and start to predict for you when things may come out - but strictly speaking your bank doesn't know when or how much.",
"title": ""
},
{
"docid": "ef1c7c2a0da5d0c4d348db3446d4e5be",
"text": "It is a rather complex system, but here is a rough summary. Interbank tranfers ultimately require a transfer of reserves at the central bank. As a concrete example, the bank of england system is the rtgs. Only the clearing banks and similar (e.g. bacs) have access to rtgs. You can send a chaps payment fairly quickly, but that costs. Chaps immediately triggers an rtgs transfer once the sending bank agrees and so you can be certain that the money is being paid. Hence its use for large amounts. Bacs also sits on the rtgs but to keep costs down it batches tranfers up. Because we are talking about bank reserve movements, checks have to be in place and that can take time. Furthermore the potential for fraud is higher than chaps since these are aggregrated transactions a layer removed, so a delay reduces the chance of payment failing after apparently being sent. Faster payments is a new product by bacs that speeds up the bacs process by doing a number of transfers per day. Hence the two hour clearing. For safety it can only be used for up to 10k. Second tier banks will hold accounts with clearing banks so they are another step down. Foreign currency transfers require the foreign Central Bank reserve somewhere, and so must be mediated by at least one clearing bank in that country. Different countries are at different stages in their technology. Uk clearing is 2h standard now but US is a little behind I believe. Much of Europe is speeding up. Rather like bitcoin clearing, you have a choice between speed and safety. If you wait you are more certain the transaction is sound and have more time to bust the transfer.",
"title": ""
},
{
"docid": "0b94911436e766d7e927bbe443605fb5",
"text": "tl;dr: Be patient, money is probably sitting somewhere, and it will eventually be credited back to your account. I had a similar problem about 10 years ago. I sent an international wire transfer, from my own bank account in Germany to my bank account in Central America. I had done this before, and there had been no issues, but in this case, even though all the information was correct, the bank rejected the wire because it was above $10K, and in that case, the bank needs written proof from the owner of the receiving account (me) , and so didn't know where the funds were coming from. I had to call the local Sparkasse bank in Germany, as well as an intermediary bank in London to sort it all out, and in total, had to wait about 3-4 weeks to get the money back in my Sparkasse bank account. At one point I thought I may never see that money back, especially since there was an intermediary bank to deal with, but it all worked out in the end.",
"title": ""
},
{
"docid": "07442b678168e578b73bde5a1fd0fb25",
"text": "My bank (USAA) moves money to and from a USAA brokerage account instantly. They also have instant transfers from their money market funds to checking, savings, and brokerage. It takes the 3 days to go to another institution, though.",
"title": ""
},
{
"docid": "e3404e5602b568dd1e5af71e50c6d531",
"text": "\"[This is the simple solution.](http://market-ticker.org/akcs-www?singlepost=3041628) \"\"Since the Securities and Exchange Act requires that all orders must be intended to execute there's a simple way to prevent this sort of nanosecond game, where any part of the strategy involves \"\"flashing\"\" an order that isn't really intended to execute and thus clear through the exchange: Force all orders to be valid for two full seconds or until executed.\"\"\"",
"title": ""
},
{
"docid": "0c2dfe34ea55af11139b3dade5f2cb38",
"text": "I assume the same criteria apply for this as your previous question. You want to physically transfer in excess of 50,000 USD multiple times a week and you want the transportation mechanism to be instant or very quick. I don't believe there is any option that won't raise serious red flags with the government entities you cross the boundaries of. Even a cheque, which a person in the comments of OP's question suggests, wouldn't be sufficient due to government regulation requiring banks to put holds on such large amounts.",
"title": ""
},
{
"docid": "e77a1e994c475bcb9e126a374154e32d",
"text": "From http://en.wikipedia.org/wiki/Wire_transfer: The entity wishing to do a transfer approaches a bank and gives the bank the order to transfer a certain amount of money. IBAN and BIC codes are given as well so the bank knows where the money needs to be sent. The sending bank transmits a message, via a secure system (such as SWIFT or Fedwire), to the receiving bank, requesting that it effect payment according to the instructions given. The message also includes settlement instructions. The actual transfer is not instantaneous: funds may take several hours or even days to move from the sender's account to the receiver's account. Either the banks involved must hold a reciprocal account with each other, or the payment must be sent to a bank with such an account, a correspondent bank, for further benefit to the ultimate recipient. Banks collect payment for the service from the sender as well as from the recipient. The sending bank typically collects a fee separate from the funds being transferred, while the receiving bank and intermediate banks through which the transfer travels deduct fees from the money being transferred so that the recipient receives less than what the sender sent. The last point may not be relevant in domestic transfers.",
"title": ""
},
{
"docid": "5d4b34e93db03a9b65fa0b00110e7e9d",
"text": "\"This seems almost overkill, but if you want to... I suppose one thing you could do is create a separate money in transit account, similar to Account Payable and Account Receivable. In your bookkeeping, transfer the money from the source account to the holding account on the date that the source bank withdraws it, and then transfer the money to the destination account on the date that the target bank deposits it. This both makes it clear that there is money going between places, and ensures that the daily balance on each \"\"physical\"\" account is accurate. For cash withdrawals and deposits, I'd just use the date when you make the withdrawal, since that is the day from which the money is available in the new location rather than the old one. Note: I don't know if this is the \"\"proper\"\" way to do it in a random jurisdiction, but I doubt being this explicit can get you into trouble.\"",
"title": ""
},
{
"docid": "b28c2b7e080f6e38428d65d2bbb39ce5",
"text": "You mentioned BoA. I have had BoA accounts for about ten years. All of my transfers between accounts are immediate. I have never had to wait with BoA. Scottrade Accounts are the worst in this respect. Once I had to wait 8 days. PayPal come in a close second for making you wait.",
"title": ""
}
] |
fiqa
|
56924b1e9b499463cda056f378fa11f1
|
How often do stocks become worthless?
|
[
{
"docid": "86e438b21751aec4fe7f59a7bf147172",
"text": "\"The only thing that makes a stock worthless is when the company goes out of business. Note that bankruptcy, by itself, does not mean the company is closing. It could successfully restructure its affairs and come out of bankruptcy with a better outlook. Being a small or unprofitable business may cause a company's to trade in the \"\"penny stock\"\" range, but there is still some value there. Since most dying companies will pass through the penny stock phase, you may be able to track down what you're looking for by finding companies who have been (or are about to be) delisted. Delisting is not death, it's just the point at which the company's shares no longer meet the qualifications to be traded on a particular exchange. If you find old stock certificates in your grandmother's sock drawer, they may be a treasure, or they may be worthless pieces of paper if the company changed its ownership and Grandma didn't know about it.\"",
"title": ""
},
{
"docid": "a56976424c16c7b52f1a6b079e405eac",
"text": "Randomly selected stocks would probably become worthless at a similar rate of all businesses going out of business do. I'm not sure why you'd randomly select a stock though. Stocks in the S&P500 (or other similar index), or large-cap stocks probably become worthless at a much lower rate.",
"title": ""
}
] |
[
{
"docid": "08cef17a1495f073999a886d3a26573c",
"text": "This has only been true over the past 10 years or so as asset classes have started to move in tandem and prices have been driven by central banks instead of fundamentals. Historically, this is abnormal. Your assertion has recency bias.",
"title": ""
},
{
"docid": "3564c1649053ad2f0f001e03b5135072",
"text": "Pretty sure the null hypothesis here is that trading equities at a high frequency is a zero sum game. The is no gain that isn't someone else's loss. No goods are created, no knowledge is gained, no value is produced. Note, I didn't say value is destroyed either.",
"title": ""
},
{
"docid": "abc2f84718703e157926e5b001527a6f",
"text": "\"Please note that the following Graham Rating below corresponds to five years: Earnings Stability (100% ⇒ 10 Years): 50.00% Benjamin Graham - once known as The Dean of Wall Street - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss. Buffett describes Graham's book - The Intelligent Investor - as \"\"by far the best book about investing ever written\"\" (in its preface). Graham's first recommended strategy - for casual investors - was to invest in Index stocks. For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them. For advanced investors, Graham described various \"\"special situations\"\". The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund. The last requires more than the average level of ability and experience. Such stocks are also not amenable to impartial algorithmic analysis, and require a case-specific approach. But Defensive, Enterprising and NCAV stocks can be reliably detected by today's data-mining software, and offer a great avenue for accurate automated analysis and profitable investment. For example, given below are the actual Graham ratings for International Business Machines Corp (IBM), with no adjustments other than those for inflation. Defensive Graham investment requires that all ratings be 100% or more. Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%. International Business Machines Corp - Graham Ratings Sales | Size (100% ⇒ $500 Million): 18,558.60% Current Assets ÷ [2 x Current Liabilities]: 62.40% Net Current Assets ÷ Long Term Debt: 28.00% Earnings Stability (100% ⇒ 10 Years): 100.00% Dividend Record (100% ⇒ 20 Years): 100.00% Earnings Growth (100% ⇒ 30% Growth): 172.99% Graham Number ÷ Previous Close: 35.81% Not all stocks failing Graham's rules are necessarily bad investments. They may fall under \"\"special situations\"\". Graham's rules are also extremely selective. Graham designed and backtested his framework for over 50 years, to deliver the best possible long-term results. Even when stocks don't clear them, Graham's rules give a clear quantifiable measure of a stock's margin of safety. Thank you.\"",
"title": ""
},
{
"docid": "362edb20d7add179442507d6e995c2da",
"text": "Most national banks are required by the regulations of their host countries to hold significant reserves in the form of government debt. A default would likely wipe out their capital and your common stock would become worthless. The common stock only has positive value today because of the option value based on the possibility the host country will evade a default.",
"title": ""
},
{
"docid": "90da7807b82f18388c78a07d60511260",
"text": "\"It's not either or. Much of the time the value of the stock has some tangible relation to the financial prospects of the company. The value of Ford and GM stock rose when they were selling a lot of cars, and collapsed when their cars became unpopular. Other companies (Enron for example) frankly 'cook the books' to make it appear they are prospering, when they are actually drowning in debt and non-performing assets. So called \"\"penny stocks\"\" have both low prices and low volumes and are susceptible to \"\"pump and dump\"\" schemes, where a manipulator buys a bunch of the stock, touts the stock to the world, pointing to the recent increase in price. They then sell out to all the new buyers, and the price collapses. If you are going to invest in the stock market it's up to you to figure out which companies are which.\"",
"title": ""
},
{
"docid": "88c1bea5105717ac6d901d758a6518b0",
"text": "Cute, but 100 years of market history will show you the fundamentals have persisted for a reason. Every industry in history has tried to pull this “but this is different” thing off (oil, gold, semiconductors) and they have ALL been brought to reality in time. There is no reason to think today is any different. There will be recessions again, there will be market crashes again, either tomorrow or 5 years from now. It always levels out.",
"title": ""
},
{
"docid": "87fd0ffbacf2f9c408959b74bf24807b",
"text": "I interned at a wealth management firm that used very active momentum trading, 99% technicals. Strictly ETFs (indexes, currencies, commodities, etc), no individual equities. They'd hold anywhere from 1-4 weeks, then dump it as soon as the chart starts turning over. As soon as I get enough capital I'm adopting their same exact strategy, it's painfully easy",
"title": ""
},
{
"docid": "9d3786a4e8a8966bf704974b96a52ffa",
"text": "\"Actually, this is a pretty good analogy to certain types of stocks, specifically tech and other \"\"fad\"\" stocks. Around the turn of the century, there were a lot of \"\"Bobs\"\" buying tech stocks (like they would baseball cards), for tech stocks' sakes. That's what drove the internet and tech stock bubbles of high valuations. At other times, the tech stocks are bought and sold mainly by \"\"Steve's\"\" for business reasons such as likely (not merely possible) future appreciation, and command a much lower valuation.\"",
"title": ""
},
{
"docid": "bae2ad702ebc1440fa3a7f006e568fe8",
"text": "\"The problem with the proposed plan is the word \"\"inevitable\"\". There is no such thing as a recovery that is guaranteed (though we may wish it to be so), and even if there was there is no telling how long it will take for a recovery to occur to a sufficient degree. There are also no foolproof ways to determine when you have hit the bottom. For historical examples, consider the Nikkei. In 2000 the value fell from 20000 to 15000 in a single year. Had you bought then, you would have found the market still fell and didn't get back to 15k until 2005...where it went up and down for years, when in 2008 it fell again and would not get back to that level again until 2014. Lest you think this was an isolated international incident, the same issues happened to the S&P in 2002, where things went up until they fell even lower in 2009 before finally climbing again. Will there be another recession at some point? Surely. Will there be a single, double, or triple dip, and at what point is the true bottom - and will it take 5, 10, or 20+ years for things to get back above when you bought? No one really knows, and we can only guess. So if you want to double down after a recession, you can, but it's important you not fool yourself into thinking you aren't greatly increasing your risk exposure, because you are.\"",
"title": ""
},
{
"docid": "b96748ba63d6294fc4cc1b466503e559",
"text": "So how often do investors really lose money? The short answer is, every day. Let's first examine your assumptions: If the price of the share gets lower, the investor can just wait until it gets higher. What are the chances that it won't forever, or for years? There are many stocks whose price goes down and then down further and then to zero. The most apparent example is, of course, Enron. The stock went from about $90 per share to zero in about 18 months. For it to have been sold at $90, obviously, someone had to buy it. Almost no matter where they sold it, they lost money. If they didn't sell it, when the stock was worthless, they lost money. https://en.wikipedia.org/wiki/Enron#/media/File:EnronStockPriceAugust2000toJanuary2001.svg There are more modern examples of companies that are declining in a rapidly changing market. For example, Sears Holdings is getting beat down by Amazon and many other on-line retailers. I suspect that if you buy it today and wait for it to go higher, you will be disappointed. https://www.google.com/finance?q=NASDAQ%3ASHLD&ei=E8_fWIjWGsSGmAGx7b_IAw The more common way to lose money is to either not have a plan or not stick to the plan. Disciplined investors typically plan to buy quality stocks at a fair price and hold them long enough for increasing sales and profits to bring the stock price up. If, later, he hears a bit of bad news about his stock and decides to sell out of panic or fear and become a trader instead of keeping to the plan to remain a disciplined investor, he is likely to lose money. He will lose because no-one can predict accurately that a stock is going down and will never recover; nor can he predict accurately when a stock is going up and will never falter. The chance of bankruptcy (especially for huge companies like Apple) is really low, as I see it, but I may be wrong. Thousands of people lost billions of dollars thinking that about Enron, too. I too believe Apple is a fine stock with excellent prospects, but technology changes and markets change. Twenty or thirty years from now, it may be a different case.",
"title": ""
},
{
"docid": "81d3eb9c34cca8052b7e5312e0a28964",
"text": "If that condition is permanent -- the stock will NEVER pay dividends and you will NEVER be able to sell it -- then yes, it sounds to me like this is a worthless piece of paper. If there is some possibility that the stock will pay dividends in the future, or that a market will exist to sell it, then you are making a long-term investment. It all depends on how likely it is that the situation will change. If the investment is small, maybe it's worth it.",
"title": ""
},
{
"docid": "3acf275d77964f6b617beee49dcc0d64",
"text": "There are those who would suggest that due to the Efficient Market Hypothesis, stocks are always fairly valued. Consider, if non-professional posters on SE (here) had a method that worked beyond random chance, everyone seeking such a method would soon know it. If everyone used that method, it would lose its advantage. In theory, this is how stocks' values remain rational. That said, Williams %R is one such indicator. It can be seen in action on Yahoo finance - In the end, I find such indicators far less useful than the news itself. BP oil spill - Did anyone believe that such a huge oil company wouldn't recover from that disaster? It recovered by nearly doubling from its bottom after that news. A chart of NFLX (Netflix) offers a similar news disaster, and recovery. Both of these examples are not quantifiable, in my opinion, just gut reactions. A quick look at the company and answer to one question - Do I feel this company will recover? To be candid - in the 08/09 crash, I felt that way about Ford and GM. Ford returned 10X from the bottom, GM went through bankruptcy. That observation suggests another question, i.e. where is the line drawn between 'investing' and 'gambling'? My answer is that buying one stock hoping for its recovery is gambling. Being able to do this for 5-10 stocks, or one every few months, is investing.",
"title": ""
},
{
"docid": "4a0041d3be74b8476abfc38b7f35e3bc",
"text": "It does when you argue that a single factor is causing the price chart to move a certain way. If they start to think it's perhaps more complicated than that, then yes, it breaks down quickly, which was precisely my point.",
"title": ""
},
{
"docid": "7e16bf72b7e84e7aac3a2eb57a804450",
"text": "\"This falls under value investing, and value investing has only recently picked up study by academia, say, at the turn of the millennium; therefore, there isn't much rigorous on value investing in academia, but it has started. However, we can describe valuations: In short, valuations are randomly distributed in a log-Variance Gamma fashion with some reason & nonsense mixed in. You can check for yourself on finviz. You can basically download the entire US market and then some, with many financial and technical characteristics all in one spreadsheet. Re Fisher: He was tied for the best monetary economist of the 20th century and created the best price index, but as for stocks, he said this famous quote 12 days before the 1929 crash: \"\"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.\"\" - Irving Fisher, Ph.D. in economics, Oct. 17, 1929 EDIT Value investing has almost always been ignored by academia. Irving Fisher and other proponents of it before it was codified by Graham in the mid 20th century certainly didn't help with comments like the above. It was almost always believed that it was a sucker's game, \"\"the bigger sucker\"\" game to be more precise because value investors get destroyed during recession/collapses. So even though a recessionless economy would allow value investors and everyone never to suffer spontaneous collapses, value investors are looked down upon by academia because of the inevitable yet nearly always transitory collapse. This expresses that sentiment perfectly. It didn't help that Benjamin Graham didn't care about money so never reached the heights of Buffett who frequently alternates with Bill Gates as the richest person on the planet. Buffett has given much credibility, and academia finally caught on around in 2000 or so after he was proven right about a pending tech collapse that nearly no one believed would happen; at least, that's where I begin seeing papers being published delving into value concepts. If one looks harder, academia's even taken the torch and discovered some very useful tools. Yes, investment firms and fellow value investors kept up the information publishing, but they are not academics. The days of professors throwing darts at the stock listings and beating active managers despite most active managers losing to the market anyways really held back this side of academia until Buffett entered the fray and embarrassed them all with his club's performance, culminating in the Superinvestors article which is still relatively ignored. Before that, it was the obsession with beta, the ratio of a security's variance to its covariance to the market, a now abandoned theory because it has been utterly discredited; the popularizers of beta have humorously embraced the P/B, not giving the satisfaction to Buffet by spurning the P/E. Tiny technology firms receive ridiculous valuations because a long-surviving tiny tech firm usually doesn't stay small for long thus will grow at huge rates. This is why any solvent and many insolvent tech firms receive large valuations: risk-adjusted, they should pay out huge on average. Still, most fall by the wayside dead, and those 100 P/S valuations quickly crumble. Valuations are influenced by growth. One can see this expressed more easily with a growing perpetuity: Where P is price, i is income, r is the rate of return, and g is the growth rate of i. Rearranging, r looks like: Here, one can see that a higher P relative to i will dull the expected rate of return while a higher g will boost it. It's fun for us value investor/traders to say that the market is totally inefficient. That's a stretch. It's not perfectly inefficient, but it's efficient. Valuations are clustered very tightly around the median, but there are mistakes that even us little guys can exploit and teach the smart money a lesson or two. If one were to look at a distribution of rs, one'd see that they're even more tightly packed. So while it looks like P/Es are all over the place industry to industry, rs are much more well clustered. Tech, finance, and discretionaries frequently have higher growth rates so higher P/Es yet average rs. Utilities and non-discretionaries have lower growth rates so lower P/Es yet average rs.\"",
"title": ""
},
{
"docid": "8269934f559d54722a958a104b6e191d",
"text": "The interest rate will probably be better for your primary residency, however the risk is higher too. In the event you can't pay it off - you probably would rather lose the second home and not the primary home. Re the tax benefit - it will be attached to the rental you're buying, since that's what the loan is for. However, if you have a HELOC on your primary residency, you can deduct interest on up to $100K on your Schedule A regardless of what you're doing with the money. This can be useful if the rental is losing money and you don't want to accumulate the interest deduction as passive loss.",
"title": ""
}
] |
fiqa
|
268c17ce256a684f80c46abe8791e91b
|
Why do banks finance shared construction as mortgages instead of financing it directly and selling the apartments in a building?
|
[
{
"docid": "c9a3c0c2284554ce69d0c8db28dcfdcc",
"text": "\"Remember that risk should correlate with returns, in an investment. This means that the more risk you take on, the more return you should be receiving, in an efficient marketplace. That's why putting your money in a savings account might earn you <1% interest right now, but putting money in the stock market averages ~7% returns over time. You should be very careful not to use the word 'interest' when you mean 'returns'. In your post, you are calling capital gains (the increase in value of owned property) 'interest'. This may be understating in your head the level of risk associated with property ownership. In the case of the bank, they are not in the business of home construction. Rather than take that risk themselves, they would rather finance many projects being done by construction companies that know the business. The bank has a high degree of certainty of getting its money back, because its mortgages are protected by the value of the property. Part of the benefit of an efficient marketplace is that risk gets 'bought' by individuals who want it. This means that people with a low-risk tolerance (such as banks, people on fixed incomes, seniors, etc.) can avoid risk, and people with a high risk tolerance (stock investors, young people with high income, etc.) can take on that risk for higher average returns. The bank's reasoning should remind you of the risk associated with property ownership: increases in value are not a sure thing. If you do not understand the risk of your investment, you cannot be certain that you are being well compensated for that risk. Note also that most countries place regulations on their banks that limit the amount of their funds that can be placed in 'higher risk' asset classes. Typically, this something along the lines of \"\"If someone places a deposit with your bank, you can only invest that deposit in a low-risk debt-based asset [ie: you can take money deposited by customer A and use it to finance a mortgage for customer B]\"\". This is done in an attempt to prevent collapse of the financial sector, if risky investments start failing.\"",
"title": ""
},
{
"docid": "2580c4ab2ca485905e4195cd4748c6c2",
"text": "Grade 'Eh' Bacon answers it well, the issue is risk. To explain further, when a bank issues a loan, that loan comes with certain legal rights. If the bank decided to partner with a construction company, many of those rights to collect would be gone. Debt is treated differently than equity in the legal system. Banks are good at debt, investors are good at equity. We also oversimplify it by asking why banks don't prefer equity to debt. Some investment banks also like to deal in equity, so it's probably an inaccurate assumption that you start with.",
"title": ""
},
{
"docid": "f07714b5631bbd2a81f26cbd7e5f6a41",
"text": "\"The most succinct answer is \"\"Banks are in the Money business\"\". Not construction, not real estate, not any of the other things they may find find themselves sometimes being dragged (foreclosure) or tempted (construction) into. \"\"Money\"\" is their core competence, and as good business people they recognize that straying outside that just dilutes their focus.\"",
"title": ""
},
{
"docid": "7e907d422e9d3d798ba1f276f896040e",
"text": "\"Assumption - you live in a country like Australia, which has \"\"recourse\"\" mortgages. If you buy the apartment and take out a mortgage, the bank doesn't care too much if your apartment gets built or not. If the construction fails, you still owe the bank the money.\"",
"title": ""
},
{
"docid": "e1aa1ce6aba2c9edee99881da6cbb51b",
"text": "Why should a bank get into construction specifically? Lots of business opportunities require capital. Conceivably banks could build factories, develop consumer electronics, complete with SpaceX, etc. It's all capital in, profits out, with varying levels of risk and returns. There's nothing special about constructing apartments. The reason banks don't run businesses is because there are plenty of private firms that compete with each other for business. What's the chance that a bank, with all its bureaucracy, can deliver cheaper apartments than an apartment developer? Pretty low in fact, and that's why they would rather lend to an apartment developer rather than building the apartments themselves. Banks are in the business of competing with other banks. The main work they do is to sort out good investments from poor ones. And if they can do that just a bit more efficiently than their competitors, they make big bucks. For example, it might only take a few additional hours to better vet a deal worth millions. Whereas with an apartment building, you wouldn't be able to make that amount of money per hour even if the materials and labor cost you nothing.",
"title": ""
},
{
"docid": "b8d7639e01902ca28754028bcf23657d",
"text": "\"Historically, Banks are mandated to take relatively safe risks with their money. In exchange, they gain a de-facto permission to invent new money. They have regulations about what mix of assets they are permitted to own. Real estate speculation will be in a different category than a mortgage to someone with good credit. Second, mortgages with a secured asset are pretty safe almost all of the time. That person might stop paying their mortgage, but it is secured; when that happens, the bank gets the secured asset (the right-to-apartment or house or what have you). In a sense, the bank loses only if both the person paying the mortgage is less creditworthy than they look, and the secured asset cannot recoup their losses. In comparison, the person paying the mortgage loses if the secured asset cannot recoup their losses. The bank is buffered from risk two fold. What more, the bank uses the customer to determine what to invest in. Deciding what to do with money is expensive and hard. By both having a customer willing to put their good credit on the line and doing due diligence on the apartment, the Bank in effect uses you as a consultant who decides this may be a solid investment. Much of the risk of failure is on you, so you have lots of incentive to make a good choice. If the Bank was instead deciding which apartment where worth buying, who would decide? A bank employee, whose bonus this year depends on finding a \"\"great apartment to invest in?\"\", but the consequence of a bad choice doesn't show up for many years? The people selling the bank the apartments? Such a business can exist. There are real estate companies that take money, and invest it in real estate. Often the borrow money from Banks secured against their existing real estate and use it to build more real estate. (Notice the bit about it being secured against existing real estate; things go south, Bank gets stuff). The Bank's indirect investment in that apartment in the current system is covered by appraisals, the seller, the mortgage holder, and the system deciding that the mortgage holder is creditworthy. Banks sell risk. They lend you money, you go off and do something risky with it, and they get a the low-risk return on investment of your loan. Multiple such low-risk investments provides them with a relatively dependable stream of money, which they give out to their bondholders, deposit account customers, shareholders or what have you. When you take a mortgage out for that, you are buying risk from the bank. You are more exposed to the failure of the investment than they are. They get less return if things go really well.\"",
"title": ""
},
{
"docid": "bc718afd9f8edd15151243165c6c5c33",
"text": "Banks should be risk averse by default. They make loans to people and businesses after measuring their ability to repay. After they approve a big project loan like an apartment building, they don't give all the money to the builders upfront. They give money as progress is made and they make sure the funds are not being used inappropriately. There's no reason they couldn't do all this while owning the project, but that would also open them to lawsuits later on if anything wasn't built to code. By keeping the project at arm's length, they avoid future liability.",
"title": ""
},
{
"docid": "4af29a241248699704bf23cf1c31c9ea",
"text": "The core competency of banks is to lend money from depositors and re-lend that money to borrowers. They do not have the expertise to develop real estate. They have trouble evening managing foreclosed real estate, such that they have to sell them at a discount.",
"title": ""
},
{
"docid": "04bc38af33a77e553afb790380e0d30b",
"text": "You seem to underestimate the risk of this deal for the inverstors. A person purchasing a residence is happy to pay $70K instead of $150K now, and the only risk they take is that the construction company fails to build the condo. Whatever happens on the estate market in two years, they still saved the price difference between the price of complete apartments and to-be-build apartments (which by the way may be less than $150K-$70K, since that $150K is the price on a hot market in two years). However, an investor aiming to earn money counts on that the property will actually cost $150K in two years, so he's additionally taking the risk that the estate market may drop. Should that happen, their return on investment will be considerably lower, and it's entirely possible they will make a loss instead of a profit. At this point, this becomes yet another high risk investment option, like financing a startup.",
"title": ""
}
] |
[
{
"docid": "bd175da814341c7ca030ec8ac91582b9",
"text": "\"It's called leverage. Here's an example from real estate. The underlying appreciation on a house in certain parts of America is something like 7% a year. So if you bought the house \"\"all cash,\"\" your return would be something like 7% a year. (Actually, a little more, because of the rent you would be collecting, or saving, if you were the \"\"renter.\"\") Suppose you buy the same house, 20% down, 80% mortgage. The rent pays for your mortgage, taxes, insurance, etc. like it is supposed to. The house goes up the same 7% each year. But now your rate of return is 35%, that is 7%/20% (your down payment). You get the whole appreciation but put up only 20% of the money. The bank (and your renter) did the rest.\"",
"title": ""
},
{
"docid": "993f127732c2a230ca27b60f7f4b927e",
"text": "It's because financing can fall through, and then the time between offer and closing is wasted. Often buyers will include preapprovals and other evidence of financing eligibility with their offer for this reason.",
"title": ""
},
{
"docid": "5f47b6796e15fb0f25e9c9892d4f783a",
"text": "\"Economy of scale on one side versus \"\"person monetizing an illliquid asset\"\" on the other. Most multifamily rental buildings are owned by professional real estate investors (as well as individuals growing an empire to become a professional real estate investor whom I will count in this group). The rental difference between a 2000 Sq foot two bedroom apartment and 2000 Sq foot two bedroom standalone house is not large. The construction cost per square foot for a standalone house is higher than for a multifamily building (of similar height and materials). Maintenance calls, landscaping, and new roofs, dealing with permits and inspections, etc are much more efficient with multifamily properties. On the supply side, most single family rentals tend to be the nonprofessional single property owner because they happen to already own the place, and for one reason or another a. Don't want to sell and b. Want to gain cash flow on the asset.\"",
"title": ""
},
{
"docid": "104851bebfcd64861002248134924b53",
"text": "The finance sector is comprised of such enterprises as banks, investment funds, insurance companies and real estate. It is traditionally contrasted with what has been called the 'real economy' because funds created and utilized in this sector produce neither goods, services or fixed capital. The unproductive nature of transactions can easily be seen in such things as real estate. When a company undertakes to build a house or whatever its input goes directly to the labor and goods necessary for such a project. At its worst the financial sector mobilizes funds not just for production but for simple acquisition. Should a company raise the funds to buy an already existing building or the mortgage on same quite obviously nothing is produced. Same building on day one as when it was owned by another. That, of course, is an extreme example as are corporate takeovers via private equity. In that case the efforts of the financial sector are not just non-productive but are often in fact ''anti-productive'' as they destroy or prevent the use of real factors of production. This 'anti-productive' action was demonstrated on a massive global scale during the last financial crisis. The basically parasitic nature of the financial sector isn't always so blatant. There are some that argue that its 'services' can be valuable to the real economy. Perhaps, but that has to be determined on a case by case examination **and** while keeping the idea ''is there a better way to do this** in one's mind.",
"title": ""
},
{
"docid": "b2b74b5cd2be5c6afc1c3fe45820c19c",
"text": "\"The current mortgaged owner would typically not have the right to sell any portion of the house without approval from the bank. The bank doesn't \"\"own\"\" the house through the mortgage, but they do have a series of rights that, in some cases, look similar to ownership. Remember that a mortgage is just a loan that uses a house as collateral, to reduce the risk to the lender in the event of default. If it was just a personal loan, without collateral, then there would be a much higher risk of default (and therefore the interest rate would be closer to 20% than 2%). But because the loan was taken with collateral, that collateral can't be sold without the bank's permission. If the bank allowed this to happen, then one risk would be exactly as you say - that the mortgagee stops paying the bank, and the bank no longer is able to recover the full value of the loan on selling the remaining 50% of the house owed as collateral.\"",
"title": ""
},
{
"docid": "442a363cb496ed3562c1c8194e56956c",
"text": "\"People borrow money all the time to buy a house. Banks will lend money on one (up to 80%, sometimes more), because they consider it an \"\"investment.\"\" If you own a large company and want to expand, a bank or bond issuer will first look at what you plan to do with the money, like build new factories, or whatever. Based on their experience, they may judge that you will earn enough money to pay them back. If you don't, they may \"\"repossess\"\" your factories and sell them to someone who can pay. As protection, you may be asked to \"\"mortgage\"\" your existing company to protect the lenders of the new money. If you don't pay back the money, the lenders get not only your new \"\"factories\"\" but also your existing company.\"",
"title": ""
},
{
"docid": "beef0bceb0f19dfb4a5ce60e4934fd0a",
"text": "\"A mortgage is simply a loan backed by a property (and, because it's both very large and very common, covered by some specific laws). As such, the bank isn't an \"\"investor\"\" in your house; it simply is lending you money with the property as collateral. So, it doesn't get any share of the profit. As long as you sell the house on your own, for more than you owe, most of the time in the US you will get about 92-94% of the sale price back, minus whatever you owe on the house. The 6-8% you don't get will go to the realtors as commission (unless you sell by owner and don't sell to someone with a buyer's agent), and to pay some of the costs of the sale (how much of those you pay depends on the deal you make with the buyer, but it's common to pay some of them in some areas). You also will owe taxes (potentially). You then pay the bank back from that amount. As such, in your example, let's say Bob owes $50k on his house, and sells it with a realtor for $150k. He gets $150k-0.06*150k = 141k after commission. He then hands the bank a check for the current payoff of the loan: that amount is usually slightly higher than the remaining principal, because you owe the interest that's accrued between [last payment you made] and [day of sale]. Let's say this is a 6% loan, which works out to around 0.5% per month, and it's been half a month since his last payment, so he owes another 0.25%, or another $125. Some mortgages also may have prepayment penalties (check your note). In this case there isn't a penalty, so the bank gets $50,125 from the sale. Usually, the bank would get that immediately at closing - ie, he doesn't get the full $141k or $150k and then write a check, instead the title/closing company gets that amount, and gives the $9k to the realtors, the $50,125 to the bank, and the remaining $90,875 to him. Don't forget he may also owe income taxes, and sometimes other local taxes, on the profit on the sale. In this case the IRS wouldn't get anything (as it's under $250k), assuming it's a primary residence, but keep that in mind. Also - in the case of a foreclosure, the bank will get some extra money to pay for the costs it incurred in foreclosing on and selling the house.\"",
"title": ""
},
{
"docid": "7f398ad2294afdfaf8c2e0f39a65b251",
"text": "The underlying investment is usually somewhat independent of your mortgage, since it encompasses a bundle of mortgages, and not only yours. It works similarly to a fund. When, you pay off the old mortgage while re-financing, the fund receives the outstanding debt in from of cash, which can be used to buy new mortgages.",
"title": ""
},
{
"docid": "ba18ba31775842e53398358765bef09d",
"text": "Construction loans have an entirely set of rules and factors than mortgages and that's hard to reconcile into one instrument. Also, I'm guessing the bank would be a bit shy about giving a commitment to a home loan before they have any information about how the construction process is going. There would have to be a ton of contingencies put into mortgage and they probably can't account for everything.",
"title": ""
},
{
"docid": "93a09e9dfa2c54463cae53fc1b3fb9c3",
"text": "Correct. The developers know that and the Fed will still willingly back all these mortgages and the Government is backing all the private insurers who also know their risk is too great in these areas. Private insurers would never insure these homes without the Government backing them. It is moral hazard gone wild.",
"title": ""
},
{
"docid": "6278cee56a5973aae9cec2d8328fb568",
"text": "\"Generally, when you own something - you can give it as a collateral for a secured loan. That's how car loans work and that's how mortgages work. Your \"\"equity\"\" in the asset is the current fair value of the asset minus all your obligations secured by it. So if you own a property free and clear, you have 100% of its fair market value as your equity. When you mortgage your property, banks will usually use some percentage loan-to-value to ensure they're not giving you more than your equity now or in a foreseeable future. Depending on the type and length of the loan, the LTV percentage varies between 65% and 95%. Before the market crash in 2008 you could even get more than 100% LTV, but not anymore. For investment the LTV will typically be lower than for primary residence, and the rates higher. I don't want to confuse you with down-payments and deposits as it doesn't matter (unless you're in Australia, apparently). So, as an example, assume you have an apartment you rent out, which you own free and clear. Lets assume its current FMV is $100K. You go to a bank and mortgage the apartment for a loan (get a loan secured by that apartment) at 65% LTV (typical for condos for investment). You got yourself $65K to buy another unit free and clear. You now have 2 apartments with FMV $165K, your equity $100K and your liability $65K. Mortgaging the new unit at the same 65% LTV will yield you another $42K loan - you may buy a third unit with this money. Your equity remains constant when you take the loan and invest it in the new purchase, but the FMV of your assets grows, as does the liability secured by them. But while the mortgage has fixed interest rate (usually, not always), the assets appreciate at different rates. Now, lets be optimistic and assume, for the sake of simplicity of the example, that in 2 years, your $100K condo is worth $200K. Voila, you can take another $65K loan on it. The cycle goes on. That's how your grandfather did it.\"",
"title": ""
},
{
"docid": "390afd4dabff9fdbde3d42a41d0007ca",
"text": "What the comments above say is true, but one more thing is there. FD rates are directly proportional to loan rates. However, banks make money because loan rates will always be higher than FD rates.",
"title": ""
},
{
"docid": "74ea18e3d9909a7d8434a44d78226db5",
"text": "Failing some answers to my comment, I am going to make some assumptions: Based upon a quick review of this article I'd probably be in the Russell 2000 Value Index Fund (IWN). Quite simply it gives you broad market exposure so you can be diversified by purchasing one fund. One of the key success factors is starting, not if you pick the best fund at the onset. I can recall, 20 years ago being amazed (and it was quite a feat) at someone who was able to invest $400 per month. These days that won't get you to the ROTH maximum and smart 20 somethings are doing just that.",
"title": ""
},
{
"docid": "6bf437514ade59fb8744135e52adbfb3",
"text": "No. The US manufactures more goods than any other country, and only China is close. However, instead of making clothes, the US makes higher value items, like medical equipment. The impression that manufacturing is dead in the US is because of this, and because manufacturing has become highly automated, so there are far fewer manufacturing jobs than there were in the past.",
"title": ""
}
] |
fiqa
|
eadf295493657cf0ca3321360968b0e9
|
If I pay taxes on my earnings, would someone also pay taxes on the same earnings if I subcontract them and pay a share?
|
[
{
"docid": "4f23189bc5ab93bc85fe590c711b5301",
"text": "If you want to subcontract some of your excess work to somebody else, you better be in business! While some kinds of employees (e.g. commissioned salespeople) are permitted to deduct some expenses on their income tax, generally only a real business can deduct wages for additional employees, or the cost of services provided by subcontractors. Do you invoice your clients and charge HST (GST)? Or do you tell your clients each pay period how many hours you worked and they compensate you through their payroll system like everybody else that walks through the door? If you're not invoicing and charging HST (GST) (assuming you exceed the threshold, and if you have too much work, you probably do!), then perhaps your clients are treating you as an employee – by default – and withholding taxes, CPP, and EI so they don't get in trouble? After all, Canada Revenue Agency is likely to consider any person providing a service to a company to be an employee unless there is sufficient evidence to the contrary, and when there isn't enough evidence, it's the company paying for the services that would be on the hook for unpaid taxes, CPP, and EI. Carefully consider what form of business you are operating, or were intending to operate. It's essential for your business to be structured appropriately if you want to hire or subcontract. You ought to be either self-employed as a sole proprietor, or perhaps incorporated if it makes more sense to your situation. Next, act accordingly. For instance, it's likely that your business should be taking care of the source deductions, CPP, and EI. In fact, self-employed individuals shouldn't even be paying into EI – an independent contractor wouldn't qualify to make an EI claim if they lost a contract. As an independent, one doesn't have a job, one has a business, and EI doesn't cover the business itself, only the employees that the business deals with at arm's length. As a business owner, you would be considered non-arms-length, and exempt from EI. Growing your business in the way that you are suggesting is an important enough a step that you should seek professional advice in advance. Find a good accountant that deals with self-employed individuals & small businesses and run all this by him. He should be able to guide you accordingly. Find a lawyer, too. A lawyer can guide you on how to properly subcontract others while protecting you and your business. Finally, be mindful of what it is you agreed to in your contract with your client: Do they expect all services to be performed by you, personally? Even if it wasn't written down who exactly would be performing the services, there may be an assumption it's you. Some negotiation may be in order if you want to use subcontractors.",
"title": ""
}
] |
[
{
"docid": "ee0f34fa27cb4ca84be860d651f060f3",
"text": "You tagged with S-Corp, so I assume that you have that tax status. Under that situation, you don't get taxed on distributions regardless of what you call them. You get taxed on the portion of the net income that is attributable to you through the Schedule K that the S-Corp should distribute to you when the S-Corp files its tax return. You get taxed on that income whether or not it's distributed. If you also work for the small business, then you need to pay yourself a reasonable wage. The amount that you distribute can be one factor in determining reasonableness. That doesn't seem to be what you asked, but it is something to consider.",
"title": ""
},
{
"docid": "04468a78b190230604ded783ba3cbc6c",
"text": "There are too many nuances to the question asked to explore fully but here are a few points to keep in mind. If you are a cash-basis taxpayer (most individuals are), then you are not required to pay taxes on the money that has been billed but not received as yet. If you operate on an accrual basis, then the income accrues to you the day you perform the service and not on the day you bill the client. You can make four equal payments of estimated tax on the due dates, and if these (together with any income tax withholding from wage-paying jobs) are at least 90% of your tax liability for that year, then you owe no penalties for underpayment of tax regardless of how your income varied over the year. If your income does vary considerably over the year (even for people who only have wages but who invest in mutual funds, the income can vary quite a bit since mutual funds typically declare dividends and capital gains in December), then you can pay different amounts in each quarterly installment of estimated tax. This is called the annualization method (a part of Form 2210 that is best avoided unless you really need to use it). Your annualized income for the payment due on June 15 is 2.4 = 12/5 times your taxable income through May 31. Thus, on Form 2210, you are allowed to assume that your average monthly taxable income through May 31 will continue for the rest of the year. You then compute the tax due on that annualized income and you are supposed to have paid at least 45% of that amount by June 15. Similarly for September 15 for which you look at income through August 31, you use a multiplier of 1.5 = 12/8 and need to pay 67.5% of the tax on the annualized income, and so on. If you miscalculate these numbers and pay too little tax in any installment, then you owe penalties for that quarter. Most people find that guesstimating the tax due for the entire year and paying it in equal installments is simpler than keeping track of nuances of the annualized method. Even simpler is to pay 100% of last year's tax in four equal installments (110% for high earners) and then no penalty is due at all. If your business is really taking off and your income is going to be substantially higher in one year, then this 100%/110% of last year's tax deal could allow you to postpone a significant chunk of your tax bill till April 15.",
"title": ""
},
{
"docid": "9c1f1e8e2449c5553a47f4f5373a243e",
"text": "S-Corp income is passed through to owners and is taxed on their 1040 as ordinary income. If you take a wage (pay FICA) and then take additional distributions these are not subject to FICA. A lot of business owners will buy up supplies/ necessary expenses right before the end of the tax year to lower their tax liability.",
"title": ""
},
{
"docid": "b34732078e878961b77988a504a7cad3",
"text": "I am probably not the most qualified person, but I have taken some managerial finance courses. If company B is still in tact, has its own documentation saying it's a company and all that, the only income company A would need to claim from B is that which B profited and the profits were given to A. I see the above scenario similar to owning an asset, like a bond, which pays you interest. If the companies are merged, most definitely but that probably wasn't your question.",
"title": ""
},
{
"docid": "a90eba7df1e05c2d0b73a98ba3ababf1",
"text": "Nope pay the employer back the due does not involve any tax. Just keep a record of the transaction so that its available as reference.",
"title": ""
},
{
"docid": "ac80072286cd31d25fe9a0ed9e3045ee",
"text": "When you do your tax return, your total income from the year from all sources is added up. So you will need to include your employment income as well as your contractor income. Any tax taken off at source through PAYE will then be deducted from how there is to pay. So whether you pay the tax or your employer pays it, it should end up the same, although the timing will differ. There will be differences in National Insurance treatment, and you don't necessarily have a free option to choose which happens - the nature of your relationship may mean you have to be classed as either employed or self-employed under HMRC rules.",
"title": ""
},
{
"docid": "dd17ea184df500d33e41bc9dd5e08bd4",
"text": "Unfortunately, no. Think about the numbers. If you work for me, and I pay you $1000, you owe tax on $1000. If you still work, but I don't pay you, you have no tax due, but there's no benefit for you to collect for my stealing your time.",
"title": ""
},
{
"docid": "fd07b9332ec0af4e8cddc1f4c558f5dc",
"text": "\"From the IRS page on Estimated Taxes (emphasis added): Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments. If the amount of income tax withheld from your salary or pension is not enough, or if you receive income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, you may have to make estimated tax payments. If you are in business for yourself, you generally need to make estimated tax payments. Estimated tax is used to pay not only income tax, but other taxes such as self-employment tax and alternative minimum tax. I think that is crystal clear that you're paying income tax as well as self-employment tax. To expand a bit, you seem to be confusing self-employment tax and estimated tax, which are not only two different things, but two different kinds of things. One is a tax, and the other is just a means of paying your taxes. \"\"Self-employment tax\"\" refers to the Social Security and Medicare taxes that you must pay on your self-employment income. This is an actual tax that you owe. If you receive a W-2, half of it is \"\"invisibly\"\" paid by your employer, and half of it is paid by you in the form of visible deductions on your pay stub. If you're self-employed, you have to pay all of it explicitly. \"\"Estimated tax\"\" does not refer to any actual tax levied on anyone. A more pedantically correct phrasing would be \"\"estimated tax payment\"\". Estimated taxes are just payments that you make to the IRS to pay tax you expect to owe. Whether you have to make such payments depends on how much tax you owe and whether you've paid it by other means. You may need to pay estimated tax even if you're not self-employed, although this would be unusual. (It could happen, for instance, if you realized large capital gains over the year.) You also may be self-employed but not need to pay estimated tax (if, for instance, you also have a W-2 job and you reduce your withholding allowances to have extra tax withheld). That said, if you earn significant income from self-employment, you'll likely have to make estimated tax payments. These are prepayments of the income tax and Social Security/Medicare taxes you accrue based on your self-employment income. As Pete B. mentioned in his answer, a possible reason that your estiamtes are low is because some taxes have already been withheld from the paychecks you received so far during the year (while you were an employee). These represent tax payments you've already made; you don't need to pay that money a second time, but you may need to make estimated tax payments for your income going forward.\"",
"title": ""
},
{
"docid": "2feb1c44e0071295f10f2c3ef34941bb",
"text": "\"OK, it's a bit of a minefield but here goes! You only pay corporation tax in the UK on any profit made, so your \"\"salary\"\" would not be classed as part of the profit, so in the example you give you would only pay corporation tax on £4k less your \"\"salary\"\" ie £3,200 so profit on the £800 remaining gross profit. You don't say if your figures are monthly, annual etc, but you only pay income tax if you earn over £11.5k in any given tax year, the rates increase as your income does, check here: https://www.gov.uk/income-tax-rates You may have a different tax code, you would need to check that with HMRC but the link gives the \"\"default\"\" position which is correct for most people. https://www.itcontracting.com/limited-company-dividends/ If the figures you give are monthly then I would consult an accountant as they are likely to save you more than they will charge for their services. You will probably find it is most tax efficient to pay yourself a dividend from the company's profits but check with an accountant. More info: https://www.gov.uk/running-a-limited-company/taking-money-out-of-a-limited-company\"",
"title": ""
},
{
"docid": "ab4e8f980720ba23c8a6f3b80ca1a3cf",
"text": "Note that you're asking about withholding, not about taxing. Withholding doesn't mean this is exactly the tax you'll pay: it means they're withholding a certain amount to make sure you pay taxes on it, but the tax bill at the end of the year is the same regardless of how you choose to do the withholding. Your tax bill may be higher or lower than the withholding amount. As far as tax rate, that will be the same regardless - you're just moving the money from one place to the other. The only difference would be that your tax is based on total shares under the plan - meaning that if you buy 1k shares, for example, at $10, so $1,500 discounted income, if you go the payroll route you get (say) $375 withheld. If you go the share route, you either get $375 worth of stock (so 38 shares) withheld (and then you would lose out on selling that stock, meaning you don't get quite as much out of it at the end) or you would ask them to actually buy rather more shares to make up for it, meaning you'd have a slightly higher total gain. That would involve a slightly higher tax at the end of it, of course. Option 1: Buy and then sell $10000 worth, share-based withholding. Assuming 15% profit, and $10/share at both points, then buy/sell 1000 shares, $1500 in profit to take into account, 38 shares' worth (=$380) withheld. You put in $8500, you get back $9620, net $1120. Option 2: Buy and then sell $13500 worth, share based withholding. Same assumptions. You make about $2000 in pre-tax profit, meaning you owe about $500 in tax withholding. Put in $11475, get back $13000, net $1525. Owe 35% more tax at the end of the year, but you have the full $1500 to spend on whatever you are doing with it. Option 3: Buy and then sell $1000 worth, paycheck withholding. You get the full $10000-$8500 = $1500 up front, but your next paycheck is $375 lighter. Same taxes as Option 1 at the end of the year.",
"title": ""
},
{
"docid": "593f4db1a68747f316eb246b4073b067",
"text": "\"Do you mean how much income tax the IRS will assess? Loans are not income, therefore they do not incur income tax. So as long as the money isn't being given, but being loaned, you don't have to pay income tax on it. And just in case you think there's a loophole of \"\"Instead of paying my workers, I'll just 'loan' them their paychecks, and then forgive the debt at the end of the year\"\", no, the IRS does consider loan forgiveness to be a form of income. So you need to look at whether the loan is going to you, or whether your business is a separate legal entity that is getting the money. If it's a capital contribution, then you are selling a stake in your company. Or, more precisely, as long as the money is going into the business, the company is selling a stake in itself. In that case, there generally isn't tax owed. Here's a Quara question that touches on this: https://www.quora.com/Is-money-raised-through-investors-taxed\"",
"title": ""
},
{
"docid": "547c7695b77b8fca33f9c4f66557eee8",
"text": "As JoeTaxpayer has mentioned, please consult a lawyer and CA. In general you would have to pay tax on the profit you make, in the example on this 10% you make less of any expenses to run the business. depending on how you are incorporating the business, there would be an element of service tax apart from corporate tax or income tax.",
"title": ""
},
{
"docid": "95016e01b71321938f2cd9859aed3f34",
"text": "If you have a public company and shareholder A owns 25% and shareholder B owns 25%, and lets say the remaining 50% is owned by various funds/small investors. Say profits are 100mil, and a dividend is payed. Say 50 mil worth is payed out as dividend and 30 mil is kept as retained earnings for future investment. Can the remaining 20 mil be distributed to shareholders A and B, so that they both get 10mil each? Can certain shareholders be favored and get a bigger cut of profits than the dividends pay out is my question basically.",
"title": ""
},
{
"docid": "ce251ce6d31823ac7124eae816392f7c",
"text": "Do you have any insight on average *effective* rates paid by SE owners? As a counterpoint to your (very valid) links, filing as S-corp allows for taxes on distributions to be exempt from payroll tax and taxed at much lower rates. Also, being SE allows for various deductions not possible for wage earners. There's probably other examples not immediately coming to mind. Also, SE taxes equal taxes otherwise paid by employer + employee. It's just that those employer taxes don't appear on the employee's paystub so not everyone realizes this.",
"title": ""
},
{
"docid": "85f1ee03b67a2df86e96dbcec51a9f21",
"text": "\"Assuming you are paying into and eligible to collect regular Employment Insurance benefits for the job in question, I don't see how owning a side business would, by itself, affect your ability to participate in the workshare program. Many people own dormant businesses ($0 revenue / $0 income), or businesses with insignificant net income (e.g. a small table at the flea market, or a fledgling web-site with up-front costs and no ad revenue, yet ;-) I think what matters is if your side business generated income substantial enough to put you over a certain threshold. Then you may be required to repay a portion of the EI benefits received through the workshare program. On this issue, I found the following article informative: How to make work-sharing work for you, from the Globe & Mail's Report on Business site. Here's a relevant quote: \"\"[...] If you work elsewhere during the agreement, and earn more than an amount equal to 40% of your weekly benefit rate, that amount shall be deducted from your work sharing benefits payable that week. [...]\"\" The definitive source for information on the workshare program is the Service Canada web site. In particular, see the Work-Sharing Applicant Guide, which discusses eligibility criteria. Section IV confirms the Globe article's statement above: \"\"[...] Earnings received in any week by a Work-Sharing participant, from sources other than Work-Sharing employment, that are in excess of an amount equal to 40% or $75 (whichever is greater) of the participant's weekly benefit rate, shall be deducted from the Work-Sharing benefits payable in that week. [...]\"\" Finally, here's one more interesting article that discusses the workshare program: Canada: Employment Law @ Gowlings - March 30, 2009.\"",
"title": ""
}
] |
fiqa
|
e78c36ac28c6704938f1c3a6989cfb68
|
Why is there such disparity of max contribution limits between 401K accounts and regular IRA accounts?
|
[
{
"docid": "d27e688047e682e8332b0c5e56a00fc3",
"text": "The 401k was not written with the specific intent of enabling retirement savings. Why do tax advantages favor employees of large employers... It seems that large businesses have been more effective at influencing legislators despite that there are more people are employed by small than large businesses.",
"title": ""
},
{
"docid": "2933e62ed49bd8af525b34be7bfb88e6",
"text": "IRAs were invented to help individuals save for retirement. 401(k)s were invented to help corporations provide more compensation to highly valued employees.",
"title": ""
},
{
"docid": "6608c171e52d13e656ec481fa3992ba5",
"text": "The investments offered in 401K are usually limited to a selection of mutual funds offered by a 401K provider. The 401K providers and the mutual funds charge fees. The mutual fund industry has a lobbying group that will push for increased 401K contributions to direct money into their mutual funds to collect fees. The top 401 K provider in 2005 was fidelity. It managed $337 billion in 401Ks of which $334 billion was directed into mutual funds. Although I would have to use some of the same providers to open an IRA, I would not have to invest in the providers' mutual funds when I open an IRA. I can buy a stock and hold onto it for 10, 20, 50 years inside of my IRA. Thus, the only fee the investment company would collect from me would be from when I purchased the stock and when I sold the stock. Not nearly as profitable as mutual fund fees.",
"title": ""
}
] |
[
{
"docid": "163a550e4375f59250e9fedb8d97204a",
"text": "My old company did this and set a limit at 13 percent which for me kept me well below putting the max into 401k. One had to make 120 - 130k to hit the irs max at 13 percent. So any explanation that the limit restricts high wage earner is BS. This limit restricts all low wage earners as their 13 percent max will be less than the max allowed. If a person making only 70k wants to put 17k into 401k fact is theycannot do this because they do not make enough the limit is discrimination against low-wage earners. Period.",
"title": ""
},
{
"docid": "ca14abfa2753a8b71c7238c22a922a32",
"text": "Some companies allow you to make a post-tax contribution to the 401K. This is not a Roth contribution. This can be money beyond the 18,000 or 24,000 401k limit. The best news is that eventually that money can be rolled into 1 Roth-IRA. Not all companies allow this option. One company I worked for did this automatically when you hit the annual max. Of course that was made more complex if you had multiple employers that year.",
"title": ""
},
{
"docid": "175c2b5e3b93c09019d2e8d5c996204d",
"text": "\"There are two types of 401(k) contributions: \"\"elective contributions,\"\" which are the part put in by the employee and \"\"nonelective contributions,\"\" which are the part put in by the company. Elective contributions are summed across all the plans she is contributing to. So she can contribute $18,000 minus whatever she put in her 403(b). Additionally she can contribute 20% of the net profit of the company (before the elective contributions) as nonelective contributions (these contributions must be designated as such). You will notice that the IRS document says 25%, but that's what you can do if her business is incorporated. For a sole proprietorship, nonelective contributions ends up being limited at 20% of profit. Additionally, the sum of these two and her contribution to her 403(b) cannot exceed $53,000. Example: line 31 of her schedule C is $30,000 and she has contributed $10,000 to her 403(b). Maximum contribution to her solo 401(k) is ($18,000 - $10,000) + 0.2 * $30,000 = $14,000 Her total contributions for the year are $10,000 from her 403(b) plus $14,000 in her solo 401(k). This is less than $53,000 so this limit does not bind. If she made a ton of 1099 money, her contribution maximum would follow the above until it hit $53,000 and then it would stop there. The IRS describes this in detail in Publication 560, which also has a worksheet for figuring out your maximum explicitly. It's unpleasant reading and the worksheets are painful, but if you do it right, it will end up being as I just described it. Using the language of that publication, hers is a \"\"qualified plan\"\" of the \"\"defined contribution\"\" variety.\"",
"title": ""
},
{
"docid": "4aa06ed706842550755202b68ebefed2",
"text": "\"The different things in each calculator are showing you a bunch of different things. In the \"\"Roth IRA calculator\"\", it is comparing what you would have in the end after contributing and withdrawing from a Roth IRA, with what you would have in the end with a taxable account (i.e. an investment outside of any IRAs). In the \"\"Traditional IRA calculator\"\", the \"\"IRA after taxes\"\" shows you what you would have in the end after contributing and withdrawing from a pre-tax Traditional IRA. The \"\"IRA before taxes\"\" simply shows the same amount before you pay the taxes on withdrawal, which is not a useful number. So if you want to compare Roth IRA vs. Traditional IRA, you want to compare the \"\"Roth IRA\"\" from the Roth IRA Calculator and the \"\"IRA after taxes\"\" from the Traditional IRA calculator, but there are some things you need to be aware of to make a fair comparison, because if you just plug in the same numbers you are going to get a very unfair comparison (it will look like Roth IRA is a lot \"\"better\"\" even though it's not). The Roth IRA contribution is after-tax, whereas a (pre-tax) Traditional IRA contribution is pre-tax, and an after-tax dollar is much more than a pre-tax dollar, so if you put in the same nominal contribution amount, you are actually contributing much \"\"more\"\" from your wallet in the Roth IRA case. To make a fair comparison, you would need to start with the same pre-tax amount, and put in a Roth IRA contribution amount that corresponds to the equivalent amount after taxes. So for example, a $5000 pre-tax amount with 25% taxes is equivalent to $5000 * 0.75 = $3750, so you would put in $5000 for Traditional IRA contribution vs. $3750 for Roth IRA contribution. Note that if you have the same flat tax rate at contribution and at withdrawal, (pre-tax) Traditional IRA and Roth IRA are exactly the same, and you can see this by putting in 25% for the \"\"Retirement tax rate\"\" in the Traditional IRA calculator (we already assumed 25% tax rate for Roth IRA when calculating the contribution). You will see that Traditional IRA would be better in a lower retirement tax rate (e.g. 15%), whereas Roth IRA would be higher in a higher retirement tax rate.\"",
"title": ""
},
{
"docid": "6f3d9168d77d34be6e5866a401312aa7",
"text": "You can contribute to a Traditional IRA instead of a Roth. The main difference is a contribution to a Roth is made with after tax money but at retirement you can withdraw the money tax free. With a Traditional IRA your contribution is tax-deductible but at retirement the withdrawal is not tax free. This is why most people prefer a Roth if they can contribute. You can also contribute to your work's 401k plan assuming they have one. And you can always save for retirement in a regular account.",
"title": ""
},
{
"docid": "7e529f8713167d8d91a2d7ae0853867c",
"text": "The first problem with your analysis is that you are not comparing equivalent contributions. The deductible Traditional IRA contribution is in terms of pre-tax money, whereas the Roth IRA contribution is in terms of post-tax money. A certain nominal amount of pre-tax money is equivalent to a smaller nominal amount of post-tax money, because taxes are taken out of it. For a fair comparison, you need to start with the same amount of pre-tax money being taken out of your wages. If you start with $1000 being taken out of your pre-tax wages, the deductible Traditional IRA contribution will be $1000, but your Roth IRA contribution will be $750, because 25% of it went to paying taxes. If you go through the calculation, you will see that after you withdraw it (and 25% taxes are paid in the Traditional case), you will be left with the exact same amount of money in your hand at the end in both cases. Even though you see that you end up with the same amount of money, you may still be confused because you paid different nominal amounts in taxes. That's the second problem with your analysis -- you are comparing the nominal amounts of taxes paid at different times. You are missing the time value of money. Would you rather pay $1000 of taxes today or $1001 of taxes in 10 years? Of course you would rather the latter, even though it is a higher nominal amount. A given amount of money now has the same value to you now as a bigger amount of money later. If I invest a given amount of money now, and it grows in to a bigger amount of money later, then that bigger amount of money later has the same value as the original contribution now. So the 25% tax on the contribution now is equivalent to the 25% tax on the total value later, even though the latter is a much bigger nominal amount. Another way to think about it is that you could have taken that 25% tax you paid now, and instead invest it, let it grow, and pay that result (which will still be 25% of the total later) in taxes later. You get to keep the remaining 75% of your investment either way. You are simply investing on behalf of the government the part of the money you would have paid them, and paying them the result of investing that portion of the money later.",
"title": ""
},
{
"docid": "530d6b402f725b2b02a2bd51388831bd",
"text": "The main restrictions you see with IRA's involve contributions, and not the actual investments themselves. I would be indifferent to having a single investment across multiple accounts. It might be a bit trickier to manage, especially if your strategy involves some specific asset allocation. Other than account management though, there's no big issue.",
"title": ""
},
{
"docid": "e47b0ed65e89b642b9d27bf9113dba23",
"text": "easier access to your money That can be a disadvantage for some people. Based on the number of people who tap their 401K for non-retirement reasons, or just cash it in when they change jobs; making it painful to use before retirement age does keep some people from spending it too early. They need to be able to compartmentalize the funds in order to understand the difference between funds spending, saving and investing for retirement. Roth 401K One advantage that the 401K may have is that you can in many plans invest the funds in a Roth 401K. This allows you to go beyond the Roth IRA limits. You are currently investing the maximum amount in your Roth IRA, so this could be a big advantage.",
"title": ""
},
{
"docid": "0aa16b8a07ae8ff46fd91f3e373b6fd0",
"text": "The point is to provide for yourself in retirement, so it makes sense that these withdrawals would be penalized. Tax deferred accounts are usually created for a specific cause. Using them outside of the scope of that cause triggers penalties. You mentioned 401(k) and IRA that have age limitations because they're geared towards retirement. In the US, here are other types, and if you intend to spend money in the related areas, they may be worth considering. Otherwise, you'll hit penalties as well. Examples: HSA - Health Savings Account allows saving pre-tax contributions and gains towards medical expenses. You must have a high deductible health plan to be eligible. Can be used as IRA once retired. 529 plans - allow saving pre-tax gains (and in some states pre-tax contributions) for education expenses for you or a beneficiary. If a beneficiary - contributions are considered a gift. There's a tax benefit in long term investing in a regular taxable brokerage accounts - long term capital gains are taxed at a preferable (lower) rate than short term or ordinary income. The difference may be significant. Long term = 1+ year holding. The condition here is holding an investment for more than a year, and there's no penalty for not satisfying it but there's a reward (lower rates) if you do.",
"title": ""
},
{
"docid": "304819453c17e5a53069b7a6f1a7afe7",
"text": "\"Whether you contribute to an IRA (Traditional or Roth) and whether you contribute to a 401k (Traditional or Roth) are independent. IRAs have one contribution limit, and 401ks have another contribution limits, and these limits are independent. I see no reason why you wouldn't maximize the amount of money in tax-advantaged accounts, if you can afford to. In your first year of work, especially if you only work for part of the year, you're likely in a lower tax bracket than in the future, so Roth is better than Traditional. Another thing to note is that the money in the Roth IRA can be part of your \"\"safety net\"\" -- contributions to a Roth IRA (but not earnings) can be withdrawn at any time without tax or penalty. So if there is an emergency you can withdraw it, and it wouldn't be any worse than in a taxable account. And if you don't need it, then it will enjoy the tax benefits of being in the IRA.\"",
"title": ""
},
{
"docid": "50760dffd8fb709fb61ee9a6688fff43",
"text": "\"Couple points: 1) Since the Roth is after tax, you can effectively contribute more than you could with the Traditional IRA before hitting the limits. So in your example, if you had extra money you wanted to invest in an IRA, you could invest up to $1,750 more into the Roth but only $500 more into the Traditional (current limits are $5,500 per year for single filers under 50). Your example assumes that you have exactly $3,750 in spare money looking for an IRA home. 2) The contributions (but not earnings) can be withdrawn from the Roth at any time, penalty and tax free. 3) The tax rate \"\"lock-in\"\" can be significant, especially early on when you are at a relatively low tax bracket, say 15%, but expect to be higher at retirement. 4) Traditional IRAs and 401(k) are taxed as ordinary income, so you go through the tax brackets. Even if the marginal rate is 25%, the effective rate may be lower. If you have a Roth, conceivably you could reduce the amount you need to withdrawal from the Trad IRA/401(k) to reduce the effective tax rate on those (of course subject to minimum distributions and all that). This is more an argument to have a mix of pre- and post-tax retirement accounts than strictly a pro-Roth reason.\"",
"title": ""
},
{
"docid": "26b5ff21ee63160b8a33ba05c49c932f",
"text": "Traditional and Roth 401k share a contribution limit of $16.5k. This means you could actually contribute to both if you wished to (say, if you weren't 100% on how taxes will change come retirement time), but the combined contributions for the year cannot exceed that limit.",
"title": ""
},
{
"docid": "28fd3f2b9abf80e7e992c156a737670d",
"text": "\"There's a bit of confusion here. Michael's article you linked is focused on the issue of post-tax 401(k) deposits. For those new to this, it sounds like we are talking about Roth 401(k) money. Not so. The Roth IRA was introduced in 1998, and the Roth 401(k) in 2006. Before '06, people had the ability to deposit more to their 401(k) than the pretax limit of $15,000 into the account as \"\"after tax\"\" deposits. My understanding is that these funds were analogous to the non-deducted IRA deposits for those outside the income limits. Michael goes on the point out that now, with the addition of Roth 401(k) and Roth IRAs, there are folk with pre and post Tax 401(k) funds and trying to crack them for transfer to Traditional IRA and Roth IRA may be problematic. Aside from a recent thread here, there are separate accounts for the Roth 401(k) and Traditional 401(k), and it's possible for the traditional to contain post tax money, which, given the recent introduction of the Roth 401(k) conversion, should be easily addressable.\"",
"title": ""
},
{
"docid": "e427d39b5716031a1384bb51f1ab5018",
"text": "The simplest explanation is that a traditional IRA is a method of deferring taxes. That is, normally you pay taxes on money you earn at the ordinary rate then invest the rest and only pay the capital gains rate. However, with a traditional IRA you don't pay taxes on the money when you earn it, you defer the payment of those taxes until you retire. So in the end it ends up being treated the same. That said, if you are strategic about it you can wind up paying less taxes with this type of account.",
"title": ""
},
{
"docid": "76ba964218717067cef7ee03a2b4a699",
"text": "This is an older question but things have changed. Its a common misconception on what the contribution cap is. A few things. In 2014, the IRS did not adjust the maximum contribution from the previous year which include 401(k) accounts, 403(b) accounts, most 457 plans, and Thrift Savings Plans, will be $18,000, up $500 from $17,500. Savers and investors aged 50 or older can take advantage of a catch-up contribution. In 2015, taxpayers who meet this age-based criterion can contribute an additional $6,000 above the regular maximum of $18,000, thus you can contribute a maximum of $24,000 into these tax-advantaged accounts. The total contribution limit, including employer contributions, has increased to $53,000 You can actually contribute up to 53k (including matching) so the exact amount you contribute from your actual income may end up being more or less than 24k. If you get a poor employer match you can actually contribute more but it would go in as after tax dollars and not claim the tax deduction. Note: after tax does NOT equal Roth. However if your a high salaried individual you can use this as a potential loop hole for funding a Roth IRA. Chances are if your making enough money to contribute 53k Total Contributions then your not going to qualify for a roth. However once you retire (or possibly before depending on the plan withdraw terms) you can roll the after tax money into a Roth IRA. This is a gray area on the tax policy. The IRS may come back and change their mind about this. If considering this option talk to a tax adviser.",
"title": ""
}
] |
fiqa
|
aafbda771bad966be54dbefb9744c696
|
What options do I have at 26 years old, with 1.2 million USD?
|
[
{
"docid": "75611f7d7709881a3c08bad29d9ebe60",
"text": "The amount of money you have should be enough for you to live a safe but somewhat restricted life if you never worked again - but it could set you up for just about any sort of financial goal (short of island buying) if you do just about any amount of work. The basic math for some financial rules of thumb to keep in mind: If your money is invested in very low-risk ways, such as a money market fund, you might earn, say, 3% in interest every year. That's $36k. But, if you withdraw that $36k every year, then every year you have the same principal amount invested. And a dollar tomorrow can't buy as much as a dollar today, because of inflation. If we assume for simplicity that inflation is 1% every year, then you need to contribute an additional $12k to your principal balance every year, just so that it has the same buying power next year. This leaves you with a net $24k of interest income that you can freely spend every year, for the rest of your life, without ever touching your principal balance. If your money is invested more broadly, including equity investments [stocks], you might earn, say, 7% every year. Some years you might lose money on your investments, and would need to draw down your principal balance to pay your bills. Some years you might do quite well - but would need to remain conservative and not withdraw your 'excess' earnings every year, because you will need that 'excess' to make up for the bad years. This would leave you with about $74k of income every year before inflation, and about $62k after inflation. But, you would be taking on more risk by doing this. If you work enough to pay your daily bills, and leave your investments alone to earn 7% on average annually, then in just 10 years your money would have doubled to ~ $2.4 Million dollars. This assumes that you never save another penny, and spend everything you make. It's a level of financial security that means you could retire at a drop of the hat. And if don't start working for 20 years [which you might need to do if you spend in excess of your means and your money dries up], then the same will not be true - starting work at 45 with no savings would put you at a much greater disadvantage for financial security. Every year that you work enough to pay your bills before 'retirement' could increase your nest egg by 7% [though again, there is risk here], but only if you do it now, while you have a nest egg to invest. Now in terms of what you should do with that money, you need to ask yourself: what are your financial goals? You should think about this long and hard (and renew that discussion with yourself periodically, as your goals will change over time). You say university isn't an option - but what other ways might you want to 'invest in yourself'? Would you want to go on 'sabbatical'-type learning trips? Take a trade or learn a skill? Start a business? Do you want to live in the same place for 30 years [and thus maybe you should lock-down your housing costs by buying a house] or do you want to travel around the world, never staying in the same place twice [in which case you will need to figure out how to live cheaply and flexibly, without signing unnecessary leases]. If you want to live in the middle of nowhere eating ramen noodles and watching tv, you could do that without lifting a finger ever again. But every other financial goal you might have should be factored into your budget and work plan. And because you do have such a large degree of financial security, you have a lot of options that could be very appealing - every low paying but desirable/hard-to-get job is open to you. You can pursue your interests, even if they barely pay minimum wage, and doing so may help you ease into your new life easier than simply retiring at such a young age [when most of your peers will be heavy into their careers]. So, that is my strongest piece of advice - work now, while you're young and have motivation, so that you can dial back later. This will be much easier than the other way around. As for where you should invest your money in, look on this site for investing questions, and ultimately with that amount of money - I suggest you hire a paid advisor, who works based on an hourly consultation fee, rather than a % management fee. They can give you much more directed advice than the internet (though you should learn it yourself as well, because that will give you the best piece of mind that you aren't being taken advantage of).",
"title": ""
},
{
"docid": "481467d7deea46bb5ea3a473c02ce5ef",
"text": "\"Pay off the credit cards. From now on, pay off the credit cards monthly. Under no circumstances should you borrow money. You have net worth but no external income. Borrowing is useless to you. $200,000 in two bank accounts, because if one bank collapses, you want to have a spare while you wait for the government to pay off the guarantee. Keep $50,000 in checking and another $50k in savings. The remainder put into CDs. Don't expect interest income beyond inflation. Real interest rates (after inflation) are often slightly negative. People ask why you might keep money in the bank rather than stocks/bonds. The problem is that stocks/bonds don't always maintain their value, much less go up. The bank money won't gain, but it won't suddenly lose half its value either. It can easily take five years after a stock market crash for the market to recover. You don't want to be withdrawing from losses. Some people have suggested more bonds and fewer stocks. But putting some of the money in the bank is better than bonds. Bonds sometimes lose money, like stocks. Instead, park some of the money in the bank and pick a more aggressive stock/bond mixture. That way you're never desperate for money, and you can survive market dips. And the stock/bond part of the investment will return more at 70/30 than 60/40. $700,000 in stock mutual funds. $300,000 in bond mutual funds. Look for broad indexes rather than high returns. You need this to grow by the inflation rate just to keep even. That's $20,000 to $30,000 a year. Keep the balance between 70/30 and 75/25. You can move half the excess beyond inflation to your bank accounts. That's the money you have to spend each year. Don't withdraw money if you aren't keeping up with inflation. Don't try to time the market. Much better informed people with better resources will be trying to do that and failing. Play the odds instead. Keep to a consistent strategy and let the market come back to you. If you chase it, you are likely to lose money. If you don't spend money this year, you can save it for next year. Anything beyond $200,000 in the bank accounts is available for spending. In an emergency you may have to draw down the $200,000. Be careful. It's not as big a cushion as it seems, because you don't have an external income to replace it. I live in southern California but would like to move overseas after establishing stable investments. I am not the type of person that would invest in McDonald's, but would consider other less evil franchises (maybe?). These are contradictory goals, as stated. A franchise (meaning a local business of a national brand) is not a \"\"stable investment\"\". A franchise is something that you actively manage. At minimum, you have to hire someone to run the franchise. And as a general rule, they aren't as turnkey as they promise. How do you pick a good manager? How will you tell if they know how the business works? Particularly if you don't know. How will you tell that they are honest and won't just embezzle your money? Or more honestly, give you too much of the business revenues such that the business is not sustainable? Or spend so much on the business that you can't recover it as revenue? Some have suggested that you meant brand or stock rather than franchise. If so, you can ignore the last few paragraphs. I would be careful about making moral judgments about companies. McDonald's pays its workers too little. Google invades privacy. Exxon is bad for the environment. Chase collects fees from people desperate for money. Tesla relies on government subsidies. Every successful company has some way in which it can be considered \"\"evil\"\". And unsuccessful companies are evil in that they go out of business, leaving workers, customers, and investors (i.e. you!) in the lurch. Regardless, you should invest in broad index funds rather than individual stocks. If college is out of the question, then so should be stock investing. It's at least as much work and needs to be maintained. In terms of living overseas, dip your toe in first. Rent a small place for a few months. Find out how much it costs to live there. Remember to leave money for bigger expenses. You should be able to live on $20,000 or $25,000 a year now. Then you can plan on spending $35,000 a year to do it for real (including odd expenses that don't happen every month). Make sure that you have health insurance arranged. Eventually you may buy a place. If you can find one that you can afford for something like $100,000. Note that $100,000 would be low in California but sufficient even in many places in the US. Think rural, like the South or Midwest. And of course that would be more money in many countries in South America, Africa, or southern Asia. Even southern and eastern Europe might be possible. You might even pay a bit more and rent part of the property. In the US, this would be a duplex or a bed and breakfast. They may use different terms elsewhere. Given your health, do you need a maid/cook? That would lean towards something like a bed and breakfast, where the same person can clean for both you and the guests. Same with cooking, although that might be a second person (or more). Hire a bookkeeper/accountant first, as you'll want help evaluating potential purchases. Keep the business small enough that you can actively monitor it. Part of the problem here is that a million dollars sounds like a lot of money but isn't. You aren't rich. This is about bare minimum for surviving with a middle class lifestyle in the United States and other first world countries. You can't live like a tourist. It's true that many places overseas are cheaper. But many aren't (including much of Europe, Japan, Australia, New Zealand, etc.). And the ones that aren't may surprise you. And you also may find that some of the things that you personally want or need to buy are expensive elsewhere. Dabble first and commit slowly; be sure first. Include rarer things like travel in your expenses. Long term, there will be currency rate worries overseas. If you move permanently, you should certainly move your bank accounts there relatively soon (perhaps keep part of one in the US for emergencies that may bring you back). And move your investments as well. Your return may actually improve, although some of that is likely to be eaten up by inflation. A 10% return in a country with 12% inflation is a negative real return. Try to balance your investments by where your money gets spent. If you are eating imported food, put some of the investment in the place from which you are importing. That way, if exchange rates push your food costs up, they will likely increase your investments at the same time. If you are buying stuff online from US vendors and having it shipped to you, keep some of your investments in the US for the same reason. Make currency fluctuations work with you rather than against you. I don't know what your circumstances are in terms of health. If you can work, you probably should. Given twenty years, your million could grow to enough to live off securely. As is, you would be in trouble with another stock market crash. You'd have to live off the bank account money while you waited for your stocks and bonds to recover.\"",
"title": ""
},
{
"docid": "ae1d54860f380f4d9791700b1724381b",
"text": "You need the services of a hard-nosed financial planner. A good one will defend your interests against the legions of creeps trying to separate you from your money. How can you tell whether such a person is working in your best interest? Here are some ways. You'll be able to tell pretty quickly whether the planner lets you get through the same story you told us. The ability to listen carefully without interrupting is a good way to tell whether the planner is going to honor your needs. You're looking for a human service professional, not an investment or business guru. There are planners who specialize in helping people navigate big changes in their financial situation. Some of the best of those planners are women. (Many of their customers are people whose spouses recently died. But they also serve people in your situation. Ask if they work with other people like you.) Of course, you need to take the planner's advice, especially about spending and saving levels.",
"title": ""
},
{
"docid": "77d8568e2a1e3363a5d02566be6d3f14",
"text": "\"Until you get some financial education, you will be vulnerable to people wanting your money. Once you are educated, you will be able to live a tidy life off this-- which is exactly why this amount was awarded to you, rather than some other amount. They gave you enough money. This is not a lottery win. I mean \"\"financial counselors\"\" who will want to help you with strategies to invest your money. Every one will promise your money will grow. The latter case describes every full-service broker, e.g. what will happen if you walk into EdwardJones. This industry has a long tradition of charmingly selling investments which significantly underperform the market, and making their money by kickbacks (sales commissions) from those investments (which is why they significantly underperform.) They also offer products which are unnecessarily complex meant to confuse customers and hide fees. One mark of trouble is \"\"early exit\"\" fees, which they need to recoup the sales commission they already paid out. Unfortunately, one of those people is you. You are treating this like a windfall, falling into old, often-repeated cliché of \"\"lottery-win thinking\"\". \"\"Gosh, there's so much money there, what could go wrong?\"\" This always ends in disaster and destitution, on top of your other woes. It's not a windfall. They gave you just enough money to live on - barely. Because these lawyers and judges do this all day every day, and they know exactly how much capital will replace a lifelong salary, and if anything you got cheated a bit. Read on. You don't want to feel like greedy Scrooge, hoarding every penny. I get that. But generous spending won't fix that. What will is financial education, and once you have real understanding and certainty about your financial situation, you will be able to both provide for yourself and be giving in a sensible manner. This stuff isn't taught in school. If it was, there'd be a lot more millionaires, because wealth isn't about luck, it's about intelligent management of money. Good advisers do exist. They're hard to find. Good advisors work only one way: for a flat rate or hourly fee. This is called a \"\"Fee-only advisor\"\". S/he never takes commissions. Beware of brokers who normally work on commission but will happily take an upfront fee. Even if they promise to hand you their commission check, they're still recommending you into the same sub-par investments because that's their training! I get the world of finance is extremely confusing and it's hard to know where to start. Just make one leap of faith with me: You can learn this. One place it's not confusing: University endowments. They get windfalls just like you, and they need to manage it to support them for a very long time, just like you. Endowments are very closely watched by the smartest people in finance -- no lottery fever here. It's agreed by all that there is one best way to invest an endowment. And it's mandatory by law. An endowment is a chunk of money (say, $1.2 million) that must fund a purpose (say, a math professorship or \"\"chair\"\") in perpetuity. You're not planning to live quite that long, but when you're in your 20's, the investment strategy is the same. The endowment is designed to generate income of some amount, on average, over the long term. You can draw from the endowment even in \"\"down years\"\". The rule of thumb is 4-6% is a sustainable rate that won't overtax the endowment (usually, but you have to keep an eye on it). On $1.2M, that's $48,000 to $72,000 per year. Not half bad. See, I told you it could work. Read Jane Austen? Mister Darcy, referred to as a gentleman of 10,000 pounds -- meaning his assets were many times that, but they yield income of £10,000 a year. Same idea. Keep in mind that you need to pay taxes. But if you plan your investments so you're holding them more than a year, you're in the much lower 0-10-15% capital gains tax bracket. So, here's where I'd like you to go. I would say more, but this will give you quite an education by itself. Say you gave all your money to me. And said \"\"Your nonprofit needs an executive director. Fund it. In perpetuity.\"\" I'd say \"\"Thank you\"\", \"\"you're right\"\", and I'd create an endowment and invest it about like this. That is fairly close to the standard mix you'll find in most endowments, because that is what's considered \"\"prudent\"\" under endowment law (UPMIFA). I'd carry all that in a Vanguard or Fidelity account and follow Bogle's advice on limiting fees. That said, dollar-cost-averaging is not a suicide pact, and bonds are ugly right now (for reason Suze Orman describes) and real estate seems really bubbly right now... so I'd back out of those for now. I'd aim to draw about $60k/year out of it or 5%, and on average, in the very long term, the capital should grow. I would adjust it downward somewhat if the next few years are a hard recession, to avoid taking too much out of the capital... and resist the urge to take more out in boom years, because that is your hedge against the next recession. Over 7% is not prudent per the law (absent very reasonable reasons). UPMIFA doesn't apply to you, but I'd act as if it did. A very reasonable reason to take more than 7% would be to shift investment into a house for living in. I would aim for a duplex/triplex to also have income from the property, if the numbers made sense, which they often don't in California, but that's another question. At your financial level -- never, never, never give cash to a charity. You will get marked as a \"\"soft target\"\" and every commercial fundraiser on earth will stalk you for the rest of your life. At your level, you open a Donor Advised Fund, and let the Fund do your giving for you. Once you've funded it (which is tax deductible) you later tell them which charities to fund when. They screen out fake charities and protect your identity. I discuss DAFs at length here. Now when \"\"charities\"\" harass you for an immediate handout, just tell them that's not how you support charities.\"",
"title": ""
},
{
"docid": "e3ee76c3bfc7a1934cb67e2493c61897",
"text": "\"If you were the friend of my daughter or some other \"\"trusted\"\" relationship, I would tell you to head on over to Bogleheads.org, follow their advice and do research there. I would advise you to aim for about a 60/40 allocation. They would advise you to make a very simple, do it yourself portfolio that could last a lifetime. No need for financial planners or other vultures. The other side of this curtailing your spending. Although the amount seems like a bunch, you probably need to keep your spending under 41K per year out of this money. If you have additional income such as from a job or social security payments then that could be on top of the 41k and never forget taxes. To help manage that, you may want to consult a CPA, but only for tax advice, not investment advice. Certainly you should make the credit card debt disappear. You may want to reevaluate your current location if the costs are too high compared to your income. Good luck to you and sorry about the wreck.\"",
"title": ""
},
{
"docid": "7180779523eb3b048dca95ac8facad3f",
"text": "\"Others have given a lot of advice about how to invest, but as a former expat I wanted to throw this in: US citizens living and investing overseas can VERY easily run afoul of the IRS. Laws and regulations designed to prevent offshore tax havens can also make it very difficult for expats to do effective investing and estate planning. Among other things, watch out for: US citizens owe US income tax on world income regardless of where they live or earn money FBAR reporting requirements affect foreign accounts valued over $10k The IRS penalizes (often heavily) certain types of financial accounts. Tax-sheltered accounts (for education, retirement, etc.) are in the crosshairs, and anything the IRS deems a \"\"foreign-controlled trust\"\" is especially bad. Heavy taxes on investment not purchased from a US stock exchange Some US states will demand income taxes from former residents (including expats) who cannot prove residency in a different US state. I believe California is neutral in that regard, at least. I am neither a lawyer nor an accountant nor a financial advisor, so please take the above only as a starting point so you know what sorts of questions to ask the relevant experts.\"",
"title": ""
},
{
"docid": "0e509a6832eed10fe457a8ba15858363",
"text": "Since the question asked for options, rather than advice, I’ll offer a few. And you can ignore the gratuitous advice that may sneak in. There are countries that will happily give you citizenship for a fee. And others where an investment of far less than your million will get you well on your way. Having citizenship and a passport from another country can be handy if your current one is or becomes unpopular or unstable. From data at numbeo.com, I estimate that my lifestyle would cost me $3300 (US) in Geneva, Switzerland, and that everywhere else on the planet would be less. I haven’t been to Geneva, but I have spent only $2500 (average) per month in eleven countries over three years, and could have been comfortable on far less. $2500/month will go through 1.2 million in only forty years, but if you use it to generate income, and are less wasteful than me, ... With the first few dollars you get, you might take steps to hedge the possibility of not actually getting it all. Appeals can take a long time, and if the defendant runs out of money or figures out how to hide, the size of the judgment is irrelevant. Believe strongly enough in something to donate money for/to it? I’ll leave the investment options to others.",
"title": ""
},
{
"docid": "382b9dc7063738f0506c4179964bd2cc",
"text": "You should invest your money. To figure out what rate of return you need, use this equation: (How Much Money You Want Per Year) / (Total Amount of Cash You Have) = (Annualized Interest Rate) If we plug in the amount of annualized interest you can expect to safely get while not managing your money personally, 2% by my estimate, we get X / 1.2m = 0.02%; X=24K/year A measly $24,000 / year. Many people say that you can get 10, 12, even 30% return on your investment. I won't speculate on if this is true, but I will guarantee that you cannot get those returns simply by handing your money over to a money manager. So your options are, 1) Earn a guaranteed $24,000 and earn the rest you need to live by working 2) Learn to invest your money (and then do so intelligently) and earn enough to live off the interest To learn how to invest your money, read Beating the Street, by Peter Lynch. https://www.amazon.ca/Beating-Street-Peter-Lynch/dp/0671891634 Good luck!",
"title": ""
},
{
"docid": "a8abcd8bc5d619cea08ed565859364f6",
"text": "\"Former financial analyst here, happy to help you. First off, you are right to not be entirely trusting of advisors and attorneys. They are usually trustworthy, but not always. And when you are new to this, the untrustworthy ones have a habit of reaching you first - you're their target market. I'll give you a little breakdown of how to plan, and a starting investment. First, figure out your future expenses. A LOT of that money may go to medical bills or associated care - don't forget the costs of modifications and customizations to items so you can have a better quality of life. Cars can be retrofit to assist you with a wheelchair, you can build a chair lift into a staircase, things like that which will be important for mobility - all depending on the lingering medical conditions. Mobility and independence will be critically important for you. Your past expenses are the best predictor of future expenses, so filter out the one-time legal and medical costs and use those to predict. Second, for investing there is a simple route to get into the stock market, and hopefully you will hear it a lot: Exchange Traded Funds (ETFs). You'll hear \"\"The S&P 500 increased by 80 points today...\"\" on the news; the S&P is a combination of 500 different stocks and is used to gauge the market overall. You can buy an exchange traded fund as a stock, and it's an investment in all those components. There's an ETF for almost anything, but the most popular ones are for those big indexes. I would suggest putting a few hundred thousand into an S&P 500 indexed ETF (do it at maybe $10,000 per month, so you spread the money out and ensure you don't buy at a market peak), and then let it sit there for many years. You can buy stocks through online brokerages like Scottrade or ETrade, and they make it fairly easy - they even have local offices that you can visit for help. Stocks are the easiest way to invest. Once you've done this, you can also open a IRA (a type of retirement account with special tax benefits) and contribute several thousand dollars to it per year. I'll be happy to give more advice if/when you need it, but there are a number of good books for beginning investors that can explain it better than I. I would suggest that you avoid real estate, especially if you expect to move overseas, as it is significantly more complicated and has maintenance costs and taxes.\"",
"title": ""
},
{
"docid": "f28372124749da6c9627223ed8e9e488",
"text": "You need to find a fiduciary advisor pronto. Yes, you are getting a large amount of money, but you'll probably have to deal with higher than average health expenses and lower earning potential for years to come. You need to make sure the $1.2 million lasts you, and for that you need professional advice, not something you read on the Internet. Finding a knowledgeable advisor who has your interests at heart at a reasonable rate is the key here. These articles are a good start on what to look for: http://www.investopedia.com/articles/financialcareers/08/fiduciary-planner.asp https://www.forbes.com/sites/janetnovack/2013/09/20/6-pointed-questions-to-ask-before-hiring-a-financial-advisor/#2e2b91c489fe http://www.investopedia.com/articles/professionaleducation/11/suitability-fiduciary-standards.asp You should also consider what your earning potential is. You rule out college but at 26, you can have a long productive career and earn way more money than the $1.2 million you are going to get.",
"title": ""
},
{
"docid": "99bf09b2846ee67270f4c4daa5ae41e3",
"text": "Wow, everyone tells you different investment strategies. You have all your life ahead of you. Your main focus should not be getting the best return rate, but ensuring your existence. Who cares if you get 7% if you'll lose all in the next market crash and stand on the street with no education, no job and nothing to fall back on? I would go a completely different route in your place: The best advise given above was to not consider this as an option to never work again. It's not enough money for that, unless you want to live poorly and always be afraid that the next financial crises wipes you out completely.",
"title": ""
},
{
"docid": "a9f566d8df6476ac559290ee3540778c",
"text": "Something not in answers so far: define your goals. What is important to you? My goals, if I were in your shoes, would include a debt-free home, passive (investment) income so I would not have to work, and have health insurance covered. I could think of many more details, and already have, but you get the idea. To help determine which investment information to learn first, consider how much risk you can tolerate. I know that's vague at this point, but if you're looking for safe investments first, you could learn about mutual funds, and then index funds specifically. At the risky extreme, you could learn about stock options, but I would not recommend such risk.",
"title": ""
},
{
"docid": "a80cfd6ba7d8c3aa2416aa91d6c0e49d",
"text": "\"When I was in a similar situation (due to my stocks going up), I quit my job and decided that if I live somewhat frugally, I wouldn't have to work again (I haven't). But I fell victim to some scams, didn't invest wisely, and tried to play as a (minor) philantropist. Bad move. I still have enough money to live on, and want to buy a home of my own, but with the rise in real estate costs in ALL the \"\"good\"\" major cities my options are very limited. There is a LOT of good advice being given here; I wish someone had given me that kind of advice years ago. $1,200,000 sounds like a lot but it's not infinity. Side comment: I've seen lots of articles that claim to help you figure out how much money you need in retirement but why do they all start out by asking you \"\"how much money do you need in retirement?\"\"\"",
"title": ""
},
{
"docid": "948ee5b44eff4a2789c3ac703ce5d2e9",
"text": "Firstly, sorry about the accident. I am afraid you will need to do your own legwork, because you cannot trust other people with your money. It's a good thing you do not need to rush. Take your time to learn things. One thing is certain, you cannot let your money sit in a bank - inflation will digest them. You need to learn about investing yourself, or you run a risk of someone taking advantage of you. And there are people who specialise in exploiting people who have money and no idea what to do with them. There is no other way, if you have money, you need to know how to deal with it, or you are likely to lose it all. Since you need to have monthly income and also income that makes more money to make further investments, you need to look at two most common investments that are safe enough and also give good returns on investment: Property and index funds. You might also have a look at National bonds as this is considered safest investment possible (country has to go bust for you to lose money), but you are too young for that. Young = you can take more risk so Property and shares (indexes). You want to have your property investments in a country that is stable and has a good ROI (like Netherlands or Lithuania). Listen to some audio lectures: https://www.audible.co.uk/pd/Health-Personal-Development/Investing-in-Real-Estate-6th-Edition-Audiobook/B008SEH1R0 https://www.audible.co.uk/pd/Business/The-Secrets-of-Buy-to-Let-Success-Audiobook/B00UVVM222 https://www.audible.co.uk/pd/Non-fiction/Economics-3rd-Edition-Audiobook/B00D8J7VUC https://www.audible.co.uk/pd/Advanced-Investments-Part-1-Audiobook/B00HU81B80 After you sorted your investment strategy, you might want to move to a country that is Expat friendly and has lower living costs than US and you should be able to live like a king... best of luck.",
"title": ""
},
{
"docid": "754593853a3d3ca40ec2b931011429f9",
"text": "I'm surprised nobody else has suggested this yet: before you start investing in stocks or bonds, buy a house. Not just any house, but the house you want to live in 20 years from now, in a place where you want to live 20 years from now - but you also have to be savvy about which part of the country or world you buy in. I'm also assuming that you are in the USA, although my suggestion tends to apply equally anywhere in the world. Why? Simple: as long as you own a house, you won't ever have to pay rent (you do have to pay taxes and maintenance, of course). You have a guaranteed return on investment, and the best part is: because it's not money you earn but money you don't have to spend, it's tax free. Even if the house loses value over time, you still come out ahead. And if you live abroad temporarily, you can rent out the house and add the rent to your savings (although that does make various things more complicated). You only asked for options, so that is mine. I'll add some caveats. OK, now here are the caveats:",
"title": ""
},
{
"docid": "5524242a152d09590947e46b8a9405bc",
"text": "If you can still work, I think a very good course of action would be to invest the majority of the money in low-cost index funds for many years. The reason is that you are young and have plenty of time to build a sizable retirement fund. How you go about this course of action depends on your comfort level with managing your money, taxes, retirement accounts, etc. At a minimum, open an investment account at any of the major firms (Schwab, Fidelity, for example). They will provide you with a free financial advisor. Ideally s/he would recommend something like: Open a retirement account and invest as much as you can tax-free or tax-deferred. Since you already received the money tax-free, a Roth IRA seems like a no-brainer. Pick some low-fee equity funds, like an S&P 500 Index fund, for a large chunk of the money. Avoid individual stocks if you aren't comfortable with them. Alternatively, get a recommendation for a fixed-fee financial planner that can help you plan for your future. Above all, don't spend beyond your means! You have an opportunity to fund a very nice future for yourself, especially if you are able to work while you are still so young!",
"title": ""
},
{
"docid": "d51a448fad7717083cd1dff308d57a4c",
"text": "\"I agree with Grade 'Eh' Bacon's answer, but there are a couple of ideas that are relevant to your particular situation: If I were you, I would invest at least half of the cash in growth ETFs because you're young enough that market variability doesn't affect you and long term growth is important. The rest should be invested in safer investments (value and dividend ETFs, bonds, cash) so that you have something to live off in the near term. You said you wanted to invest ethically. The keyword to search is \"\"socially responsible ETFs\"\". There are many, and if this is important to you, you'll have to read their prospectus to find one that matches your ethics. Since you're American, the way I understand it, you need to file taxes on income; selling stocks at a gain is income. You want to make sure that as your stocks appreciate, you sell some every year and immediately rebuy them so that you pay a small tax bill every year rather than one huge tax bill 20 years from now. Claiming about $20600 of capital gains every year would be tax free assuming you are not earning any other money. I would claim a bit more in years where you make a lot. You can mitigate your long term capital gains tax exposure by opening a Roth IRA and maxing that out. Capital gains in the Roth IRA are not taxable. Even if you don't have income from working, you can have some income if you invest in stocks that pay dividends, which would allow you to contribute to a Roth IRA. You should figure where you're going to be living because you will want to minimize the currency risk of having your money in USD while you're living abroad. If the exchange rate were to change by a lot, you might find yourself a lot poorer. There are various hedging strategies, but the easiest one is to invest some of your money in securities of the country you'll be living in. You should look into how you'll be converting money into the foreign currency. There are sometimes way of minimizing the spread when converting large amounts of money, e.g., Norbert's gambit. Shaving off 1.5% when exchanging $100k saves $1500.\"",
"title": ""
},
{
"docid": "5441f74c31fd065e750dc107af1495a4",
"text": "\"This may be a great idea, or a very bad one, or it may simply not be applicable to you, depending on your personal circumstances and interests. The general idea is to avoid passive investments such as stocks and bonds, because they tend to grow by \"\"only\"\" a few percent per year. Instead, invest in things where you will be actively involved in some form. With those, much higher investment returns are common (but also the risk is higher, and you may be tied down and have to limit the traveling you want to do). So here are a few different ways to do that: Get a college degree, but only if you are interested in the field, and it ends up paying you well. If you aren't interested in the field, you won't land the $100k+ jobs later. And if you study early-childhood education, you may love the job, but it won't pay enough to make it a good investment. Of course, it also has to fit with your life plans, but that might be easier than it seems. You want to travel. Have you thought about anthropology, marine biology or archeology? Pick a reputable, hard-to-get-into, academic school rather than a vocation-oriented oe, and make sure that they have at least some research program. That's one way to distinguish between the for-profit schools (who tend to be very expensive and land you in low-paying jobs), and schools that actually lead to a well-paying future. Or if your interest runs more in a different direction: start a business. Your best bet might be to buy a franchise. Many of the fast-food chains, such as McDonalds, will let you buy as long as you have around $300k net worth. Most franchises also require that you are qualified. It may often make sense to buy not just one franchised store, but several in an area. You can increase your income (and your risk) by getting a loan - you can probably buy at least $5 million worth of franchises with your \"\"seed money\"\". BTW, I'm only using McDonalds as an example. Well-known fast food franchises used to be money-making machines, but their popularity may well have peaked. There are franchises in all kinds of industries, though. Some tend to be very short-term (there is a franchise based on selling customer's stuff on ebay), while others can be very long-lived (many real-estate brokerages are actually franchises). Do be careful which ones you buy. Some can be a \"\"license to print money\"\" while others may fail, and there are some fraudsters in the franchising market, out to separate you from your money. Advantage over investing in stocks and bonds: if you choose well, your return on investment can be much higher. That's generally true for any business that you get personally involved in. If you do well, you may well end up retiring a multimillionaire. Drawback: you will be exposed to considerable risk. The investment will be a major chunk of your net worth, and you may have to put all your eggs in none basket. If your business fails, you may lose everything. A third option (but only if you have a real interest in it!): get a commercial driver's license and buy an 18-wheeler truck. I hear that owner-operators can easily make well over $100k, and that's with having to pay off a bank loan. But if you don't love trucker culture, it is likely not worth doing. Overall, you probably get the idea: the principle is to use your funds as seed money to launch something profitable and secure, as well as enjoyable for you.\"",
"title": ""
},
{
"docid": "d14269d4cf625bfcf53924ae731d02be",
"text": "Windfalls can disappear in a heartbeat if you're not used to managing large amounts of money. That said, if you can read a bank statement and can exercise a modicum of self control over spending, you do not need a money manager. (See: Leonard Cohen) First, spend $15 on J.L. Collins' book The Simple Path to Wealth. https://www.goodreads.com/book/show/30646587-the-simple-path-to-wealth. Plan to spend about 4% of your wealth annually (4% of $1.2 million = $48,000) Bottom line: ALWAYS live within your means. Own your own home free and clear. Don't buy an annuity unless you have absolutely no self control. If it feels like you're spending money too fast, you almost certainly are.",
"title": ""
},
{
"docid": "bf5ea98e3a5e02267db235c18e167e8d",
"text": "Lots of good advice so far. Here's some meta-advice. Read through everything here twice, and distill out what the big picture ideas are. Learn about what you need to know about them. Pick a strategy and/or long term goals. Work toward them. Get advice from many many places and distill it. This is currently known as crowd-sourcing but I've been doing it all my life. It's very effective. No one will ever care as much about your money as you. Some specific things I haven't seen mentioned (or not mentioned much):",
"title": ""
},
{
"docid": "ab01b6c2f3467c83189d8bddc8bb4e98",
"text": "Since you mentioned moving, you can buy real state very cheap here in Mexico that will give you income monthly. I will tell you some numbers in case you're interested. Now to investments: you can buy houses for rent, and prices are as follows: Average house $25k which will give about $220 monthly of income. Let's say you buy 20 of these that would be $4400 USD monthly. Now you have a very high standard here and you will never have to work again, and each year the income will increase about 2% and you still have $576k left.",
"title": ""
},
{
"docid": "1de7ac58a48a62fd6986f39af5c6a8f7",
"text": "Buy a land and build a house. Then plant wine trees. Hire people after like 5 years and start to do and sell wine. A beautiful business :-) A second opation is to buy a houses in a city and rent rooms.",
"title": ""
},
{
"docid": "dd3c6e4a2fd7f18be93d7d51a00d951f",
"text": "That's what I would do; 1.2 million dollars is a lot of money, but it doesn't make you retired for the rest of your life: There is a big crisis coming soon (my personal prediction) in the next 10-15 years, and when this happens: government will hold your money if you leave them in the bank (allowing you to use just part of it; you will have to prove the reason you need it), government will pass bills to make it very hard to close your investment positions, and government will pass new laws to create new taxes for people with a lot of money (you). To have SOME level of security I would separate my investment in the following: 20% I would buy gold certificates and the real thing (I would put the gold in a safe(s)). 20% I would put in bitcoin (you would have to really study this if you are new to crypto currency in order to be safe). 40% I would invest in regular finance products (bonds, stocks and options, FX). 20% I would keep in the bank for life expenses, specially if you don't want work for money any more. 20% I would invest in startup companies exchanging high risk hoping for a great return. Those percentages might change a little depending how good/confident you become after investing, knowing about business, etc...",
"title": ""
}
] |
[
{
"docid": "a53943674802a7f24468cb4093badfa3",
"text": "\"At that sum, it essentially doesn't matter what you do, unless you just want to outright gamble the money. Let's look at some options: \"\"High\"\" interest guaranteed savings. A five year CD returns a sad 2% right now. That means if you invest all $1,000 into a CD, by 2016 you will have earned $105.08 in interest. Think about that: About a hundred bucks over the next five years. Of course, with 3% inflation, that $105.08 will be worth about $90.57. In fact, the total amount will be worth $953.25. Your \"\"doing something with your money\"\" did nothing. Stocks can return significantly more interest, but there is no guarantee. Even if you made 20% year on year, you would only make maybe $1,500 in returns or so in the next 5 years, and 20% every year is like Warren Buffet territory--totally unrealistic. That's also not taking into account inflation. And neither of these is taking into account taxes! However, if you go to a casino and gamble the $1,000, it is possible you could turn it into significantly more. It's very much unlikely, and I do not advise it at all, but it's possible. The point is, you need money to make money, and, in some sense, $1,000 is not money at all. I recommend you work on your skills, knowledge, and preparation for making money in the future, and by 25 or so you can really be cooking with gas. Don't waste your efforts trying to find a brilliant way to make a few hundred bucks over the next half decade. Save the money and find ways to try to double it by earning money on small projects. Then challenge yourself to double it again, and keep honing your skills.\"",
"title": ""
},
{
"docid": "4be1712bc31d7fa78eee37ac2c171b30",
"text": "\"Your question asks \"\"how\"\" but \"\"if\"\" may be your issue. Most companies will not permit an external transfer while still employed, or under a certain age, 55 or so. If yours is one of the rare companies that permits a transfer, you simply open an IRA with the broker of your choice. Schwab, Fidelity, eTrade, or a dozen others. That broker will give you the paperwork you need to fill out, and they initiate the transfer. I assume you want an IRA in which you can invest in stocks or funds of your choosing. A traditional IRA. The term \"\"self-directed\"\" has another meaning, often associated with the account that permits real estate purchases inside the account. The brokers I listed do not handle that, those custodians have a different business model and are typically smaller firms with fewer offices, not country-wide.\"",
"title": ""
},
{
"docid": "ba4c40ef92b1b89622a3207dc14fd562",
"text": "My god man, where do you live that is too expensive to live on your own and 7K isn't enough for emergency cash? Anyway, with your age and income I would be more worried about a long-term sustainable lifestyle. In other words, a job that nets you more than $26K/year. Someday you may want to have a wife and kids and that income sure as hell wont pay for their college. That was life advice, now for financial: I've always been a believer that if someone is not a savvy investor, their priorities before investments should be paying off debt. If you had a lot of capital or knew your way around investment vehicles and applicable returns then I would be telling you something different. But in your case, pay off that car first giving yourself more money to invest in the long-run.",
"title": ""
},
{
"docid": "bebad083a6e66d5ba199fd1e63a0f15b",
"text": "With $800/month extra? Do both. (I am ethnocentric enough to assume you live in the same country as me) First, figure out what your emergency fund should look like. Put this money in a high yield checking or savings account. Add to it monthly until you reach your goal. It should be 3 to 6 months of your total monthly expenses. It will be a lot more than $2k I suspect. You will earn bubkis in interest, but the point of the emergency fund is a highly liquid asset for emergencies so you can choose cheaper car insurance and not buy warranties on stuff. With your $800/month, split it up this way: $416/month into a Roth IRA account at Vanguard (or Schwab or Fidelity) in the Star Fund (or similar low cost, diversified fund). The star is $1000 to open, pretty diversified. $416 is a lazy number that comes close to the $5000 annual limit for a Roth IRA in the US. Contribute like clockwork, directly from your paycheck if you can. This will make it easy to do and get you the benefit of dollar cost averaging. $200 or $300 into your savings account until you reach your emergency fund goal. $85 - $100. Live a little. Speculate in stocks with your vanguard account. Or rent fancy cars. Or taken a vacation or go party. If you are saving $800/month in your early 20 be proud of yourself, but have a little fun too so you can let off steam. It isn't much but you know you can play with it. Once you reach your emergency fund, save up for your future house or car or plane tickets to Paris. Ask another question for how to save up for these kinds of goals.",
"title": ""
},
{
"docid": "44f3472e2763764b0699988a69b9de22",
"text": "Congratulations on making it at minimum you are close to a 2 millionaire if I understand your numbers correctly. Here is what I would do if I woke up in your shoes: 1) Take some time. Budget some money and time. Go live abroad, take hang gliding lessons or become scuba certified. Something like that. The only thing I really dislike about your situation is that your wife may be precluded on going with you due to her business concerns. During this time dream, plan and decide what you want your life to look like. You seem to understand that you won't be happy doing nothing for a really long time. Its not a big deal if you blow 50K or so doing this. Take the wife to Paris, go visit the Galapagos Islands. 2) You are going to have to become wise about investing. I'd put close to one million in stock based mutual funds. That may sound scary, and you might seek others out to help you with this transition. I feel like that your time spent in your business may have precluded you delving into this area of knowledge. For now, you may just want to stick it all in interest bearing accounts, and slowly invest the money. Don't invest in things you don't understand, and you have to be on the look out for the next Bernie Madoff. 3) Its hard to speak to your desire to downsize your home. You could probably buy a nice ranch in Nevada from the sale of your home if that is what you desire, but you may kind of hate something like that. 4) Could you start more of a boutique business? Not one that occupies all of your time, but one that takes 20-40 hours per week. Something that interests you, not something that is overly a chore. Perhaps you can consult in the field that your former business was in. You most certainly have a lot of intelligent things to say. 5) Be generous. Find worthwhile charities to give time and money to. Congratulations again. Take some time to dream, and then make those things happen. Edit: You may need to make new friends. Actually wealthy people are a very small segment of the population and are out numbered by people who act wealthy. Its going to be hard, but you need to find people that have a certain level of wealth but are also don't make you uncomfortable with their level of spending (either high or low).",
"title": ""
},
{
"docid": "3799199cc1a37a3e5988e37f91eb8788",
"text": "\"Well... (in the US, at least) \"\"making investments and building assets\"\" is how you save for retirement. The investments just happen to be in the stock market, and the federal legislature has directed the US version of Inland Revenue Services to give special tax breaks to investments which are not withdrawn until age 59 1/2. I don't know if there are such tax breaks in Pakistan, or what the stock market is like there, so I'm presuming that by saying, \"\"building lucrative assets\"\", your father is referring to buying real estate and/or becoming a trader. Anyway, it's a good thing that you are looking so far ahead in life instead of only thinking of fast cars and pretty girls.\"",
"title": ""
},
{
"docid": "e92c138a220871b654595fe3b11985c8",
"text": "Well, to get money, you need to leverage your assets. So your options basically are: - Asset: Cash. Well, I figure if you had, you wouldn't have asked how to get more of it, but its always worth mentioning. Don't forget about cash that can be in tricky places to tap, like 401ks, IRAs, investment accounts, etc. There is usually some way to get at the cash, but it may not be worth it and you could end up sacrificing long term financial stability if you do. - Asset: Job Skills and Initiative. Get a job and and earn the cash. $2k is not a ton, and if you live frugally you should be able to save it. There are tons of websites dedicated to living frugally and earning extra cash on the side. My personal favorite is r/beermoney. - Asset: Good Credit. Borrow the money from a traditional bank. Signature loans go up to $35k at most banks, just ask what it would take to qualify. You could also get a credit card for that amount, and use it to start up the business. - Asset. Bad Credit. If you've got bad credit, you can still take out a loan from a place like Prosper or Lending Club or Sofi (these places are handy if you have good credit, too). Your rates will be much higher, but they will still lend to you. - Asset: Property. If you own stuff, you can sell it and get cash. Clean out your attic (or ask relatives if you can have the stuff in theirs!) and sell it. If you own fancy stuff, you can borrow against it (home, car, boat, etc.). - Asset: Your Charm and Winning Smile. If you have a good, solid business plan (written down and professional looking), ask around and see if you can find an investor. It could be friends or family, but it could also be someone who is looking to invest. Be professional, and be sure to draw up the appropriate business docs if you do a partnership or take a private loan. - Asset: Your Government. If you live in the US, there are federal programs that offer Small Business Loans. Check out sba.gov for more info. You will need a business plan and will have to meet the criteria of the loan or grant. Not sure if your Ecommerce business will meet the criteria, as the intent of these types of programs are to spur the economy by allowing small business owners to hire workers. But its worth checking out.",
"title": ""
},
{
"docid": "31eb14798fa124a9d56118dfc3f58f28",
"text": "Lots of good advice on investing already. You may also want to think about two things: A Bausparvertrag. You can set this up for different monthly saving rates. You'll get a modest interest payment, and once you have saved up enough (the contract is zuteilungsreif), you will be eligible for a loan at a low rate. However, you can only use the loan for building, buying or renovating real estate. With interest rates as low as they are right now, this is not overly attractive. However, depending on your salary, you may qualify for subsidies, and these could indeed be rather attractive. This may be helpful (in German). A Riester-Rente. This is a subsidized saving scheme - you save something every year and again get subsidies at the end of the year. I think the salary thresholds where you qualify for a subsidy are a bit higher for the Riester-Rente than for a Bausparvertrag, and even if you don't qualify for a subsidy, your contributions will be deducted from your taxable income. I wouldn't invest all my leftover money in these, considering that you commit yourself for the medium to long term, but they might well be attractive options for at least part of your money, say 20-25% of what you aim at saving every month. Finally, as others have written: banks and insurance companies exist to make money, and they live off their provisions. Get an independent financial advisor you pay by the hour, who doesn't get provisions, and have him help you.",
"title": ""
},
{
"docid": "34cd5a23fbe463b0ccd510681344e33d",
"text": "As observed above, 1.5% for 3 years is not attractive, and since due to the risk profile the stock market also needs to be excluded, there seems about 2 primary ways, viz: fixed income bonds and commodity(e,g, gold). However, since local bonds (gilt or corporate) are sensitive and follow the central bank interest rates, you could look out investing in overseas bonds (usually through a overseas gilt based mutual fund). I am specifically mentioning gilt here as they are government backed (of the overseas location) and have very low risk. Best would be to scout out for strong fund houses that have mutual funds that invest in overseas gilts, preferably of the emerging markets (as the interest is higher). The good fund houses manage the currency volatility and can generate decent returns at fairly low risk.",
"title": ""
},
{
"docid": "7976ebac42b29cd1cffa0d98f24be429",
"text": "Here are some possibilities: avoid buying a car for as long as you can; if forced to own one, buy a used dependable car like a Toyota Corolla- 4 cyl and don't abuse it. open a Roth IRA, depositing max possible, the plan on doing so until you've investing the remaining balance. A Roth IRA, while not tax deductible now (you're in a low tax bracket now) will provide for tax-free distributions when you are both older and not in a low bracket. of course, invest in low cost equity funds. Come back for more ideas once the dust settles, you've got money left over and some of the above accomplished. You've got one asset many of us don't have: time.",
"title": ""
},
{
"docid": "6ec31ff25a842884336420f39e6b4a99",
"text": "I am in a very similar situation as you (software engineer, high disposable income). Maximize your contributions to all tax-advantaged accounts first. From those accounts you can choose to invest in high risk funds. At your age and date-target funds will invest in riskier investments on your behalf; and they'll do it while avoiding the 30%+/- haircut that you'll be paying in taxes anyhow. If, after that, you're looking for bigger risk plays then look into a brokerage account that will let you buy and sell options. These are big risk swingers and they are sophisticated, complicated products which are used by many people who likely understand finance far better than you. You can make money with them but you should consider it akin to gambling. It might be more to your liking to maintain a long position in a stock and then trade options against your long position. Start with trading covered calls, then you could consider buying options (defined limited downside risk).",
"title": ""
},
{
"docid": "30feb5a4ba881b67248e3400ceb0ad70",
"text": "\"What a lovely position to find yourself in! There's a lot of doors open to you now that may not have opened naturally for another decade. If I were in your shoes (benefiting from the hindsight of being 35 now) at 21 I'd look to do the following two things before doing anything else: 1- Put 6 months worth of living expenses in to a savings account - a rainy day fund. 2- If you have a pension, I'd be contributing enough of my salary to get the company match. Then I'd top up that figure to 15% of gross salary into Stocks & Shares ISAs - with a view to them also being retirement funds. Now for what to do with the rest... Some thoughts first... House: - If you don't want to live in it just yet, I'd think twice about buying. You wouldn't want a house to limit your career mobility. Or prove to not fit your lifestyle within 2 years, costing you money to move on. Travel: - Spending it all on travel would be excessive. Impromptu travel tends to be more interesting on a lower budget. That is, meeting people backpacking and riding trains and buses. Putting a resonable amount in an account to act as a natural budget for this might be wise. Wealth Managers: \"\"approx. 12% gain over 6 years so far\"\" equates to about 1.9% annual return. Not even beat inflation over that period - so guessing they had it in ultra-safe \"\"cash\"\" (a guaranteed way to lose money over the long term). Give them the money to 'look after' again? I'd sooner do it myself with a selection of low-cost vehicles and equal or beat their return with far lower costs. DECISIONS: A) If you decided not to use the money for big purchases for at least 4-5 years, then you could look to invest it in equities. As you mentioned, a broad basket of high-yielding shares would allow you to get an income and give opportunity for capital growth. -- The yield income could be used for your travel costs. -- Over a few years, you could fill your ISA allowance and realise any capital gains to stay under the annual exemption. Over 4 years or so, it'd all be tax-free. B) If you do want to get a property sooner, then the best bet would to seek out the best interest rates. Current accounts, fixed rate accounts, etc are offering the best interest rates at the moment. Usual places like MoneySavingExpert and SavingsChampion would help you identify them. -- There's nothing wrong with sitting on this money for a couple of years whilst you fid your way with it. It mightn't earn much but you'd likely keep pace with inflation. And you definitely wouldn't lose it or risk it unnecessarily. C) If you wanted to diversify your investment, you could look to buy-to-let (as the other post suggested). This would require a 25% deposit and likely would cost 10% of rental income to have it managed for you. There's room for the property to rise in value and the rent should cover a mortgage. But it may come with the headache of poor tenants or periods of emptiness - so it's not the buy-and-forget that many people assume. With some effort though, it may provide the best route to making the most of the money. D) Some mixture of all of the above at different stages... Your money, your choices. And a valid choice would be to sit on the cash until you learn more about your options and feel the direction your heart is pointing you. Hope that helps. I'm happy to elaborate if you wish. Chris.\"",
"title": ""
},
{
"docid": "19a399279fa3d682c76b0f1cb8422a2e",
"text": "IMO almost any sensible decision is better than parking money in a retirement account, when you are young. Some better choices: 1) Invest in yourself, your skills, your education. Grad school is one option within that. 2) Start a small business, build a customer base. 3) Travel, adventure, see the world. Meet and talk to lots of different people. Note that all my advice revolves around investing in YOURSELF, growing your skills and/or your experiences. This is worth FAR more to you than a few percent a year. Take big risks when you are young. You will need maybe $1m+ (valued at today's money) to retire comfortably. How will you get there? Most people can only achieve that by taking bigger risks, and investing in themselves.",
"title": ""
},
{
"docid": "7031661473e400ff4da42629ccfcd65c",
"text": "My suggestion is that you speak with a financial adviser that specializes in Islamic investing. For the long term there are Islam approved mutual funds that only invest in non-banking organizations, and I would assume there are more conservative options for the short term as well (3-4 years). Although you may not feel the effects of inflation all that much in just a few years, it would still be beneficial to utilize programs that allow you to earn a return on your money. (I may not have said that for $2,500 but for $25,000 I think it's worth looking into.) Also, some scholars suggest that it is even allowed to invest in mutual funds that deal with banks, as long as you calculate the portion of your return that came from the bank charging interest, and donate that amount to charity.",
"title": ""
},
{
"docid": "a96857cf8f4229f9687b18538caa3dcc",
"text": "\"Are most big US based financial institutions and banks in such a close relationship with USCIS (United States Citizenship And Immigration Services) so they can easily request the information about market traders? Yes. They must be in order to enforce the laws required by the sanctions. What online broker would you suggest that probably won't focus on that dual citizenship matter? \"\"Dual\"\" citizenship isn't actually relevant here. Nearly anyone in the world can invest in US banks except for those few countries that the US has imposed sanctions against. Since you are a citizen of one of those countries, you are ineligible to participate. The fact that you are also a US citizen isn't relevant in this case. I believe the reasoning behind this is that the US doesn't encourage dual citizenship: The U.S. Government does not encourage dual nationality. While recognizing the existence of dual nationality and permitting Americans to have other nationalities, the U.S. Government also recognizes the problems which it may cause. Claims of other countries upon U.S. dual-nationals often place them in situations where their obligations to one country are in conflict with the laws of the other. In addition, their dual nationality may hamper efforts of the U.S. Government to provide consular protection to them when they are abroad, especially when they are in the country of their second nationality. If I had to guess, I'd say the thinking there is that if you (and enough other people that are citizens of that country) want to participate in something in the US that sanctions forbid, you (collectively) could try to persuade that country's government to change its actions so that the sanctions are lifted. Alternatively, you could renounce your citizenship in the other country. Either of those actions would help further the cause that the US perceives to be correct. What it basically boils down to is that even though you are a US citizen, your rights can be limited due to having another citizenship in a country that is not favorable in the current political climate. Thus there are pros and cons to having dual citizenship.\"",
"title": ""
}
] |
fiqa
|
df4c8e1e8fcd863176182074096716a8
|
How quickly does short float ratio/percent change?
|
[
{
"docid": "e8b3c1cca904587c28af58db32522868",
"text": "The short float ratio and percent change are all calculated based on the short interest (the total number of shares shorted). The short interest data for Nasdaq and NYSE stocks is published every two weeks. NasdaqTrader.com shows the exact dates for when short interest is published for Nasdaq stocks, and also says the following: FINRA member firms are required to report their short positions as of settlement on (1) the 15th of each month, or the preceding business day if the 15th is not a business day, and (2) as of settlement on the last business day of the month.* The reports must be filed by the second business day after the reporting settlement date. FINRA compiles the short interest data and provides it for publication on the 8th business day after the reporting settlement date. The NYSE also shows the exact dates for when short interest is published for NYSE stocks, and those dates are exactly the same as for Nasdaq stocks. Since the short interest is only updated once every 2 weeks, there is no way to see real-time updating of the short float and percent change. That information only gets updated once every 2 weeks - after each publication of the short interest.",
"title": ""
}
] |
[
{
"docid": "22d688f1402e8f49f666d9a6935b39a0",
"text": "The volatility measures how fast the stock moves, not how much. So you need to know the period during which that change occurred. Then the volatility naturally is higher the faster is the change.",
"title": ""
},
{
"docid": "5d0b360de7d5745d006ae345e6072492",
"text": "The value of the asset doesn't change just because of the exchange rate change. If a thing (valued in USD) costs USD $1 and USD $1 = CAN $1 (so the thing is also valued CAN $1) today and tomorrow CAN $1 worth USD $0.5 - the thing will continue being worth USD $1. If the thing is valued in CAN $, after the exchange rate change, the thing will be worth USD $2, but will still be valued CAN $1. What you're talking about is price quotes, not value. Price quotes will very quickly reach the value, since any deviation will be used by the traders to make profits on arbitrage. And algo-traders will make it happen much quicker than you can even notice the arbitrage existence.",
"title": ""
},
{
"docid": "589e8e9ab52c413eb5b16076903fd7a3",
"text": "The optimal time period is unambiguously zero seconds. Put it all in immediately. Dollar cost averaging reduces the risk that you will be buying at a bad time (no one knows whether now is a bad or great time), but brings with it reduction in expected return because you will be keeping a lot of money in cash for a long time. You are reducing your risk and your expected return by dollar cost averaging. It's not crazy to trade expected returns for lower risk. People do it all the time. However, if you have a pot of money you intend to invest and you do so over a period of time, then you are changing your risk profile over time in a way that doesn't correspond to changes in your risk preferences. This is contrary to finance theory and is not optimal. The optimal percentage of your wealth invested in risky assets is proportional to your tolerance for risk and should not change over time unless that tolerance changes. Dollar cost averaging makes sense if you are setting aside some of your income each month to invest. In that case it is simply a way of being invested for as long as possible. Having a pile of money sitting around while you invest it little by little over time is a misuse of dollar-cost averaging. Bottom line: forcing dollar cost averaging on a pile of money you intend to invest is not based in sound finance theory. If you want to invest all that money, do so now. If you are too risk averse to put it all in, then decide how much you will invest, invest that much now, and keep the rest in a savings account indefinitely. Don't change your investment allocation proportion unless your risk aversion changes. There are many people on the internet and elsewhere who preach the gospel of dollar cost averaging, but their belief in it is not based on sound principles. It's just a dogma. The language of your question implies that you may be interested in sound principles, so I have given you the real answer.",
"title": ""
},
{
"docid": "47e1b1d01bb31194a38b0bdea0b8fbe0",
"text": "\"The charts on nasdaq.com are log based, if you look closely you can see that the spacing between evenly incremented prices is tighter at the top of the chart and wider at the bottom. It's easiest to see on a stock with a wide price range using candlestick where you can clearly see the grid. I'm also not seeing the \"\"absurdism\"\" you indicate when I look at google finance with the settings ticked to use log on the price axis. I see what I'd expect which is basically a given vertical differential on the price axis representing the same percentage change in price no matter where it is located. For example if I look at GOOG from the earliest date they have (Aug 20 2004) to a nice high point (dec 7 2007) I see a cart where the gap from the the bottom of the chart (seems to be right around 100) to the 200 point, (a 100% increase) is the same as from 200 to 400 (a 100% increase) is the same as 400 to 800 (a 100# increase) That's exactly what I expect from a 'log' chart on a financial site, each relative move up or down of the same distance, represents the same relative change in value. So I'm having difficulty understanding what your complaint is. (note: I'm using chrome, which is the browser I'd expect to work best with any google website. results with other browsers could of course vary) If you want to do some other wacky math with the axis then I humbly suggest that something like Excel is your friend. Goto the charts at nasdaq.com get the chart displaying the period you care about, click the chart to display the unlying data, there will be an option to download the data. cram it into excel and go wild as you want with charting it out. e.g. note that step 2 links to client side javascript, so you will need javascript enabled, if you are running something like noscript, disable it for this site. Also since the data opens in a new window, you may also need to enabled 'popups' for the site. (and yes, I sometimes get an annoying news alert advert popup and have to close it when the chart first appears.. oh well it pays the rent and nasdaq is not charging you so for access so such is the price for a free site. )\"",
"title": ""
},
{
"docid": "04df881344f4003c31ca6fb7b9d516fe",
"text": "This is a gross simplification as there are a few different ways to do this. The principle overall is the same though. To short a stock, you borrow X shares from a third party and sell them at the current price. You now owe the lender X shares but have the proceeds from the sale. If the share price falls you can buy back those shares at the new lower price, return them to the lender and pocket the difference. The risk comes when the share price goes the other way, you now owe the lender the new value of the shares, so have to find some way to cover the difference. This happened a while back when Porsche made a fortune buying shares in Volkswagen from short sellers, and the price unexpectedly rose.",
"title": ""
},
{
"docid": "40e19a42d0c1030422b12eaa08ea15d4",
"text": "The shortest-hand yet most reliable metric is daily volume / total shares outstanding. A security with a high turnover rate will be more efficient than a lower one, ceteris paribus. The practical impacts are tighter spread and lower average percentage change between trades. A security with a spread of 0% and an average change of 0% between trades is perfectly efficient.",
"title": ""
},
{
"docid": "e5fd2fc3ea79e1c5c3779c8ed00a42f8",
"text": "\"Yes, there are non-stock analogs to the Price/Earnings ratio. Rental properties have a Price/Rent ratio, which is analogous to stocks' Price/Revenue ratio. With rental properties, the \"\"Cap Rate\"\" is analogous to the inverse of the Price/Earnings ratio of a company that has no long-term debt. Bonds have an interest rate. Depending on whether you care about current dividends or potential income, the interest rate is analogous to either a stock's dividend rate or the inverse of the Price/Earnings ratio.\"",
"title": ""
},
{
"docid": "1e68f8e0e96e2216f94cc5d9bcecc01a",
"text": "\"Here's the slippage I was talking about - - - this is when I was trading DXO or around that time. the ultra shares----interesting read at least. \"\"Based on data from October 22, 2008 to January 26, 2009, the S&P 500 had a daily standard deviation of 3.62%. If you were to invest in SDS, an UltraShort ETF which has the S&P 500 as its underlying index, and were to hold it for a year, you should expect to lose between 34% and 74% of your money, if the S&P 500 is flat for that period. This assumes that there are no transaction costs, and that the expense ratio is 0% (in fact, it's 0.91%.) My experiment also assumed that daily stock market returns follow a normal distribution. In fact, the the distribution of daily stock market returns is leptokurtotic (it has fat tails.) According to my mathematical intuition (the Ph.D. is in math, in case you were curious,) if I had performed the experiment with a leptokurtotic distribution, the losses would have been larger. Obviously, this could be checked, but the results are bad enough as it is.\"\" http://www.altenergystocks.com/archives/2009/02/ultrapromises_fall_short.html\"",
"title": ""
},
{
"docid": "7a1af1f518ca2fda333f2639837459d9",
"text": "PE ratio is the current share price divided by the prior 4 quarters earnings per share. Any stock quote site will report it. You can also compute it yourself. All you need is an income statement and a current stock quote.",
"title": ""
},
{
"docid": "dc8fc7455dd37b3f2c63dd9bc2c955fc",
"text": "\"How accurate is Implied Volatility in predicting future moves? How would you measure this? If the implied volatility says that there's a 1% chance that a stock will double, and it doubles, was it \"\"right\"\"? You could also say that it says there's a 99% change that it doesn't double, so was it \"\"wrong\"\"? What you could measure is the variance of daily returns over a time period, and see how well that compares to implied volatility, but there's no way to compare IV with the absolute price movement. If a stock goes up 0.01 each day, then the variance is 0 (the daily returns are the same each day), but over 250 the stock would go up $2.50.\"",
"title": ""
},
{
"docid": "4c23a61f572194b420b110c7a2af7c62",
"text": "\"This is called \"\"change\"\" or \"\"movement\"\" - the change (in points or percentage) from the last closing value. You can read more about the ticker tape on Investopedia, the format you're referring to comes from there.\"",
"title": ""
},
{
"docid": "ef18299621646b2cd361cf1313bf5a04",
"text": "> A short position also loses money if the stock just appreciates more slowly than the broader market, which is one way an overvaluation can correct itself. Is there a derivative based on the literal second derivative (acceleration) of the stock price? If so, you'd be able to short those, yes?",
"title": ""
},
{
"docid": "6657c05898ceb7473983e062b054aa66",
"text": "\"Thanks! Do you know how to calculate the coefficients from this part?: \"\"The difference between the one-year rate and the spread coefficients represents the response to a change in the one-year rate. As a result, the coefficient on the one-year rate and the difference in the coefficients on the one-year rate and spread should be positive if community banks, on average, are asset sensitive and negative if they are liability sensitive. The coefficient on the spread should be positive because an increase in long-term rates should increase net interest income for both asset-sensitive and liability-sensitive banks.\"\" The one-year treasury yield is 1.38% and the ten-year rate is 2.30%. I would greatly appreciate it if you have the time!\"",
"title": ""
},
{
"docid": "c600f9ea131c2cbd2362197798ffc51f",
"text": "This is a really easy problem. If you're genuinely having trouble, maybe don't be a finance major? All you need to do is know the formulas for the ratios and plug in the variables. Simple and clean. However, if you're lazy and trying to get free answers off of reddit, then you could have saved the time you took to post this question and actually do the problem. You probably would have gotten the answer all by yourself without much help.",
"title": ""
},
{
"docid": "9e080f52dc5ab00a2c1dee3097206fc9",
"text": "Don´t forget that changing volatility will have an impact on the time value too! So at times it can happen that your time value is increasing instead of decreasing, if the underlying (market) volatility moves up strongly. Look for articles on option greeks, and how they are interdependent. Some are well explaining in simple language.",
"title": ""
}
] |
fiqa
|
ecc1bafa3cd552e75bbcfbf5f664d623
|
Double-Taxation of Royalties paid for in Korea to a US Company
|
[
{
"docid": "29f435b2c18dc8dbc198bb80a1cabc83",
"text": "If treaties are involved for something other than exempting student wages on campus, you shouldn't do it yourself but talk to a licensed US tax adviser (EA/CPA licensed in your state) who's well-versed in the specific treaty. Double taxation provisions generally mean that you can credit the foreign tax paid to your US tax liability, but in the US you can do that regardless of treaties (some countries don't allow that). Also, if you're a US tax resident (or even worse - a US citizen), the royalties related treaty provision might not even apply to you at all (see the savings clause). FICA taxes are generally not part of the income tax treaties but totalization agreements (social security-related taxes, not income taxes). Most countries who have income tax treaties with the US - don't have social security totalization agreements. Bottom line - talk to a licensed professional.",
"title": ""
}
] |
[
{
"docid": "4264ba71d1fe0abe46fc0bf6b997c97d",
"text": "But it's not tax evasion. They are trying to avoid the US's double dipping on foreign income -- an unjust tax if there ever was one. If the money is made overseas then the US government shouldn't have any right to it. I mean, they didn't build any of that infrastructure. That's the way it works in most countries. Their fair share is 0.",
"title": ""
},
{
"docid": "d80c18ea48134a0b736e4a9b6d587ae9",
"text": "It means you must pay federal (and possibly state) tax on any income you produce in America -- including Internet and mail-order sales. Tax treaties may keep you from having to pay tax on it again in your own country, or may not.",
"title": ""
},
{
"docid": "adf54e322321ae00bf1074b7816ba251",
"text": "\"The elephant in the room is the research. From the article it seems to conclude that the majority of the research happened in the US, but Microsoft is claiming it happened overseas. From what I've seen a lot of *initial* research does happen in Microsoft international offices, all further development to bring it to market might be done in the US but the idea sprung elsewhere. From a taxation perspective you can argue that the patent was invented offshore and profits should be allocated there, or you can argue that it was the US development investment that made it profitable and so profits should be allocated in the US. Both are right - and this makes the US so interesting to invest in. If you invest in the US and then license offshore to sell back to a US entity - thats just exploiting a loophole. If it was invented offshore, thats what the laws are trying to protect. Personally I think Microsoft is doing pretty well here, like the demo of translations from chinese sign language to english - MSR Asia invented it, but it will be US teams transform it to a feature that derives income. Where should it be taxed if it does become a real product? How many other areas of Windows, Visual Studio, Office, Azure were \"\"invented\"\" by non-US teams and should also be taxed offshore?\"",
"title": ""
},
{
"docid": "779f8dd471f286641d33982a470a98e1",
"text": "This doesn't make much sense. What costs are you referring to? And aren't they using roads, airports etc that federal money goes into? Do you think payroll taxes paid through employees should be the major consideration on payment of taxes for corporations? Also, do you think European criticism of Amazon for avoiding paying taxes is off-base?",
"title": ""
},
{
"docid": "34143732aa5386271946327f19199cab",
"text": "Surprisingly enough, this one isn't actually all that complicated. No, you will not be taxed twice. Dividends are paid by the company, which in this case is domiciled in Spain. As a Spanish company, the Spanish government will take dividend witholding tax from this payment before it is paid to a foreign (i.e. non-Spanish resident) shareholder. What's happening here is that a Spanish company is paying a dividend to a Malaysian resident. The fact that the Spanish stock was purchased in the form of an ADR from a US stock market using US dollars is actually irrelevant. The US has no claim to tax the dividend in this case. One brave investor/blogger in Singapore even set out to prove this point by buying a Spanish ADR just before the dividend was paid. Bravo that man! http://www.investmentmoats.com/money-management/dividend-investing/how-to-calculate-dividend-withholding-taxes-on-us-adrs-for-international-investors-my-experience-with-telefonica/",
"title": ""
},
{
"docid": "d5ac94f732227a06ae11b14d25976e69",
"text": "You're missing the point. The US is double dipping as the jurisdiction where the money was earn and taxed too the first dip. It is direct interference in another country's economy and an attack on their sovereignty. Frankly, it smack of typical American conservatism: taking the view that the rest of the world is just an American colony. It's fundamentally undemocratic.",
"title": ""
},
{
"docid": "055098b4d402b693dce81bc782885cc6",
"text": "\"I also don't know the specific details for Finland and/or Belgium, however many countries have tax treaties, which generally prevent double taxation (i.e., paying tax in both countries on the same base income). Being that both Finland and Belgium are EU member states, I'm quite certain there's a provision that covers this, and the same would apply: You pay taxes on what you earn while in Finland to Finland, and to Belgium what you earn while in Belgium. All of this is similar to what you presented, however there's also a section where you'd declare how much taxes were paid in other countries. One other thing to note, which will be the determining factor in the above, is whether EU law requires you to change residence to BE for the time you're there. If not then you'll be paying taxes in Finland the entire time on the entire amount. This comes from an Irish governmental site: \"\"By working in another member state and by transferring your residence there, you are likely to become \"\"resident for tax purposes\"\" there. The definition of fiscal residence varies from one member state to another. You must comply with the laws of the country where you have established your residence. The laws on personal taxation vary considerably from one member state to another and you may be liable for taxation in more than one country. In general, you are subject to income tax in the country where you are living but this may not be the case if you are a “posted worker” – see below. In general, property is taxed in the country in which it is situated but, again, there are variations. Tax agreements have been concluded between most of the member states of the EU, which are intended to avoid double taxation, if you derive income from different countries. In general, national fiscal rules must respect the fundamental principle of non-discrimination against nationals of another EU country.\"\"\"",
"title": ""
},
{
"docid": "466fdad4bd9f74405c977449c36e5bef",
"text": "No he's arguing for a lower US Corporate tax rate specifically on overseas earnings. Because companies are earning overseas and not taking it back to the US because of our double taxation. He absolutely does not want higher taxes",
"title": ""
},
{
"docid": "47c9c8dbbbfb64b9537ec5a36e9cc724",
"text": "\"What theyre fishing for is whether the money was earned in the U.S. It's essentially an interest shelter, and/or avoiding double taxation. They're saying if you keep income you make outside the US in a bank inside the US, the US thanks you for storing your foreign money here and doesn't tax the interest (but the nation where you earned that income might). There is no question that the AirBNB income is \"\"connected with a US trade or business\"\". So your next question is whether the fraction of interest earned from that income can be broken out, or whether IRS requires you to declare all the interest from that account. Honestly given the amount of tax at stake, it may not be worth your time researching. Now since you seem to be a resident nonresident alien, it seems apparent that whatever economic value you are creating to earn your salary, is being performed in the United States. If this is for an American company and wages paid in USD, no question, that's a US trade or business. But what if it's for a Swedish company running on Swedish servers, serving Swedes and paid in Kroner to a Swedish bank which you then transfer to your US bank? Does it matter if your boots are on sovereign US soil? This is a complex question, and some countries (UK) say \"\"if your boots are in our nation, it is trade/income in our nation\"\"... Others (CA) do not. This is probably a separate question to search or ask. To be clear, the fact that your days as a teacher or trainee do not count toward residency, is a separate question from whether your salary as same counts as US income.\"",
"title": ""
},
{
"docid": "3078a9b101176a07d9507d44a6890d1d",
"text": "It's technically correct to say BK will still pay taxes on all profits made here in the US, the problem here is that it's very easy to structure this whole thing so that there are no US profits. Company A sells itself to Company B, which it also owns. Company A transfers all its' intellectual property to Company B which then charges Company A a fee to use it. The fee is structured so that Company A makes zero profit and Company B makes all the money.",
"title": ""
},
{
"docid": "f51c78a279001c87478c3ab65d5f5df5",
"text": "So you gonna not do business with essentially every multinational corporation? Bribery is necessary to get things done in many many countries across the world. Plus you are taking samsung to task for playing ball with their now disgraced president who had some mystic pulling her strings. If they were bribing US officials, sure, but different countries play by different rules Hell if i remember correctly the IRS allows businesses to make deductions based on foreign bribes",
"title": ""
},
{
"docid": "b3d112d442aaebdea1fb1e142be0ed4f",
"text": "Every country has its own tax code. Consult a professional in each country regarding income earned in that country. Anything else is speculation.",
"title": ""
},
{
"docid": "25312634099f64f7f748b56b40f4eeaa",
"text": "You clearly have no understanding of the issue. As an example, lets say Apple sells an iphone in France. Apple has to pay income tax and tarrifs and whatever else on that money they receive for the iphone they sold. That makes sense, they use France's infrastructure and citizens to sell the phones. Then when the money comes back to the US (the money is not coming back at this time), Apple is taxed on the same money from the iPhone they just paid taxes on in France. That makes selling iPhones outside of the US difficult due to tax law and regulations that other companies don't have to deal with. This makes it easier for other phone manufacturers to sell phones at a profit and not Apple. This hurts Apple at the end of the day and keeps the money in foreign countries when it could be re-invested in the US... What is the point of selling internationally if you are going to have to pay two sets of taxes and likely lose money?",
"title": ""
},
{
"docid": "d137f8ba2fc7c051f2118309f7059b59",
"text": "There is no such thing as double taxation. If you pay tax in the US, you CAN claim tax credits from India tax authority. For example, if you pay 100 tax in USA and your tax liability in India is 200, then you will only pay 100 (200 India tax liability minus 100 tax credits on foreign tax paid in the USA). This is always true and not depending on any treaty. If there is a treaty, the tax rate in the United States is set on the treaty and you CAN claim that final tax rate based upon that treaty. If you operate an LLC, and the income is NOT derived from United States and you have no ties with the US and that LLC is register to a foreign person (not company but a real human) then you will not have to submit tax return in the US... I advice you to read this: http://www.irs.gov/businesses/small/article/0,,id=98277,00.html",
"title": ""
},
{
"docid": "2948cd0e63af02de801485656a7996bc",
"text": "\"Tax US corporate \"\"persons (citizens)\"\" under the same regime as US human persons/citizens, i.e., file/pay taxes on all income earned annually with deductions for foreign taxes paid. Problem solved for both shareholders and governments. [US Citizens and Resident Aliens Abroad - Filing Requirements](https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad-filing-requirements) >If you are a U.S. citizen or resident alien living or traveling outside the United States, **you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States.** Thing is, we know solving this isn't the point. It is to misdirect and talk about everything, but the actual issues, i.e., the discrepancy between tax regimes applied to persons and the massive inequality it creates in tax responsibility. Because that would lead to the simple solutions that the populace need/crave. My guess is most US human persons would LOVE to pay taxes only on what was left AFTER they covered their expenses.\"",
"title": ""
}
] |
fiqa
|
bdf8191aaf2b2612abdc0c46fc54911d
|
Is there a way to claim a car purchase in the tax return?
|
[
{
"docid": "2b3eb961fe4796f80757fdd694888379",
"text": "IRS Publication 463 is a great resource to help you understand what you can and can't deduct. It's not a yes/no question, it depends on the exact company use, other use, and contemporaneous record keeping.",
"title": ""
},
{
"docid": "9fe54d3599894d568a96ea2e88b22f60",
"text": "You've got two options. Deduct the business portion of the depreciation and actual expenses for operating the car. Use the IRS standard mileage rate of $.575/mile in 2015. Multiply your business miles by the rate to calculate your deduction. Assuming you're a sole proprietor you'll include a Schedule C to your return and claim the deduction on that form.",
"title": ""
}
] |
[
{
"docid": "bb5ad2a26e78ae916de76fa854300476",
"text": "\"While you'd need to pay tax if you realized a capital gain on the sale of your car, you generally can't deduct any loss arising from the sale of \"\"personal use property\"\". Cars are personal use property. Refer to Canada Revenue Agency – Personal-use property losses. Quote: [...] if you have a capital loss, you usually cannot deduct that loss when you calculate your income for the year. In addition, you cannot use the loss to decrease capital gains on other personal-use property. This is because if a property depreciates through personal use, the resulting loss on its disposition is a personal expense. There are some exceptions. Read up at the source links.\"",
"title": ""
},
{
"docid": "f6596d074e54060305ee4274ca92893b",
"text": "\"Going by the information from Goods and Services Tax (GST) on the Australian Government website, there seem to be a number of possibilities. Note: First I am neither a tax expert nor a lawyer; this is simply my interpretation of the rules on the page linked above. Second, this interpretation is based on the assumption that \"\"resells a service\"\" means you (at least technically) buy the service from another company and sell it on to the users of your app. Depending on the nature of the service, and possibly factors such as whether you are deemed to \"\"take possession\"\" during the transaction, it might be that different rules apply. Your Turnover is Under A$75,000 (Providing you're not reselling taxi services!) You won't need to register for GST, should not charge it, and your invoices should show that GST was not included in the price. However, if the turnover of the company whose services you are reselling is registered for GST, they will be charging you GST that you will not be able to claim back, so you would need to factor this into the price you charge your users (before any promotional discount). For example: Your Turnover is Over A$75,000 If your turnover is above the limit, you would need to charge GST on the final sale amount and pay this amount (one eleventh of the price your customer paid) to the Australian Government. You also have to send out properly-formatted tax invoices. However, it's probably safe to say the company you are buying the original service from will also be over the GST threshold, so you should be able to reclaim the GST that was charged to you by them. For example: Here, your overall profit/loss is helped by the fact that you can reclaim the GST you were charged, and can under some circumstances result in an overall rebate. These figures assume you add 10% to your selling price to cover the GST you have to pay the Government. However, this may make your offering uncompetitive, so you may have to absorb some/all of the GST yourself.\"",
"title": ""
},
{
"docid": "39f3a8221f16c84c72aefff9e8144049",
"text": "To quote the answer you linked to: Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. So, if your business purchased the $1000 gift card for $800, you should see a $800 charge appearing on a business CC or bank statement. You would therefore be able to deduct the $800, but not the full $1000 of items that you purchase with it. Side Notes:",
"title": ""
},
{
"docid": "c2e80c349518ee93dd52768ec917fa84",
"text": "I would take each of these items and any others and consider how you would count it as an expense in the other direction. If you have an account for parking expenses or general transportation funds, credit that account for a refund on your parking. If you have an account for expenses on technology purchases, you would credit that account if you sell a piece of equipment as you replace it with an upgrade. If you lost money (perhaps in a jacket) how would you account for the cash that is lost? Whatever account would would subtract from put a credit for cash found.",
"title": ""
},
{
"docid": "a254f084d7f18a44be22b255ec156e46",
"text": "\"You cannot \"\"claim back\"\" VAT. What happens is that if you sell goods with VAT and charge customers VAT, you would have to send that VAT straight to HMRC, but if your business itself paid VAT, then you already paid VAT, so you have to send less. As an example, if you send an invoice for £10,000 plus £2,000 VAT, and you paid yourself £500 VAT on business related expenses, then you need to send £2,000 - £500 = £1,500 to HMRC. But if you don't send invoices including VAT, then you owe HMRC £0. Any VAT you paid on business related expenses is lost; HMRC won't pay you money. BTW. Only VAT on business related expenses can be deducted. So if you want to be \"\"smart\"\", register for VAT and get the VAT on your weekly shopping bill refunded, forget it.\"",
"title": ""
},
{
"docid": "6758ac85a2d327ad8e3e4586e379f735",
"text": "In order: 1.) Speak to car dealership, demand refund. If that doesn't work, 2.) Contact the local authorities. If that doesn't work, 3.) Get in touch with a lawyer. If that doesn't work, (or if it's too expensive), 4.) Get in touch with local media, and have them run a story.",
"title": ""
},
{
"docid": "5bbb5414747ce9d5812c9eb7c8af0030",
"text": "Yes, you can. That the books were purchased from abroad is irrelevant: you incurred an expense in the course of earning your income. If the books are expensive (>$300 per set iirc) you will need to deprecate them over a reasonable life time rather than claiming the entire amount up front. It doesn't matter whether what you got was a VAT Invoice; as long as you have some reasonable documentation of the expense you're ok.",
"title": ""
},
{
"docid": "2ef47bc6e77a08529092f461b85d993b",
"text": "\"The lead story here is you owe $12,000 on a car worth $6000!! That is an appalling situation and worth a lot to get out of it. ($6000, or a great deal more if the car is out of warranty and you are at risk of a major repair too.) I'm sorry if it feels like the payments you've made so far are wasted; often the numbers do work out like this, and you did get use of the car for that time period. Now comes an \"\"adversary\"\", who is threatening to snatch the car away from you. I have to imagine they are emotionally motivated. How convenient :) Let them take it. But it's important to fully understand their motivations here. Because financially speaking, the smart play is to manage the situation so they take the car. Preferably unbeknownst that the car is upside down. Whatever their motivation is, give them enough of a fight; keep them wrapped up in emotions while your eye is on the numbers. Let them win the battle; you win the war: make sure the legal details put you in the clear of it. Ideally, do this with consent with the grandfather \"\"in response to his direct family's wishes\"\", but keep up the theater of being really mad about it. Don't tell anyone for 7 years, until the statute of limitations has passed and you can't be sued for it. Eventually they'll figure out they took a $6000 loss taking the car from you, and want to talk with you about that. Stay with blind rage at how they took my car. If they try to explain what \"\"upside down\"\" is, feign ignorance and get even madder, say they're lying and they won, why don't they let it go? If they ask for money, say they're swindling. \"\"You forced me, I didn't have a choice\"\". (which happens to be a good defense. They wanted it so bad; they shoulda done their homework. Since they were coercive it's not your job to disclose, nor your job to even know.) If they want you to take the car back, say \"\"can't, you forced me to buy another and I have to make payments on that one now.\"\"\"",
"title": ""
},
{
"docid": "19a5eaff889e256c24b4d030e13e7d2c",
"text": "As a general rule, you must choose between a mileage deduction or an actual expenses deduction. The idea is that the mileage deduction is supposed to cover all costs of using the car. Exceptions include parking fees and tolls, which can be deducted separately under either method. You explicitly cannot deduct insurance costs if you claim a mileage deduction. Separately, you probably won't be able to deduct the deductible for your car as a casualty loss. You first subtract $100 from the deductible and then divide it by your Adjusted Gross Income (AGI) from your tax return. If your deductible is over 10% of your AGI, you can deduct it. Note that even with a $1500 deductible, you won't be able to deduct anything if you made more than $14,000 for the year. For most people, the insurance deductible just isn't large enough relative to income to be tax deductible. Source",
"title": ""
},
{
"docid": "fa004f6659916743d7a9cfa6c7fcb905",
"text": "Also, depending where you buy the car in the US, you have to pay property tax every year for just having purchased the car.",
"title": ""
},
{
"docid": "49be38301e97d9b2978e78799196a64a",
"text": "\"I'm going to look just at purchase price. Essentially, you can't always claim the whole of the purchase price (or 95% your case) in the year (the accounting period) of purchase, but you get a percentage of the value of the car each year, called writing down allowance, which is a capital allowance. It is similar to depreciation, but based on HRMC's own formula. In fact, it seems you probably can claim 95% of the purchase price, because the value is less than £1000. The logic is a bit involved, but I hope you can understand it. You could also claim simplified expenses instead, which is just based on a rate per mile, but you can't claim both. Note, by year I mean whatever your account period is. This could be the normal financial year, but you would probably have a better idea about this. See The HMRC webpage on this for more details. The big idea is that you record the value of any assets you are claiming writing down allowance on in one of a number of pools, that attract the same rate of writing down allowance, so you don't need to record the value of each asset separately. They are similar to accounts in accounting, so they have an opening balance, and closing balance. If you use an asset for personal use, it needs a pool to itself. HRMC call that a single asset pool. So, to start with, look at the Business Cars section, and look at the Rates for Cars section, to determine the rate you can claim. Each one links to a further article, which gives more detail if you need it. Your car is almost certainly in the special rate category. Special rate is 8% a year, main rate is 18%, and First year allowance is essentially 100%. Then, you look at the Work out what you can claim article. That talks you through the steps. I'll go through your example. You would have a pool for your car, which would end the account period before you bought the vehicle at zero (step 1). You then add the value of the car in the period you bought it (Step 2). You would reduce the value of the pool if you dispose of it in the same year (Step 3). Because the car is worth less than £1,000 (see the section on \"\"If you have £1,000 or less in your pool\"\"), you would normally be able to claim the whole value of the pool (the value of the car) in the first accounting period, and reduce the value of the pool to zero. As you use the car for personal use, you only claim 95% of the value, but still reduce the pool to zero. See the section on \"\"Items you use outside your business\"\". This £1000 is adjusted if your accounting period lasts more or less than 12 months. Once the pool is down to zero that it you don't need to think about it any more for tax purposes, apart from if you are claiming other motoring expenses, or if you sell it. It gets more complicated if the car is more expensive. I'll go through an example for a car worth £2,000. Then, after Step 3, on the year of purchase, you would reduce the value of the pool by 8%, and claim 95% of the reduction. This would be a 160 reduction, and 95%*160 = 152 claim, leaving the value of 1860 in the pool. You then follow the same steps for the next year, start with 1840 in the pool, reduce the value by 8%, then claim 95% of the reduction. This continues until you sell or dispose of the car (Step 3), or the value of the pool is 1000 or less, then you claim all of it in that year. Selling the car, or disposing of the car is discussed in the Capital allowances when you sell an asset article. The basic idea is that if you have already reduced the value of the pool to zero, the price you sell the car for is added you your profits for that year (See \"\"If you originally claimed 100% of the item\"\"), if you still have anything in the pool, you reduce the value of the pool by the sale value, and if it reduces to below zero (to -£200, say), you add that amount (£200, in this case), to your profits. If the value is above zero, you keep applying writing down allowances. In your case, that seems to just means if you sell the car in the same year you buy it, you claim the difference (or 95% of it) as writing down allowance, and if you do it later, you claim the purchase price in the year of purchase, and add 95% of the sale price to your profits in the year you sell it. I'm a bit unclear about starting \"\"to use it outside your business\"\", which doesn't seem to apply if you use it outside the business to start with. You can claim simplified expenses for vehicles, if you are a sole trader or partner, but not if you claim capital allowances (such as writing down allowances) on them, or you include a separate expense in your accounts for motoring expenses. It's a flat rate of 45p a mile for the first 10,000 miles, and 25p per mile after that, for cars, and 24p a mile for motorcycles. See the HRMC page on Simplifed Mileage expenses for details. For any vehicle you decide to either claim capital allowances claim running costs separately, or claim simplified mileage expenses, and \"\"Once you use the flat rates for a vehicle, you must continue to do so as long as you use that vehicle for your business.you have to stick with that decision for that vehicle\"\". In your case, it seems you can claim 95% of the purchase price in the accounting period you buy it, and if you sell it you add 95% of the sale price to your profits in that accounting period. It gets more complicated if you have a car worth more than £1000, adjusted for the length of the accounting period. Also, if you change how you use it, consult the page on selling selling an asset, as you may have disposed of it. You can also use simplified mileage expenses, but then you can't claim capital allowances, or claim running costs separately for that car. I hope that makes sense, please comment if not, and I'll try to adjust the explanation.\"",
"title": ""
},
{
"docid": "abe49f26f27ffe70f80550ff0b9d841a",
"text": "\"Payment gateways such as Square do not normally withhold tax. It is up to you to pay the appropriate tax at tax time. That having been said, Square does report your payments to the IRS on a form 1099-K if your payments are large enough. According to Square, you'll get a 1099-K from them if your total payments for the year add up to $20,000 AND more than 200 transactions. Whether or not they report on a 1099-K, you are required to pay the appropriate taxes on your income. So now the question becomes, \"\"Do I have to pay income tax on the proceeds from my garage sale?\"\" And the answer to that question is usually not. When you sell something that you previously purchased, if you sell it for more than you paid for it, you have a capital gain and need to pay tax on that. However, generally you sell things in a garage sale at a loss, meaning that there is no tax due. If you make more than $20,000 at your garage sale and the IRS gets a 1099-K, the IRS might be curious as to how you did that with no capital gain. So if you sell any big ticket items (a bulldozer, for example), you should keep a record of what you paid for it, so you can show the loss to the IRS in the event of an audit.\"",
"title": ""
},
{
"docid": "90544e3c1e3bf85fdd78b635d8ba2d0f",
"text": "\"the state of New Mexico provides guidance in this exact situation. On page 4: Gross receipts DOES NOT include: Example: When the seller passes tax to the buyer, the seller should separate, or “back out”, that tax from the total income to arrive at \"\"Gross Receipts,\"\" the amount reported in Column D of the CRS-1 Form. (Please see the example on page 48.) and on page 48: How do I separate (“back out”) gross receipts tax from total gross receipts? See the following examples of how to separate the gross receipts tax: 1) To separate (back out) tax from total receipts at the end of the report period, first subtract deductible and exempt receipts, and then divide total receipts including the tax for the report period by one plus the applicable gross receipts tax rate. For example, if your tax rate is 5.5% and your total receipts including tax are $1,055.00 with no deductions or exemptions, divide $1,055.00 by 1.055. The result is your gross receipts excluding tax (to enter in Column D of the CRS-1 Form) or $1,000. 2) If your tax rate is 5.5%, and your total gross receipts including tax are $1,055.00, and included in that figure are $60 in deductions and another $45 in exemptions: a) Subtract $105 (the sum of your deductions and exemptions) from $1,055. The remainder is $950. This figure still includes the tax you have recovered from your buyers. b) Divide $950 by 1.055 (1 plus the 5.5% tax rate). The result is $900.47. c) In Column D enter the sum of $900.47 plus $60 (the amount of deductible receipts)*, or $960.47. This figure is your gross receipts excluding tax.\"",
"title": ""
},
{
"docid": "5356f3858e3f23badd6f69f9bb16c3d4",
"text": "I'll give the credit to @Quid in the comments section of the question. You put out $10k, you got back $20k, that's a cash gain of $10k, how the asset was valued between your purchase and sale isn't relevant. From an accounting perspective, the company is the only party that is realizing the loss (as they have sold the asset for 40K less than par). You the buyer, only get to see the initial buy and sale of such capital asset. Example: A company purchases a car for $20,000 and after depreciation it is worth (book valued at) $2,000. It is then sold to a customer for $3,000. Does the customer realize a loss of $1,000? No. Does the company realize a gain of $1,000? Yes. Your bank analogy is flawed in two ways:",
"title": ""
},
{
"docid": "2335e2302d6eee2c43c7bfdc105a902e",
"text": "As mhoran_psprep and others have already said, it sounds like the sale is concluded and your son has no obligation to return the car or pay a dime more. The only case in which your son should consider returning the car is if it works in his favor--for example, if he is able to secure a similar bargain on a different car and the current dealer buys the current car back from your son at a loss. If the dealer wants to buy the car back, your son should first get them to agree to cover any fees already incurred by your son. After that, he should negotiate that the dealer split the remaining difference with him. Suppose the dealership gave a $3000 discount, and your son paid $1000 in title transfer, registration, and any other fees such as a cashier's check or tax, if applicable. The remaining difference is $2000. Your son should get half that. In this scenario, the dealer only loses half as much money, and your son gains $1000 for his trouble.",
"title": ""
}
] |
fiqa
|
401d8fedada7ccfd21a02b0a4d4114f5
|
Can I deduct equipment expenses for a job I began overseas?
|
[
{
"docid": "87c9d0ed048118e676a8196605eb034b",
"text": "A computer is a special case because the IRS thinks that you might be using it for personal applications. You may need to keep a log, or be able to state that you also have another computer for non-business use. That said, if your schedule C shows a small profit then you don't need to itemize expenses, just state the total.",
"title": ""
},
{
"docid": "fab076774b036cd9084c4f5e2bad63c9",
"text": "I'm not an expert, but here's my $0.02. Deductions for business expenses are subject to the 2% rule. In other words, you can only deduct that which exceeds 2% of your AGI (Adjusted Gross Income). For example, say you have an AGI of $50,000, and you buy a laptop that costs $800. You won't get a write-off from that, because 2% of $50,000 is $1,000, and you can only deduct business-related expenses in excess of that $1,000. If you have an AGI of $50,000 and buy a $2,000 laptop, you can deduct a maximum of $1,000 ($2,000 minus 2% of $50,000 is $2,000 - $1,000 = $1,000). Additionally, you can write off the laptop only to the extent that you use it for business. So in other words, if you have an AGI of $50,000 and buy that $2,000 laptop, but only use it 50% for business, you can only write off $500. Theoretically, they can ask for verification of the business use of your laptop. A log or a diary would be what I would provide, but I'm not an IRS agent.",
"title": ""
}
] |
[
{
"docid": "c743007f4e745fb1bbad1caed4a16da7",
"text": "I looked at Publication 463 (2014), Travel, Entertainment, Gift, and Car Expenses for examples. I thought this was the mot relevant. No regular place of work. If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area. Generally, a metropolitan area includes the area within the city limits and the suburbs that are considered part of that metropolitan area. You cannot deduct daily transportation costs between your home and temporary work sites within your metropolitan area. These are nondeductible commuting expenses. This only deals with transportation to and from the temporary work site. Transportation expenses do not include expenses you have while traveling away from home overnight. Those expenses are travel expenses discussed in chapter 1 . However, if you use your car while traveling away from home overnight, use the rules in this chapter to figure your car expense deduction. See Car Expenses , later. You will also have to consider the cost of tolls of the use of a trailer if those apply.",
"title": ""
},
{
"docid": "d8aaee2278cffb583d47b047c320b68d",
"text": "First of all, Dilip's answer explains well how the business deductions generally work. For most (big) expenses you depreciate it. However, in some cases you need to capitalize it, which is another accounting method. When you capitalize your expense, it becomes part of the basis of the product you're creating. Since you're an engineer, this might be relevant for you. Talk to your tax adviser. How exactly you deduct/depreciate/capitalize things, and what expense goes which way depends greatly on the laws and jurisdictions. Even in the US, different states have different laws, and the IRS and State laws don't have to conform (unfortunately). For example, the limitations on Sec. 179 deduction in 2010-2011 were 20 times higher on Federal level than in the State of California. This could have lead to cases where you fully deducted your expense on your Federal tax return, but need to continue and depreciate it on your State return (or vice versa). Good tax adviser is crucial to avoid or manage these cases.",
"title": ""
},
{
"docid": "c1f72824ef2b3072f154a0d2fa565ef4",
"text": "Depending on what software you use. It has to be reported as a foreign income and you can claim foreign tax paid as a foreign tax credit.",
"title": ""
},
{
"docid": "2ec447312a423d5378550f6d87afb5a5",
"text": "\"To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary. (IRS, Deducting Business Expenses) It seems to me you'd have a hard time convincing an auditor that this is the case. Since business don't commonly own cars for the sole purpose of housing $25 computers, you'd have trouble with the \"\"ordinary\"\" test. And since there are lots of other ways to house a computer other than a car, \"\"necessary\"\" seems problematic also.\"",
"title": ""
},
{
"docid": "4feb648016f073df68bca025da36bfd5",
"text": "\"Hobby expenses are not tax deductible. Business expenses are, but only if it's a bona fide business. First they look at profitability: if you reported a net profit (i.e. paid taxes) in your first 3 years, they will believe you rant on Youtube for a living. Remember, by the time they get around to auditing you, you'll likely be well into, or through, your third year. There is an exception for farms. Other than that, if you lose money year after year, you better be able to show that you look, walk and quack like a business; and one with a reasonable business reason for delayed profitability. For instance Netflix's old business model of mailing DVDs had very high fixed infrastructure expense that took years to turn profitable, but was a very sensible model. They're fine with that. Pets.com swandived into oblivion but they earnestly tried. They're fine with that too. You can't mix all your activities. If you're an electrician specializing in IoT and smart homes, can you deduct a trip to the CES trade show, you bet. Blackhat conference, arguable. SES? No way. Now if you had a second business of a product-reco site which profited by ads and affiliate links, then SES would be fine to deduct from that business. But if this second business loses money every year, it's a hobby and not deductible at all. That person would want separate accounting books for the electrician and webmaster businesses. That's a basic \"\"duck test\"\" of a business vs. a hobby. You need to be able to show how each business gets income and pays expense separate from every other business and your personal life. It's a best-practice to give each business a separate checking account and checkbook. You don't need to risk tax penalties on a business-larva that may never pupate. You can amend your taxes up to 3 years after the proper filing date. I save my expense reciepts for each tax year, and if a business becomes justifiable, I go back and amend past years' tax forms, taking those deductions. IRS gives me a refund check, with interest!\"",
"title": ""
},
{
"docid": "8b45e548d7249ae24266bede29b37465",
"text": "I will not pay any taxes in the Us, since I am not working for an US company What you will or will not pay is up to you of course, but you definitely should pay taxes in the US, as you're working in the US. Since you mentioned being from Japan, I'll also suggest checking whether you're allowed to perform any work in the US under the conditions of your visa. If you're a F1/J1 student - you'll be breaking the immigration law and may be deported. You might be liable for taxes in Germany, as well, and also in Japan. I'll have to edit this to allow people who downvoted the answer without knowing the legal requirements to change their vote. F1 student cannot be a contractor without a valid EAD. Period. There's no doubt about it and legal requirements are pretty clear. Anyone who claims that you wouldn't be breaking the terms of your visa is wrong. Note, I'm neither a lawyer nor a tax professional, for definite advice talk to a professional.",
"title": ""
},
{
"docid": "c11d1781a910fe53b160db6f0ac43cb5",
"text": "The IRS Guidance pertaining to the subject. In general the best I can say is your business expense may be deductible. But it depends on the circumstances and what it is you want to deduct. Travel Taxpayers who travel away from home on business may deduct related expenses, including the cost of reaching their destination, the cost of lodging and meals and other ordinary and necessary expenses. Taxpayers are considered “traveling away from home” if their duties require them to be away from home substantially longer than an ordinary day’s work and they need to sleep or rest to meet the demands of their work. The actual cost of meals and incidental expenses may be deducted or the taxpayer may use a standard meal allowance and reduced record keeping requirements. Regardless of the method used, meal deductions are generally limited to 50 percent as stated earlier. Only actual costs for lodging may be claimed as an expense and receipts must be kept for documentation. Expenses must be reasonable and appropriate; deductions for extravagant expenses are not allowable. More information is available in Publication 463, Travel, Entertainment, Gift, and Car Expenses. Entertainment Expenses for entertaining clients, customers or employees may be deducted if they are both ordinary and necessary and meet one of the following tests: Directly-related test: The main purpose of the entertainment activity is the conduct of business, business was actually conducted during the activity and the taxpayer had more than a general expectation of getting income or some other specific business benefit at some future time. Associated test: The entertainment was associated with the active conduct of the taxpayer’s trade or business and occurred directly before or after a substantial business discussion. Publication 463 provides more extensive explanation of these tests as well as other limitations and requirements for deducting entertainment expenses. Gifts Taxpayers may deduct some or all of the cost of gifts given in the course of their trade or business. In general, the deduction is limited to $25 for gifts given directly or indirectly to any one person during the tax year. More discussion of the rules and limitations can be found in Publication 463. If your LLC reimburses you for expenses outside of this guidance it should be treated as Income for tax purposes. Edit for Meal Expenses: Amount of standard meal allowance. The standard meal allowance is the federal M&IE rate. For travel in 2010, the rate for most small localities in the United States is $46 a day. Source IRS P463 Alternately you could reimburse at a per diem rate",
"title": ""
},
{
"docid": "1525ae32cf52879d47052ec31a67d930",
"text": "A non-resident alien is only allowed for deductions connected to producing a US-sourced income (See IRC Sec. 873). Thus you can only deduct things that qualify as business expenses, and State taxes on your wages. In addition you can deduct a bunch of stuff explicitly allowed (like tax preparation, charitable contributions, casualty losses, etc) but sales tax is not in that list.",
"title": ""
},
{
"docid": "84fb32f8ad53e211bbdd5f4eb31af3c8",
"text": "No, you cannot. You can only deduct expenses that the employer required from you, are used solely for the employer's (not your!) benefit, you were not reimbursed for them and they're above the 2% AGI threshold. And that - only if you're itemizing your deductions.",
"title": ""
},
{
"docid": "9410aac2831c33bba5318245fae862a3",
"text": "\"As a person who has had several part time assistants in the past I will offer you a simple piece of advise that should apply regardless of what country the assistant is located. If you have an assistant, personal or business, virtual or otherwise, and you don't trust that person with this type of information, get a different assistant. An assistant is someone who is supposed to make your life easier by off loading work. Modifying your records before sending them every month sounds like you are creating more work for yourself not less. Either take the leap of faith to trust your assistant or go somewhere else. An assistant that you feel you have to edit crucial information from is less than useful. That being said, there is no fundamental reason to believe that an operation in the Philippines or anywhere else is any more or less trustworthy than an operation in your native country. However, what is at issue is the legal framework around your relationship and in particular your recourse if something goes wrong. If you and your virtual assistant are both located in the US you would have an easier time collecting damages should something go wrong. I suggest you evaluate your level of comfort for risk vs. cost. If you feel that the risk is too high to use an overseas service versus the savings, then find someone in the states to do this work. Depending on your needs and comfort you might want to seek out a CPA or other licensed/bonded professional. Yes the cost might be higher however you might find that it is worth it for your own piece of mind. As a side note you might even consider finding a local part-time assistant. This can often be more useful than a virtual assistant and may not cost as much as you think. If you can live without someone being bonded. (or are willing to pay for the bonding fee) yourself, depending on your market and needs you may be able to find an existing highly qualified EA or other person that wants some after hours work. If you are in a college town, finance, accounting or legal majors make great assistants. They will usually work a couple hours a week for \"\"beer money\"\", they have flexible schedules and are glad to have something pertinent to their degree to put on their resume when they graduate. Just be prepared to replace them every few years as they move on to real jobs.\"",
"title": ""
},
{
"docid": "47fbaf740dacac037b1f7a8f5dfa294b",
"text": "This answer is assuming you're in the US, which apparently you're not. I doubt that the rules in the EU are significantly different, but I don't know for sure. In case of an IRS control, is it ok to say that I regularly connect remotely to work from home although in the work contract it says I must work at client's office? No. Are there any other ways I can prove that this deduction is valid? No. You can't prove something is valid when its not. You can only deduct home office expense if it is used exclusively for your business, and your bedroom obviously is not.",
"title": ""
},
{
"docid": "a6d8246a6d2c372099e8140b3683674e",
"text": "Business Apprentice is internship. That is not what is applicable for you. You're a visiting professor/researcher, which falls under Article 22, so you don't get the standard deduction.",
"title": ""
},
{
"docid": "e65ca832826c13679b69f21901aa6230",
"text": "First, you should probably have a proper consultation with a licensed tax adviser (EA/CPA licensed in your State). In fact you should have had it before you started, but that ship has sailed. You're talking about start-up expenses. You can generally deduct up to $5000 in the year your business starts, and the expenses in excess will be amortized over 180 months (15 years). This is per the IRC Sec. 195. The amortization starts when your business is active (i.e.: you can buy the property, but not actually open the restaurant - you cannot start the depreciation). I have a couple questions about accounting - should all the money I spent be a part of capital spending? Or is it just a part of it? If it qualifies as start-up/organizational expenses - it should be capitalized. If it is spent on capital assets - then it should also be capitalized, but for different reasons and differently. For example, costs of filing paperwork for permits is a start-up expense. Buying a commercial oven is a capital asset purchase which should be depreciated separately, as buying the tables and silverware. If it is a salary expense to your employees - then it is a current expense and shouldn't be capitalized. Our company is LLC if this matters. It matters to how it affects your personal tax return.",
"title": ""
},
{
"docid": "c2c0ee6cdbc67b58bdec4983dbec7a49",
"text": "\"It depends on what the \"\"true\"\" reason for the trip is. If you decide to deduct the trip as a business expense, then during an audit you will be asked why you had to go there. If there was nothing accomplished via the travel (that is, you worked from the hotel, met with no clients, visited no tradeshows, etc) then the expense is unlikely to be allowed. Yes, on a business trip you can do sightseeing if you wish (though you can't deduct any sightseeing specific expenses, like admission to a tourist attraction), but if you are just working while on vacation, then the trip itself is not deductible, since there was no business benefit to traveling in the first place.\"",
"title": ""
},
{
"docid": "be257fcb0ae0253e58681c0f96f3d63a",
"text": "\"The answer is \"\"Yes\"\", You can deduct them. As long as you showed that you put in effort to make a profit then you can deduct business expenses.\"",
"title": ""
}
] |
fiqa
|
1dc93a20b611cb9de2466782bce5ebc4
|
How do we know the number of shorted shares of a stock?
|
[
{
"docid": "98634ad20792e08f87659493195a9884",
"text": "For a company listed on NASDAQ, the numbers are published on NASDAQ's site. The most recent settlement date was 4/30/2013, and you can see that it lists 27.5 million shares as held short. NASDAQ gets these numbers from FINRA member firms, which are required to submit them to the exchange twice a month: Each FINRA member firm is required to report its “total” short interest positions in all customer and proprietary accounts in NASDAQ-listed securities twice a month. These reports are used to calculate short interest in NASDAQ stocks. FINRA member firms are required to report their short positions as of settlement on (1) the 15th of each month, or the preceding business day if the 15th is not a business day, and (2) as of settlement on the last business day of the month.* The reports must be filed by the second business day after the reporting settlement date. FINRA compiles the short interest data and provides it for publication on the 8th business day after the reporting settlement date.",
"title": ""
}
] |
[
{
"docid": "b932b0d181fe36d3fdcc9450f3209b67",
"text": "\"The reason for selling a stock \"\"short\"\", is for when you believe the stock value will decrease in the near future. Here is an example: Today Exxon-Mobile stock is selling for $100 / share. You are expecting the price to decrease, so you want to short the stock, which means your broker (i.e. eTrade, etc) allows you to borrow shares without paying money, and those shares are transferred into your account, and then you sell them and receive money for the sale. But you didn't actually own those shares, you only borrowed them, so you need to return the shares to your broker sometime in the future. Let's say you borrow 10 shares @ $100, and you sell them at the market price of $100, you receive $1,000 in your account. But you owe your broker 10 shares, which you need to return sometime in the future. A few days later, the share price has decreased to $80. Now you can buy 10 shares from the market at a total cost of $800. You get 10 shares, and return those shares to your broker. Since you originally took in $1,000, and you just paid out $800, you keep a resulting profit of $200\"",
"title": ""
},
{
"docid": "e3b31f6ff09ba86956fe3909c37414b4",
"text": "\"As the other answer said, the person who owns the lent stock does not benefit directly. They may benefit indirectly in that brokers can use the short lending profits to reduce their fees or in that they have the option to short other stocks at the same terms. Follow-up question: what prevents the broker lending the shares for a very short time (less than a day), pocketing the interest and returning the lenders their shares without much change in share price (because borrowing period was very short). What prevents them from doing that many times a day ? Lack of market. Short selling for short periods of time isn't so common as to allow for \"\"many\"\" times a day. Some day traders may do it occasionally, but I don't know that it would be a reliable business model to supply them. If there are enough people interested in shorting the stock, they will probably want to hold onto it long enough for the anticipated movement to happen. There are transaction costs here. Both fees for trading at all and the extra charges for short sale borrowing and interest. Most stocks do not move down by large enough amounts \"\"many\"\" times a day. Their fluctuations are smaller. If the stock doesn't move enough to cover the transaction fees, then that seller lost money overall. Over time, sellers like that will stop trading, as they will lose all their money. All that said, there are no legal blocks to loaning the stock out many times, just practical ones. If a stock was varying wildly for some bizarre reason, it could happen.\"",
"title": ""
},
{
"docid": "005ae68f6b6c32c422f0c8118e17c5a7",
"text": "There is no difference. When dealing with short positions, talking about percentages become very tricky since they no longer add up to 100%. What does the 50% in your example mean? Unless there's some base amount (like total amount of the portfolio, then the percentages are meaningless. What matters when dealing with long and short positions is the net total - meaning if you are long 100 shares on one stock trade and short 50 shares on another, then you are net long 50 shares.",
"title": ""
},
{
"docid": "2136d2107d301d8ce67bde3c860700d0",
"text": "\"There are two primary reasons shares are sold short: (1) to speculate that a stock's price will decline and (2) to hedge some other related financial exposure. The first is acknowledged by the question. The second reason may be done for taxes (shorting \"\"against the box\"\" was once permitted for tax purposes), for arbitrage positions such as merger arbitrage and situations when an outright sale of stock is not permitted, such as owning restricted stock such as employer-granted shares. Why would a shareholder lend the investor the shares? The investor loaning his stock out to short-sellers earns interest on those shares that the borrower pays. It is not unusual for the annualized cost of borrowing stock to be double digits when there is high demand for heavily shorted shares. This benefit is however not available to all investors.\"",
"title": ""
},
{
"docid": "5f505ea025ad3b724d57c8c6297ce71a",
"text": "When you buy a stock, the worst case scenario is that it drops to 0. Therefore, the most you can lose when buying a stock is 100% of your investment. When you short a stock, however, there's no limit on how high the stock can go. If you short a stock at 10, and it goes up to 30, then you've lost 200% on your investment. Therefore shorting stocks is riskier than buying stocks, since you can lose more than 100% of your investment when shorting. because the price might go up, but it will never be as big of a change as a regular price drop i suppose... That is not true. Stocks can sometimes go up significantly (50-100% or more) in a very short amount of time on a positive news release (such as an earnings or a buyout announcement). A famous example occurred in 2008, when Volkswagen stock quintupled (went up 400%) in less than 2 days on some corporate news: Porsche, for some reason, wants to control Volkswagen, and by building up its stake has driven up the price. Hedge funds, figuring the share price would fall as soon as Porsche got control and stopped buying, sold a lot of VW shares short. Then last weekend, Porsche disclosed that it owned 42.6 percent of the stock and had acquired options for another 31.5 percent. It said it wanted to go to 75 percent. The result: instant short-squeeze. The German state of Lower Saxony owns a 20 percent stake in VW, which it said it would not sell. That left precious few shares available for anyone else. The shorts scrambled to cover, and the price leaped from about €200, or about $265, to above €1,000.",
"title": ""
},
{
"docid": "98e3bfb692726eb17aedb4ba794c9489",
"text": "In order to short a stock, you have to borrow the number of shares that you're shorting from someone else who holds the shares, so that you can deliver the shares you're shorting if it becomes necessary to do so (usually; there's also naked short selling, where you don't have to do this, but it's banned in a number of jurisdictions including the US). If a stock has poor liquidity, or is in high demand for shorting, then it may well be impossible to find anyone from whom it can be borrowed, which is what has happened in this instance.",
"title": ""
},
{
"docid": "a2f7ad0541af31f8d8438cfa6e0f8f23",
"text": "In less than two decades, more than half of all publicly traded companies have disappeared. There were 7,355 U.S. stocks in November 1997, according to the Center for Research in Security Prices at the University of Chicago’s Booth School of Business. Nowadays, there are fewer than 3,600. A close look at the data helps explain why stock pickers have been underperforming. And the shrinking number of companies should make all investors more skeptical about the market-beating claims of recently trendy strategies. Back in November 1997, there were more than 2,500 small stocks and nearly 4,000 tiny “microcap” stocks, according to CRSP. At the end of 2016, fewer than 1,200 small and just under 1,900 microcap stocks were left. Most of those companies melted away between 2000 and 2012, but the numbers so far show no signs of recovering. Several factors explain the shrinking number of stocks, analysts say, including the regulatory red tape that discourages smaller companies from going and staying public; the flood of venture-capital funding that enables young companies to stay private longer; and the rise of private-equity funds, whose buyouts take shares off the public market. For stock pickers, differentiating among the remaining choices is “an even harder game” than it was when the market consisted of twice as many companies, says Michael Mauboussin, an investment strategist at Credit Suisse in New York who wrote a report this spring titled “The Incredible Shrinking Universe of Stocks.” That’s because the surviving companies tend to be “fewer, bigger, older, more profitable and easier to analyze,” he says — making stock picking much more competitive. Consider small-stock funds. Often, they compare themselves to the Russell 2000, an index of the U.S. stocks ranked 1,001 through 3,000 by total market value. “Twenty years ago, there were over 4,000 stocks smaller” than the inclusion cutoff for the Russell 2000, says Lubos Pastor, a finance professor at the University of Chicago. “That number is down to less than 1,000 today.” So fund managers have far fewer stocks to choose from if they venture outside the index — the very area where the best bargains might be found. More money chasing fewer stocks could lead some fund managers to buy indiscriminately, regardless of value. Eric Cinnamond is a veteran portfolio manager with a solid record of investing in small stocks. Last year, he took the drastic step of shutting down his roughly $400 million mutual fund, Aston/River Road Independent Value, and giving his investors their money back. “Prices got so crazy in small caps, I fired myself,” he says. “My portfolio was 90% in cash at the end, because I couldn’t find anything to buy. If I’d kept investing, I was sure I’d lose people their money.” He adds, “It was the hardest thing I’ve ever done professionally, but I didn’t feel I had a choice. I knew my companies were overvalued.” Mr. Cinnamond hopes to return to the market when, in his view, values become attractive again. He doesn’t expect recent conditions to be permanent. The evaporation of thousands of companies may have one enduring result, however — and it could catch many investors by surprise. Most research on historical returns, points out Mr. Mauboussin, is based on the days when the stock market had twice as many companies as it does today. “Was the population of companies so different then,” he asks, “that the inferences we draw from it might no longer be valid?” So-called factor investing, also known as systematic or smart-beta investing, picks hundreds or thousands of stocks at a time based on common sources of risk and return. Among them: how big companies are, how much their shares fluctuate, how expensive their shares are relative to asset value and so on. But the historical outperformance of many such factors may have been driven largely by the tiniest companies — exactly those that have disappeared from the market in droves. Before concluding that small stocks or cheap “value” stocks will outrace the market as impressively as they did in the past, you should pause to consider how they will perform without the tailwinds from thousands of tiny stocks that no longer exist. The stock market has more than tripled in the past eight years, so the eclipse of so many companies hasn’t been a catastrophe. But it does imply that investing in some of the market’s trendiest strategies might be less profitable in the future than they looked in the past.",
"title": ""
},
{
"docid": "c214d560ed54ea4495c8526b2894adf6",
"text": "The worth of a share of stocks may be defined as the present cash value of all future dividends and liquidations associated therewith. Without a crystal ball, such worth may generally only be determined retrospectively, but even though it's generally not possible to know the precise worth of a stock in time for such information to be useful, it has a level of worth which is absolute and not--unlikely market price--is generally unaffected by people buying and selling the stock (except insofar as activities in company stock affect a company's ability to do business). If a particular share of stock is worth $10 by the above measure, but Joe sells it to Larry for $8, that means Joe gives Larry $2. If Larry sells it to Fred $12, Fred gives Larry $2. The only way Fred can come out ahead is if he finds someone else to give him $2 or more. If Fred can sell it to Adam for $13, then Adam will give Fred $3, leaving Fred $1 better off than he would be if he hadn't bought the stock, but Adam will be $3 worse off. The key point is that if you sell something for less than it's worth, or buy something for more that it's worth, you give money away. You might be able to convince other people to give you money in the same way you gave someone else money, but fundamentally the money has been given away, and it's not coming back.",
"title": ""
},
{
"docid": "d502149a85e0fe587f5e0b9b1570ba9c",
"text": "It this a real situation or is it a made up example? Because for a stock that has a last traded priced of $5 or $6 and volume traded over $4M (i.e. it seems to be quite liquid), it is hardly likely that the difference from bid to ask would be as large as $1 (maybe for a stock that has volume of 4 to 5 thousand, but not for one having volume of 4 to 5 million). In regards to your question, if you were short selling the order would go in exactly the same as if you were selling a stock you owned. So your order would be on the ask side and would need to be matched up with a price on the bid side for there to be a trade.",
"title": ""
},
{
"docid": "d3123290e32d907c6d91f25b639be154",
"text": "Brokerage firms are required to report the number of shares being shorted. This information is reported to the exchange (NYSE of NASDAQ) and is made public. Most financial sites indicate the number of shares being shorted for a particular stock. The image below from Yahoo finance shows 3.29 million shares of CMG were being shorted at the close of 9-28-2012. This is over 12% of the total outstanding shares of CMG. For naked short selling additional information is tracked. If the brokerage is unable to borrow shares to deliver before the settlement date of a short sale then the transaction is recorded as fails-to-deliver. No money or shares are exchanged since the brokerage is unable to deliver the shares that were agreed upon. A large amount of fails-to-deliver transactions for a stock usually indicates an excessive amount of naked shorting. When investors and brokerage firms start to aggressively short a stock they will do so without having borrowed the shares to sell. This will result in a large amount of naked short selling. When there are a large number of naked short sellers not all the sellers will be able to borrow the necessary shares before the settlement date and many fails-to-deliver transactions will be recorded. The SEC records the number of fails-to-deliver transactions. The table below summarizes the fails-to-deliver transactions from 1-1-2012 through 9-14-2012 (data obtained from here). The “Ext Amount” column shows the total dollar value of the transactions that failed ( i.e. Fail Qty * Share price ). The “Volume” column is the total number of shares traded in the same time period. The “% Volume” shows the percentage of shares that failed to deliver as a percentage of the total market volume. The table orders the data in descending order by the quantity of shares that were not delivered. Most of the companies at the top of the list no longer exist. For many of these companies, the quantity of shares that failed to deliver where many multiples of the number of shares traded during the same time period. This indicates massive naked short selling as many brokerages where unable to find shares to borrow before the settlement date. More information here.",
"title": ""
},
{
"docid": "7cfb787181731c3db190ce83e73934f7",
"text": "You can't. If there was a reliable way to identify an undervalued stock, then people would immediately buy it, its price would rise and it wouldn't be undervalued any more.",
"title": ""
},
{
"docid": "0781f8a4ea12589a43b6447b9e7066ea",
"text": "\"To summarize, there are three basic ways: (3) is the truly dangerous one. If there is a lot of short interest in a stock, but for some reason the stock goes up, suddenly a lot of people will be scrambling to buy that stock to cover their short position -- which will drive the price up even further, making the problem worse. Pretty soon, a bunch of smart rich guys will be poor guys who are suddenly very aware that they aren't as smart as they thought they were. Eight years ago, such a \"\"short squeeze\"\", as it's called, made the price of VW quadruple in two days. You could hear the Heinies howl from Hamburg to Haldenwanger. There are ways to protect yourself, of course. You can go short but also buy a call at a much higher price, thereby limiting your exposure, a strategy called a \"\"straddle\"\", but you also reduce your profit if you guessed right. It comes down to, as it always does, do you want to eat well, or to sleep well?\"",
"title": ""
},
{
"docid": "c04be15b6800d5c5717ebe50622497f3",
"text": "\"You can't do this automatically; you want to understand whether the drop is from a short-term high. is likely to be a short-term low, or reflects an actual change in how folks expect the company to do in the future. Having said that, some people do favor a strategy which resembles this, betting on what are known as \"\"the dogs of the Dow\"\" in the assumption that they're well trusted but not as strongly sought and therefore perhaps not bid up as strongly. I have no opinion on it; I'm just mentioning it for comparison.\"",
"title": ""
},
{
"docid": "f40ce647ec1934ec570d35784baa2775",
"text": "James Roth provides a partial solution good for stock picking but let's speed up process a bit, already calculated historical standard deviations: Ibbotson, very good collection of research papers here, examples below Books",
"title": ""
},
{
"docid": "cb5918e849d1e717ad6b71c9f01f57f8",
"text": "Matt Levine talked about a cute scam that this resembles, a kind of extended short squeeze. You manipulate up the stock of a company, so that it's obviously way above the fundamental value. Word will get out. Then the shorts come in. But the value remains stubbornly high. All the stock is held by a few insiders, but they didn't manipulate the stock price to do a pump and dump. They did it to milk the shorts on borrow cost.",
"title": ""
}
] |
fiqa
|
9c21da7bce7d74822e52e34d6729f1b0
|
Can one get a house mortgage without buying a house?
|
[
{
"docid": "2df00d72437669b65c71a5bda02b87fd",
"text": "\"I've never heard of a loan product like that. Yes, if they keep the funds in an account, it is no risk to the bank, but they would essentially need to go through the loan process twice for the same loan: when you pick a house, they need to reevaluate everything, along with appraising and approving the house. Even if you did find a bank that would do this for you, there are a few problems with this scheme. You would be paying interest before you have a need for this money, negating the savings you might achieve if the interest rates go up. In addition, your \"\"balance\"\" will go down as \"\"payments\"\" are deducted from your loan, and when you finally find a home to buy, you might not have enough for the house you want. You'll need to borrow more than you need, which will further negate any possible savings. It is impossible to know how fast rates will climb. If I were you, I would stick to saving for your down payment, and just get the best rate you can when you are ready to buy. Another potential idea for you is to lock an interest rate. When you apply for a mortgage, the interest rate is often locked for as much as 60 days, to protect the borrower in the event that the rates go up. You could ask the bank if you can pay a fee to lock the rate even longer. I don't know if that is possible or not. And, of course, the fee would eat into your potential savings.\"",
"title": ""
},
{
"docid": "5c3ee85ebbb20ccd9966af2e638bf2b1",
"text": "\"As a legal contract, a mortgage is a form of secured debt. In the case of a mortgage, the debt is secured using the property asset as collateral. So \"\"no\"\", there is no such thing as a mortgage contract without a property to act as collateral. Is it a good idea? In the current low interest rate environment, people with good income and credit can obtain a creditline from their bank at a rate comparable to current mortgage rates. However, if you wish to setup a credit line for an amount comparable to a mortgage, then you will need to secure it with some form of collateral.\"",
"title": ""
},
{
"docid": "a2c62a6f95a19d4d305afd7ae5426f82",
"text": "First, many banks do not keep the loan. Even if they send you a payment notice and process the monthly payment, there's still a good chance the loan itself was packed up and sold to investors. Collateralizing mortgages, in and of itself, is not inherently dangerous. But the loan definitely needs a house behind it. If you found a bank that keeps its loans, it would be a tough sell. You'd be asking them to trust that you've chosen the right number to match up with the house you intend to buy. And then they'd need to have another round of processing to turn this into a loan with normal collateral (i.e. put a lien on the house and tie them together.)",
"title": ""
},
{
"docid": "73deb8ce59c254ab3f7158df06349e47",
"text": "\"Not unless you have something else to put up as collateral. The bank wants a basic assurance that you're not going to immediately move the money to the Caymans and disappear. 999 times out of 1000, the collateral for a home mortgage is the home itself (which you wouldn't be able to take with you if you decided to disappear), so signing up for a 30 year mortgage on a nonexistent house is probably going to get you laughed out of the bank. It's sometimes possible to negotiate something else as collateral; you may, for instance, have a portfolio of securities worth the loan principal, that you can put in escrow for the term of the loan (the securities will stay in your name and make you money, but if you default on the loan the bank goes to the escrow company and takes the portfolio for their own). The bank will consider the risk of value loss on the securities in the portfolio, and may ask for a higher collateral value or only allow a lower loan amount. In all cases, it's usually a bad idea to go into long-term personal debt just to get \"\"cheap money\"\" that you can use to beat the interest rate with some business plan or investment. If you have a business plan, take that to the bank with an LLC and ask for a business loan. The business itself, if the plan is sound, should become valuable, and the terms of business loans take that into account, allowing for a \"\"shrinking collateral\"\" transferring the initial personal risk of the loan to the business.\"",
"title": ""
}
] |
[
{
"docid": "62d78935dca3e53a5cd56df814a91a5b",
"text": "I would use that money to buy a car instead of taking out a loan to buy the car. It does however prompt the question: What do you want more a house or a car?",
"title": ""
},
{
"docid": "7dde74392ae43418f5636c60a710d5c6",
"text": "\"I'm not aware that any US bank has any way to access your credit rating in France (especially as you basically don't have one!). In the US, banks are not the only way to get finance for a home. In many regions, there are plenty of \"\"owner financed\"\" or \"\"Owner will carry\"\" homes. For these, the previous owner will provide a private mortgage for the balance if you have a large (25%+) downpayment. No strict lending rules, no fancy credit scoring systems, just a large enough downpayment so they know they'll get their money back if they have to foreclose. For the seller, it's a way to shift a house that is hard to sell plus get a regular income. Often this mortgage is for only 3-10 years, but that gives you the time to establish more credit and then refinance. Maybe the interest rate is a little higher also, but again it's just until you can refinance to something better (or sell other assets then pay the loan off quick). For new homes, the builders/developers may offer similar finance. For both owner-will-carry and developer finance, a large deposit will trump any credit rating concerns. There is usually a simplified foreclosure process, so they're not really taking much of a risk, so can afford to be flexible. Make sure the owner mortgage is via a title company, trust company, or escrow company, so that there's a third party involved to ensure each party lives up to their obligations.\"",
"title": ""
},
{
"docid": "6b80cfd67567b2482cfe5fb29d67f9c5",
"text": "It depends on how much equity you have in your home. Scenario 1: Your home is worth $100K, and your current mortgage is for $100K (or more which means you are underwater.) In this case you can't get a 2nd mortgage because: That being said, you can use different portions of equity in your home as collateral for multiple mortgages, as long as none of the equity overlaps, but you may need permission from the primary mortgage bank first, for example: Scenario 2: Your home is worth $100K, and your current mortgage is for $80K meaning you currently have $20K in equity. It is possible to get a 2nd mortgage or home equity line of credit for $20K. As a side note, if your loan agent is telling you to use a different bank, it sounds like she is trying (and willing) to do something shady. If you are in Scenario 1, I'd find a new agent.",
"title": ""
},
{
"docid": "944043c4c9d8348c585222be3451c1ef",
"text": "Generally speaking the lower credit score trumps. In the case you cite, the lower credit score will prevail. However, you may need to do exactly that in order to qualify for the loan income wise. There are two factors when obtaining a mortgage, really all loans, but more so with a mortgage: the likeliness to repay (credit score), and your ability to service the debt. This last one is a combination of income and debt-to-income ratio. If you don't have enough income to qualify for the loan or fail to meet the debt to income ration, you may have to use your GF's income to qualify despite her poor credit. You might want to see past posts about buying property with non-spouses. It could work, but generally it requires a lot of legal work before closing on the deal. Avoiding this will lead to tales of woe.",
"title": ""
},
{
"docid": "94b7b27feac8a3dcef63056fa43001dd",
"text": "It seems like you are asking two different questions, one is, how do I know if I can afford a house? The other is, how do I know what type of mortage to get? The first question is fairly simple to answer, there's plenty of calculators out there that will tell you what you can afford, but rule of thumb is 30% of income can goto housing. Now what type of mortgage to get can be much more confusing, because the mortgage industry makes money off of these confusing products. The best thing to do in my opionion in situations like this is to keep it simple. You need to be careful buying a house. So much money is changing hands and there are so many parasites involved in the transaction I would be extremely wary of anybody who is going to tell you what mortgage to get. I've never heard of a fee only independent mortgage broker, and if I found one that claimed to be I wouldn't believe him. I would just ignore all the exotic non-conforming products and just answer one simple question. Are you the type of person that buys an insurance policy or that likes to self insure? If you like insurance, get a 30 year fixed mortgage. If you like to self insure, get a 7 year ARM. The average lenghth someone owns a house is 7 years, plus in 7 years time, it might not adjust up, and even if it does, you can just accelerate your payments and pay it off quickly (this is the self insurance part of it). If you're like me, I'm willing to pay an extra .5% for the 30 year so that my payment never changes and I'm never forced to move (which is admitedly extremely unlikely, but I like the safety). I don't like 15 year term loans because rates are so low, you can get way better returns in the stock market right now, so why pay off sooner then you need to. Heck, if I had a paid off house right now I'd refi into a 30 year and invest the money. In summary, pick 30 year or ARM, then just shop around to find the lowest rate (which is extremely easy).",
"title": ""
},
{
"docid": "c805b4bd5c0bdcc9a481645e470d3ae8",
"text": "You're effectively looking for a mortgage for a new self-build house. At the beginning, you should be able to get a mortgage based on the value of the land only. They may be willing to lend more as the build progresses. Try to find a company that specializes in this sort of mortgage.",
"title": ""
},
{
"docid": "edba9615a6bb1cd4c4198604e9497c9d",
"text": "If you really want to help your friend buy a house, make a counter-offer to buy the house yourself and lease it to your friend, with the option to buy for original purchase cost, plus all interest paid so far to the bank, plus closing costs and other expenses incurred by you, minus payments made so far by the friend. Otherwise, just no. The other answers already detail why.",
"title": ""
},
{
"docid": "b2b74b5cd2be5c6afc1c3fe45820c19c",
"text": "\"The current mortgaged owner would typically not have the right to sell any portion of the house without approval from the bank. The bank doesn't \"\"own\"\" the house through the mortgage, but they do have a series of rights that, in some cases, look similar to ownership. Remember that a mortgage is just a loan that uses a house as collateral, to reduce the risk to the lender in the event of default. If it was just a personal loan, without collateral, then there would be a much higher risk of default (and therefore the interest rate would be closer to 20% than 2%). But because the loan was taken with collateral, that collateral can't be sold without the bank's permission. If the bank allowed this to happen, then one risk would be exactly as you say - that the mortgagee stops paying the bank, and the bank no longer is able to recover the full value of the loan on selling the remaining 50% of the house owed as collateral.\"",
"title": ""
},
{
"docid": "b2357d8110fb4543d81549c6e887d7e6",
"text": "The problem is, you are trying to qualify for a loan that has a 25% down payment using money you don't have, which defeats the purpose of having a down payment. The best thing to do is have your parents buy the house for you. You then rent the house from them where your rent is equal to the mortgage + x. Your parents then put x into savings account for you and then once you have 25% in that account, they gift it to you and you purchase the house from them using that 25% as the downpayment for the mortgage.",
"title": ""
},
{
"docid": "a1cbaf548cfac2d95afa711c88f816b6",
"text": "I think we would be good with paying around $1200 monthly mortgage fees (with all other property fees included like tax etc.) You probably can't get a $250k house for $1,200 a month including taxes and insurance. Even at a 4% rate and 20% down, your mortgage payment alone will be $954, and with taxes and insurance on top of that you're going to be over $1,200. You might get a lower rate but even a drop to 3% only lowers the payment $90/month. Getting a cheaper house (which also reduces taxes and insurance) is the best option financially. What to do with the $15k that I have? If you didn't have a mortgage I'd say to keep 3-6 months of living expenses in an emergency fund, so I wouldn't deplete that just to get a mortgage. You're either going to be Since 1) the mortgage payment would be tight and 2) you aren't able to save for a down payment, my recommendation is for you to rent until you can make a 20% down payment and have monthly payment that is 25% of your take-home pay or less. Which means either your income goes up (which you indicate is a possibility) or you look for less house. Ideally that would be on a 15-year note, since you build equity (and reduce interest) much more quickly than a 3-year note, but you can get the same effect by making extra principal payments. Also, very few people stay in their house for 30 years - 5 years is generally considered the cutoff point between renting and buying. Since you're looking at a 10-year horizon it makes sense to buy a house once you can afford it.",
"title": ""
},
{
"docid": "2c42f2eb5810f7b396be829f8e997dfd",
"text": "\"Outside of broadly hedging interest rate risk as I mentioned in my other answer, there may be a way that you could do what you are asking more directly: You may be able to commit to purchasing a house/condo in a pre-construction phase, where your bank may be willing to lock in a mortgage for you at today's rates. The mortgage wouldn't actually be required until you take ownership from the builder, but the rates would be set in advance. Some caveats for this approach: (1) You would need to know the house/condo you want to move into in advance, and you would be committing to that move today. (2) The bank may not be willing to commit to rates that far in advance. (3) Construction would likely take far less than 5 years, unless you are buying a condo (which is the reason I mention condos specifically). (4) You are also committing to the price you are paying for your property. This hedges you somewhat against price fluctuation in your future area, but because you currently own property, you are already somewhat hedged against property price fluctuation, meaning this is taking on additional risk. The 'savings' associated with this plan as they relate to your original question (which are really just hedging against interest rate fluctuations) are far outweighed by the external pros and cons associated with buying property in advance like this. By that I mean - if it was something else you were already considering, this might be a (small) tick in the \"\"Pro\"\" column, but otherwise is far too committal / complex to be considered for interest rate hedging on its own.\"",
"title": ""
},
{
"docid": "dd865e96fd492e3189f843200cf4f59a",
"text": "Lenders pay attention to where your down payment money comes from. If they see a large transfer of money into your bank account within about a year before your purchase, this WILL cause an issue for you. Down payments are not just there to make the principal smaller; they are primarily used as an underwriting data-point to assess your quality as a borrower. If you take the money as loan, it will count against your credit worthiness. If you take the money as a gift, it will raise some other red flags. All of this is done for a reason: if you can't get a down payment, you are a higher credit risk (poor discipline, lack of consistent income), even if you can (currently) pay the monthly cost of a mortgage. (PS - The cost of home ownership is much higher than the monthly mortgage payment.) Will all this mean you WON'T get a loan? Of course not. You can almost always get SOME loan. But it will likely be at a higher rate than you otherwise would qualify for if you just waited a little bit and saved money for a down payment. (Another option: cheaper house.) EDIT: The below comments provide examples where gifts were/are NOT a problem. My experience from buying a house just a few years ago (and my several friends who bought house in the same period, some with family gifts and some without) is that it IS an issue. Your best bet is to TALK, IN PERSON with an actual mortgage broker in your area who can go through the options with you, and the downsides to various approaches.",
"title": ""
},
{
"docid": "98745389a9c404c24dae73985ec90c7c",
"text": "Generally, no. A mortgage is a lien against the property, which allows the bank to exercise certain options, primarily Power of Sale (Force you to sell the property) and outright seizure. In order to do this, title needs to be clear, which it isn't if you have half title. However, if you have a sales agreement, you can buy your brother's half, and then mortgage the entire property. This happens all the time. When you buy a house from someone, you get pre-approved for that house, which, at the time, you have no title to. Through some black magic lawyering and handwaving, this is all sorted out at closing time.",
"title": ""
},
{
"docid": "1c2ddf482737d372ae1c5fb5ee672551",
"text": "\"Some pros and cons to renting vs buying: Some advantages of buying: When you rent, the money you pay is gone. When you buy, assuming you don't have the cash to buy outright but get a mortgage, some of the payment goes to interest, but you are building equity. Ultimately you pay off the mortgage and you can then live rent-free. When you buy, you can alter your home to your liking. You can paint in the colors you like, put in the carpet or flooring you like, heck, tear down walls and alter the floor plan (subject to building codes and safety consideration, of course). If you rent, you are usually sharply limited in what alterations you can make. In the U.S., mortgage interest is tax deductible. Rent is not. Property taxes are deductible from your federal income tax. So if you have, say, $1000 mortgage vs $1000 rent, the mortgage is actually cheaper. Advantages of renting: There are a lot of transaction costs involved in buying a house. You have to pay a realtor's commission, various legal fees, usually \"\"loan origination fees\"\" to the bank, etc. Plus the way mortgages are designed, your total payment is the same throughout the life of the loan. But for the first payment you owe interest on the total balance of the loan, while the last payment you only owe interest on a small amount. So early payments are mostly interest. This leads to the conventional advice that you should not buy unless you plan to live in the house for some reasonably long period of time, exact amount varying with whose giving the advice, but I think 3 to 5 years is common. One mitigating factor: Bear in mind that if you buy a house, and then after 2 years sell it, and you discover that the sale price minus purchase price minus closing costs ends up a net minus, say, $20,000, it's not entirely fair to say \"\"zounds! I lost $20,000 by buying\"\". If you had not bought this house, presumably you would have been renting. So the fair comparison is, mortgage payments plus losses on the resale compared to likely rental payments for the same period.\"",
"title": ""
},
{
"docid": "4feb648016f073df68bca025da36bfd5",
"text": "\"Hobby expenses are not tax deductible. Business expenses are, but only if it's a bona fide business. First they look at profitability: if you reported a net profit (i.e. paid taxes) in your first 3 years, they will believe you rant on Youtube for a living. Remember, by the time they get around to auditing you, you'll likely be well into, or through, your third year. There is an exception for farms. Other than that, if you lose money year after year, you better be able to show that you look, walk and quack like a business; and one with a reasonable business reason for delayed profitability. For instance Netflix's old business model of mailing DVDs had very high fixed infrastructure expense that took years to turn profitable, but was a very sensible model. They're fine with that. Pets.com swandived into oblivion but they earnestly tried. They're fine with that too. You can't mix all your activities. If you're an electrician specializing in IoT and smart homes, can you deduct a trip to the CES trade show, you bet. Blackhat conference, arguable. SES? No way. Now if you had a second business of a product-reco site which profited by ads and affiliate links, then SES would be fine to deduct from that business. But if this second business loses money every year, it's a hobby and not deductible at all. That person would want separate accounting books for the electrician and webmaster businesses. That's a basic \"\"duck test\"\" of a business vs. a hobby. You need to be able to show how each business gets income and pays expense separate from every other business and your personal life. It's a best-practice to give each business a separate checking account and checkbook. You don't need to risk tax penalties on a business-larva that may never pupate. You can amend your taxes up to 3 years after the proper filing date. I save my expense reciepts for each tax year, and if a business becomes justifiable, I go back and amend past years' tax forms, taking those deductions. IRS gives me a refund check, with interest!\"",
"title": ""
}
] |
fiqa
|
1f1347690486a325d3dc7935db641fef
|
What to bear in mind when considering a rental home as an investment?
|
[
{
"docid": "366e4f092dbfd5bf75a34ea777a4fe2b",
"text": "Here would be the big two you don't mention: Time - How much of your own time are you prepared to commit to this? Are you going to find tenants, handle calls if something breaks down, and other possible miscellaneous issues that may arise with the property? Are you prepared to spend money on possible renovations and other maintenance on the property that may occur from time to time? Financial costs - You don't mention anything about insurance or taxes, as in property taxes since most municipalities need funds that would come from the owner of the home, that would be a couple of other costs to note in having real estate holdings as if something big happens are you expecting a government bailout automatically? If you chose to use a property management company for dealing with most issues then be aware of how much cash flow could be impacted here. Are you prepared to have an account to properly do the books for your company that will hold the property or would you be doing this as an individual without any corporate structure? Do you have lease agreements printed up or would you need someone to provide these for you?",
"title": ""
},
{
"docid": "e59d231ab74cf650e600dc45be110e7f",
"text": "What are the most important facts to keep in mind as I consider this? IMHO, the most important consideration to keep in mind is - do you really want to be in the landlord business, and if so, how much experience do you have in this business?",
"title": ""
},
{
"docid": "7c0129ccf189b8444f3ea2693d965ba8",
"text": "\"First off, I would label this as speculation, not investing. There are many variables that you don't seem to be considering, and putting down such a small amount opens you to a wide variety of risks. Not having an \"\"emergency fund\"\" for the rental increases that risk greatly. (I assume that you would not have an emergency fund based upon \"\"The basic idea is to save up a 20% down payment on a property and take out a mortgage\"\".) This type of speculation lent a hand in the housing bubble. Is your home paid off? If not you can reduce your personal risk (by owning your home), and have a pretty safe investment in real estate. Mission accomplished. My hope for you would be that you are also putting money in the market. Historically it has performed quite well while always having its share of \"\"chicken littles\"\".\"",
"title": ""
},
{
"docid": "88d77a3dd754aefdfb72b4a009b8c5e4",
"text": "\"Started to post this as a comment, but I think it's actually a legitimate answer: Running a rental property is neither speculation nor investment, but a business, just as if you were renting cars or tools or anything else. That puts it in an entirely different category. The property may gain or lose value, but you don't know which or how much until you're ready to terminate the business... so, like your own house, it really isn't a liquid asset; it's closer to being inventory. Meanwhile, like inventory, you need to \"\"restock\"\" it on a fairly regular basis by maintaining it, finding tenants, and so on. And how much it returns depends strongly on how much effort you put into it in terms of selecting the right location and product in the first place, and in how you market yourself against all the other businesses offering near-equivalent product, and how you differentiate the product, and so on. I think approaching it from that angle -- deciding whether you really want to be a business owner or keep all your money in more abstract investments, then deciding what businesses are interesting to you and running the numbers to see what they're likely to return as income, THEN making up your mind whether real estate is the winner from that group -- is likely to produce better decisions. Among other things, it helps you remember to focus on ALL the costs of the business. When doing the math, don't forget that income from the business is taxed at income rates, not investment rates. And don't forget that you're making a bet on the future of that neighborhood as well as the future of that house; changes in demographics or housing stock or business climate could all affect what rents you can charge as well as the value of the property, and not necessarily in the same direction. It may absolutely be the right place to put some of your money. It may not. Explore all the possible outcomes before making the bet, and decide whether you're willing to do the work needed to influence which ones are more likely.\"",
"title": ""
},
{
"docid": "4ec9c5228759edbab19be997d455092a",
"text": "Real estate is not an investment but pure speculation. Rental income may make it look like an investment but if you ask some experienced investor you would be told to stay away from real estate unless it is for your own use. If you believe otherwise then please read on : Another strong reason not to buy real estate right now is the low interest rates. You should be selling real estate when the interest rates are so low not buying it. You buy real estate when the interest rate cycle peaks like you would see in Russia in months to come with 17% central bank rate right now and if it goes up a little more that is when it is time to start looking for a property in Russia. This thread sums it up nicely.",
"title": ""
}
] |
[
{
"docid": "8458e6ebcc66911b291d37d15bc50a86",
"text": "To start, I hope you are aware that the properties' basis gets stepped up to market value on inheritance. The new basis is the start for the depreciation that must be applied each year after being placed in service as rental units. This is not optional. Upon selling the units, depreciation is recaptured whether it's taken each year or not. There is no rule of thumb for such matters. Some owners would simply collect the rent, keep a reserve for expenses or empty units, and pocket the difference. Others would refinance to take cash out and leverage to buy more property. The banker is not your friend, by the way. He is a salesman looking to get his cut. The market has had a good recent run, doubling from its lows. Right now, I'm not rushing to prepay my 3.5% mortgage sooner than it's due, nor am I looking to pull out $500K to throw into the market. Your proposal may very well work if the market sees a return higher than the mortgage rate. On the flip side I'm compelled to ask - if the market drops 40% right after you buy in, will you lose sleep? And a fellow poster (@littleadv) is whispering to me - ask a pro if the tax on a rental mortgage is still deductible when used for other purposes, e.g. a stock purchase unrelated to the properties. Last, there are those who suggest that if you want to keep investing in real estate, leverage is fine as long as the numbers work. From the scenario you described, you plan to leverage into an already pretty high (in terms of PE10) and simply magnifying your risk.",
"title": ""
},
{
"docid": "03252d1fca7489fe4a01185bad2050df",
"text": "\"I'm going to start with your title question: How can home buying be considered a sound investment with all of that interest that needs to be paid? If taken literally, this is a loaded question because if you pay cash for a home, you don't pay any interest. Furthermore, if your interest rate is 3% for 10 years you won't pay nearly as much interest as you will if your rate is 10% for 30 years, so \"\"all of that interest\"\" is relative to your personal situation. Having said that, of course I understand what you mean. Most people pay interest, and interest is expensive, so how do you calculate if it's worth it? That question has been asked and answered, but for your particular situation, you really have two separate questions: I believe you should answer these questions independently. If you move far away, it's probably the case that you can save a lot of money by either renting or buying in that location. So you should first consider if it's worth it to move, and then if it is, decide if it's worth it to rent or buy. If you decide not to move far away, then decide if maybe you can save money by renting somewhere near your current home. Since it sounds like if you move you may have to become a landlord, living close by to your tenant may also make it easier to deal with problems when they arise.\"",
"title": ""
},
{
"docid": "11f43f32825eead66ad9471abfbb0e4f",
"text": "Hmm, if your financially savvy enough to have saved up half a million dollars, I'd think you would be savvy enough to spend it wisely. :-) I think I'd spend the cash before running down stocks and bonds, as cash almost surely has a lower rate of return. I'd look into what rate of return you're getting on the rental property versus what you're getting from other investments. If the rental property has a lower return, I'd sell that before selling off stocks. (I own a rental property on which I am losing money every month. I'm still paying a mortgage on it, but even without that, the ROI would be about 4% under current market conditions.) Besides that, your plan looks good to me. Might need to add, 8. Beg on the streets, and 9. Burglary.",
"title": ""
},
{
"docid": "a0cd7730d095a4ebac6e95aabb354f31",
"text": "Buying a property and renting it out can be a good investment if it matches your long term goals. Buying an investment property is a long term investment. A large chunk of your money will be tied up with the property and difficult to access. If you put your money into dividend producing stocks you can always sell the stock and have your money back in a matter of days this is not so with a property. (But you can always do a Home equity line of credit (HELOC)) I would also like to point out landlording is not a passive endeavor as JohnFx stated dealing with a tenant can be a lot of work. This is not work you necessarily have to deal with, it is possible to contract with a property management company that would place tenants and take care of those late night calls. Property management companies often charge 10% of your monthly rent and will eat a large portion of your profits. It could be worth the time and headache of tenant relations. You should build property management into you expenses anyway in case you decide to go that route in the future. There are good things about owning an investment property. It can produce returns in a couple of ways. If you choose this route it can be lucrative but be sure to do your homework. You must know the area you are investing very well. Know the rent, and vacancy rates for Single family homes, look at multifamily homes as a way of mitigating risk(if one unit is vacant the others are still paying).",
"title": ""
},
{
"docid": "f06c7c60ab50533394de47beb5d0f937",
"text": "why does it make sense financially to buy property and become a landlord? Because then your investment generates cash instead of just sitting idle. All taxes, fees and repairs aside it would take almost 21 years before I start making profits. No - your profit will be the rents that you collect (minus expenses). You still have an asset that is worth roughly what you paid for it (and might go up in value), so you don't need to recoup the entire cost of the property before making a profit. Compared to investing the same 150k in an ETF portfolio with conservative 4% in annual returns I would have made around 140k € after taxes in the same 21 years i.e. almost doubled the money. If you charge 600 € / month (and never miss a month of rental income), after 21 years you have made 151k € in rents plus you still have a property. That property is most likely going to be worth more than you paid for it, so you should have at least 300k € in assets. Having said all that, it does NOT always make sense to invest in rental property. Being a landlord can be a hard job, and there are many risks involved that are different that risks in financial investments.",
"title": ""
},
{
"docid": "749960a13c58456820dd69d8e93bd7c4",
"text": "\"Whether or not you choose to buy is a complicated question. I will answer as \"\"what you should consider/think about\"\" as I don't think \"\"What should I do\"\" is on topic. First off, renting tends to look expensive compared to mortgages until you factor in the other costs that are included in your rent. Property taxes. These are a few grand a year even in the worst areas, and tend to be more. Find out what the taxes are ahead of time. Even though you can often deduct them (and your interest), you're giving up your standard deduction to do so - and with the low interest regime currently, unless your taxes are high you may not end up being better off deducting them. Home insurance. This depends on home and area, but is at least hundreds of dollars per year, and could easily run a thousand. So another hundred a month on your bill (and it's more than renter's insurance by quite a lot). Upkeep costs for the property. You've got a lot of up-front costs (buy a lawnmower, etc. types of things) plus a lot of ongoing costs (general repair, plumbing breaks, electrical breaks, whatnot). Sales commission, as Scott notes in comments. When you sell, you're paying about 6% commission; so you won't be above water, if housing prices stay flat, until you've paid off 6% of your loan value (plus closing costs, another couple of percent). You hit the 90% point on a 15 year about year 2, but on a 30 year you don't hit it until about year 5, so you might not be above water when you want to sell. Risk of decrease in value. Whenever you buy property, you take on the risk of losing value as well as the potential of gaining value. Don't assume that because prices are going up they will continue to; remember that a lot of investors are well aware of possible profits from rising prices and will be buying (and driving prices up) themselves. 2008 was a shock to a lot of people, even in areas where it seemed like prices should've still gone up; you never know what's going to happen. If you buy a house for 20% or so down, you have a bit of a safety net (if it drops 10-20% in value, you're still above water, though you do of course lose money), while if you buy it for 0% down and it drops 20% in value, you won't be able to sell (at all) for years. All that together means you should really take a hard look at the costs and benefits, make a realistic calculation including all actual costs, and then make a decision. I would not buy simply because it seems like a good idea to not pay rent. If you're unable to make any down payment, then you're also unable to deal with the risks in home ownership - not just decrease in value, but when your pipe bursts and ruins your basement, or when the roof needs a replacement because a tree falls on it. Yes, home insurance helps, but not always, and the deductible will still get you. Just to have some numbers: For my area, we pay about $8000 a year in property taxes on a $280k house ($200k mortgage), $1k a year in home insurance, so our escrow payment is about $750 a month. A 15 year for $200k is about $1400 a month, so $2200 or so total cost. We do live in a high property tax area, so someone in lower tax regimes would pay less - say 1800-1900 - but not that cheap. A 30 year would save you 500 or so a month, but you're still not all that much lower than rent.\"",
"title": ""
},
{
"docid": "9af2b9eb9a52388362c67d7d73f4a9ce",
"text": "\"I invested in single family homes and made ok. Houses can be an investment. (though the OP seems to equate \"\"house\"\" with primary residence) Just like any other investment buying houses has risks. I would not treat your primary residence or a vacation home as an investment. That is asking for trouble, but for many many years it was safe to assume that you would make a good return on it, and many people did. If you evaluate the numbers for purchase price, rental market, etc and find that rentals or flipping is worth your exposure then by all means, do it. But treating your primary residence as an investment apparently is what that comment means. Just like the stock market, many people have gotten wealthy on homes and there are lots of people who lost their shirts.\"",
"title": ""
},
{
"docid": "f84220fd43bec9562e69e878985ace2e",
"text": "Insurance - get estimate from an insurance agent who works with policies for commercial real estate. See comments below regarding incorporation. Taxes - if this was basic income for a simple LLC, estimating 25-40% and adjusting over time might work. Rental property is a whole different prospect. Financial experts who specialize in rental properties would be a good source of advice, and worth the cost. See below regarding incorporating. Real estate appreciation - not something you can count on for developed property. Appreciation used to be almost guaranteed to at least keep up with inflation. Now property values are not even guaranteed to go up. Never have been but the general rule was improved real estate in good repair appreciated in price. Even if property values increase over time, rental properties depreciate. In fact, for rental properties, you can claim a certain rate of depreciation over time as an expense on taxes. This depreciation could mean selling for less than you paid for the property after a number of years, and owing capital gains taxes, since you would owe the difference between the depreciated value and the sale price. Related to taxes are local codes. Some areas require you to have a property management license to handle buildings with more than a certain number of units. If you are going to own rental properties, you should protect your private financial life by incorporating. Form a company. The company will own the property and hire any maintenance people or property managers or security staff or any similar employment activities. The company takes out the insurance and pays taxes. The company can pay you a salary. So, bottom line, you can have the company pay all the expenses and take all the risks. Then, assuming there's any money left after expenses, the company can pay you a manager's salary. That way if the worst happens and a tenant breaks their hip in the shower and sues you for ONE MILLION DOLLARS and wins, the company folds and you walk away. You might even consider two companies. One to own the property and lease it to a property management company. The property management company can then go bankrupt in case of some sort of liability issue, in which case you still keep the property, form a new management company, repaint and rename the property and move on. TL;DR: Get insurance advice from insurance agent before you buy. Same for taxes from an accountant. Get trained as a property manager if your local codes require it (might be a good idea anyway). Incorporate and have the company take all the risks.",
"title": ""
},
{
"docid": "fc6af9dfa9b8eac88e2574cf3268fd3d",
"text": "\"As a rental, this is not an ideal set of numbers. You manage to show a $255 'gain' but $275 is from payment to principal. So, from the start, you're out $20/wk. This ignores the $170K down payment, which has an opportunity cost, however you calculate it. You can assign the same rate as the mortgage, and it's nearly $10K/yr. Or the rate you feel your choice of stock market or alternate investment would rise. Either way, you can't ignore this money. Your mortgage rate isn't fixed. A 1% rise and it would jump to $1663 ($842/week) Ideally, a rental property is cash positive without counting principal paydown or even the tax refund. It's a risky proposition to buy and count on everything going right. I didn't mean to scare you off with \"\"1%\"\" but you should research the costs of repair and maintenance. Last year my Heat/AC system needed replacement. US$10K. This year, it's time to paint, and replace rotting trim, $7000. In the US we have property tax that can range from 1-2% of the house value. If you don't have this tax, that's great, just please confirm this.\"",
"title": ""
},
{
"docid": "00b9e39c2ab056cafe629fed477dab86",
"text": "Do not borrow to invest in real estate. The interest payments will eat up most of your profit (the property management fees might eat up the rest), and you will have significant risk with tenant issues, property value, etc. Many people have made it work - many also lose everything. Real estate can be a great investment, but you can't even afford a house of your own yet, let alone investment property. Keep saving up until you have 20% down to buy a house of your own (ideally that you can put on a 15% fixed mortgage), and pay it off as quickly as you can. Then you can start saving for your first rental property. If that process isn't fast enough for you, you have two options. Increase your income or reduce your expenses. There's no shortcut to wealth-building without taking significant risks. At most I would scale back the 401(k) to the 5% match you get, but you should scale that back up once you have enough for a down payment.",
"title": ""
},
{
"docid": "6950d92f340ffdb328d15afac8299aba",
"text": "BLUF: Continue renting, and work toward financial independence, you can always buy later if your situation changes. Owning the house you live in can be a poor investment. It is totally dependent on the housing market where you live. Do the math. The rumors may have depressed the market to the point where the houses are cheaper to buy. When you do the estimate, don't forget any homeowners association fees and periodic replacement of the roof, HVAC system and fencing, and money for repairs of plumbing and electrical systems. Calculate all the replacements as cost over the average lifespan of each system. And the repairs as an average yearly cost. Additionally, consider that remodeling will be needful every 20 years or so. There are also intangibles between owning and renting that can tip the scales no matter what the numbers alone say. Ownership comes with significant opportunity and maintenance costs and is by definition not liquid, but provides stability. As long as you make your payments, and the government doesn't use imminent domain, you cannot be forced to move. Renting gives you freedom from paying for maintenance and repairs on the house and the freedom to move with only a lease to break.",
"title": ""
},
{
"docid": "579f9a0a5a958b3a896d6f07239b2853",
"text": "\"I want to caveat that I am not an active investor in Australia, you most likely should seek out other investors in your market and ask them for advice/mentorship, but since you came here I can give you some generalized advice. When investing in real estate there are a two main rules of thumb to quickly determine if the property will be a good investment. The 50% rule and the 2% (or 1%) rule. The 50% rules says that in general 50% if the income from the property will go to expenses not including debt service. If you are bringing in $1000 a month 500 of that will go to utilities, taxes, repair, capital expenditures, advertising, lawn care, etc. That leave you with 500 to pay the mortgage and if anything is left that can be cash flow. As this is your first property and it is in \"\" a relatively bad neighbourhood\"\" you might consider bumping that up to 60% just to make sure you have padding. The 1 or 2% rules says that the monthly rent should be 1(or 2) percent of the purchase price in this case the home is bought at 150,000. If the rent is 1,500 a month it might be a good investment but if it rents for 3,000 a month it probably is a good investment. There are other factors to consider if a home meets the 2% rule it might be in a rough neighborhood which increases turnover which in general is the biggest expense in an investment property. If a property meets one or both of these rules you should take a closer look at it and with proper due diligence determine that it is a deal. These rules are just hard and fast guidelines to property analysis, they may need to be adapted to you market. For example these rules will not hold in most (all?) big cities.\"",
"title": ""
},
{
"docid": "deb2bff6905ef128e60e380efdfb843f",
"text": "In general you do not want to show a taxable gain on rental properties if you can avoid it. One of the more beneficial advantages of owning cash flowing rental properties, is that the income is tax deferred because of the depreciation. I say deferred, because depreciation affects the cost basis of your property. Also since you are considering financing, it sounds like you don't need the cash flow currently. You usually can get better returns by financing and buying more rental properties, especially with investment mortgages at historical lows (Win via inflation over time)",
"title": ""
},
{
"docid": "aae6aa95ca158a1d7d4a9e369456150d",
"text": "\"You are a \"\"strategic\"\" investor, which is to say that you are in the best position to evaluate the deal because you already live there. Others don't have this advantage going in, which is why they might not be inclined to do what you're doing. Your biggest advantage is that you know at least one tenant. In essence, you are your own \"\"tenant\"\" for the top floor You also presumably have a pretty good idea of the neighborhood. These are arguments for owning your own home, although it does get a bit trickier with a second tenant, whom you may not know. Do check credit and references, etc. You might ask the landlord why he wants to sell. Presumably it's because he wants to retire or move, and not a problem with the property. But it does no harm to ask.\"",
"title": ""
},
{
"docid": "a51c9ca986fa7b362dce41bd2e9c1e30",
"text": "The HST is a sales tax levied on most goods and services. It is important to realize that in both BC and Ontario, the new HST does not (in most cases) result in an increase in sales tax paid. For example, in Ontario the PST is 8% and when combined with the GST the sales tax is 13%. With the HST, the GST and PST are replaced by a single HST of 13% so the tax bill does not change. Some services that were previously not subject to PST (such as mutual fund service fees and labour) will now be subject to the HST. So some things will increase. Over time, this should not have a material impact on the consumer due to the way businesses remit GST/HST.",
"title": ""
}
] |
fiqa
|
c0b172e88433c6b72058109bd0fff73f
|
What does cryptocurrency mean for governments?
|
[
{
"docid": "24b3d060e4c23665a0a4e0e103faada2",
"text": "Government's tax citizens and businesses in their currency. Earnings (even earnings in cryptocurrencies) are taxable income.",
"title": ""
}
] |
[
{
"docid": "f03a4b47ff3adde312d2859893fa1ae1",
"text": "\"Perhaps just an ambiguity rather than a contradiction - You said, \"\"at the end of the day, fiat currencies are based on trust and accountability of the government\"\". You then later said \"\"I'm not conflating trust of the issuer with trust of the \"\"bank\"\". I don't trust either.\"\" The problem there is that, on the Bitcoin side of the fence, there's no one there *to* trust. **You** can be the bank. You can also be the issuer, with enough computing horsepower. Do you, then, not trust *yourself*? Or, did I take that entirely wrong and you meant that directed toward the fiat side of things, and don't trust that Trump won't get us into a currency war with China (or his successor finally authorize that trillion dollar platinum coin to circumvent the debt ceiling - I don't mean that to be at all partisan)?\"",
"title": ""
},
{
"docid": "55bd82392b9f03e4190e3d4436bb95c2",
"text": "Thank you. Added to my list. This is very very helpful. I knew about the blockchain and the currency. Unfortunately, I'm not a pedant about differentiating between them with capitalising the first letter. I do not, however, understand Ethereum very well at all. So will read up.",
"title": ""
},
{
"docid": "0ee003abb9d3d266789513d9d7673856",
"text": "\"Edit: I discovered Bitcoin a few months after I posted this answer. I would strongly recommend anyone interested in this question to review it, particularly the myths page that dispels much of the FUD. Original answer: Although it is not online, as a concept the Totnes Pound may be of interest to you. I live quite close to this village (in the UK) and the system it promotes does work well. According to the Transition Town Totnes website this means that it is \"\"a community in a process of imagining and creating a future that addresses the twin challenges of diminishing oil and gas supplies and climate change , and creates the kind of community that we would all want to be part of.\"\" If you are looking for a starting place to introduce a new type of currency, perhaps in response to over-dependence on oil and global trade, then reading about the Transition Towns initiative could provide you with the answers you're looking for.\"",
"title": ""
},
{
"docid": "341db8f4c2c2686e74b451a59f893298",
"text": "Dream on. You are parroting government apologists. The only real complaint against gold is that it forces governments to limit their expenditures to what they can collect in revenue. All the critics of gold are in favor of big government and deficit spending. Gold is money. It is the only real money. And within five years there will be a de facto gold standard in international commerce.",
"title": ""
},
{
"docid": "d8b546e3ca3edf9892dc011ac3e6ca69",
"text": "It's quite the contrary. If there are mass failures of banks, then the money supply will collapse and there will be vicious deflation, increasing the value of money held as cash. It's only if governments print money to bail the banks out that there's a (small) risk of hyperinflation and the effective collapse of the currency.",
"title": ""
},
{
"docid": "6921b95d58b4a2801f0b86f9e9a3cc27",
"text": "\"Lol you finance guys are so hilarious. You don't understand cryptocurrencies or \"\"decentralized ledger technology\"\" at all. The ONLY way it works is if people have some **incentive** to actually secure and verify the Merkle Chain.... If I'm not getting something out of it **Why the fuck would I run a program to do that? Just to watch the computer get hot?** The block reward (aka the amount of bitcoins) I get are the underpinning incentive to do so! Get it? No bitcoins = nobody wants to secure your ledger! Therefore these \"\"permissioned ledgers\"\" are not going to be as secure or as trustworthy. There will likely be some cool shit that comes out of permissioned ledgers and intrablockchain stuff, but you are completely missing the ball if you think the actual bitcoins are dumb...... I know its complicated, it takes a while to **actually** understand, but it's partially engineering and you actually have to understand it all before you get to call it stupidity. The \"\"non-speculative value\"\" or utility of bitcoin as a currency seems to work just fine for online drug markets and has done quite a bit of business. It's got fantastic utility for buying retail shit online without having to give up personal information as well. It's got great utility for remittance. It's got divisibility. It is indeed a bonafide currency.... **TLDR; So how do you think that the recordkeeping gets done? Do you think people will do this for free? What function do you think the \"\"cryptocurrencies\"\" themselves currently serve? How do you think permissioned ledgers will be secure (i.e. tamperproof) if not done by public record? Don't you think that if they simply wanted to prevent tamperproof records they only need to use an airgapped computer and pen and paper?***\"",
"title": ""
},
{
"docid": "010f6c1e70e941277e8234cd594d6fbd",
"text": "I legitimately can't tell if this post is satirical. Ethereum is a very unique technology because it allows for Turing complete computation on its crypto network. Basically allowing for much higher security for data transmission and processing on the web. The reason that the currency is valuable is that in order to encrypt this information and transmit it, you have to pay the network in ethereum. It's had the support of Accenture and is in use by the Luxembourg stock exchange. I think they might know a bit more than the unnamed author of this article who doesn't think being able to inject code into a block chain is unique.",
"title": ""
},
{
"docid": "4e31045050a5d96241b49790eec6f013",
"text": "Currently many countries (and non-government bodies) hold dollars to facilitate trade. If the dollar is no longer used in their trade, then they no longer have a reason to hold those dollars. If every other country starts to dump their dollar holdings into the world currency markets, the number of dollars floating around in those market would shoot up. The massive supply increase of dollars (we're assuming these other countries are holding massive amounts of dollars) would lead to a large drop in value of the dollar - lots more dollars chasing the same amount of goods. Every purchase will become much more expensive for anyone still buying with dollars, including the American government trying to buy expensive military equipment - unless the US government also switches to using something else to purchase military supplies.",
"title": ""
},
{
"docid": "991df101a274ed8b90d892d33db7a635",
"text": "Cryptocurrency is undoubtedly at the peak of Gartner hype cycle, but it very well could revolutionise the way we use currency for our daily needs in the future. Stay with me on this… At present, cryptocurrency appears no more than a speculation that is sugar-coated by individuals who have vested interest in it. However, if we overlook this excitement, the actual use of cryptocurrency is mind-boggling. Suppose you had a mid-life crisis and went on a journey to the middle of the Earth to find where humans supposedly originated from, and you met and connected with a local coffee farmer named Razaq in a very remote part of Ethiopia. He invited you for an evening coffee and you obliged, and six months later you yearned for this same coffee whilst you were having another wave of existential thoughts in your penthouse that overlooked the urban jungle. Suddenly, you remembered that Razaq had a cheap but functional smartphone with a Bitcoin wallet, and afterwards you communicated with him on WhatsApp and decided to enter in a transaction with him. Razaq is delighted with this technology, but mainly because he does not have to travel 100 km to-and-fro the nearest city where his bank is located, and he is also happy that he can send a sack of coffee beans to his friend who lives in a faraway land, and all he needs to do is hand over the coffee sack to delivery truck en route the shipping port. Ultimately, saving Razaq lot of his precious time and resources. Now use this one example and multiply it by hundreds of millions of people around the world who have a very remote access to a ‘bank’, but have an access to a basic smartphone – imagine the possibility of connecting people like Razaq to the ‘internet’ world and having a seamless cross-border trade finance transaction using currency that is not controlled by any government. Like many others, I am keen to see the developments of cryptocurrency in the coming years, but for now I remain sceptical. That said, I am more interest in the countless opportunities that will be unlocked by the very technology that is fundamental to all the cryptocurrencies; the Blockchain. Crytocurrency is one branch of Blockchain technology which has proved useful. There are million other possibilities which I'm sure will benefit many industries in the coming decade, and I, for one, am very excited.",
"title": ""
},
{
"docid": "7cece024ae930e0b3672b0a10b701a58",
"text": "The government is this countries largest monopoly and rent seeker, whose interests run divergent to our own, and which must be managed closely by the governed lest it becomes an arbitrary regime beholdent to no other authority but its own. If you've watched congress at all, you know how quickly these people can write away the rights and privileges of their constituents. http://work.chron.com/average-salary-government-employees-7863.html",
"title": ""
},
{
"docid": "a01f34dd2676063e1e509af2ad1089e8",
"text": "Legal tender laws and capital gains tax mean that other commodities are at an unfair legal disadvantage to local fiat currency. In other words, governments are using taxes and regulations to manipulate the market and create artificial demand for the currency their central bank has a monopoly on the creation of.",
"title": ""
},
{
"docid": "e25013fc40b53ee2602fc7567b1b01be",
"text": "Does it matter? IF a hostile State wanted to use this data it will certainly be available to buy. Imagine the chaos that a coordinated attack could cause if this data started to be used specifically to cause disruption. The US government should be reacting AS IF this was a State sponsored attack. Legislation should be *flying* through Congress to mitigate this risk.",
"title": ""
},
{
"docid": "a3baab1d43ea0036f564a369fd70ccb1",
"text": "They can only do that because Coinbase interfaces with fiat currency. As more transactions and holding become denominated in crypto, it will be more difficult for them to tax (if you are using an unlinkable crypto). If I pay someone with Monero or most coins, then the government won't know who was involved in the transaction.",
"title": ""
},
{
"docid": "b45f748a0c31dd76eb6f670978f51320",
"text": "Fist money does not have legal tender. And technically there are thousands of people willing to fight for bitcoin, who can be seen as an army so in that logic bitcoin has some intrinsic value. But both don't have intrinsic value. Most sources on the internet I can find agree with that. Wikipedia, investopedia and many others. Not that money needs intrinsic value. If the market value is 1000 times above the intrinsic value then the intrinsic value is not even relevant. But 1000 * 0 = 0 and the intrinsic value of the dollar itself (not coins) will always be 0. Same for the EUR and then YUAN.",
"title": ""
},
{
"docid": "14aeb975937fddce5a74b66509faa80b",
"text": "Well, if the bond notes are the only currency around, then the electric company will have to choose from at least one of the money supplies to accept as payment; bonds will be the cash. Whichever firm they choose will just see their money demand go up. Second, It will most likely be implied that those people choosing to go into a certain money supply will want to look for a produced good or service in the economy from that firm before taking on it's notes. If the supply has too much inflation for everyone, than they can all move to another one that ensures their capital value. The idea of these systems is also to facilitate productive decision making, which is one of the things are education system should do more of these days. This will be more possible when Government is more limited to and more focused on the role of researcher and developer.",
"title": ""
}
] |
fiqa
|
46aa6170a96de7ecf6b9250ec7af702b
|
Are there any regulations regards end of loan payment procedures?
|
[
{
"docid": "180891a9e29d7ad7a96a15eaec0e7bc2",
"text": "There are federal regulations that state that: As a result it can be assumed that when a loan is paid off, notification should be given to the borrower. There is not a penalty since schools are pretty good about recovering their money. It could be due to a simple human error or glitch in the system. I would email them again confirming that your Perkins Loan had been paid in full, just so you have documentation of it.",
"title": ""
}
] |
[
{
"docid": "40ae70712ee0d2fee4c95c13d1d2069d",
"text": "If the loan is for a car, or mortgage there is specific paperwork that is processed when the loan payments have been completed. For other types of loans ask the lender, what will they give you regarding the payoff of the loan. Keep this paperwork, in hard copy and electronic form forever.",
"title": ""
},
{
"docid": "fa333059fd11e1523cf382938d912982",
"text": "\"Let me give you some advice from someone who has experience at both ends - had student loan issues myself and parents ran financial aid department at local university. Quick story of my student loan. I graduated in debt and could not pay at first due to having kids way too early. I deferred. Schools will have rules for deference. There are also federal guidelines - lets not get specific on this though since these change every year it seems. So basically there is an initial deferment period in which any student can request for the repayments to be deferred and it is granted. Then there is an extended deferment. Here someone has to OK it. This is really rather arbitrary and up to the school/lender. My school decided to not extend mine after I filled out a mound of paperwork and showed that even without paying I had basically $200 a month for the family to live off past housing/fixed expenses. Eventually they had to cave, because I had no money so they gave me an extended deferment. After the 5 years I started paying. Since my school had a very complex way to pay, I decided to give them 6 months at a time. You would think they would love that right? (On the check it was clearly stated what months I was paying for to show that I was not prepaying the loan off) Well I was in collections 4 months later. Their billing messed up, set me up for prepayment. They then played dumb and acted like I didn't but I had a picture of the check and their bank's stamp on the back... They couldn't get my loan out of collections - even though they messed up. This is probably some lower level employee trying to cover their mistake. So this office tells creditors to leave me alone but I also CANNOT pay my loan because the credit collection agency has slapped a 5k fee on the 7k loan. So my loan spent 5 years (kid you not) like this. It was interest free since the employee stopped the loan processing. Point being is that if you don't pay the lender will either put your loan into deferment automatically or go after you. MOST (not all) schools will opt for deferment, which I believe is 2 years at most places. Then after that you have the optional deferment. So if you keep not paying they might throw you into that bucket. However if you stop paying and you never communicate with them the chances of you getting the optional deferment are almost none - unless school doesn't know where you live. Basically if you don't respond to their mail/emails you get swept into their credit collection process. So just filling out the deferment stuff when you get it - even if they deny it - could buy you up to 10 years - kid you not. Now once you go into the collection process... anything is game. As long as you don't need a home/car loan you can play this game. What the collection agency does depends on size of loan and the rules. If you are at a \"\"major\"\" university the rules are usually more lax, but if you are at the smaller schools, especially the advertised trade/online schools boom - better watch out. Wages will be garnished very soon. Expect to go to court, might have to hire an attorney because some corrupt lenders start smacking on fees - think of the 5k mine smacked on me. So the moral of the story is you will pay it off. If you act nice, fill out paperwork, talk to school, and so on you can probably push this off quite a few years. But you are still paying and you will pay interest on everything. So factor in that to the equation. I had a 2.3% loan but they are much higher now. Defaulting isn't always a bad thing. If you don't have the money then you don't have it. And using credit cards to help is not the thing to do. But you need to try to work with the school so you don't incur penalties/fees and so that your job doesn't have creditors calling them. My story ended year 4 that my loan was in collection. A higher up was reviewing my case and called me. Told her the story and emailed her a picture of their cashed check. She was completely embarrassed when she was trying to work out a plan for me and I am like - how about I come down tomorrow with the 7k. But even though lender admitted fault this took 20+ calls to agencies to clear up my credit so I could buy a house. So your goal should be:\"",
"title": ""
},
{
"docid": "0a2e54e542bab264da2cf0c2dc3f09b7",
"text": "There are different options here. Either way, ensure that you have a paper trail of all your payments. When in doubt, speak to a lawyer, there are many who offer free consultations.",
"title": ""
},
{
"docid": "55a4f389f97a24cc60821597a105d24a",
"text": "In the EU, you might be looking for Directive 2000/35/EC (Late Payment Directive). There was a statutory rate, 7% above the European Central Bank main rate. However, this Directive was recently repealed by Directive 2011/7/EU, which sets the statutory rate at ECB + 8%. (Under EU regulations, Directives must be turned into laws by national governments, which often takes several months. So in some EU countries the local laws may still reflect the old Directive. Also, the UK doesn't participate in the Euro, and doesn't follow the ECB rate)",
"title": ""
},
{
"docid": "b9300c42e6ddab9c79fd61d14d4cb061",
"text": "You should also be aware that there are banks that do business in the US that do not deal with Fannie Mae, and thus are not subject to the rules about conforming loans. Here is an example of a well-known bank that lists two sets of rates, with the second being for loans of $750,000 or more (meaning the first covers everything up to that) https://home.ingdirect.com/orange-mortgage/rates",
"title": ""
},
{
"docid": "60b52ce239d29324e0aacd35c82de6e3",
"text": "It depends on the type of loan. Fully amortized loans have a schedule of payments don't recalculate as you pay. If you want to make an additional payment you need to contact the lender to apply your payment toward principle and reamortize the loan. Otherwise all your additional payment will do is change the amount due on your next payment, or push out your next payment due date. Regarding interest calculation, you owe interest on the principle outstanding. Say you have a 10 year loan (120 Months), at 5% APR, and a $1,000 payment (this means you borrowed roughly $94,000) Each month the amount of interest owed reduces because there is less principle outstanding. The reason loans are amortized like this is so the borrower has a predictable, known, monthly amount due.",
"title": ""
},
{
"docid": "1cee712904c22253683819c081aae7fc",
"text": "I've been an F&I Manager at a new car dealership for over ten years, and I can tell you this with absolute certainty, your deal is final. There is no legal obligation for you whatsoever. I see this post is a few weeks old so I am sure by now you already know this to be true, but for future reference in case someone in a similar situation comes across this thread, they too will know. This is a completely different situation to the ones referenced earlier in the comments on being called by the dealer to return the vehicle due to the bank not buying the loan. That only pertains to customers who finance, the dealer is protected there because on isolated occasions, which the dealer hates as much as the customer, trust me, you are approved on contingency that the financing bank will approve your loan. That is an educated guess the finance manager makes based on credit history and past experience with the bank, which he is usually correct on. However there are times, especially late afternoon on Fridays when banks are preparing to close for the weekend the loan officer may not be able to approve you before closing time, in which case the dealer allows you to take the vehicle home until business is back up and running the following Monday. He does this mostly to give you sense of ownership, so you don't go down the street to the next dealership and go home in one of their vehicles. However, there are those few instances for whatever reason the bank decides your credit just isn't strong enough for the rate agreed upon, so the dealer will try everything he can to either change to a different lender, or sell the loan at a higher rate which he has to get you to agree upon. If neither of those two things work, he will request that you return the car. Between the time you sign and the moment a lender agrees to purchase your contract the dealer is the lien holder, and has legal rights to repossession, in all 50 states. Not to mention you will sign a contingency contract before leaving that states you are not yet the owner of the car, probably not in so many simple words though, but it will certainly be in there before they let you take a car before the finalizing contract is signed. Now as far as the situation of the OP, you purchased your car for cash, all documents signed, the car is yours, plain and simple. It doesn't matter what state you are in, if he's cashed the check, whatever. The buyer and seller both signed all documents stating a free and clear transaction. Your business is done in the eyes of the law. Most likely the salesman or finance manager who signed paperwork with you, noticed the error and was hoping to recoup the losses from a young novice buyer. Regardless of the situation, it is extremely unprofessional, and clearly shows that this person is very inexperienced and reflects poorly on management as well for not doing a better job of training their employees. When I started out, I found myself in somewhat similar situations, both times I offered to pay the difference of my mistake, or deduct it from my part of the sale. The General Manager didn't take me up on my offer. He just told me we all make mistakes and to just learn from it. Had I been so unprofessional to call the customer and try to renegotiate terms, I would have without a doubt been fired on the spot.",
"title": ""
},
{
"docid": "743fe6aa7cf121a0fcb74e4e50c1c1b2",
"text": "Writing a promissory note will be sufficient. Presumably the money will be transferred on or near the date that the loan is signed, and the repayments will follow the pattern prescribed in the note. The IRS is only skeptical of family loans if there is no documentation to support the claim.",
"title": ""
},
{
"docid": "02e05f5235a7d8057f0aed641c5c7262",
"text": "You may need to specifically state that your extra payments should go towards principal, and should not be considered early payments of future months.",
"title": ""
},
{
"docid": "3f619a6f40638cb8a9ed76badeb58cb7",
"text": "\"Paperwork prevails. What you have is a dealer who get a kickback for sending financing to that institution. And the dealer pretty much said \"\"We only get paid our kickback at two levels of loan life, 6 and 12 months.\"\" You just didn't quite read between the lines. This is very similar to the Variable Annuity salespeople who tell their clients, \"\"The best feature about this product is that the huge commissions I get from the sale fund my kid's college tuition and my own retirement. You, on the other hand, don't really do so well.\"\" Car salesmen and VA sellers.\"",
"title": ""
},
{
"docid": "1ad8afd66a346863ad67ec813bbba710",
"text": "The mortgage I got last year through Wells Fargo explicitly indicates in its terms that excess payment will be considered against future payments (i.e., pay $500 extra in January and you owe $500 less in February) unless indicated otherwise. It goes on to state that with electronic payments you do not get to specify where excess payment goes, so excess payment made electronically always goes toward future payments. If you want to make excess payments toward principal, you must actually send them a check and your payment stub, with the appropriate box ticked. This won't be very different for other major banks, I wouldn't imagine.",
"title": ""
},
{
"docid": "f3fd5c9c209bfbf5883680b43d728caf",
"text": "You will be best to cancel the original instruction first, as you will have to wait for any pending payments to be received, as the banks will not entertain multiple refunds. After this can be confirmed the account will simply show a credit which you ask for. Many lenders/banks process these type of transactions after a period of time ie 30 days and there will be no way to speed this up, so the sooner you act the better. When you contact the bank have bank details for the payment(they might transfer externally fingers crossed), or you may receive a cheque in the post. Try to avoid complicating the matter with changes of address and ringing before you have cancelled the instruction etc if possible.",
"title": ""
},
{
"docid": "5694e32c676d48aaca4d8e2f863eaf4d",
"text": "If you selected a mortgage that allows additional payments to be credited against the principal rather than as early payment of normal installments, them yes, doing so will reduce the actual cost of the loan. You may have to explicitly instruct the bank to use the money this way each time, if prepay is their default assumption. Check with your lender, and/or read the terms of your mortgage, to find out if this is allowed and how to do it. If your mortgage doesn't allow additional payments against the principal, you may want to consider refinancing into a mortgage which does, or into a mortgage with shorter term and higher monthly payments, to obtain the same lower cost (modulo closing costs on the new mortgage; run the numbers.)",
"title": ""
},
{
"docid": "0cdbf1f4a40dcc629730439f9a65c531",
"text": "Disclaimer: I am not a banker nor a lawyer. I am unaware of the exact term in English, there is a process where you can ask for a reversal of a payment if it was made in error and your former employer should have made use of this. After a month though, I'm fairly sure the period of eligibility for this reversal has passed. As far as I am aware there is no point in time where it becomes ok for you to take this money. If you wish to close the account I would advise contacting the company and obtaining their payment details so you can transfer them the money and subsequently close the account.",
"title": ""
},
{
"docid": "97346439b9bda6cb87eaf6f87a228137",
"text": "Keep in mind that lenders will consider the terms of any loans you have when determining your ability to pay back the mortgage. They'll want to see paperwork, or if you claim it is a gift they will require a letter to that effect from your relative. Obviously, this could effect your ability to qualify for a loan.",
"title": ""
}
] |
fiqa
|
7833b8b9a507a8c2abb24a5c329b6eb6
|
If banksimple.com is not a bank, what is it?
|
[
{
"docid": "ee8fccbcca3d7618962273ff5df1d43a",
"text": "The model itself is fairly common for serving particular niche markets. A few other organizations which operate in similar setups: prepaid card providers such as NetSpend, GreenDot, AccountNow, etc; startups such as SmartyPig, PerkStreet, WePay, and HigherOne. Still, nobody else seems to be providing full-service online banking to mainstream customers the way we plan to. We plan to have much better security than most banks, which isn't hard given the current sorry state of online banking in the US. And having an intermediary who's looking out for your interests can be a good thing. David, my co-founder Josh lays out our launch plans and why we are invite-only in his latest post. In short, we made a decision to build our own call center rather than outsource it, and that limits how quickly we can bring people on.",
"title": ""
},
{
"docid": "235f063b15ea8d58511488c38c8316ab",
"text": "Looks more like an idea for a business rather than an actual business -- especially since it hasn't even launched. That said, it does have its merits. What bank actually holds the deposit funds becomes irrelevant, and may actaully change from time to time as they forge better partnerships with different banks. Think of it like a mutual fund -- the individual stocks (if there are stocks) in the fund are less important than the balance of risk vs. income and the leveling of change over the course of time. It offers services banks offer, without fees (at least that is the proposal) with the addition of budgetting capability as well. It does have downsides as well There is an increased level of indirection between you and your money. They propose to simplify the banking business model, but in fact are only hiding it from you. The same complexity that was there before is still there, with the added complexity of their service on top of it. It's just a matter of how much of that complexity you would have to deal with directly. With that in mind, I would reiterate that they are not a business yet -- just a proposed business model. Even the sign up process is a red flag for me. I understand they need to gauge interest in order to forge initial relationships with various banks, but I don't see the need for the 'invitation only' sign up method. It just sounds like a way to increase interest (who doesn't like feeling exclusively invited), and is a bit too 'gimmicky' for my taste. But, like I said, the idea has merit -- I have my reservations, but will reserve full judgement until they are an actual operating business.",
"title": ""
},
{
"docid": "ad95541644e49cb3761095f39c7f52da",
"text": "\"I don't see how this concept takes off. First and foremost, BankSimple is NOT a bank but a tech company masquerading as one. BankSimple leaves industry regulation and treasury management -- the CORE of banking, to outside parties. Call me old fashioned, but I prefer to have as few stops between me and my money as possible. If not for a fear of losing it in a robbery and inability to earn interest, I'd shove it under a mattress. So why would I want to bank with an intermediary, who admittently doesn't understand how the process works? How is that \"\"looking out for my interests\"\"? And how is your security better than other institutions that offer 128-bit encryption and multiple security questions to test a customer's identity? I'd like to add that not charging overdraft fees and providing lines of credit to help customers out in the event they spend more than they have is nice in concept, but what happens when those same customers do not make deposits to cover their shortfalls? When it comes to money, people will take advantage of any opportunities they have to circumvent the system. Especially if funds are tight.\"",
"title": ""
}
] |
[
{
"docid": "2254fe416d8e60c86d1f4473f3238fe0",
"text": "Update: it looks like this may no longer be a requirement. I was able to withdraw from TreasuryDirect into another bank account without issue.",
"title": ""
},
{
"docid": "7c30e030994a0056aa4467e006942217",
"text": "You might check out Thrive. They're almost a carbon copy of Mint from the last I checked, but with some additional and (I think) more useful metrics. For instance, they seemed to help more to plan for future expenses in addition to keeping tabs on individual budgets the way Mint does. Everything is automated in the same way as Mint, though I'm not sure their breadth is as far-reaching now since Mint was bought out by Intuit. Nevertheless, whenever I've had a question on Thrive, I shoot it to the devs and I get a very personal and courteous response within the day. So it depends on what you're looking for: Mint can almost guarantee any US bank will be accessible through their site, however Thrive will work much harder to gain your favor.",
"title": ""
},
{
"docid": "1d9d3121a57a654f46a39ca379ab12ec",
"text": "Those fields are used in a bank-to-bank transfers that do not use SWIFT. SWIFT is a messaging system, however with the fields you have listed, banks can exchange messages directly without having to use SWIFT. Your bank may not support bank-to-bank transfers, in which you need to notify your client that it needs to be a SWIFT transfer.",
"title": ""
},
{
"docid": "b5d49eeba6439306dafda1540ce9d30c",
"text": "Exactly. Or if you prefer, they were not acting *as* banks when doing so. (Well, at least by the definition I gave, obviously. If you prefer a different definition, you get a different answer. Although I'm not sure there really is a useful definition of banking that would cover the behaviour you described.)",
"title": ""
},
{
"docid": "bd79b85d692bf9e419a41ca027831ac8",
"text": "You don't have much choice other than to open an account in your business name, then do a money transfer, as @DJClayworth says. You will not without providing your name and street address and possibly other information that you may consider to be of a private nature. This is due to laws about fraud, money laundering and consumer protection. I'm not saying that's what you have in mind! But without accountability of the sort provided by names and street addresses, banks would be facilitating crimes of many sorts, which is why regulatory agencies enforce disclosure requirements.",
"title": ""
},
{
"docid": "784dc17a63c49148584cfa21eca0421b",
"text": "Their messaging always weirded me out. They keep talking about you not needing a bank, but have no checking savings. Probably because it's low margin. They stick to student loans, mortgages from rich parts of the market for low risk. They tranche them just like old housing mortgages, but I wonder if there are enough high quality customers out there to satisfy the demand of their investors.",
"title": ""
},
{
"docid": "8695e8030ee3269d15f22929ed6fbf9f",
"text": "I know of websites that do this, but I don't know of banks that do. Is there any reason you want to do this at a bank rather than use a service? My main concern with using a bank for this would be the risk of overdraft fees",
"title": ""
},
{
"docid": "b65b627719b3ee2b52feb10c3e1222fa",
"text": "One of us is misreading the other's message. I think FDIC is great. If a Congolese citizen wants to buy the company I work at right now, great. I just make an exception for state owned enterprises, royal families, et cetera.",
"title": ""
},
{
"docid": "830598775e637c5f87e5ecf2bbbf7e59",
"text": "I don't know that. I know mine has a great mobile app where I can deposit a check online. And all the smaller banks I've seen dont build their own sites or apps, they white label generic ones from common vendors.",
"title": ""
},
{
"docid": "c55c405c834c45e2dcf101bef19613ad",
"text": "The answer to this question can be found in the related question Is there any online personal finance software without online banking?",
"title": ""
},
{
"docid": "bdcc8808bdf896f1396ddc7bb2e6a235",
"text": "CashBase has a web app, an iPhone app and an Android app, all sync'ed up. It doesn't integrate with banks automatically, but you can import bank statements as CSV. Disclaimer: I'm CashBase's founder.",
"title": ""
},
{
"docid": "7f27667221cca30f0a98511cc22f04d9",
"text": "I'm always hesitant to use local credit unions because I love accessing all atms fee free, having services available 24/7, having robust, safe and audited online services, and having a big enough bank that all major third party tools interface with it. Joe Schmo Local Credit Union has a lot of good services, but audited and secure online banking? No fee nationwide ATMs? Native interfacing to major tools? I just don't see it often. I shudder to think of the security at small bank websites, frankly.",
"title": ""
},
{
"docid": "5de2302daad9e8d231a14595943b7a66",
"text": "Many U.S. banks now support POPMoney, which allows recurring electronic transfers between consumer accounts. Even if your bank doesn't support it, you can still use the service. See popmoney.com.",
"title": ""
},
{
"docid": "31fc9c275253a8a25056530c6bdd76d5",
"text": "I read an article where this website did an interview with them and concluded its very sketchy and possibly illegal. They refused to give out their FDIC number and they got the high interest rate by selling personal customer information to third parties",
"title": ""
},
{
"docid": "cd91ac9a13ba443f8dd0b2a5af1598d9",
"text": "You will probably not be able to figure out the bank from the account number. You can check for your name on registries of abandoned bank accounts or unclaimed money, but without more information, you don't have a lot of options.",
"title": ""
}
] |
fiqa
|
711c00f33bfa077576d4e751fa7fa068
|
How can a credit card company make any money off me? I have a no-fee card and pay my balance on time
|
[
{
"docid": "53552812408e5317cdfaa66b3d22b403",
"text": "Credit cards have two revenue streams: So yes, the are making money from your daily use of the card.",
"title": ""
},
{
"docid": "c20932e982311b1eb7c0ae28931d70f1",
"text": "They don't make any money off of you personally. They make money off of the merchants per transaction when you use the card. You trigger this fee to the credit card issuer, but it doesn't come out of your pocket. (Or it shouldn't; merchants aren't allowed to pass this fee on to you.) They keep you around because you may at some point become less responsible than you already are, and it would be quite costly to get you back (a couple hundred dollars is the cost of acquiring a new credit card customer). People who are less responsible than you subsidize your free float and your rewards (if any) but the new CARD act makes it more difficult for people to use their cards irresponsibly, so these perks that you enjoy will get less perky with time.",
"title": ""
},
{
"docid": "0f03fc2da0b47a0bb430485b28eb283f",
"text": "Of course they make money. They double dip in a lot of instances they make 2 - 3% plus $0.30 per transaction from the merchant and then whatever interest you pay on your card. So let's just say in one day you make stops at Starbucks for a $4 Latte, then at Wendy's for lunch for about $8, then you put about $20 worth of gas in your tank, then you stop at Kroger for some $40 groceries and may you pick up some dinner for about $15. That's 5 transactions at $0.30 which is a $1.50 then at 3% starbucks is $0.12, Wendy's $0.24, gas is $0.60 then kroger $1.20 then dinner $0.45 so the total that they get is $4.11 multiply this by about a million people per day that is about $4.1 million per day that they get. That is a nice penny! just from the merchant so you are making them a lot of money by just using it.",
"title": ""
},
{
"docid": "5bf19fd604b1be18afc9a8357116ed92",
"text": "Maybe they don't make much, but they make some for sure. In addition to what duffbeer703 says, they also have a warm body at the end of the line and will sell your contact info (or at least access to your eyeballs) to marketers. They stuff advertisements into your bill for example. If nothing else, you are brand value for them as they can convince merchants (who get charged monthly) that X billion people carry their card and that merchant would be missing out on sales by not accepting their product. If you have a rewards card that pays you for using it, the merchant has higher corresponding fees.",
"title": ""
},
{
"docid": "5b0d95869358bf04e59f28abbe0058a2",
"text": "\"Ever wonder why certain businesses won't accept certain credit cards? (The sign above the register saying \"\"Sorry, we don't accept AmericanExpress\"\"). It's because they don't want to pay that credit card company's transaction fees. One of the roles of the credit card company is to facilitate the transaction process between the customer (you) and the store. And now that using credit cards over cash or check is so ingrained in our culture, it creates extra work for the customer to make purchases at an establishment that is cash-only. Credit card companies know this, and so do businesses. So businesses will partner with credit card companies so that customers can use their cards. This way, everything is handled electronically (this can also benefit the business, since there's added security as they're not dealing with cash directly, and they don't have to manually count as much cash later). However a business may only budget a certain amount of their profits they want taken by credit card transactions. So if a company's fees are too high (say AmericanExpress, for example) and they are banking on you already having a Visa card, the company isn't going to go out of its way to provide the AmericanExpress option for you. If it were free for the business to use a credit card company's service at their stores, then they would all just provide the option for every card! So the credit card company making money is all contingent on you spending your money by using their credit card. You use the card, and the store pays the company for the transaction.\"",
"title": ""
}
] |
[
{
"docid": "013e7bbdcf2f60f8c14ed6aeb7d90a95",
"text": "\"This is most likely protecting Square's relationship with Visa/Mastercard/AMEX/etc. Credit card companies typically charge their customers a much higher interest rate with no grace period on cash advances (withdrawals made from an ATM using a credit card). If you use Square to generate something that looks like a \"\"merchandise transaction\"\" but instead just hand over a wad of banknotes, you're forcing the credit card company to apply their cheaper \"\"purchases\"\" interest rate on the transaction, plus award any applicable cashback offers†, etc. Square would absolutely profit off of this, but since it would result in less revenue for the partner credit card companies, that would quickly sour the relationship and could even result in them terminating their agreements with Square altogether. † This is the kind of activity they are trying to prevent: 1. Bill yourself $5,000 for \"\"merchandise\"\", but instead give yourself cash. 2. Earn 1.5% cashback ($75). 3. Use $4,925 of the cash and a $75 statement credit to pay your credit card statement. 4. Pocket the difference. 5. Repeat. Note, the fees involved probably negate any potential gain shown in this example, but I'm sure with enough creative thinking someone would figure out a way to game the system if it wasn't expressly forbidden in the terms of service\"",
"title": ""
},
{
"docid": "e16dfc5ebe4ff44d109ba85703e0815c",
"text": "If you've agreed to pay the money, then you owe them whether they have a valid credit card number of yours or not. If they want to report your debt to a collections agency and/or credit bureau, they can. Which would suck for you. It may not be that likely over $9.99 or whatever, but my point is that it's still a small risk even with a temporary card number.",
"title": ""
},
{
"docid": "bcf3e85b478a43834c0d63f867c7c6a3",
"text": "\"Other answers didn't seem to cover it, but most \"\"0%\"\" bank loans (often offered to credit card holders in the form of balance transfer checks), aside from less-obvious fees like already-mentioned late fees, also charge an actual loan fee, typically 2-3% (or a minimum floor amount) - that was the deal with every single transfer 0% offer I ever saw from a bank. So, effectively, even if you pay off the loan perfectly, on time, and within 0% period, you STILL got a 3% loan and not 0% (assuming 0% period lasts 12 months which is often the case).\"",
"title": ""
},
{
"docid": "7b000a97892cc975d572e05f9af9505f",
"text": "This is very much possible and happens quite a lot. In the US, for example, promotional offers by credit card companies where you pay no interest on the balance for a certain period are a very common thing. The lender gains a new customer on such a loan, and usually earns money from the spending via the merchant fees (specifically for credit cards, at least). The pro is obviously free money. The con is that this is usually for a short period of time (longest I've seen was 15 months) after which if you're not careful, high interest rates will be charged. In some cases, interest will be charged retroactively for the whole period if you don't pay off the balance or miss the minimum payment due.",
"title": ""
},
{
"docid": "2c682ef5283bb51dbcdf86854fba99e8",
"text": "Yes, but note that some credit card companies let you create virtual cards--you can define how much money is on them and how long they last. If you're worried about a site you can use such a card to make the payment, then get rid of the virtual number so nobody can do dirty deeds with it. In practice, however, companies that do this are going to get stomped on hard by the credit card companies--other than outright scams it basically does not happen. (Hacking is another matter--just pick up the newspaper. It's not exactly unusual to read of hackers getting access to credit card information that they weren't supposed to have access to in the first place.) So long as you deal with a company that's been around for a while the risk is trivial.",
"title": ""
},
{
"docid": "25289ea61944e5b4bafd9ae395d2a347",
"text": "\"never carry a balance on a credit card. there is almost always a cheaper way to borrow money. the exception to that rule is when you are offered a 0% promotion on a credit card, but even then watch out for cash advance fees and how payments are applied (typically to promotional balances first). paying interest on daily spending is a bad idea. generally, the only time you should pay interest is on a home loan, car loan or education loan. basically that's because those loans can either allow you to reduce an expense (e.g. apartment rent, taxi fair), or increase your income (by getting a better job). you can try to make an argument about the utility of a dollar, but all sophistry aside you are better off investing than borrowing under normal circumstances. that said, using a credit card (with no annual fee) can build credit for a future car or home loan. the biggest advantage of a credit card is cash back. if you have good credit you can get a credit card that offers at least 1% cash back on every purchase. if you don't have good credit, using a credit card with no annual fee can be a good way to build credit until you can get approved for a 2% card (e.g. citi double cash). additionally, technically, you can get close to 10% cash back by chasing sign up bonuses. however, that requires applying for new cards frequently and keeping track of minimum spend etc. credit cards also protect you from fraud. if someone uses your debit card number, you can be short on cash until your bank fixes it. but if someone uses your credit card number, you can simply dispute the charge when you get the bill. you don't have to worry about how to make rent after an unexpected 2k$ charge. side note: it is a common mis-conception that credit card issuers only make money from cardholder interest and fees. card issuers make a lot of revenue from \"\"interchange fees\"\" paid by merchants every time you use your card. some issuers (e.g. amex) make a majority of their revenue from merchants.\"",
"title": ""
},
{
"docid": "e98a39641e112d9ac6b9f797f28319c9",
"text": "\"Banks are in it to make money. But they're expected to provide a social good which powers our economy: secure money storage (bank accounts) and cashless transactions (credit/debit cards). And the government does not subsidize this. In fact, banks are being squeezed. Prudent customers dislike paying the proper cost of their account's maintenance (say, a $50/year fee for a credit card, or $9/month for a checking account) - they want it free. Meanwhile government is pretty aggressive about preventing \"\"fine print\"\" trickery that would let them recover costs other ways. However there isn't much sympathy for consumers who make trivial mistakes - whether they be technical (overdraft, late fee) or money-management mistakes (like doing balance transfers or getting fooled by promotional interest rates). So that's where banks are able to make their money: when people are imprudent. The upshot is that it's hard for a bank to make money on a prudent careful customer; those end up getting \"\"subsidized\"\" by the less-careful customers who pay fees and buy high-margin products like balance transfers. And this has created a perverse incentive: banks make more money when they actively encourage customers to be imprudent. Here, the 0% interest is to make you cocky about running up a balance, or doing balance transfers at a barely-mentioned fee of 3-5%. They know most Americans don't have $500 in the bank and you won't be able to promptly pay it off right before the 0% rate ends. (or you'll forget). And this works - that's why they do it. By law, you already get 0% interest on purchases when you pay the card in full every month. So if that's your goal, you already have it. In theory, the banks collect about 1.5% from every transaction you do, and certainly in your mind's eye, you'd think that would be enough to get by without charging interest. That doesn't work, though. The problem is, such a no-interest card would attract people who carry large balances. That would have two negative impacts: First the bank would have to spend money reborrowing, and second, the bank would have huge exposure to credit card defaults. The thing to remember is the banks are not nice guys and are not here to serve you. They're here to use you to make money, and they're not beneath encouraging you to do things that are actually bad for you. Caveat Emptor.\"",
"title": ""
},
{
"docid": "5de33e9ed8137e3add616b13b786624b",
"text": "\"From the card issuer's point of view, the purpose of balance transfers is very simple. A credit card company wants you to owe them more money, so they will make more profit getting more interest payments from you. To do that, they will offer an (apparently) good deal to transfer the debt that you owe to other companies onto their card. The deal may superficially look good to you, because it offers a low interest rate for a limited time period, etc. But never forget that its real purpose is to be a good deal for the card company, not for you. Of course, credit card companies target these deals at their \"\"typical\"\" customers. They have to tolerate a few \"\"smart\"\" customers who actually make them no money at all, by always paying off their card balance before any interest is due, never using their card to draw cash from an ATM (which has no interest-free loan period), never using their card for overseas transactions that incur fees and/or poor currency exchange rates, etc. Your financial objective should be to make yourself one of the customers the card company doesn't want - but \"\"only paying off the minimum balance every month\"\" is exactly the wrong way to do that!\"",
"title": ""
},
{
"docid": "00e5b6849aa3eb56d71d5a50da47a537",
"text": "\"Well, I answered a very similar question \"\"Credit card payment date\"\" where I showed that for a normal cycle, the average charge isn't due for 40 days. The range is 35-55, so if you want to feel good about the float just charge everything the day after the cycle closes, and nothing else the rest of the month. Why is this so interesting? It's no trick, and no secret. By the way, this isn't likely to be of any use when you're buying gas, groceries, or normal purchases. But, I suppose if you have a large purchase, say a big TV, $3000, this will buy you extra time to pay. It would be remiss of me to not clearly state that anyone who needs to take advantage of this \"\"trick\"\" is the same person who probably shouldn't use credit cards at all. Those who use cards are best served by charging what they can afford to pay at that moment and not base today's charges on what paychecks will come in by the due date of the credit card bill.\"",
"title": ""
},
{
"docid": "2180f91615b9d9c4599b3ab34e79b69e",
"text": "1) Every credit card company charges vendors a fee. That's sufficient to make an acceptable profit per charge even if some of that money goes into marketing expenses -- and the cash-back offer is a marketing expense. 2) Many if not most consumers pay interest; probably everyone does so occasionally when we get distracted and miss a payment. 3) The offer encourages you to put more payments on the card -- and in particular on their card -- than you might otherwise. See #1; that increases net income.",
"title": ""
},
{
"docid": "eea446cbb3ebab34ec08cdc4dd791dde",
"text": "That would have been a good idea. They don't charge interest on a $0 balance, but if you payoff your account after the cycle date, there is a hidden balance and that balance will accrue interest. It is only a few cents a day. I just don't think it is legal for them to refuse to provide you a payoff quote mid cycle. I'm almost certain. When I worked for Discover it was a key point in training to not give the wrong amount and to make sure to use the calculator in the system to quote a daily balance, how much it goes up per day, and how much they should send if they were mailing the payment, giving consideration for the time it takes to receive/process the payment.",
"title": ""
},
{
"docid": "b4e97de34cef36c0dad6a1c09fff5040",
"text": "\"It is called \"\"Credit card installments\"\" or \"\"Equal pay installments\"\", and I am not aware of them being widely used in the USA. While in other countries they are supported by banks directly (right?), in US you may find this option only in some big stores like home improvement stores, car dealerships, cell phone operators (so that you can buy a new phone) etc. Some stores allow 0% financing for, say, 12 months which is not exactly the same as installments but close, if you have discipline to pay $250 each month and not wait for 12 months to end. Splitting the big payment in parts means that the seller gets money in parts as well, and it adds risks of customer default, introduces debt collection possibility etc. That's why it's usually up to the merchants to support it - bank does not care in this case, from the bank point of view the store just charges the same card another $250 every month. In other countries banks support this option directly, I think, taking over or dividing the risk with the merchants. This has not happened in US. There is a company SplitIt which automates installments if stores want to support it but again, it means stores need to agree to it. Here is a simple article describing how credit cards work: https://www.usbank.com/credit-cards/how-credit-cards-work.html In general, if you move to US, you are unlikely to be able to get a regular credit card because you will not have any \"\"credit history\"\" which is a system designed to track each customer ability to get & pay off debt. The easiest way to build the history - request \"\"secured credit card\"\", which means you have to give the bank money up front and then they will give you a credit card with a credit limit equal to that amount. It's like a \"\"practice credit card\"\". You use it for 6-12 months and the bank will report your usage to credit bureaus, establishing your \"\"credit score\"\". After that you should be able to get your money back and convert your secured card into a regular credit card. Credit history can be also built by paying rent and utilities but that requires companies who collect money to report the payments to credit bureaus and very few do that. As anything else in US, there are some businesses which help to solve this problem for extra money.\"",
"title": ""
},
{
"docid": "f8109b05f5d08b665d3a2bff4d6e99bb",
"text": "Credit card companies charge merchants for accepting their cards. They'll take their cut and give you some of the fee back as a reward. So, in reality merchants have increased their prices to accommodate for the credit card processing fees. The credit card takes a bit of their fee and gives you back some of the money you wouldn't have spent if there were no fees for using a credit card.",
"title": ""
},
{
"docid": "a27715be676e47c2c991c5717c23bdfa",
"text": "\"I'm not sure if this answer is going to win me many friends on reddit, but here goes... There's no good reason why they couldn't have just told him the current balance shown on their records, BUT... **There are some good reasons why they can't quote a definitive \"\"payoff\"\" balance to instantly settle the account:** It's very possible to charge something today, and not have it show up on Chase's records until tomorrow, or Monday, or later. There are still places that process paper credit-card transactions, or that deal with 3rd-party payment processors who reconcile transactions M-F, 9-5ish, and so on. - Most transactions these days are authorized the instant you swipe the card, and the merchant won't process until they get authorization back from the CC company. But sometimes those authorizations come from third-party processors who don't bill Chase until later. Some of them might not process a Friday afternoon transaction until close-of-business Monday. - Also, there are things like taxicab fares that might be collected when you exit the cab, but the record exists only in the taxi's onboard machine until they plug it into something else at the end of the shift. - There are still some situations (outdoor flea-markets, auctions, etc) where the merchant takes a paper imprint, and doesn't actually process the payment until they physically mail it in or whatever. - Some small businesses have information-security routines in place where only one person is allowed to process credit-card payments, but where multiple customer service reps are allowed to accept the CC info, write it down on one piece of paper, then either physically hand the paper to the person with processing rights, or deposit the paper in a locked office or mail-slot for later processing. This is obviously not an instant-update system for Chase. (Believe it or not, this system is actually considered to be *more* secure than retaining computerized records unless the business has very rigorous end-to-end info security). So... there are a bunch of legit reasons why a CC company can't necessarily tell you this instant that you only need to pay $x and no more to close the account (although there is no good reason why they shouldn't be able to quote your current balance). What happens when you \"\"close an account\"\" is basically that they stop accepting new charges that were *made* after your notification, but they will still accept and bill you for legit charges that you incurred before you gave them notice. So basically, they \"\"turn off\"\" the credit-card, but they can't guarantee how much you owe until the next billing cycle after this one closes: - You notify them to \"\"close\"\" the account. They stop authorizing new charges. - Their merchant agreements basically give the merchant a certain window to process charges. The CC company process legit charges that were made prior to \"\"closing\"\" the account. - The CC company sends you the final statement *after* that window for any charges has expired, - When that final statement is paid (or if it is zero), *THAT* is when the account is settled and reported to Equifax etc as \"\"paid\"\". So it's hard to tell from your post who was being overly semantic/unreasonable. If the CC company refused to tell the current balance, they were just being dickheads. But if they refused to promise that the current balance shown is enough to instantly settle the account forever, they had legit reasons. Hope that helps.\"",
"title": ""
},
{
"docid": "a02953d7276dc71ac04d14269d15ff1c",
"text": "Much money is made by creditors on the transaction value of a client in addition to interest value. Knowing that, I pay off all my cards every month, have never made a late payment, and get a number of offers every year for reward type cards. Don't ever be worried about paying off your card in full, just be sure you're using your card and that you pay on time, every time.",
"title": ""
}
] |
fiqa
|
4dacf3a1d8a1899c61e7fa30724b5249
|
What are the common income tax deductions used by “rich” salaried households?
|
[
{
"docid": "3d1a7d0081a852ae4d9ecee9dc1239f4",
"text": "\"You're asking explicitly about $250K+ wage earners. Well, believe it or not, but this is the most discriminated group of people in the US tax code. This is what is called \"\"the upper middle class\"\". People who still have to work for a living, but treated as if they're rich (I don't consider people who must work to keep up their life style as rich). Many of the deductions cannot be taken by them. Lets go over the list Keith made: You mentioned losses - you cannot deduct gambling losses (in excess of gambling income), and you cannot deduct passive (rental real estate, for example) losses. While for rental real estate there's a small amount of losses you could deduct, it phases out well below the $250K line (can be deducted against passive income, or when disposed of the property). 529 plans are not deductible (in fact, its a gift subject to the gift tax). Bottom line, being a high earner with wages only means you pay the most tax. You either find a way to become self employed and have a lot of business deductions on your schedule C/1120S, or switch to capital gains. You can marry an unemployed partner, it will make your life slightly easier.\"",
"title": ""
},
{
"docid": "794ea32bcc14adc5586eceeeb639c9ee",
"text": "The $250K and up are not one homogeneous group. The lower end of this group benefits from normal Schedule A itemized deductions, e.g. mortgage interest, property tax, state income tax, and charitable donations. As you mention, 401(k) ($17k employee contribution limit this year), but also things like the dependent care account ($5k limit) and flexible spending account, limited usually up to $2500 in '14. The 529 deposits are limited to the gifting limit, $14K in 2014, but one can gift up to five years' deposits up front. This isn't a tax deduction, but does pull money out of one's estate and lets it grow tax free similar to a Roth IRA. The savings from such accounts is probably in the $15k - $20K range given the 20 or so year lifetime of the account and limited deposits. At the higher end, the folks making the news are those whose income is all considered capital gains. This applies both to hedge fund managers as well as CEOs whose compensation included large blocks of stock. This isn't a tax deduction, but it's how our system works, the taxation of capital gains vs. ordinary income.",
"title": ""
},
{
"docid": "8b2f97bee5af06b424e41ea98c2014ae",
"text": "One of the main tax loopholes more readily available to the wealthy in the U.S. is the fact that long-term capital gains are taxed at a much lower rate. Certainly, people making less than $250,000/year can take advantage of this as well, but the fact is that people making, say, $60,000/year likely have a much smaller proportion of their income available to invest in, say, indexed mutual funds or ETFs. You may wish to read Wikipedia's article on capital gains tax in the United States. You can certainly make the argument that the preferential tax rate on capital gains is appropriate, and the Wikipedia article points out a number of these. Nevertheless, this is one of the main mechanisms whereby people with higher wealth in the U.S. typically leverage the tax code to their advantage.",
"title": ""
},
{
"docid": "7b8b3758cd1582dcdfa95058d7eac28b",
"text": "\"From Rich Dad, Poor Dad. 3 Major Things: With rental real estate, in addition to mortgage interest, you also deduct property taxes, and must claim depreciation (cost of house / 27.5 years) Business Expenses. For example, buy a yacht and put it in a charter fleet. Deduct interest on the loan, depreciation of the asset, property taxes, upkeep of the boat. Your \"\"business\"\" earns profit from chartering the boat, which if I recall correctly is taxed at a lower rate. You get to go sailing for free. Then there was the concept of subdividing the businesses. If you own a restaurant, create another business to own the property, and the equipment used in the company. Then lease the equipment and rent the land to the restaurant. Now admittedly I thought this was like the Daylight Savings plan of tax avoidance, I mean now aren't you essentially having two companies paying half the taxes. I am sure there are well paid CPAs that make the math happen, perhaps using insurance plans.. Perhaps each business funds a \"\"whole life\"\" insurance account, and contributes vast amounts into that. Then you take a loan from your insurance account. Loans of course are not income, so not taxed. The third way is to create your own bank. Banks are required to have reserves of 9%. Meaning if I have $100 dollars, the FDIA allows me to loan $1,111. I then charge you 20% interest, or $222/yr. Now how much can I loan? ...well you can see how profitable that is. Sure you pay taxes, but when you print your own money who cares? Most of this is just gleamed from books, and government publications, but that was my general understanding of it. Feel free to correct the finer points.\"",
"title": ""
},
{
"docid": "75056fd07d30862bad206916f2cc6322",
"text": "\"As was stated, households earning over $250k/yr don't all get their income one way. Below that threshold, even in the six figure range, most households are in one of two categories; salary/wage/commission workers, and those living off of nest eggs/entitlements (retired, disabled, welfare). Above $250k, though, are a lot of disparate types of incomes: Now, you specifically mentioned wage earners above $250k. Wage earners typically have the same \"\"tax havens\"\" that most of us do; the difference is usually that they are better able to make use of them: In other words, there are many ways for a high-end wage earner to live the good life and write a lot of it off.\"",
"title": ""
}
] |
[
{
"docid": "ff3e1c7ccbf8ca72b2a7017d7258f5f7",
"text": "It's the percent of your gross income put into savings. You make 60000/year, and save 6000, that's 10%. You can certainly say that you paid 10000 in tax so you really saved 6000/50000, or 12%, if that will make you feel better, but the saving rate is typically based on gross income.",
"title": ""
},
{
"docid": "baac78ff623eee42bf7091319816b7ac",
"text": "\"In your case, I believe the answer is that you don't owe any taxes, if your deductions exceed your income. There is something called the Alternate Minimum Tax to catch \"\"rich\"\" people, who claim \"\"too many\"\" deductions. Basically, it taxes their \"\"gross\"\" income at a lower rate, but allows them no deductions if they make $175,000 or more. You are not in that tax \"\"bracket.\"\"\"",
"title": ""
},
{
"docid": "d55b27429ba53a663bc7257aa958fc75",
"text": "\"I am going to keep things very simple and explain the common-sense reason why the accountant is right: Also, my sister in law owns a small restaurant, where they claim their accountant informed them of the same thing, where a portion of their business purchases had to be counted as taxable personal income. In this case, they said their actual income for the year (through their paychecks) was around 40-50K, but because of this detail, their taxable income came out to be around 180K, causing them to owe a huge amount of tax (30K ish). Consider them and a similarly situated couple that didn't make these purchases. Your sister in law is better off in that she has the benefit of these purchases (increasing the value of her business and her expected future income), but she's worse off because she got less pay. Presumably, she thought this was a fair trade, otherwise she wouldn't have made those purchases. So why should she pay any less in taxes? There's no reason making fair trades should reduce anyone's tax burden. Now, as the items she purchased lose value, that will be a business loss called \"\"depreciation\"\". That will be deductible. But the purchases themselves are not, and the income that generated the money to make those purchases is taxable. Generally speaking, business gains are taxable, regardless of what you do with the money (whether you pay yourself, invest it, leave it in the business, or whatever). Generally speaking, only business losses or expenses are deductible. A purchase is an even exchange of income for valuable property -- even exchanges are not deductions because the gain of the thing purchased already fairly compensates you for the cost. You don't specify the exact tax status of the business, but there are really only two types of possibilities. It can be separately taxed as a corporation or it can be treated essentially as if it didn't exist. In the former case, corporate income tax would be due on the revenue that was used to pay for the purchases. There would be no personal income tax due. But it's very unlikely this situation applies as it means all profits taken out of the business are taxed twice and so small businesses are rarely organized this way. In the latter case, which is almost certainly the one that applies, business income is treated as self-employment income. In this case, the income that paid for the purchases is taxable, self-employment income. Since a purchase is not a deductible expense, there is no deduction to offset this income. So, again, the key points are: How much she paid herself doesn't matter. Business income is taxable regardless of what you do with it. When a business pays an expense, it has a loss that is deductible against profits. But when a business makes a purchase, it has neither a gain nor a loss. If a restaurant buys a new stove, it trades some money for a stove, presumably a fair trade. It has had no profit and no loss, so this transaction has no immediate effect on the taxes. (There are some exceptions, but presumably the accountant determined that those don't apply.) When the property of a business loses value, that is usually a deductible loss. So over time, a newly-purchased stove will lose value. That is a loss that is deductible. The important thing to understand is that as far as the IRS is concerned, whether you pay yourself the money or not doesn't matter, business income is taxable and only business losses or expenses are deductible. Investments or purchases of capital assets are neither losses nor expenses. There are ways you can opt to have the business taxed separately so only what you pay yourself shows up on your personal taxes. But unless the business is losing money or needs to hold large profits against future expenses, this is generally a worse deal because money you take out of the business is taxed twice -- once as business income and again as personal income. Update: Does the business eventually, over the course of the depreciation schedule, end up getting all of the original $2,000 tax burden back? Possibly. Ultimately, the entire cost of the item is deductible. That won't necessarily translate into getting the taxes back. But that's really not the right way to think about it. The tax burden was on the income earned. Upon immediate replacement, hypothetically with the exact same model, same cost, same 'value', isn't it correct that the \"\"value\"\" of the business only went up by the amount the original item had depreciated? Yes. If you dispose of or sell a capital asset, you will have a gain or loss based on the difference between your remaining basis in the asset and whatever you got for the asset. Wouldn't the tax burden then only be $400? Approximately, yes. The disposal of the original asset would cause a loss of the difference between your remaining basis in the asset and what you got for it (which might be zero). The new asset would then begin depreciating. You are making things a bit more difficult to understand though by focusing on the amount of taxes due rather than the amount of taxable gain or loss you have. They don't always correlate directly (because tax rates can vary).\"",
"title": ""
},
{
"docid": "32f0b35ffba25db5202507ec36bb4f1d",
"text": "You can call what you're asking about a 'wealth tax', or 'capital tax'. These are taxes not based on income you earned in a year, but some measure of how much you own. Some countries (Italy I believe is a prime example) tax ownership of foreign land. Some countries tax amounts owned by corporations [Canada did this until ~5-10 years ago depending on province]. Some countries strictly tax your wealth above a certain level (Switzerland, as has been mentioned, does this). One form of what you are referring to that does exist in the US is the 'Estate Tax'. This is a tax on the amount of wealth that a person owns, at the time they die. The threshold for when this tax applies has been very volatile over the last 20 years, but it is generally in the multi-millions, and I believe sits somewhere around $5M. If these taxes start to crop up more and more (and I believe they will), don't be shocked at the initial 'sticker price'. Theoretically a wealth tax could replace some of the current income tax regime in many countries without creating a strict increased tax burden on their people. ie: if you owe $10k in income tax this year, but a $2k capital tax is instituted next year, then you are still in the same position as long as your income tax is reduced to $8k. Whether these taxes are effective/preferable or not is really a question of economics, not personal finance, so I will not belabour that point. Note: if the money you have saved earns money (interest, or dividends, or maybe rent from a condo you own), then those earnings are typically taxed alongside your wage income. Any 'wealth/capital tax' as I've described it above would be in addition to income tax on investment earnings.",
"title": ""
},
{
"docid": "491dd89d4c1e83d87c9a39f03e00fe85",
"text": "I know all too well how it works. That doesn't change the fact that GE didn't pay taxes. If only my personal expenses such as food, gas, car maintenance, rent could be deducted from my tax liability and then when I operate on a loss (spend more than I receive) use that to get a tax refund. If corporations were people, why do they have a separate tax code? If corporations are people, they would be subject to the same tax code people are. We have so much corporate welfare via the tax code in this country, that it exceeds the amount of social welfare for poor people.",
"title": ""
},
{
"docid": "27ad0e1d3743243190091ec762ea034c",
"text": "Yes, but how does that compare to those with multiple houses? I build homes in the Seattle area for a living and one lifestyle who own several rentals... One thing them do is use equity for their 4 homes to purchase another.. Writing off the the interest paid on the loan(s)... I'm not saying it's a deduction normal people don't use... I'm just saying that it strikes me as a deduction that the wealthiest landlords use more with better results...",
"title": ""
},
{
"docid": "15718d45c58e87edb9c4696bed4f7991",
"text": "\"Rob - I'm sorry your first visit here has been unpleasant. What you are asking for is beyond the capability of most software. If you look at Fairmark.com, you find the standard deduction for married filing joint is $12,200 in 2012, and $12,400 in 2013. I offer this anecdote to share a 'deduction' story - The first year I did my MIL's taxes, I had to explain that she didn't have enough deductions to itemize. Every year since, she hands me a file full of paper substantiating medical deductions that don't exceed 7.5% of her income. In turn, I give her two folders back, one with the 5 or so documents I needed, and the rest labeled \"\"trash\"\". Fewer than 30% of filers itemize. And a good portion of those that do, have no question that's the right thing to do. e.g. my property tax is more than the $12K, so anything else I have that's a deduction adds right to the number. It's really just those people who are at the edge that are likely frustrated. I wrote an article regarding Standard Deduction vs Itemizing, in which I describe a method of pulling in one's deductible expenses into Odd years, reducing the number in Even years, to allow a bi-annual itemization. If this is your situation, you'll find the concept interesting. You also ask about filing status. Think on this for a minute. After pulling in our W2s (TurboTax imports the data right from ADP), I do the same for our stock info. The stock info, and all Schedule A deductions aren't assigned a name. So any effort to split them in search of savings by using Married Filing Separate, would first require splitting these up. TurboTax has a 'what-if' worksheet for this function, but when the 'marriage penalty' was lifted years ago, the change in status had no value. Items that phaseout over certain income levels are often lost to the separate filer anyway. When I got married, I found my real estate losses each year could not be taken, they accumulated until I either sold, or until our income dropped when the Mrs retired. So, while is respect your desire for these magic dials within the software, I think it's fair to say they would provide little value to most people. If this thread stays open, I'd be curious if anyone can cite an example where filing separately actually benefits the couple.\"",
"title": ""
},
{
"docid": "74a8f28c7eb659da142b94cda4f6a897",
"text": "Isn't that a deduction mostly used by the top 1%? There seem to be mostly 2 types of people, those who own many homes, And those that rent them... I always thought the mortgage interest deduction was used substantially more by the wealthy than the middle class... (Luxury homes also offer higher deductions right?)",
"title": ""
},
{
"docid": "a67e97c315357cc1ac6335a6f29b8e79",
"text": "\"There are tax free bonds in the United States. They are for things like public housing and other urban projects. They are tax free for everyone but only rich people buy them. Why? The issue is that the tax free nature of the bond is included in its yield. So rather than yielding say a 5% return, they figure that the owner is getting 20% off due to not paying taxes. As a result, they only give a 4% return but are as risky as a 5% return investment. Net result, only rich people invest in tax free bonds. \"\"Rich\"\" is defined here to mean people paying a 20% tax on long term investment returns. Or take the State and Local Tax (SALT) deduction, which has been in the news recently. Again, it is technically open to everyone. But there is also a standard deduction that is open to everyone. For the typical family, state and local taxes might be 5% of income. So for a family making $100k a year, that's $5k. The same family can take a $13k or so standard deduction instead of itemizing. So why would they take the smaller deduction? As a practical matter, two groups take the SALT deduction. People rich enough to pay more than $13k in state and local taxes and people who also take the mortgage interest deduction. So it helps a lot of people who are rich quite a bit. And it helps a few middle class people some. But if you are lower middle class with a $30k mortgage on a tiny house and paying 4% interest, then that's only $1200 a year. Add in property taxes of $3000 and SALT of $2.8k and that's only $7k. Even if the person gives $3k to charity, the $13k deduction is a lot better and requires less paperwork. Contrast that with someone who has $500k mortgage at 3.6% interest. That's $18k in interest alone. Add in a SALT of $7k and property taxes of $50k, and there's $75k of itemized deductions, much better than $13k. Now a $7k donation to charity is entirely deductible. And even after the mortgage interest deduction goes away, the other $64k remains.\"",
"title": ""
},
{
"docid": "4aa71bc5470147597db83be59cdb3e56",
"text": "\"The scenario you mention regarding capital gains is pretty much the core of the issue. Here's a run-down from PolitiFact.com that explains it a bit. It's important to focus on it being the tax rate, not the tax amount (which I think you get, but I want to reinforce that for other readers). Basically, most of Buffett's income comes from capital gains and dividends, income from investments he makes with the money he already has. Income earned by buying and selling stocks or from stock dividends is generally taxed at 15 percent, the rate for long-term capital gains and qualified dividends. Buffett also mentioned that some of the \"\"mega-rich\"\" are hedge fund managers \"\"who earn billions from our daily labors but are allowed to classify our income as 'carried interest,' thereby getting a bargain 15 percent tax rate.\"\" We don't know the taxes paid by Buffett's secretary, who was mentioned by Obama but not by Buffett. Buffet's secretary would have to make a high salary, or else typical deductions (such as the child tax credit) would offset taxes owed. Let's say the secretary is a particularly well-compensated executive assistant, making adjusted income more than $83,600 in income. (Yes, that sounds like a lot to us, too, but remember: We're talking about the secretary to one of the richest people in the world.) In that case, marginal tax rates of 28 percent would apply. Then, there would be payroll taxes of 6.25 percent on the first $106,800, money that goes to Social Security, and another 1.45 percent on all income, which goes to Medicare. The secretary’s overall tax rate would be lower than 28 percent, since not all the income would be taxed at that rate, only the income above $83,600. Buffett, meanwhile, would pay very little, if anything, in payroll taxes. In the New York Times op-ed, Buffett said he paid 17.4 percent in taxes. Thinking of the secretary, it gets a little complicated, given how the tax brackets work, but basically, people who make between $100,000 and $200,000 are paying around 20 percent in federal taxes, including payroll and income taxes, according to an analysis from the nonpartisan Tax Policy Center. So in this case, the secretary's rate is higher because so much of Buffett's income comes from investments and is taxed at the lower capital gains rate. Here's Buffet's original Op-Ed in the NYT for those of you that aren't familiar.\"",
"title": ""
},
{
"docid": "4a56de6fe6adc204eaa9797811f0f34b",
"text": "Rich people use debt for various reasons. The question should not assume that billionaires don't use debt. They also pay lower interest rates on that debt because they have enough collateral that their debt is safer than a typical mortgage. Many rich people will use interest only mortgages on their primary residences so that they can keep their stock earning at higher growth rates than the mortgage interest that they are paying all while writing off a portion of that mortgage interest on their taxes. Taking an artificially low salary and receiving equity for the larger portion of compensation is also a tax strategy to limit the amount of taxes owed on that income. If paid directly in stock grants, that will count as income, but if paid in options, then the purchased stock will only be taxed at the lower capital gains rates if the stock is held for a year after the options are exercised. Every billionaire will have complicated tax avoidance strategies that will require multi-year planning for the best long-term minimization of taxes. Debt is a strategic part of that planning. Also consider that a major part of that upscale lifestyle (corporate jets, fancy meals, etc.) is on the company dime because the CEO is always on the clock. As long as he is meeting with business prospects or doing other company business, those expenses will be justified for the corporation and not attributed as income.",
"title": ""
},
{
"docid": "4de563418f99abb697400b8828af05ba",
"text": "Standard deduction is $6300, and exemption is $4050, totaling $10,350. (For 2016) Twice this for a couple ($20,700). The tax on money just above this is 10%, so the few thousand above will be taxed at a few hundred dollars. Where are you getting the number you showed? Can you edit your question to clarify exactly what you are asking?",
"title": ""
},
{
"docid": "cfaf8d7f007bef45c302a0396157f5e3",
"text": "Is this right? The example is slightly off. Google would be running a cafeteria that can be subsidized. Employees pay an amount to buy food. Not every one spends the same amount or eats the same amount of food. If someone doesn't use cafeteria; he doesn't get more money. For example, suppose John Doe makes $100,000 a year taxed at a rate of 20%, for a take home pay of $80,000. He spends $10,000 on food. His employer Corporation decides to give him all of his food and deduct it as a business expense - costing them $10,000. But now they can pay John Doe an amount so his take home pay will be reduced by $10,000 - $87,500 The company is now spending $97500 employing John Doe, for a savings of $2500$. If a scheme is devised specifically to evade taxes; then it is invalid. In this case Bill may buy groceries worth only $5000. So keep track of which employee buys how much groceries in added cost of Google. Plus one can't really call it a business expense.",
"title": ""
},
{
"docid": "ce251ce6d31823ac7124eae816392f7c",
"text": "Do you have any insight on average *effective* rates paid by SE owners? As a counterpoint to your (very valid) links, filing as S-corp allows for taxes on distributions to be exempt from payroll tax and taxed at much lower rates. Also, being SE allows for various deductions not possible for wage earners. There's probably other examples not immediately coming to mind. Also, SE taxes equal taxes otherwise paid by employer + employee. It's just that those employer taxes don't appear on the employee's paystub so not everyone realizes this.",
"title": ""
},
{
"docid": "72f0f7aedd28a51c993e07637b5a79c4",
"text": "\"You cannot deduct commute expenses. Regarding your specific example, something to consider is that if the standard of living is higher in San Francisco, presumably the wages are higher too. Therefore, you must make a choice to trade \"\"time and some money for commuting costs\"\" for \"\"even more money\"\" in the form of higher wages. For example, if you can make $50K working 2 hours away from SF, or $80K working in SF, and it costs you $5K extra per year in commute costs, you still come out ahead by $25K (minus taxes). If it ends up costing $20K more to live in SF (due to higher rent/mortgage/food/etc), some people choose to trade 4 extra hours of commuting time to put that extra $20K in their pocket. It's sort of like having an extra part time job, except you get paid to read/watch tv/sleep on the job (assuming you can take a train to work).\"",
"title": ""
}
] |
fiqa
|
6c161de8dff5bf7550b8be398ce5684e
|
How U.S. Depreciation works Explain in brief?
|
[
{
"docid": "77e432ce5d06ab22ff9b55d924bbf401",
"text": "If a business tool has a limited lifespan, it's value decreases (depreciates) from year to year. The business can capture that loss of value on some things that it couldn't otherwise write off as expenses. A few tools can be either expenses or depreciated, but only one of those can be chosen for that particular object. This is generally not relevant for individual taxpayers, unless you can show that the item is being used for income-producing purposes.",
"title": ""
}
] |
[
{
"docid": "22c0f2cf46cd1c218084c88abdbc96d4",
"text": "This is bullshit. The US government requires taxes to be paid in USD. There's your intrinsic value. If you want to be compliant with the federal law, your business and you as an individual are required to convert assets or labor into USD to pay them.",
"title": ""
},
{
"docid": "dc23dc0b3a9f674b1d90cdb84f98052a",
"text": "This was such a wonderful and clear explanation. It has helped me to understand (at 28) a concept that I have always been a bit murky on. I would feel safe making the bet that you are a teacher of some sort. I would find it extremely interesting to hear you thoughts on why we don't use the gold standard anymore. Do you work in finance?",
"title": ""
},
{
"docid": "5f2843f0727becf25573f503842927fc",
"text": "On expiry, with the underlying share price at $46, we have : You ask : How come they substract 600-100. Why ? Because you have sold the $45 call to open you position, you must now buy it back to close your position. This will cost you $100, so you are debited for $100 and this debit is being represented as a negative (subtracted); i.e., -$100 Because you have purchased the $40 call to open your position, you must now sell it to close your position. Upon selling this option you will receive $600, so you are credited with $600 and this credit is represented as a positive (added) ; i.e., +$600. Therefore, upon settlement, closing your position will get you $600-$100 = $500. This is the first point you are questioning. (However, you should also note that this is the value of the spread at settlement and it does not include the costs of opening the spread position, which are given as $200, so you net profit is $500-$200 = $300.) You then comment : I know I am selling 45 Call that means : As a writer: I want stock price to go down or stay at strike. As a buyer: I want stock price to go up. Here, note that for every penny that the underlying share price rises above $45, the money you will pay to buy back your short $45 call option will be offset by the money you will receive by selling the long $40 call option. Your $40 call option is covering the losses on your short $45 call option. No matter how high the underlying price settles above $45, you will receive the same $500 net credit on settlement. For example, if the underlying price settles at $50, then you will receive a credit of $1000 for selling your $40 call, but you will incur a debit of $500 against for buying back your short $45 call. The net being $500 = $1000-$500. This point is made in response to your comments posted under Dr. Jones answer.",
"title": ""
},
{
"docid": "3e3d6a2ce2c219ca85fe488f106792ae",
"text": "\"While you have asked for general principles, I am going to seize onto a specific example you gave in order to illustrate the difficulties here: Argentina. Argentina's bonds are probably not safer than US treasuries. Argentina is presently in the business of seizing foreign oil businesses (Repsol YPF) while championing leftist causes. At the very least this indicates an elevated level of political risk: S&P, which affirmed Argentina's ratings five notches into junk territory at B, said policies such as those enacted since the country's October presidential election could also weaken Argentina's macroeconomic framework and external liquidity... \"\"Actions of this type continue to shorten the economic planning horizon in the country and contribute to Argentina's deteriorating economic and political links with the international community.\"\" -- \"\"S&P Lowers Argentina Outlook To Negative\"\". The Wall Street Journal, 23 April 2012 You're not going to be able to capture that sort of a risk with raw budget numbers. It's hard enough to figure out creditworthiness for a business; for an entire nation it's even harder. That's why credit-rating firms, as faulty as they may be, employ dozens of people to try and figure this sort of thing out. Additionally, there is a currency risk associated with buying bonds denominated in foreign currencies. It doesn't matter much if $nation repays all its bonds if they have so much inflation that the repayment is worth half of what it used to be (nor is it much help if your own nation's currency rises in value while your investment's value is stable elsewhere). Ultimately the value of a bond is \"\"how much money am I actually going to get back?\"\" and while operating a budget surplus isn't a bad sign in and of itself, it's hardly the complete picture. A fair accounting of the relative creditworthiness of any two nations needs to unite two massive fields of study: Macroeconomics and Politics. It is possible that the right sort of degree in economics, risk management, or a similar field of study could prepare you to know exactly what sort of research is necessary to make a meaningful analysis. :) Now, if you just want some commentary on which bonds are safe to buy, ask a credit-rating agency -- for example, read Standard and Poor's sovereign ratings - or find a mutual fund which may invest in international bonds at its own discretion and have someone else make the decisions.\"",
"title": ""
},
{
"docid": "c293eedb83f25dabcb22559f40ee799b",
"text": "\"The basic idea is that money's worth is dependent on what it can be used to buy. The principal driver of monetary exchange (using one type of currency to \"\"buy\"\" another) is that usually, transactions for goods or services in a particular country must be made using that country's official currency. So, if the U.S. has something very valuable (let's say iPhones) that people in other countries want to buy, they have to buy dollars and then use those dollars to buy the consumer electronics from sellers in the U.S. Each country has a \"\"basket\"\" of things they produce that another country will want, and a \"\"shopping list\"\" of things of value they want from that other country. The net difference in value between the basket and shopping list determines the relative demand for one currency over another; the dollar might gain value relative to the Euro (and thus a Euro will buy fewer dollars) because Europeans want iPhones more than Americans want BMWs, or conversely the Euro can gain strength against the dollar because Americans want BMWs more than Europeans want iPhones. The fact that iPhones are actually made in China kind of plays into it, kind of not; Apple pays the Chinese in Yuan to make them, then receives dollars from international buyers and ships the iPhones to them, making both the Yuan and the dollar more valuable than the Euro or other currencies. The total amount of a currency in circulation can also affect relative prices. Right now the American Fed is pumping billions of dollars a day into the U.S. economy. This means there's a lot of dollars floating around, so they're easy to get and thus demand for them decreases. It's more complex than that (for instance, the dollar is also used as the international standard for trade in oil; you want oil, you pay for it in dollars, increasing demand for dollars even when the United States doesn't actually put any oil on the market to sell), but basically think of different currencies as having value in and of themselves, and that value is affected by how much the market wants that currency.\"",
"title": ""
},
{
"docid": "efc0e864bbf6af6afaa295022d4b712f",
"text": "Illustrating with a shorter example: Suppose I deposit 1,000 USD. Every year I deposit another 100 USD. I want to know how much money will be on that savings account in 4 years. The long-hand calculation is Expressed with a summation And using the formula derived from the summation (as shown by DJohnM) So for 20 years Note in year 20 (or year 4 in the shorter example) the final $100 deposit does not have any time to accrue interest before the valuation of the account.",
"title": ""
},
{
"docid": "de76dd8be879644dd6aff119fe53a486",
"text": "Money itself has no value. A gold bar is worth (fuzzy rushed math, could be totally wrong on this example figure) $423,768.67. So, a 1000 dollars, while worthless paper, are a token saying that you own %.2 of a gold bar in the federal reserve. If a billion dollars are printed, but no new gold is added to the treasury, then your dollar will devalue, and youll only have %.1 percent of that gold bar (again, made up math to describe a hypothetical). When dollars are introduced into the economy, but gold has not been introduced to back it up, things like the government just printing dollars or banks inventing money out of debt (see the housing bubble), then the dollar tokens devalue further. TL;DR: Inflation is the ratio of actual wealth in the Treasury to the amount of currency tokens the treasury has printed.",
"title": ""
},
{
"docid": "45185420c394230f6ea4c738968825fd",
"text": "To understand this fully one would need to understand quite a few things. Not in scope here. In short, whenever China sells goods to US, it gets USD as most of the trades are in USD. China uses this money to buy other things it needs like Oil etc. After this they still have quite a bit of USD left with them. The money is left with them because US is buying more things from China and selling less things to China. This creates a surplus USD with China. So if US were to borrow money from China or any other country, it would be this excess money. Ofcourse how money gets created in first place is a different topic altogether.",
"title": ""
},
{
"docid": "da65d37e11ced3265657280ccf9478aa",
"text": "\"For political reasons, almost all governments (including the US) spend more money than they get from taxes etc. There are a number of things a government can do to cover the difference: Most governments opt for selling bonds. The \"\"National Debt\"\" of a country can be thought of as being the sum of all the \"\"Bonds\"\" that are still paying interest, and that the Government hasn't Redeemed. It can all go horribly wrong. If the Government gets into a situation where it cannot pay the interest, or it cannot Redeem the Bonds it has promised to, then it may have to break its promise (\"\"Default\"\" on its payments). This makes the owners of the Bonds unhappy and means potential buyers of future Bond sales are less likely to want to buy the Governments new Bonds - effectively meaning the Government has to promise to pay more interest in the future. Recent examples of this include Argentina; and may include Greece soon. The US is in the fortunate position that not many people believe it will Default. Therefore the new Bonds it sells (which it does on a regular basis) are still in demand, even though its interest payments, and promises to Redeem Bonds are huge.\"",
"title": ""
},
{
"docid": "5f4bc1e354155fce7135692aa703dd66",
"text": "The first method is the correct one. You bought an asset worth of $1000 and you put it on your depreciation schedule. What it means is that you get to write off the $1000 over a certain period of time (and not at once, as you do with expenses). But the value you're writing off is the $1000 regardless of how much you've written off already. Assume you depreciate in straight line over 5 years (that's how you depreciate computers for Federal tax purposes, most states follow). For the simplicity of the calculation, assume you depreciate each year as a whole year (no mid-year/mid-quarter conventions). The calculation is like this: If you sell the computer - the proceeds above the adjusted basis amount are taxed as depreciation recapture up to the accumulated depreciation amount, and as capital gains above that. So in your case - book value is the adjusted basis at the end of the year (EOY), depreciation this year is the amount you depreciate in the year in question out of the total of the original cost, and the accumulated depreciation is the total depreciation including the current year. In Maryland they do not allow depreciating to $0, but rather down to 25% of the original cost, so if you bought a $1000 computer - you depreciate until your adjusted basis is $250. Depreciation rates are described here (page 5). For computers (except for large mainframes) you get 30% depreciation, with the last year probably a bit less due to the $250 adjusted basis limitation.",
"title": ""
},
{
"docid": "a854b7f1fb9a4c4cbd73fad4b1fced68",
"text": "Essentially imported goods from the country (in this case the US) that is improving against your local currency will become more expensive. For the most part, that is the only practical effect on you on an individual financial level.",
"title": ""
},
{
"docid": "41d2b73e1ee4366764534c224b142964",
"text": "\"Other than the inconvienent fact that Treasury cannot sell to the Fed by law your theory is nice. You forget the step where the open market buys from the Treasury since they desire bonds to invest in, and the Fed can buy only from the open market. Secondly, the Fed does not give cash to the Treasury. The mint (a branch of the Treasury, not the Fed) prints cash. So it seems your understanding of how the money system works is quite wrong, yet since this is the Economy subreddit instead of the Economics subreddit, I expect you to get upvotes for saying what is popular even though it is laughably incorrect. You seem to not like cash that was not \"\"even existing previously\"\". All cash was not existing previously. How do you expect people to make transactions? Barter? You call them interest free loans (but above claimed they will never be paid back?), but then the Fed is making a profit on them? It seems you contradict yourself with all that handwaving. It would be interesting for you to explain how (and why) money (not cash) gets added and removed to the economy. Yay for ignorance!\"",
"title": ""
},
{
"docid": "fefb2bebc863d73f23a0dfeed3af1802",
"text": "Question: So basically the money created in this globalized digital world where capital is free to roam, it is referring to digital money and not actual physical cash. So the goldbugs that talk about america becoming weimar republic is delusional, since there isn't enough physical cash in relations to how big the economy is. And it is actually the debt lending that acts as a derivative of cash money that goes around posing as the money supply or the blood supply of an economy, and that feels like inflation, but when the debt is defaulted on or destroyed, underwritten or even paid back closing the circuit then it's deflationary? But does defaulting on ones debt create inflation since that money is still in the system and not being paid off? You know, when debts are paid off they are taken out of the system.",
"title": ""
},
{
"docid": "2bae84a1e806fee7db2cde68ad554dd3",
"text": "\"First, to clear up your misconceptions: The balance is not merely made up of deductible and non-deductible contributions. There are also earnings implied in the balance .. i.e. the whole reason you invest in the first place is to realize some return on investment. That return, a.k.a. the earnings, are included in the balance of the account. The balance is the sum total of everything in the account, the \"\"bottom line\"\". Generally speaking, basis for an account is all of the money that has been contributed (deposited) to the account. In the context of an IRA as described in the article, however, they are using basis to refer to only the non-deductible contributions. Of note, however, is that basis specifically excludes earnings. If you have deposited, say, $5000 one year and $5000 the next, then your basis is $10,000, even if the balance has grown to, say, $12,000 (which includes the earnings). As may be evident by now, earnings are not equivalent to deductible contributions. Earnings may arise from such contributions but they are not the same. Rather, earnings are the net positive investment results from all contributions. Again, if you had contributed $5000 one year and $5000 the next and the balance has grown to $12,000, then the earnings portion is $2000. So to interpret what happened in the specific example provided: Over the years, the account holder contributed (deposited) a total of $15,000 into his account. These must have been non-deductible contributions in the case of the IRA in order to arrive at basis of $15,000. Over time (and coincident with the deposits), that $15,000 grew to $24,000 .. i.e. earned $9,000 in earnings. Then, the nearly 50% drop caused the balance to decay to $13,000. This means all $9,000 of his earnings were wiped out, plus $2000 of the original basis. The remaining $13,000 is all basis .. that is, considered to be original money deposited to the account, no earnings. In effect, the account has lost $2000 of basis, because $15,000 was deposited and only $13,000 remains. Simplistic way of looking at it: A $15,000 investment resulted in a final $13,000 sale, i.e. a net loss of $2000. It doesn't matter that it hit $24,000 in the meanwhile .. it could have hit $250,000 in value and then dropped to $13,000 and the net result would be the same: a loss of $2000 in basis. Traditional IRA earnings are always tax-deferred .. i.e. whether earnings arise from deductible or else non-deductible contributions, when one takes a distribution (withdraws) from an IRA and the distribution includes earnings, the earnings portion is always taxable income. Doesn't matter if the earnings arose from one kind of contribution or the other. I don't think in this example there were any deductible contributions whatsoever. Does that make sense / help?\"",
"title": ""
},
{
"docid": "991a3c3f2d868d20ef41153c719b87fe",
"text": "Recessions are prolonged by less spending and wages being 'sticky' downward. My currency, the 'wallark', allows a company to pay its workers in it's own scrip instead of dollars which they can use to purchase its goods, thus reducing it's labor costs and allowing prices to fall faster. While scrip in the past purposely devalued to discourage hoarding, the wallark hold's it's purchasing power. The difference is, a worker can only use it to purchase their company's good *on the date the wallark was earned or before*. In other words, each good is labeled with a date it was put on display for sale, if a worker earns scrip on that same day, they can trade the scrip for that good, or any good that was on the shelves on that day it was earned *or before that date*. Any good that comes onto market after the date that particular wallark was earned cannot be purchased with that wallark(which is dated), and must be purchased either with dollars or with wallark that was earned on that good's date or after. This incentivizes spending without creating inflation, and allows costs to fall which helps businesses during rough economic times. Please feel free to read it, and comment on my site! Any feedback is welcome!",
"title": ""
}
] |
fiqa
|
b65f490d3c490653ff348c8651c23588
|
If I pay someone else's property taxes, can I use it as a deduction on my income tax return?
|
[
{
"docid": "3a7145ec3e498ec494ec69fc53741a7b",
"text": "According to page 107 of the instructions for schedule A for form 1040 : Include taxes (state, local, or foreign) paid on real estate you own that was not used for business. ... If you want to make a business out of her property and be her agent in the management, you might be able to work with an accountant on this, but it won't be a valid personal deduction.",
"title": ""
},
{
"docid": "fc6045279745777f82afedccd6bbf517",
"text": "To make matters worse, if you pay the property tax your mother in law can't take the deduction either. You may be better off paying rent and having her handle the property correctly, as a rental.",
"title": ""
},
{
"docid": "b239ecbe22ac4293f7f0df722ed82b8e",
"text": "You cannot deduct. Even if you could, unless you also hold the mortgage, it's unlikely that you would have sufficient deductions to exceed the standard deduction for a married couple.",
"title": ""
}
] |
[
{
"docid": "3ecb3c403e3a3186ddfa2c51db2b0c14",
"text": "Yes. The S-Corp can deduct up to the amount it actually incurred in expenses. If your actual expenses to build the carport were $1000, then the $1000 would be deductible, and your business should be able to show $1000 in receipts or inventory changes. Note you cannot deduct beyond your actual expenses even if you would normally charge more. For example, suppose you invoiced the non-profit $2000 for the carport, and once the bill was paid you turned around and donated the $2000 back to the non-profit. In that case you would be deducting $1000 for your cost + $2000 donation for a total of $3000. But, you also would have $2000 in income so in the end you would end up with a $1000 loss which is exactly what your expenses were to begin with. It would probably be a good idea to be able to explain why you did this for free. If somehow you personally benefit from it then it could possibly be considered income to you, similar to if you bought a TV for your home with company funds. It would probably be cleaner from an accounting perspective if you followed through as described above- invoice the non-profit and then donate the payment back to them. Though not necessary, it could lesson any doubt about your motives.",
"title": ""
},
{
"docid": "6d70f2cae68608a83cef66fb85788404",
"text": "@Pete B.'s answer is good, but there's an important note to consider for tax purposes. It's too large for a comment, so I'm adding it as an answer. And that is: you cannot claim the property as a rental property under certain conditions. This affects things like claiming mortgage interest (which you don't have), and depreciation in value (which a rental is allowed). See IRS topic 415 for details, but I've included an important excerpt below with emphasis added: If you rent a dwelling unit to others that you also use as a residence, limitations may apply to the rental expenses you can deduct. You're considered to use a dwelling unit as a residence if you use it for personal purposes during the tax year for more than the greater of: ... A day of personal use of a dwelling unit is any day that it's used by: Talk to a tax accountant to better understand the ramifications of this, but it's worth noting that you can't just rent it to her for a paltry sum and be able to take tax advantages from this arrangement.",
"title": ""
},
{
"docid": "0ed92882d7cbc66bf11a0b97bb7e5885",
"text": "I am not a tax accountant and the caveats about taking tax advice from random people on the internet stand. I have, however, had partial payment as in specie benefit in the past so have a good idea of how this is taxed. The chickens are taxed as in specie benefits (supposing you classify the chickens as beneficial) at the same rate as any other payment. That the chickens died soon after has no effect unless it was for a reason that meant that their value was lower at the time that you received them than was accounted for for tax reasons. If their value at that time was less than reported you can write down the value and receive a tax rebate for the amount of tax on that write down.",
"title": ""
},
{
"docid": "77ab62b35ae2e993a581105bd61da212",
"text": "To expand a little on what littleadv said, you can only deduct what something cost you. Even if you had done volunteer work for a charity as a sole prop you could only deduct your actual costs. If you paid an employee to do charity work or to learn something related to the business that would be deductible as a normal business expense. Some common sense would show that if you could deduct something that didn't cost you anything (your time) you could deduct away all of your income and avoid paying taxes altogether. Back to your more nuanced question could 2 businesses you own bill each other for services? Yes, but you will still have to pay taxes for money earned under each of them. You will also need to be careful that the IRS does not construe the transactions as being done solely to lower your tax bill.",
"title": ""
},
{
"docid": "735c8ce05f91b7ded0f1db14eb87d381",
"text": "If it's in your name and you don't live there, there's a number of issues. If you charge her rent, it needs to be at fair value to treat it as a rental property. If she lives there for the next 20 years, it will (or we hope) gain value. If she passes while it's in her name you get to step up the basis, and avoid tax. If in your name , the gain would be taxable.",
"title": ""
},
{
"docid": "9d125401d3513b5ef340f771897e138b",
"text": "\"http://www.irs.gov/taxtopics/tc503.html says you can deduct \"\"Any prior year's state or local income tax you paid during the year.\"\" So I would say as long as you have good records, you can deduct the excess refund you had to pay back in the year in which you paid it. Whether or not your return was amended shouldn't affect whether or not it is deductible.\"",
"title": ""
},
{
"docid": "ea582ead73b55789e8dd68ef14643254",
"text": "I don't believe you can do that. From the IRS: Finally, certain types of property are specifically excluded from Section 1031 treatment. Section 1031 does not apply to exchanges of: I highlighted the relevant items for emphasis.",
"title": ""
},
{
"docid": "8f10d7be113a5e78e3f8ea82a4fff4d8",
"text": "My basic rule of thumb is that if the the bill come from a government office of taxation, and that if you fail to pay the amount they can put a tax lien on the property it is a tax. for you the complication is in Pub530: Assessments for local benefits. You cannot deduct amounts you pay for local benefits that tend to increase the value of your property. Local benefits include the construction of streets, sidewalks, or water and sewer systems. You must add these amounts to the basis of your property. You can, however, deduct assessments (or taxes) for local benefits if they are for maintenance, repair, or interest charges related to those benefits. An example is a charge to repair an existing sidewalk and any interest included in that charge. If only a part of the assessment is for maintenance, repair, or interest charges, you must be able to show the amount of that part to claim the deduction. If you cannot show what part of the assessment is for maintenance, repair, or interest charges, you cannot deduct any of it. An assessment for a local benefit may be listed as an item in your real estate tax bill. If so, use the rules in this section to find how much of it, if any, you can deduct. I have never seen a tax bill that said this amount is for new streets, and the rest i for things the IRS says you can deduct. The issue is that if the Center City tax bill is a separate line or a separate bill then does it count. I would go back to the first line of the quote from Pub 530: You cannot deduct amounts you pay for local benefits that tend to increase the value of your property. Then I would look at the quote from the CCD web site: The Center City District (CCD) is a business improvement district. Our mission is to keep Philadelphia's downtown, called Center City, clean, safe, beautiful and fun. We provide security, cleaning and promotional services that supplement, but do not replace, basic services provided by the City of Philadelphia and the fundamental responsibilities of property owners. CCD also makes physical improvements to the downtown, installing and maintaining lighting, > signs, banners, trees and landscape elements. and later on the same page: CCD directly bills and collects mandatory payments from properties in the district. CCD also receives voluntary contributions from the owners of tax-exempt properties that benefit from our services. The issues is that it is a business improvement district (BID), and you aren't a business: I did find this document from the city of Philadelphia explain how to establish a BID: If the nature of the BID is such that organizers wish to include residential properties within the district and make these properties subject to the assessment, it may make sense to assess these properties at a lower level than a commercial property, both because BID services and benefits are business-focused, and because owner-occupants often cannot treat NID assessments as tax-deductible business expenses, like commercial owners do. Care must be taken to ensure that the difference in commercial and residential assessment rates is equitable, and complies with the requirements of the CEIA. from the same document: Funds for BID programs and services are generated from a special assessment paid by the benefited property owners directly to the organization that manages the BID’s activities. (Note: many leases have a clause that allows property owners to pass the BID assessment on to their tenants.) Because they are authorized by the City of Philadelphia, the assessment levied by the BID becomes a legal obligation of the property owner and failure to pay can result in the filing of a lien. I have seen discussion that some BIDS can accept tax deductible donations. This means if a person itemizes they can deduct the donation. I would then feel comfortable deducting the tax because: If you can't deduct it that would mean the only people who can't deduct it are home owners. So deduct it. (keep in mind I am not a tax professional)",
"title": ""
},
{
"docid": "90b272b16d3db982961db359ed6ecedc",
"text": "Very simple. If it wasn't rented, it's deductible as a schedule A home mortgage interest. If it was rented, you go into Schedule E land, still a deduction along with any/every expense incurred.",
"title": ""
},
{
"docid": "14a5c1fa8ba40025c86bfdd6cf559442",
"text": "If you ended at your second paragraph, no. It's simply a refund of your own money. Same as any time I get any cash back, whether due to a credit card reward program or price match. But. Your 4th paragraph changes this. Yes, you owe tax, as it's clearly not your own money coming back. Even barter income is taxable. Per the new comments appearing, this is not a case of bartering. I cited bartering as an understandable example of when there's no cash and yet, tax is owed. In this situation, value is received, and it counts as income similar to the barter situations. Just because the value isn't in cash doesn't negate the tax due. I'd rhetorically ask how OP pays his rent/mortgage, utilities, cell phone bill, etc. The answer is simple, non-traditional income, as OP puts it, has a tax due.",
"title": ""
},
{
"docid": "3a24e8c7fb56eacce57030b2d4d34c3c",
"text": "For stocks, bonds, ETF funds and so on - Taxed only on realised gain and losses are deductible from the gain and not from company's income. Corporate tax is calculated only after all expenses have been deducted. Not the other way around. Real estate expenses can be deducted because of repairs and maintenance. In general all expenses related to the operation of the business can be deducted. But you cannot use expenses as willy nilly, as you assume. You cannot deduct your subscription to Playboy as an expense. Doing it is illegal and if caught, the tours to church will increase exponentially. VAT is only paid if you claim VAT on your invoices. Your situation seems quite complicated. I would suggest, get an accountant pronto. There are nuances in your situation, which an accountant only can understand and help.",
"title": ""
},
{
"docid": "691f379e386fc1183176cdae0adf3072",
"text": "This will be a complex issue and you will need to sit down with a professional to work through the issues: When the house was put up for rent the initial year tax forms should have required that the value of the house/property be calculated. This number was then used for depreciation of the house. This was made more complex based on any capital improvements. If the house wasn't the first he owned, then capital gains might have been rolled over from previous houses which adds a layer of complexity. Any capital improvements while the house was a rental will also have to be resolved because those were also depreciated since they were placed in service. The deprecation will be recaptured and will be a part of the calculation. You have nowhere near enough info to make a calculation at this time.",
"title": ""
},
{
"docid": "1445b89ab44471005c83df5b57ed7abe",
"text": "If your deductions are higher than the standard deduction, you will be able to subtract property taxes from your income. In your example, that means that taxes are computed based on $95,000. In 2011, the standard deduction varies between $5,800 (single filer) and $11,600 (married filing jointly). Tax credits are subtracted from your tax obligation. The most common tax credit for most people is student loan interest. If you pay $500 in student loan interest, that sum is subtracted from your tax bill.",
"title": ""
},
{
"docid": "d0e6b701520402660bc8962f6c5066a2",
"text": "\"Can't vouch for LA, but property typically is taxed at either the appraised value, the most recent purchase price (\"\"if it wasn't worth that much, you wouldn't have paid that much\"\"), or some combination of the two (usually highest of the two, to prevent \"\"$1 and other goods and services\"\" from lowering the tax to zero). You have now explicitly paid a total of $125k for the property; the fact that you bought it in two stages shouldn't be relevant. But \"\"should\"\" and law are only tangentially connected. I'd recommend asking a tax accountant who know your local practices, unless someone here can give you an authoritative answer.\"",
"title": ""
},
{
"docid": "00b414e442d21632884141ce59c4e87a",
"text": "\"You will need to see a tax expert. Your edited question includes the line For the short term, we will be \"\"renting\"\" it to my wife's grandmother at a deep discount. According to the instructions for schedule E If you rented out a dwelling unit that you also used for personal purposes during the year, you may not be able to deduct all the expenses for the rental part. “Dwelling unit” (unit) means a house, apartment, condominium, or similar property. For each property listed on line 1a, report the number of days in the year each property was rented at fair rental value and the number of days of personal use. A day of personal use is any day, or part of a day, that the unit was used by: I have no idea how this will work for Schedule C.\"",
"title": ""
}
] |
fiqa
|
35a1da1c1fdb2ddb51757d9ce6bb97a5
|
Is it possible for credit card companies to check credit score in India?
|
[
{
"docid": "52e1c589979e235123e70ad8f4e74996",
"text": "Is it possible for the card issuing banks to check my score without my permission? As far as I understand these things, that is exactly the whole purpose of these sorts of credit-rating institutions. The banks and other financial businesses are their customers. They exist to serve those customers. Their relationship, if any, with a consumer is probably secondary to that. When you apply for credit, you give that business any permission needed.",
"title": ""
}
] |
[
{
"docid": "e17891853f8ba14a06247af56ef889c3",
"text": "\"No. Credit card companies will typically not care about your individual credit card account. Instead they look either at a \"\"package\"\" of card accounts opened at roughly the same time, or of \"\"slices\"\" of cardholder accounts by credit rating. If an entire package's or slice's balance drops significantly, they'll take a look, and will adjust rates accordingly (often they may actually decrease rates as an incentive to increase you use of the card). Because credit card debt is unstructured debt, the bank cannot impose an \"\"early payment penalty\"\" of any kind (there's no schedule for paying it off, so there's no way to prove that they're missing out on $X in interest because you paid early). Generally, banks don't like CC debt anyway; it's very risky debt, and they often end up writing large balances off for pennies on the dollar. So, when you pay down your balance by a significant amount, the banks breathe a sigh of relief. The real money, the stable money, is in the usage fees; every time you swipe your card, the business who accepted it owes the credit card company 3% of your purchase, and sometimes more.\"",
"title": ""
},
{
"docid": "074ce24b4b91ea5b5e687d5911d8da83",
"text": "5% cashback? Wow. No, this would not generally affect your credit rating. You aren't altering anything that is generally tracked by the credit rating agencies. You put a purchase on your credit card which temporarily increases your utilisation, but then immediately pay it off, leaving your utilisation practically unchanged.",
"title": ""
},
{
"docid": "ccc83c20986bc4ce66ffc6f1c1bd529f",
"text": "Most merchants (also in Europe) are reasonable, and typically are willing to work with you. credit card companies ask if you tried to work with the merchant first, so although they do not enforce it, it should be the first try. I recommend to give it a try and contact them first. If it doesn't work, you can always go to the credit card company and have the charge reversed. None of this has any effect on your credit score (except if you do nothing and then don't pay your credit card bill). For the future: when a transaction supposedly 'doesn't go through', have them write this on the receipt and give it to you. Only then pay cash. I am travelling 100+ days a year in Europe, using my US credit cards all the time, and there were never any issues - this is not a common problem.",
"title": ""
},
{
"docid": "7c5c80b89c7a12c454f67efe2fd2f61a",
"text": "\"Typically, the CC company itself won't follow the customer very far upon a default (though it certainly can act as its own debt collector, or hire an agency for a fee to do the collection). What most often happens: Once they do that, assuming they win the lawsuit, they can do the following: They cannot \"\"force\"\" you into bankruptcy, but they might make it so you have no better options (if bankruptcy is less painful than the above, which it often is). They certainly can (and will) report to the credit bureaus, of course. For more information, Nolo has a decent help site on this subject. Different jurisdictions have slightly different rules, so look up yours. Here is an example (this is from Massachusetts). Not every debt is sued for, of course; particularly, pay attention to the statute of limitations in your state. (In mine, it's seven years, for example.) And it's probably worth contacting someone locally (a legitimate non-profit debt relief agency, or your state's help agency if they have one) to find local rules and regulations.\"",
"title": ""
},
{
"docid": "bd66d8058d8b507ecaf9f0b377570b05",
"text": "Definitely push for a check, they may not do anything nefarious with your credit card number however someone else may be able to read the email before it gets to its final destination. It's never safe to give out credit card number in a less than secure interface. Also, if this is a well known company, then the person interacting with you should know better than to ask for your information through email.",
"title": ""
},
{
"docid": "5651ed4550edbbf5adea6fbdbc7b9bdd",
"text": "fine because the application was declined anyway. No it isn't fine. Credit card applications generally need a hard pull, so get it rectified. Firstly check if an application was really made on your behalf. Some companies use this ploy to pull you into a scheme of making you apply for a credit card. Secondly call up the credit card company and ask them about the details of who had made the application as you haven't done so and inform them that it was a fraudulent application. It might be somebody is using your personal details to do a identity theft in your name. Thirdly get in touch with the credit rating firms and see if a check has been made on your credit report. Dispute it if you see a check in your record and have it removed from your report. If you subscribe to credit agency, get the identity theft protection, helps you in such cases. And finally keep a diligent eye on your credit records from now on. Once bitten, twice shy.",
"title": ""
},
{
"docid": "d74a74d5aeabef3044cf1f4454d7077d",
"text": "Need is a strong word. As far as merchants are concerned, if they accept, e.g., Visa credit, they will accept Visa Debit. The reverse is not necessarily true. Up until lately, Aldi would only accept debit cards (credit cards have higher merchant fees), and when I used to got to Sam's Club, they would accept Visa debit, but not credit (they had/have an exclusive deal with Discover for credit). So, yes, they can tell from the card number whether it's credit or debit. However, I've never heard of a case of the situation being biased against debit.* That said there are some advantages to having a credit card: ETA: I don't know how credit history works in the EU, but in the US having open credit accounts definitely does affect your credit score which directly affects what rate you can get for a mortgage. *ETA_2: As mentioned in the comments and another answer, car rentals will often require credit cards and not debit (Makes sense to me that they would want to make sure they can get their money if there is damage to the car). Many credit cards do include rental car insurance if you use it to pay for your rental, so that's another potential advantage for credit cards.",
"title": ""
},
{
"docid": "cf28d2e6e0df4f9a3b7ce870dd89e9d4",
"text": "It sounds like your current loan is in your name. As such, you are responsible for paying it. Not your family, you. It also sounds like the loan payments are regularly late. That'll likely drastically affect your credit rating. Given what you've said, it doesn't surprise me that you were declined for a credit card. With the information on your credit report, you are a poor risk. Assuming your family is unable to pay loan on time (and assuming you aren't willing to do so), you desperately need to get your name off the loan. This may mean selling the property and closing out the loan. This won't be enough to fix your credit, though. All that will do is stop making your credit worse. It'll take a few years (five years in Canada, not sure how many years in India) until this loan stops showing up on your credit report. That's why it is important to do this immediately. Now, can a bank give you a loan or a credit card despite bad credit? Yes, absolutely. It all depends on how bad your credit is. If the bank is willing to do so, they'll most likely charge a higher interest rate. But the bank may well decide not to give you a loan. After all, your credit report shows you don't make your loan payments on time. You may also want to request your own copy of your credit report. You may have to pay for this, especially if you want to see your score. This could be valuable information if you are looking to fix your finances, and may be worth the cost. If you are sure it's just this one loan, it may not be necessary. Good luck! Edit: In India CIBIL is the authority that maintains records. Getting to know you exact score will help. CIBIL offers it via TransUnion. The non-payment will keep appearing on your record for 3 years. As you don't have any loans, get a credit card from a Bank where you have Fixed Deposits / PPF Account as it would be easier to get one. It can then help you build the credit.",
"title": ""
},
{
"docid": "648f6347d16224f43171a32628d4a67e",
"text": "Currently the credit history are not International but are local. Many countries don't have a concept of credit history yet. Having said that, if you are moving to US, depending on your history in your country, you can ask the same bank to provide you with a card and then start building history. For example in India I had a card with Citi Bank and when I moved to US for a short period, I was given a card based on my India Card, with equivalent credit in USD. If you are moving often internationally, it would make sense to Bank with a leading bank that provide services in geographies of your interest [Citi, HSBC, etc] and then in a new country approach these institutions to get you some starting credit for you to build a history.",
"title": ""
},
{
"docid": "001467b6ee0f5efdbd4ee55a495d55c5",
"text": "Consider that however high your credit score gets, there is a 'worst piece of it'. The automated software will always report your 'weakest' two points, even if they are already at the top 0.0001% of everyone; that's just how it is coded.",
"title": ""
},
{
"docid": "645e83e8696b475e9bdfbcbe6a1891af",
"text": "No, because of regulations Paypal is different in India to most countries and you cannot actually spend paypal balance. You will need to verify your PAN number and connect a bank account, although this should be very quick",
"title": ""
},
{
"docid": "a12d4c02b46a38be2eacbfee2b24c239",
"text": "The OP might have obtained his credit card by now but I'm answering now as there is one more easy way to get a credit card. All major Indian banks like SBI, ICICI, HDFC and Axis issue instant credit cards on opening a FD (Fixed Deposit). For instance ICICI offers one for FD amount of as less as ₹20000. The credit limit on such cards will be 85% of the deposit amount. Another advantage of these kind of cards is customer won't be charged any annual fees and at the same time interest will be paid on original FD.",
"title": ""
},
{
"docid": "85b4e9a6d0ffa7e877775abbfd87f311",
"text": "There are two types of credit checks. First is the hard pull which is typically done when you apply for a credit line. The lender will hard pull your file and make his/her decision based on that. This affects your score negatively. You might lose few points for one hard inquiry. Second type is soft pull, which is done as a background check. Typically done by credit card companies to send you a pre-approved offer, or renting an apartment etc. This does not affect your score. One thing to keep in mind is a company will not do a hard pull without your permission, where as they can do soft pulls without you even knowing. Soft inquiries vs hard inquiries",
"title": ""
},
{
"docid": "ebb874728ea5c83f7c47d5f71cbed3ed",
"text": "I can't speak for India, but for US travelers abroad, using an ATM card that reimburses transaction fees is usually the most convenient and cheapest way to obtain foreign cash. There are several banks and brokerages that offer these types of ATM cards in the US. The exchange rate is competitive and because the fees are reimbursed it's cheaper and easy than going to a bank or kiosk to exchange currencies. I don't know if you can get accounts/cards like this in India that reimburse ATM fees. For purchases, using a credit card is fine, too. Some cards charge a foreign transaction fee of ~1%, some don't. The credit card I use most of the time does charge a 1% transaction fee, but I get 2% back in rewards so I still don't mind using it when traveling.",
"title": ""
},
{
"docid": "bfc9c5ef1521b95b5048561579618633",
"text": "\"Why are banks all of a sudden providing people their credit scores for free? Because it is a really good idea. On an ABC Bank website, it has: \"\"Check your credit score for free\"\" button. You click it. Not only will it come up with a credit score, but it could also trigger a marketing workflow. If it is direct mail, email, or a phone call a banker could contact you for help with a debt product. This marketing could also be targeted, say a person with a high score could be targeted for a mortgage. A person with a low or medium score could be targeted for ways and products to improve their score. Now if you run XYZ bank and not do the same, you are losing a competitive advantage to banks that offer this. Not only will your customers be less happy, but you will lose a great marketing opportunities. Face it, the only people that worry about their credit score are people that are in the market to borrow. Which again, is more information. If you have someone that never checks their credit score, or has their credit frozen, then it is wise not to market to them debt products.\"",
"title": ""
}
] |
fiqa
|
aaee59a05f9f8d4bfd09a6d102529f61
|
Free cash flow and capex on morningstar.com
|
[
{
"docid": "e4a6f20f1d8ec5ed31c6003b6ff660df",
"text": "\"Free Cash Flow (FCF) is not a metric/data point which represents any ACTUAL cash flow of a company. FCF is a data point which communicates how much cash a company has after Operating cash requirements and cash expenditures \"\"required\"\" to grow and maintain the existing business. FCF can be used to pay dividends, buy back stock, purchase companies, et cetera. None of which are REQUIRED to run the business.\"",
"title": ""
}
] |
[
{
"docid": "fdb0d925b58ea2b1b9af8fe85c545a4c",
"text": "E&P can be valid throug Net Present Value methods, on a field-by-field basis. As no field is ever-lasting, and there Are not an unlimited number of fields, perpetuity-formulaes Are shitty. FCFF on a per-field basis with WC and Capex, with a definite lifetime. Thank you for the compliment.",
"title": ""
},
{
"docid": "237d225e0da24ae0ac9d26ba666568d8",
"text": "i will not calculate it for you but just calculate the discounted cash flow (by dividing with 1.1 / 1.1^2 / 1.1^3 ...)of each single exercise as stated and deduct the 12.000 of the above sum. in the end compare which has the highest npv",
"title": ""
},
{
"docid": "8958b5c15f7245431cc66cdfeca66ed0",
"text": "Questrade is a Canada based broker offering US stock exchange transactions as well. It says this right on their homepage. ETFs are traded like stocks, so the answer is yes. Why did you think they only offered funds?",
"title": ""
},
{
"docid": "de1433f15a5657ab6d10c2427bdd38b9",
"text": "As @littleadv and @DumbCoder point out in their comments above, Bloomberg Terminal is expensive for individual investors. If you are looking for a free solution I would recommend Yahoo and Google Finance. On the other side, if you need more financial metrics regarding historic statements and consensus estimates, you should look at the iPad solution from Worldcap, which is not free, but significantly cheaper then Bloomberg and Reuters. Disclosure: I am affiliated with WorldCap.",
"title": ""
},
{
"docid": "2649f29b989d8e7f895fca5b3d7d7194",
"text": "\"At the bottom of Yahoo! Finance's S & P 500 quote Quotes are real-time for NASDAQ, NYSE, and NYSE MKT. See also delay times for other exchanges. All information provided \"\"as is\"\" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein. Fundamental company data provided by Capital IQ. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Orderbook quotes are provided by BATS Exchange. US Financials data provided by Edgar Online and all other Financials provided by Capital IQ. International historical chart data, daily updates, fundAnalyst estimates data provided by Thomson Financial Network. All data povided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. Thus, yes there is a DB being accessed that there is likely an agreement between Yahoo! and the providers.\"",
"title": ""
},
{
"docid": "fc784201d1147155f79cd4e356cbe61a",
"text": "edit: nevermind. i glanced and thought you meant total market mutual funds. For fixed income - if you want to get a good analysis of the bond market/interest rates, i would suggest you read some of bill gross' letters off the pimco site - a lot of discussion about our current zero bound interest rates. For equities - I have the view that if the economy is doing well, people are less inclined to focus on dividend yield...thereby lowering the relative multiples on dividend/fcf yielding stocks. So total return fund may be trading slightly cheaper.",
"title": ""
},
{
"docid": "9e6f5a82008f9330d2061b78d7cbadd5",
"text": "I spent a while looking for something similar a few weeks back and ended up getting frustrated and asking to borrow a friend's Bloombterg. I wish you the best of luck finding something, but I wasn't able to. S&P and Morningstar have some stuff on their site, but I wasn't able to make use of it. Edit: Also, Bloomberg allows shared terminals. Depending on how much you think as a firm, these questions might come up, it might be worth the 20k / year",
"title": ""
},
{
"docid": "9351d22e6c503efd0342ed11b4695e78",
"text": "I just called options express, and apparently you need a margin account for futures and options, but you don't NEED margin to trade futures. I will have to debate the merits, but I think I may try playing with it once I build up my regular stock account.",
"title": ""
},
{
"docid": "88f2601280f52c488c4745adbf7d599a",
"text": "I'm not 100% sure, but I don't think it would be considered a free ride. The idea of a free ride is that you are engaging in a transaction when you do not actually have the money available to cover it, since the broker is technically giving you a 3 day loan whenever you purchase your stock (3 day rule to settle.) However, if you are using a margin account, and you have enough credit available, then you are not actually using unsettled assets, but rather an additional line of credit which was granted to you. You would just need to make sure that your total transactions are less than your purchasing power. That's my take on it anyway. I hope that helps, and hopefully someone can confirm or reject what I have said.",
"title": ""
},
{
"docid": "55b98bac35fca6833f115fb68dd9e9e2",
"text": "The simple answer is technically bonds don't have earnings, hence no P/E. What I think the OP is really asking how do I compare stock and bond ETFs. Some mature stocks exhibit very similar characteristics to bonds, so at the margin if you are considering investing between 2 such investments that provide stable income in the form of dividends, you might want to use the dividend/price ratio (D/P) of the stock and compare it to the dividend yield of the bond. If you go down to the basics, both the bond and the stock can be considered the present value of all future expected cashflows. The cash that accrues to the owner of the stock is future dividends and for the bond is the coupon payments. If a company were to pay out 100% of its earnings, then the dividend yield D/P would be conveniently E/P. For a company with P/E of 20 that paid out it's entire earnings, one would expect D/P = 1/20 = 5% This serves as a decent yard stick in the short term ~ 1 year to compare mature stock etfs with stable prospects vs bond funds since the former will have very little expected price growth (think utilities), hence they both compete on the cashflows they throw off to the investor. This comparison stops being useful for stock ETFs with higher growth prospects since expected future cashflows are much more volatile. This comparison is also not valid in the long term since bond ETFs are highly sensitive to the yield curve (interest rate risk) and they can move substantially from where they are now.",
"title": ""
},
{
"docid": "aade973ed2fc9f2d0cc26bc56b1d2607",
"text": "This looks more like an aggregation problem. The Dividends and Capital Gains are on quite a few occassions not on same day and hence the way Yahoo is aggregating could be an issue. There is a seperate page with Dividends and capital gains are shown seperately, however as these funds have not given payouts every year, it seems there is some bug in aggregating this info at yahoo's end. For FBMPX http://uk.finance.yahoo.com/q/hp?s=FBMPX&b=2&a=00&c=1987&e=17&d=01&f=2014&g=v https://fundresearch.fidelity.com/mutual-funds/fees-and-prices/316390681 http://uk.finance.yahoo.com/q/pr?s=FBMPX",
"title": ""
},
{
"docid": "ee13d447ca63a0e4424994931d061598",
"text": "https://www.hussmanfunds.com/wmc/wmc171009m.png >The following charts will provide a sense of where the U.S. equity market currently stands. The first chart shows our margin-adjusted CAPE, which as noted above has a correlation of about -0.89 with actual subsequent market returns across U.S. market cycles since the 1920’s. https://www.hussmanfunds.com/wmc/wmc171009.htm It will turn, downside potential is historic.",
"title": ""
},
{
"docid": "379fd084a7b1339e70292490902c9a36",
"text": "I don't see a contrast. It's really hard to predict which mutual funds will do well in the future. Predicting that ones which have done well recently will continue to do well works slightly better than chance. The WSJ article and Morningstar agree on all the objective facts, they just spin them differently.",
"title": ""
},
{
"docid": "19ac0999abb883032e6599d328eeb541",
"text": "The three sites mentioned in the second link are all professional trading workstations, not public web sites. There may not be free quotes available.",
"title": ""
},
{
"docid": "85f66c1e48bebc938ca53a2fc722f965",
"text": "Sure. No-one promises that all the outstanding stocks are ever for sale, but if you get them all - you get them all, what marketplace you used for that doesn't really matter.",
"title": ""
}
] |
fiqa
|
58764b9a899072fdf4a1b2acda5e4504
|
Filing a corporation tax return online?
|
[
{
"docid": "36ed8d706a4650c12342497bdeadc185",
"text": "When in doubt, you should always seek the advice of a professional tax preparer or your accountant. (Many agents/accountants will gladly review your tax preparations to ensure you haven't missed something. That's quicker and cheaper than paying them to do it all.) Having said that... This Illinois resource has detailed information about S-corps: Of relevance to your situation:",
"title": ""
},
{
"docid": "90bf0c014b7268f7f6404fa099240da9",
"text": "This may not exactly answer your question but, as a small business owner, I would highly recommend having a professional handle your taxes. It is worth the money to have it done correctly rather than doing something wrong and getting audited or worse having penalties assessed and owing more than you thought would be possible. I would recommend this especially if this is how you make your primary income, you can always write it off as a business expense.",
"title": ""
}
] |
[
{
"docid": "9c19f9ceaab748d179323a7f07b6ec39",
"text": "It is a great advice. I would suggest going to the Companies House (it's in London somewhere), picking up all of their leaflets regarding requirements for different forms of corporate entity, and deciding if you want to have that burden. It is not a lot of work, you can essentially claim VAT on all business purchases (the way roughly it works, is that your company invoices your client, your client has to pay the fee + VAT (usually that VAT is then deducted by your client from it's VAT, so no loss there), and you pay the VAT on the difference between the service sales price, and your costs (computers etc.) ) You have to be careful to avoid excessive double taxation (paying income tax on both corporate income, and then your personal income off said company), but it usually comes off in your favor. Essentially, if you're making more than 50% of your income from services rendered, it is to your advantage to render such services as a business entity.",
"title": ""
},
{
"docid": "1d4ba8a949e4138c61188e7132d74980",
"text": "You need to file IRS Form 1040-NR. The IRS's website provides instructions.",
"title": ""
},
{
"docid": "bfb3bb9c58961c4994b6fef8d7252358",
"text": "I heard that a C-Corp being a one person shop (no other employees but the owner) can pay for the full amount 100% of personal rent if the residence is being used as a home office. Sure. Especially if you don't mind being audited. Technically, it doesn't matter how the money gets where it goes as long as the income tax filings accurately describe the tax situation. But the IRS hates it when you make personal expenses from a business account, even if you've paid the required personal income tax (because their computers simply aren't smart enough to keep up with that level of chaos). Also, on a non-tax level, commingling of business and personal funds can reduce the effectiveness of your company's liability protection and you could more easily become personally liable if the company goes bankrupt. From what I understand the 30% would be the expense, and the 70% profit distribution. I recommend you just pay yourself and pay the rent from your personal account and claim the allowed deductions properly like everyone else. Why & when it would make sense to do this? Are there any tax benefits? Never, because, no. You would still have to pay personal income tax on your 70% share of the rent (the 30% you may be able to get deductions for but the rules are quite complicated and you should never just estimate). The only way to get money out of a corporation without paying personal income tax is by having a qualified dividend. That's quite complicated - your accounting has to be clear that the money being issued as a qualified dividend came from an economic profit, not from a paper profit resulting from the fact that you worked hard without paying yourself market value.",
"title": ""
},
{
"docid": "8d28aa994d28e9404b96d8ac04f34c79",
"text": "LLC doesn't explain the tax structure. LLCs can file as a partnership (1065) Scorp (1120S) or nothing at all, if it's a SMLLC. (Single Member LLC). I really enjoy business, and helping people get started. If you PM me your contact information, id be more than happy to go over any issues you may have, and help you with your current issue.",
"title": ""
},
{
"docid": "00b3c587b025b5ae800f89468ba7f5d0",
"text": "To be on the safe side - you'll want to get the full invoice. You don't need to actually print them, you can save it as a PDF and make sure to make your own backups once in a while. Only actually print them when the IRS asks you to kill some trees and send them a paper response, and even then you can talk to the agent in charge and check if you can email the digital file instead. The IRS won't ask for this when you file your taxes, they will only ask for this if you're under audit and they will want to actually validate the numbers on your return. You'll know when you're under audit, and who is the auditor (the agent in charge of your case). You'll also want to have some representation when that happens.",
"title": ""
},
{
"docid": "dc0f5b39efa96f612d974c9271078571",
"text": "As the owner of the S-corp, it is far easier for you to move money in/out of the company as contributions and distributions rather than making loans to the company. Loans require interest payments, 1099-INT forms, and have tax consequences, whereas the distributions don't need to be reported because you pay taxes on net profits regardless of whether the money was distributed. If you were paid interest, disregard this answer. I don't know if or how you could re-categorize the loan once there's a 1099-INT involved. If no interest was ever paid, you just need to account for it properly: If the company didn't pay you any interest and never issued you a 1099-INT form (i.e. you wrote a check to the company, no promissory note, no tax forms, no payments, no interest, etc.) then you can categorize that money as a capital contribution. You can likewise take that money back out of the company as a capital distribution and neither of these events are taxable nor do they need to be reported to the IRS. In Quickbooks, create the following Equity accounts -- one for each shareholder making capital contributions and distributions: When putting money into the company, deposit into your corporate bank account and use the Capital Contribution equity account. When taking money out of the company, write yourself a check and use the Distributions account. At the end of every tax year, you can close out your Contributions and Distributions to Retained Earnings by making a general journal entry. For example, debit retained earnings and credit distributions on Dec 31 every year to zero-out the distributions account. For contributions, do the reverse and credit retained earnings. There are other ways of recording these transactions -- for example I think some people just use a Member Capital equity account instead of separate accounts for contributions and distributions -- and QB might warn you about posting journal entries to the special Retained Earnings account at the end of the year. In any case, this is how my CPA set up my books and it's been working well enough for many years. Still, never a bad idea to get a second opinion from your CPA. Be sure to pay yourself a reasonable salary, you can't get out of payroll taxes and just distribute profits -- that's a big red flag that can trigger an audit. If you're simply distributing back the money you already put into the company, that should be fine.",
"title": ""
},
{
"docid": "0a998ba4e2f818772ac51100aeaa986e",
"text": "I am from India. I visited US 6-8 times on business VISA and then started 2 Member LLC. Myself and My wife as LLC Members. We provide Online Training to american students from India. Also Got EIN number. Never employed any one. Do i need to pay taxes? Students from USA pays online by Paypal and i am paying taxes in India. Do i need to pay Taxes in US? DO i need to file the Tax returns? Please guide me. I formed LLC in 2010. I opened an Office-taken Virtual office for 75 USD per month to open LLC in 2010. As there is physical virtual address, am i liable for US taxes? All my earning is Online, free lancing.",
"title": ""
},
{
"docid": "094dc968198d3380a7c3aa6a75e77ac5",
"text": "\"A tax return is a document you sign and file with the government to self-report your tax obligations. A tax refund is the payment you receive from the government if your payments into the tax system exceeded your obligations. As others have mentioned, if an extra $2K in income generated $5K in taxes, chances are your return was prepared incorrectly. The selection of an appropriate entity type for your business depends a lot on what you expect to see over the next several years in terms of income and expenses, and the extent to which you want or need to pay for fringe benefits or make pretax retirement contributions from your business income. There are four basic flavors of entity which are available to you: Sole proprietorship. This is the simplest option in terms of tax reporting and paperwork required for ongoing operations. Your net (gross minus expenses) income is added to your wage income and you'll pay tax on the total. If your wage income is less than approximately $100K, you'll also owe self-employment tax of approximately 15% in addition to income tax on your business income. If your business runs at a loss, you can deduct the loss from your other income in calculating your taxable income, though you won't be able to run at a loss indefinitely. You are liable for all of the debts and obligations of the business to the extent of all of your personal assets. Partnership. You will need at least two participants (humans or entities) to form a partnership. Individual items of income and expense are identified on a partnership tax return, and each partner's proportionate share is then reported on the individual partners' tax returns. General partners (who actively participate in the business) also must pay self-employment tax on their earnings below approximately $100K. Each general partner is responsible for all of the debts and obligations of the business to the extent of their personal assets. A general partnership can be created informally or with an oral agreement although that's not a good idea. Corporation. Business entities can be taxed as \"\"S\"\" or \"\"C\"\" corporations. Either way, the corporation is created by filing articles of incorporation with a state government (doesn't have to be the state where you live) and corporations are typically required to file yearly entity statements with the state where they were formed as well as all states where they do business. Shareholders are only liable for the debts and obligations of the corporation to the extent of their investment in the corporation. An \"\"S\"\" corporation files an information-only return similar to a partnership which reports items of income and expense, but those items are actually taken into account on the individual tax returns of the shareholders. If an \"\"S\"\" corporation runs at a loss, the losses are deductible against the shareholders' other income. A \"\"C\"\" corporation files a tax return more similar to an individual's. A C corporation calculates and pays its own tax at the corporate level. Payments from the C corporation to individuals are typically taxable as wages (from a tax point of view, it's the same as having a second job) or as dividends, depending on how and why the payments are made. (If they're in exchange for effort and work, they're probably wages - if they're payments of business profits to the business owners, they're probably dividends.) If a C corporation runs at a loss, the loss is not deductible against the shareholders' other income. Fringe benefits such as health insurance for business owners are not deductible as business expenses on the business returns for S corps, partnerships, or sole proprietorships. C corporations can deduct expenses for providing fringe benefits. LLCs don't have a predefined tax treatment - the members or managers of the LLC choose, when the LLC is formed, if they would like to be taxed as a partnership, an S corporation, or as a C corporation. If an LLC is owned by a single person, it can be considered a \"\"disregarded entity\"\" and treated for tax purposes as a sole proprietorship. This option is not available if the LLC has multiple owners. The asset protection provided by the use of an entity depends quite a bit on the source of the claim. If a creditor/plaintiff has a claim based on a contract signed on behalf of the entity, then they likely will not be able to \"\"pierce the veil\"\" and collect the entity's debts from the individual owners. On the other hand, if a creditor/plaintiff has a claim based on negligence or another tort-like action (such as sexual harassment), then it's very likely that the individual(s) involved will also be sued as individuals, which takes away a lot of the effectiveness of the purported asset protection. The entity-based asset protection is also often unavailable even for contract claims because sophisticated creditors (like banks and landlords) will often insist the the business owners sign a personal guarantee putting their own assets at risk in the event that the business fails to honor its obligations. There's no particular type of entity which will allow you to entirely avoid tax. Most tax planning revolves around characterizing income and expense items in the most favorable ways possible, or around controlling the timing of the appearance of those items on the tax return.\"",
"title": ""
},
{
"docid": "dd10d90ffdb55b8ff054948c6a6d2926",
"text": "\"You will be filing the exact same form you've been filing until now (I hope...) which is called form 1040. Attached to it, you'll add a \"\"Schedule C\"\" form and \"\"Schedule SE\"\" form. Keep in mind the potential effect of the tax and totalization treaties the US has with the UK which may affect your filings. I suggest you talk to a licensed EA/CPA who works with expats in the UK and is familiar with all the issues. There are several prominent offices you can find by Googling.\"",
"title": ""
},
{
"docid": "177452e08f5bcd1a5ccb6fada4720bcd",
"text": "\"(Insert the usual disclaimer that I'm not any sort of tax professional; I'm just a random guy on the Internet who occasionally looks through IRS instructions for fun. Then again, what you're doing here is asking random people on the Internet for help, so here goes.) The gigantic book of \"\"How to File Your Income Taxes\"\" from the IRS is called Publication 17. That's generally where I start to figure out where to report what. The section on Royalties has this to say: Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. In most cases, you report royalties in Part I of Schedule E (Form 1040). However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). It sounds like you are receiving royalties from a copyright, and not as a self-employed writer. That means that you would report the income on Schedule E, Part I. I've not used Schedule E before, but looking at the instructions for it, you enter this as \"\"Royalty Property\"\". For royalty property, enter code “6” on line 1b and leave lines 1a and 2 blank for that property. So, in Line 1b, part A, enter code 6. (It looks like you'll only use section A here as you only have one royalty property.) Then in column A, Line 4, enter the royalties you have received. The instructions confirm that this should be the amount that you received listed on the 1099-MISC. Report on line 4 royalties from oil, gas, or mineral properties (not including operating interests); copyrights; and patents. Use a separate column (A, B, or C) for each royalty property. If you received $10 or more in royalties during 2016, the payer should send you a Form 1099-MISC or similar statement by January 31, 2017, showing the amount you received. Report this amount on line 4. I don't think that there's any relevant Expenses deductions you could take on the subsequent lines (though like I said, I've not used this form before), but if you had some specific expenses involved in producing this income it might be worth looking into further. On Line 21 you'd subtract the 0 expenses (or subtract any expenses you do manage to list) and put the total. It looks like there are more totals to accumulate on lines 23 and 24, which presumably would be equally easy as you only have the one property. Put the total again on line 26, which says to enter it on the main Form 1040 on line 17 and it thus gets included in your income.\"",
"title": ""
},
{
"docid": "23daa071e6209ff4ccaf3a2c8cc13b2e",
"text": "You need to talk to an accountant who practices tax accounting, preferaby someone who is an Enrolled Agent (EA) with the IRS, and possibly an attorney who specializes in tax law. There are multiple issues here, and the executor of your father's estate might need to be involved here too. Presumably you were a minor in 2007 since the transactions took place in a custodial account, and perhaps you were a dependent of your father in 2007. So, were the transactions reported on your father's 2007 income tax return? or did he file a separate income tax return in your name? You say you have a W2 for 2007. So you were earning some income in 2007? This complicates matters. It is necessary to determine who has the responsibility to file income tax returns for a minor with earned income. Above all, I urge you to not file income tax returns on your own or using a tax return preparation program, or after talking to a tax return preparation service (where you will likely get someone who works on a seasonal basis and is unlikely to be familiar with tax law as of 2007).",
"title": ""
},
{
"docid": "e0da1c350ee0704b3a89e3d114cd5e5e",
"text": "I have been doing e-filing and I get the return in my account in 10 to 14 days over the past couple of years. It is worth the e-filing cost to get my money back a month faster.",
"title": ""
},
{
"docid": "84722d62eebbcb7adb23220fa92244a1",
"text": "Do you need to incorporate? This depends on whether the company prefers you to be incorporated. If you are going through a recruiting company, some of them are willing to deal with non-incorporated people (Sole Proprietor) and withhold taxes from your cheques for you. If you do want to incorporate, you can do it yourself, go through a paralegal, or you can even do it online. I did mine in Ontario for about $300 (no name search - i just have a numbered corporation like 123456 Ontario Inc.) through www.oncorp.com - there are other sites that do it as well. Things to consider - if you're contracting through a corporation you most likely need to: Talk to an accountant about these for clarification - most of them will give you an initial consultation for free. Generally speaking, accountant fees for corporate filing taxes averages about $1000-2000 a year.",
"title": ""
},
{
"docid": "9797c3ae43e312e7a4e29c26a0f28f57",
"text": "If i am not wrong, any business activities such should be declared on Year End Tax filing. If your friend is going to own that website either it is commercial or nonprofit, he has to declare in the year end taxation.",
"title": ""
},
{
"docid": "acd13ed628496354fa8b601a28ac4b2d",
"text": "As a new (very!) small business, the IRS has lots of advice and information for you. Start at https://www.irs.gov/businesses/small-businesses-self-employed and be sure you have several pots of coffee or other appropriate aid against somnolence. By default a single-member LLC is 'disregarded' for tax purposes (at least for Federal, and generally states follow Federal although I don't know Mass. specifically), although it does have other effects. If you go this route you simply include the business income and expenses on Schedule C as part of your individual return on 1040, and the net SE income is included along with your other income (if any) in computing your tax. TurboTax or similar software should handle this for you, although you may need a premium version that costs a little more. You can 'elect' to have the LLC taxed as a corporation by filing form 8832, see https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc . In principle you are supposed to do this when the entity is 'formed', but in practice AIUI if you do it by the end of the year they won't care at all, and if you do it after the end of the year but before or with your first affected return you qualify for automatic 'relief'. However, deciding how to divide the business income/profits into 'reasonable pay' to yourself versus 'dividends' is more complicated, and filling out corporation tax returns in addition to your individual return (which is still required) is more work, in addition to the work and cost of filing and reporting the LLC itself to your state of choice. Unless/until you make something like $50k-100k a year this probably isn't worth it. 1099 Reporting. Stripe qualifies as a 'payment network' and under a recent law payment networks must annually report to IRS (and copy to you) on form 1099-K if your account exceeds certain thresholds; see https://support.stripe.com/questions/will-i-receive-a-1099-k-and-what-do-i-do-with-it . Note you are still legally required to report and pay tax on your SE income even if you aren't covered by 1099-K (or other) reporting. Self-employment tax. As a self-employed person (if the LLC is disregarded) you have to pay 'SE' tax that is effectively equivalent to the 'FICA' taxes that would be paid by your employer and you as an employee combined. This is 12.4% for Social Security unless/until your total earned income exceeds a cap (for 2017 $127,200, adjusted yearly for inflation), and 2.9% for Medicare with no limit (plus 'Additional Medicare' tax if you exceed a higher threshold and it isn't 'repealed and replaced'). If the LLC elects corporation status it has to pay you reasonable wages for your services, and withhold+pay FICA on those wages like any other employer. Estimated payments. You are required to pay most of your individual income tax, and SE tax if applicable, during the year (generally 90% of your tax or your tax minus $1,000 whichever is less). Most wage-earners don't notice this because it happens automatically through payroll withholding, but as self-employed you are responsible for making sufficient and timely estimated payments, and will owe a penalty if you don't. However, since this is your first year you may have a 'safe harbor'; if you also have income from an employer (reported on W-2, with withholding) and that withholding is sufficent to pay last year's tax, then you are exempt from the 'underpayment' penalty for this year. If you elect corporation status then the corporation (which is really just you) must always make timely payments of withheld amounts, according to one of several different schedules that may apply depending on the amounts; I believe it also must make estimated payments for its own liability, if any, but I'm not familiar with that part.",
"title": ""
}
] |
fiqa
|
12c1cc42a2692514e14399f3e954cf97
|
Taxes on transactions of services
|
[
{
"docid": "a5280605812e2385284b2802e8d5a509",
"text": "Do Alice and Bob have to figure out the fair market value of their services and report that as income or something? Yes, exactly that. See Topic 420. Note that if the computer program is for Bob's business, Bob might be able to deduct it on his taxes. Similarly, if the remodeling is on Alice's business property, she might be able to deduct it. There might also be other tax advantages in certain circumstances.",
"title": ""
},
{
"docid": "598447d7fc5f43f2a053c5c29cf3c2a4",
"text": "It's called bartering and the IRS has a page titled Four Things to Know About Bartering. The summary is - The bottom line is this is taxable.",
"title": ""
}
] |
[
{
"docid": "48aa72e0f6ae4c58204f8d146c9af0b7",
"text": "All Bank fees were included in the service tax ambit [For example Check bounce, issue of duplicate statement, fees charged for remittance etc]. However as quite a few Banks structured the Remittance Business to show less charges and cover the difference in the Fx rate involved, the Govt has redone the service tax and one needs to pay Rs 120 for an amount of Rs 100,000. There is no way to avoid service tax on remittance if you are using a remittance service.",
"title": ""
},
{
"docid": "9797c3ae43e312e7a4e29c26a0f28f57",
"text": "If i am not wrong, any business activities such should be declared on Year End Tax filing. If your friend is going to own that website either it is commercial or nonprofit, he has to declare in the year end taxation.",
"title": ""
},
{
"docid": "b958ecddb6579a5edb96c07558272915",
"text": "\"In most jurisdictions, both the goods (raw materials) and the service (class) are being \"\"sold\"\" to the customer, who is the end user and thus the sale is subject to sales tax. So, when your friend charges for the class, that $100 is subject to all applicable sales taxes for the jurisdiction and all parent jurisdictions (usually city, county and state). The teacher should not have to pay sales tax when they buy the flowers from the wholesaler; most jurisdictions charge sales tax on end-user purchases only. However, they are required to have some proof of sales tax exemption for the purchase, which normally comes part and parcel with the DBA or other business entity registration paperwork in most cities/states. Wholesalers deal with non-end-user sales (exempt from sales tax) all the time, but your average Michael's or Hobby Lobby may not be able to deal with this and may have to charge your friend the sales tax at POS. Depending on the jurisdiction, if this happens, your friend may be able to reduce the amount the customer is paying that is subject to sales tax by the pre-tax value of the materials the customer has paid for, which your friend already paid the tax on.\"",
"title": ""
},
{
"docid": "8f5439eccba9927dbad2c3edb01e31dd",
"text": "Such activity is normally referred to as bartering income. From the IRS site - You must include in gross income in the year of receipt the fair market value of goods or services received from bartering. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit from Business (Sole Proprietorship). If you failed to report this income, correct your return by filing a Form 1040X (PDF), Amended U.S. Individual Income Tax Return. Refer to Topic 308 and Amended Returns for information on filing an amended return.",
"title": ""
},
{
"docid": "f35f977f4958bf5092e2f8145f753a2f",
"text": "Australian Goods and Services Tax is charged on the sale amount. Whatever internal accounting you do before billing the customer is of no interest to the Australian Tax Office.",
"title": ""
},
{
"docid": "bd32fe9ac63a48f7adcb39dea2923ad9",
"text": "I am an Israeli based citizen who represents and Indian company who sells its products in Israel. As an agent I am entitled to commission on sales on behalf the Indian company who advised that. Any commission paid to you will be applicable to TDS at 20.9% of the commission amount, the tax will be paid and a Tax paid certificate will be given to you. According to a Bilateral Double tax avoidance treaty if the tax has been deducted in India you will get credit for this tax in Israel.",
"title": ""
},
{
"docid": "83b8ff6405ec069847836954c0674ea8",
"text": "If it's a legitimate cost of doing business, it's as deductible as any other cost of doing business. (Reminder: be careful about the distinctions between employee and contractor; the IRS gets annoyed if you don't handle this correctly.)",
"title": ""
},
{
"docid": "265d27dfb5d41ee5453592f8dcd0d2bc",
"text": "Its one of the main points. Transfer pricing includes discretionary decisions and is part of BEPS. Its also completely unnecessary: Pay taxes on revenue in country earned/sold. Get tax credits/refunds in country were spending is made. The reason why already profitable companies consider BEPS/tax arbitrage for HQ locations is because they get discretionary power over accounting profit allocation. Tax policy should serve the society though, and this proposal encourages the spending that benefits society. Its the usual case that the right answer is different than that being lobbied for.",
"title": ""
},
{
"docid": "5d6566768c428287ad67c19f059a13f8",
"text": "\"Keep in mind that all of the information below assumes: That being said, here are some examples of national tax laws relating to barter transactions. Obviously this isn't an exhaustive list, but based on my grossly non-representative sample, I think it's fairly safe to assume that barter transactions are more likely taxable than not. You're referring to a barter system; in the United States, the IRS is very specific about this (see the section titled Bartering). Bartering is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included on Form 1040 in the income of both parties. The IRS also provides more details: Bartering occurs when you exchange goods or services without exchanging money. An example of bartering is a plumber doing repair work for a dentist in exchange for dental services. You must include in gross income in the year of receipt the fair market value of goods and services received in exchange for goods or services you provide or may provide under the bartering arrangement. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business or Form 1040, Schedule C-EZ (PDF), Net Profit from Business. If you failed to report this income, correct your return by filing a Form 1040X (PDF). Refer to Topic 308 for amended return information. So yes, the net value of bartered goods or services is most likely taxable. According to the Australian Tax Office: Barter transactions are assessable and deductible for income tax purposes to the same extent as other cash or credit transactions. Her Majesty's Revenue and Customs states that: If you supply services or goods (new or second-hand) and receive other goods or services in payment, there are two separate supplies: You must account for VAT, and so must your customer if they're VAT-registered. The VAT treatment is the same as for part-exchanges. You must both account for VAT on the amounts you would each have paid for the goods or services if there had been no barter and they had been paid for with money. Searching the website of the Federal Tax Service for the Russian/Cryllic word for barter (бартер) doesn't yield any results, but that might be because even between Google Translate and the rest of the internet, I don't speak Russian. That being said, I did manage to find this (translated from the first full paragraph of the Russian, beginning with \"\"Налог на доходы...\"\": The tax on personal income is paid by citizens of the Russian Federation with all types of income received by them in the calendar year, either in cash or in kind. Since bartering would probably qualify as an in kind transaction, it would likely be taxable. The South African Revenue Service includes barter transactions in the supply of goods taxed under the VAT. The term “supply” is defined very broadly and includes all forms of supply and any derivative of the term, irrespective of where the supply is effected. The term includes performance in terms of a sale, rental agreement, instalment credit agreement or barter transaction. Look for section 3.6, Supply and Taxable Supply, found on p17 of the current version of the linked document.\"",
"title": ""
},
{
"docid": "46a36a35ae2c95ebde6fa7d46367d2ac",
"text": "Disclaimer: I am not a tax specialist You probably need a sales tax permit if you're going to sell goods, since just about every state taxes goods, though some states have exemptions for various types of goods. For services, it gets tricker. There is a database here that lists what services are taxed in what states; in Wyoming, for example, cellphone services and diaper services are taxed, while insurance services and barber services are not. For selling over the internet, it gets even dicier. There's a guide on nolo.com that claims to be comprehensive; it states that the default rule of thumb is that if you have a physical presence in a state, such as a warehouse or a retail shop or an office, you must collect tax on sales in that state. Given your situation, you probably only need to collect sales tax on customers in Wyoming. Probably. In any event, I'd advice having a chat with an accountant in Wyoming who can help walk you through what permits may or may not be needed.",
"title": ""
},
{
"docid": "b0e89d948d1a3eeeb4332ed2e5712a2a",
"text": "Tax Deducted at source is applicable to Employee / Employer [contract employee] relations ... it was also made applicable for cases where an Indian company pays for software products [like MS Word etc] as the product is not sold, but is licensed and is treated as Royalty [unlike sale of a consumer product, that you have, say car] ... Hence it depends on how your contract is worded with your India clients, best is have it as a service agreement. Although services are also taxed, however your contract should clearly specify that any tax in India would be borne by your Indian Client ... Cross Country taxation is an advanced area, you will not find good advice free :)",
"title": ""
},
{
"docid": "d76b0aa423ae2d10652b65376f7b65d4",
"text": "\"I'll assume United States as the country; the answer may (probably does) vary somewhat if this is not correct. Also, I preface this with the caveat that I am neither a lawyer nor an accountant. However, this is my understanding: You must recognize the revenue at the time the credits are purchased (when money changes hands), and charge sales tax on the full amount at that time. This is because the customer has pre-paid and purchased a service (i.e. the \"\"credits\"\", which are units of time available in the application). This is clearly a complete transaction. The use of the credits is irrelevant. This is equivalent to a customer purchasing a box of widgets for future delivery; the payment is made and the widgets are available but have simply not been shipped (and therefore used). This mirrors many online service providers (say, NetFlix) in business model. This is different from the case in which a customer purchases a \"\"gift card\"\" or \"\"reloadable debit card\"\". In this case, sales tax is NOT collected (because this is technically not a purchase). Revenue is also not booked at this time. Instead, the revenue is booked when the gift card's balance is used to pay for a good or service, and at that time the tax is collected (usually from the funds on the card). To do otherwise would greatly complicate the tax basis (suppose the gift card is used in a different state or county, where sales tax is charged differently? Suppose the gift card is used to purchase a tax-exempt item?) For justification, see bankruptcy consideration of the two cases. In the former, the customer has \"\"ownership\"\" of an asset (the credits), which cannot be taken from him (although it might be unusable). In the latter, the holder of the debit card is technically an unsecured creditor of the company - and is last in line if the company's assets are liquidated for repayment. Consider also the case where the cost of the \"\"credits\"\" is increased part-way through the year (say, from $10 per credit to $20 per credit) or if a discount promotion is applied (buy 5 credits, get one free). The customer has a \"\"tangible\"\" item (one credit) which gets the same functionality regardless of price. This would be different if instead of \"\"credits\"\" you instead maintain an \"\"account\"\" where the user deposited $1000 and was billed for usage; in this case you fall back to the \"\"gift card\"\" scenario (but usage is charged at the current rate) and revenue is booked when the usage is purchased; similarly, tax is collected on the purchase of the service. For this model to work, the \"\"credit\"\" would likely have to be refundable, and could not expire (see gift cards, above), and must be usable on a variety of \"\"services\"\". You may have particular responsibility in the handling of this \"\"deposit\"\" as well.\"",
"title": ""
},
{
"docid": "37a8df9320affe0b7287c522247d716f",
"text": "If you are being paid money in exchange for services that you are providing to your cousin, then that is income, are legally you are required to declare it as self-employment income, and pay taxes when you file your tax return (and if you have a significant amount of self-employment income, you're supposed make payments every quarter of your estimated tax liability. The deposit itself will not be taxed, however.",
"title": ""
},
{
"docid": "d0d3389d1c8d60b52ffff6b5f878ec11",
"text": "\"Of course. The rationale is exactly the same as always: profit is taxed. The fact that you use intermediate barter to make that profit is irrelevant. To clarify, as it seems that you think it makes a difference that no money \"\"changed hands\"\". Consider this situation: So far your cost is $10000. How will the tax authority address this? They will look at the fair market value of the barter. You got gold worth of $20000. So from their perspective, you got $20000, and immediately exchanged it into gold. What does it mean for you? That you're taxed on the $10000 gain you made on your product X (the $20000 worth of barter that you received minus the $10000 worth of work/material/expenses that you spend on producing the merchandise), and that you have $20000 basis in the gold that you now own. If in a year, when you plan to sell the gold, its price drops - you can deduct investment losses. If its price goes up - you'll have investment gain. But for the gain you're making on your product X you will pay taxes now, because that's when you realized it - sold the merchandize and received in return something else of a value.\"",
"title": ""
},
{
"docid": "a51c9ca986fa7b362dce41bd2e9c1e30",
"text": "The HST is a sales tax levied on most goods and services. It is important to realize that in both BC and Ontario, the new HST does not (in most cases) result in an increase in sales tax paid. For example, in Ontario the PST is 8% and when combined with the GST the sales tax is 13%. With the HST, the GST and PST are replaced by a single HST of 13% so the tax bill does not change. Some services that were previously not subject to PST (such as mutual fund service fees and labour) will now be subject to the HST. So some things will increase. Over time, this should not have a material impact on the consumer due to the way businesses remit GST/HST.",
"title": ""
}
] |
fiqa
|
d58c6cff404acbdff359ca52b0969de2
|
How long do wire transfers take?
|
[
{
"docid": "880e242b835fc149307678468ee21539",
"text": "The experience I have with wire transfers is from Australia to the US. These transfers can take up to 5 business dates (i.e. a whole week including the non-business days of the weekend). I would have thought intra-European transfers would be quicker, given how behind most US (regional) banks are in their electronic transfers. However, I don't think you should be worried just yet.",
"title": ""
}
] |
[
{
"docid": "e878c5f773f6ace2241e462af3b02251",
"text": "International wires using SWIFT are reliable way of getting funds. The issue could be because you are not giving the right details to your counterparty. Any incorrect details on wires would get it rejected. The timelines typically would be around 2-4 days depending on various things. There are alternatives like getting a paper check mailed to you and you cash it [this takes more time] or depending on which countries you operate in, there could be special remittance services.",
"title": ""
},
{
"docid": "4dbccce9bfdb3d5448498fda524912d6",
"text": "Typical wire transfers are not with 4-5%; but it all depends on the bank that does the transfer. You can chose to send ('wire') the money in source currency or in US $; the former, the target bank in the US does the conversion (so pick one that adds no or little spread); the latter, the sending bank does the conversion (so ask about their fees/spreads). I have multiple times transferred money across the ocean (though not from Japan), and never paid more than 0.3% + ~40 $ flat. It should be possible to get te same range. Note that if you look around for current offers, you might be easily able to even make some money on it - some US banks are eager for new money, and offer 200+$ bonus if you open an account and bring (significant =15k$+) new money to them.",
"title": ""
},
{
"docid": "b3f7ca9a1cecf9f2c6afd951935cb3eb",
"text": "I would recommend wire transfer. I was in your position some years ago, and the US$ cheque took 6 weeks to clear. Wire transfer fees are generally a few tens of pounds, depending on the banks involved.",
"title": ""
},
{
"docid": "31bb2bcfa644d2d77d932c3d312c5cf9",
"text": "During the settlement period, the buyer transfers payment to the seller and the seller transfers ownership to the buyer. This is really a holdover from the days when so much of stock trading was done by individual human traders, and computers were still not a huge part of the operation. Back then, paper tickets for trades exchanged hands, and the time period was actually 5 days, so 3 days is an improvement. A settlement period was necessary for everyone to figure out their trades and do what was necessary to make the settlements happen, so it was not always a quick process, mainly because of smaller trading firms that didn't have technology to help them along. Nowadays, technology makes settlements easy, and they usually occur at the end of the trading day. The trading firms sum up their trades, figure out who they owe, and send lump sum settlements to the counterparties to their trades. If anything, the 3-day period may just be used now to let parties verify trades before settling. I hope this helps. Good luck!",
"title": ""
},
{
"docid": "e7f04c3f01481c3d230c4c4cb737861e",
"text": "Register an account with multiple transfer services and see who will actually give you the best rate, including any fees charged by the service itself, at the time you want to make the transfer. Research the available methods to get the money into and out of the transfer service to five the lowest cost options, which would ideally be free on both ends. Be patient. It can take a week for money to arrive in your recipients account depending on the methods of getting the money into and out of the transfer service. You might also be called to verify the transaction before it goes through.",
"title": ""
},
{
"docid": "79eabf0ae820460afcb4fd80cb9bcae9",
"text": "Essentially you can send a Check by mail, you brother deposits into Bank account. It costs very little, the time required would be around 1-2 months. You can do International Wire [Via SWIFT] it would reach in few days, fees are high. You can use specialized remittance services like Money2india, remit2india, or western union etc. The fees are low and generally funds reach in a week.",
"title": ""
},
{
"docid": "7aa8f1f8a428385791c57a0123eed623",
"text": "All the items listed are required for International Wire transfer. In wrong hands this info along with other info can cause issues. Most of the times you trust the person with this info and hence is less cause to worry. So the key is if you don't trust, don't give the details. Use alternatives like; Best open an account for receiving funds. Share the details, once the funds are received move it to an account where the details have not been shared. Alternatively paypal or other such services can help.",
"title": ""
},
{
"docid": "7d9579caffe876adaaec0604f08c7549",
"text": "Currency exchange is rather the norm than the exception in international wire transfers, so the fact that the amount needs to be exchanged should have no impact at all. The processing time depends on the number of participating banks and their speeds. Typically, between Europe and the US, one or two business days are the norm. Sending from Other countries might involve more steps (banks) which each takes a bit of time. However, anything beyond 5 business days is not normal. Consider if there are external delays - how did you initiate the sending? Was it in person with an agent of the bank, who might have put it on a stack, and they type it in only a day later (or worse)? Or was it online, so it is in the system right away? On the receiver side, how did you/your friend check? Could there be a delay by waiting for an account statement? Finally, and that is the most common reason, were all the numbers, names, and codes absolutely correct? Even a small mismatch in name spelling might trigger the receiving bank to not allocate the money into the account. Either way, if you contact the sender bank, you will be able to make them follow up on it. They must be able to trace where they money went, and where it currently is. If it is stuck, they will be able to get it ‘unstuck’.",
"title": ""
},
{
"docid": "85a70fb4452fb46deb0bcd177c56ffd5",
"text": "Online banking, including international wire transfers, works from (nearly) anywhere in the world; make sure to have it set up. You can also give someone power of attorney (authorization to act in your name, the bank must accept him as you), if you have someone you trust enough; or if not, give a lawyer power of attorney. You can do that even after the fact, while you are out of the country; you would work with an international lawyer company.",
"title": ""
},
{
"docid": "48c4aa5aa6b8c8d5d06a84a7f9401c40",
"text": "No. You can initiate SWIFT payments from Bank A, whenever Bank A is open for business. The transaction takes around 2-5 days for it to complete depending on the currency pair and countries involved. Once you initiate the payment, the Bank A sends it to SWIFT Network which in turn send it to Bank B. Whenever Bank B is open for business it would process the payment.",
"title": ""
},
{
"docid": "5d9228e10db25f68942d77425abb2fd5",
"text": "It takes about 4-5 workdays, maybe it depends on the day also when you start the transfer. I transferred an amount last Wednesday, and the same amount on Thursday too. Both transactions hit the destination account on the next Tuesday, with a difference of 2 minutes.",
"title": ""
},
{
"docid": "d81d671b0862c112b56f9571e6a57717",
"text": "\"If the amount is large, \"\"wire transfer\"\" is usually the cheapest option. Mane banks have online option for it.\"",
"title": ""
},
{
"docid": "486420b297d6d92642fa8c90ebcd3bc2",
"text": "\"Can you tell me please, is it really hard to make international wire transfer for payment my job and can i resolve this problem without using third party services? This is mostly a barrier, the form at times is quite complicated. For Russia, one has to enter \"\"Purpose of remittance\"\" ... at times select intermediate banks, give BIC and other details. This can become unnerving to people who are not used to it. The other option you can try is set-up a credit card gateway and get funds via cards.\"",
"title": ""
},
{
"docid": "e30c604e463c55058ea91f5d191ce154",
"text": "Transfer of Millions of USD in and out is not possible for Individuals. There are limits on how much money an individual Indian Ordinary Citizen can send or receive. If an corporate wants to send money, depending on the services offered, they would have to initiate a SWIFT transaction. It typically takes 2-3 days for settlement of International wire.",
"title": ""
},
{
"docid": "94b2fd12e0f23935c4f35f3d4f8cfcee",
"text": "I phoned Tangerine; they enlightened me. It generally takes 2 hours for the email to arrive. Next, the recipient must open the email, click the link, and enter their bank account number. They'll generally receive the money 2-3 business days after that. This forum post suggests that the delays are due to systemic risk management, tendering, and clearing.",
"title": ""
}
] |
fiqa
|
a7f1086b0c94b52fc3d967748dcd07c4
|
Do companies that get taken-over have to honour the old gift card/certificate?
|
[
{
"docid": "3a78bb55ecfe2fb430be31b6985c68b4",
"text": "It depends completely on the nature of the takeover. When a business is bought, the new owner takes on the obligations of the prior owner, the debts don't just go away. When a business files for bankruptcy, its debts may get discharged, and gift card holders can easily be the first ones to get nothing back. A case in point was Sharper Image who stopped honoring gift cards even while the doors were open as they filed for bankruptcy.",
"title": ""
},
{
"docid": "9e3871bf398dd6ea9e573b13ebb1319c",
"text": "I know this is old, but Joe Taxpayer is wrong. When you dissolve a corporation in selling it, all liabilities go with the old owners and the new owners, smartly starting with a new corporation and taxpayer ID, start with a clean slate. The only way this is not true is if the new owners did not change a thing legally and kept everything the same, other than there names, which would be entirely insane if you asked any lawyer in the country. Gift cards are a touchy situation, if not negotiated in the deal, by law the new owners DO NOT have to take them. Yes, it's good PR, but when there's a considerable amount of money out there it could bury the new owners by giving away free stuff.",
"title": ""
}
] |
[
{
"docid": "67671d949d47e992245884da2f90c06b",
"text": "The NY company's board of directors are your agents and fiduciaries. I'll call them your agents below. The acquiring company entered into some contract that your agents negotiated. Whatever the acquiring company owes you in terms of money, equity, or specific communication is based on what your agents dealt for in the sale contract. Best ask your agents what they got for you.",
"title": ""
},
{
"docid": "cd5a5805c50b110f2775b8b4850f1a38",
"text": "5.) Target allowed the use of the coupons for gift certificates, negating the profit they would have made themselves. The customers did not create this situation. Target also renewed the coupon system with full knowledge of the circumstances. Corporate systems are hardly capable of knowledgeably allowing injury they can prevent.",
"title": ""
},
{
"docid": "d18beb46cb0338a631f4fa4b4b77fcea",
"text": "My understanding it that the signature requirement is at the retailer's discretion. If the merchant decides to require a signature it protects them against fraudulent charge-back claims, but increases their administrative costs. In some situations it just isn't practical for a retailer to require a signature. Consider for example mail-order or online purchases, which I've never had to sign a credit card slip for.",
"title": ""
},
{
"docid": "7e5fe8aaa425cd08ca576a07c27c3f16",
"text": "You'd have to consult a lawyer in the state that the transaction took place to get a definitive answer. And also provide the details of the contract or settlement agreement. That said, if you clearly presented the check as payment (verbally or otherwise) and they accepted and cashed the check, and it cleared, you should have good legal standing to force them to finalize the payment. While they had every right to refuse the payment, and also every right to place a hold on the credit until the transaction cleared their bank, they don't have the right to simply claim the payment as a gift just because it came in a different form than they specified in the contract. Obviously this is a lesson learned on reading the fine print though. And, to be frank, it sounds like someone wants to make life difficult for you for whatever reason. And if that is the case I would refer back to my initial comment about contacting a lawyer in that state.",
"title": ""
},
{
"docid": "43e8c95da1e279bf671b0131e76f83ba",
"text": "Good question. I have no idea what legal recourse they have to reverse gift and credit card purchases. Cash people are probably safe. Like I said, it's unlikely they will do anything, but I would not be holding on to gift cards purchased via gift cards if it was my money on the line.",
"title": ""
},
{
"docid": "63cb75611375746f06571c1a15539d58",
"text": "\"I can't give you proper legal advice, but if I called their customer service and used half an hour of my time to wait and explain the situation in detail, and their official response was \"\"just use the points,\"\" I would do just that. Of course you would have stronger legal standing if you had recorded their answer, or had it in writing from them. But I don't think spending these points will come crashing down on you. And morally I see absolutely no problem with spending these points; it is not as if you are stealing from someone else. These points can usually be given away in any kind of crazy manner. Sometimes there are lotteries or events where they give away 100,000 points for new customers who open up an account on a specific weekend. Sometimes they give points to customers who want to terminate their contracts as an attempt to coax them into staying. They have given you a lot of points and don't really care. As a result you are probably staying their customer forever – and will most likely tell this story to many friends. This is free advertising for them. Heck, maybe they would even make a news story out of this some day, it could be good publicity. Everyone is essentially getting these points \"\"for free\"\" but in fact the company has a business case by improving their image and customer retention with these points. So you can spend these points with a sound mind morally. Legally you would have to contact a lawyer, but I think chances for legal repercussions are small if you have done your duty, informed them and their customer service basically said it's ok.\"",
"title": ""
},
{
"docid": "05a2f8e0a28b65ca24ec68ecb84e114d",
"text": "The way I have seen this done in the past is the business will withhold taxes on the amount of the gift. Very much like receiving a bonus. There are probably other ways to do it where taxes are avoided like you boss could buy the gift for you personally. Not sure about all the legal ways to avoid taxes on this.",
"title": ""
},
{
"docid": "c4fe313697ab1f1eda3dfb44d0d27106",
"text": "Yes. Instead of paying a cash dividend to shareholders, the company grants existing shareholders new shares at a previously determined price. I'm sorry, but scrip issues are free (for all ordinary shareholders) and are in proportion to existing share holding. No payment is required from shareholders. So instead of having 10 $1 shares, the shareholder (if accepts) now could have 20 50p shares, if it was a one-for-one scrip issue.",
"title": ""
},
{
"docid": "fc9e6fa705358329c493d5f29d33399b",
"text": "\"Why would you consider it null and void? It might be that something went wrong and the business \"\"lost\"\" the transaction one way or another. It might be something else. It might never appear. It might appear. In one of the questions a while ago someone posted a link of a story where an account was overdrawn because of a forgotten debit card charge that resurfaced months later. Can't find the link right now, but it can definitely happen.\"",
"title": ""
},
{
"docid": "b8843fe9bca74bcb7d197cc97362eaae",
"text": "I found a german article describing the legal situation in Germany. To summarize As outlined by the many possible reasons in the other answer, it is unclear from the information I have, whether condition 1 holds. Also condition 2 may not hold since the credit card was frozen. I suppose this makes a good argument to MasterCard and my bank, but I also suspect they will not care unless it comes with a attorney letterhead.",
"title": ""
},
{
"docid": "0f09a405c8242b6ac42a50f5bbd2bd20",
"text": "\"Getting \"\"physical stocks\"\" will in most cases only be for the \"\"fun of it\"\". Most stocks nowadays are registered electronically and thus the physical stock will be of no value - it will just be a certificate saying that you own X amount of shares in company X; but this information is at the same time registered electronically. Stocks are not like bearer bonds, the certificate itself contains no value and is registered to each individual/entity. Because the paper itself is worthless, stealing it will not affect your amount of stock with the company. This is true for most stocks - there may exist companies who live in the 70s and do not keep track of their stock electronically, but I suspect it will only be very few (and most likely very small and illiquid companies).\"",
"title": ""
},
{
"docid": "b6d8ecadbd9030bfa54936e96161faef",
"text": "Question 1: Who do I report such fraud to? Walmart, or their card processor. They may be in their right to require the original purchaser to do the report. Generally, credit card and debit card fraud must be reported to the bank within 60 days of the statement for them to take responsibility. I don't see why gift cards would be different. You can also report it to the police, but I believe you'll be asked to file a report in the jurisdiction where the card was used. Again - time is of the essence, and there's nothing much they could do with your report now. Question 2: How can I recover the $100 value of my Walmart gift card? At this point, 2.5 years later when the card was used to buy prepaid cards, there's no way to catch the thief and recover the funds. Had you reported it promptly, Wlamart could have block the prepaid cards sold or track their usage, but now is too late. Question 3: Is Citibank in any way liable? (The gift card was fraudulently used shortly after---within the same month---I received it from Citibank.) I doubt it unless you can show a pattern. It could be someone working for the Citibank, someone working for the USPS, or someone just stole a bunch of numbers and waited until they became activated.",
"title": ""
},
{
"docid": "c3c2aed57ee5fbf0d1db32a4a7e0c190",
"text": "They cannot refuse to accept coins and demand some other payment after providing a good or service. Legal tender is legal tender for all debts. But until they provide the good or service, they don't have to accept it. In this case, you want the service of depositing money. But by its nature, they have to accept the payment first. In that situation, they can refuse it. There is no law that banks have to accept your deposits. If they don't want you as a customer, that's their problem. Consider switching banks. Historically this was easier and some banks may still do things the old way. Call your local banks and ask. Perhaps you'll find someone happy to do business with you, on your terms. As already said, some coin rolling machines will pay you with gift certificates. If you plan to buy a sufficient amount from the place that accepts the gift certificate, this can get that place to play the fee. That may help you, although it is obviously a limited solution. The goal is to make it so that you only make purchases that you would have anyway. The seller obviously has a different goal. It's possible to buy coin sorters. Heck, you could buy one with a gift certificate from a public machine. Cheap ones require extra work to get the coins rolled and may jam a lot. More expensive ones do more of the work for you. Note that a given sorter that works better may be cheaper than another that doesn't work as well. Cheap is more of a qualitative judgment than a financial measure in this case. If you carry a small amount of change with you, pretty much everywhere accepts small amounts of change for purchases. So if you have been always paying with dollars and dumping the change in a jar, instead always give the correct change (coins). They may still give you dollars in change, but at least you won't get new coins. And you'll use some of your existing coins. Of course, this doesn't scale well. For small purchases, say $1.50, you can often pay the whole thing in change without argument. Or if something is $18.50, you might give them $10, $5, two $1 bills, and the rest in change. If you are buying something and can see that they have little change in one of the coin buckets, offer to swap some change for bills. Sometimes places find that easier than breaking a roll. With vending machines, use change instead of dollar bills. Especially use exact change so as not to convert bills to change. They usually don't take pennies, but they're great with nickels and above. This won't allow you to use change as a way to force yourself to save. But it will keep your change down to a manageable level going forward. And you might be able to use up your existing store. I'm assuming that this isn't a fifty year coin collection that you are just now starting to process. But if you have six months of change, you should be able to use it up in a year or so. I tend to do this. So I rarely have more than a couple dollars in change. No one ever tells me that they don't take change, because I don't give anyone a lot. Maybe $.99 here but more likely $.43 there. Sometimes I give them, e.g., $.07 so as to get $.25 in change rather than $.18. It's a little more work at every transaction, but it saves the big clump of work of rolling the coins. And you don't have to buy wrappers.",
"title": ""
},
{
"docid": "41a06545fc835b047c6d7573dbab219c",
"text": "\"So this situation is fraud. -SumGuy: \"\"Hey Mr. Target employee can I use this to buy this.\"\" -Employee: \"\"Abso-fucking-lutely Sir\"\". The responsibility lies on the store, not the customer in this situation. Terms of service on things like coupons are not LAWS, they are terms a company is telling you they will accept. For this Company to then accept it makes these people a few bucks richer, not criminals. The customers did not lie or hide what they where doing, and the company accepted it. Good on em I say.\"",
"title": ""
},
{
"docid": "b96288340f7a74edaf5cd6401bbece0e",
"text": "All of this assumes that this relationship isn't as employer-employee relationship, which would require you to withhold taxes. If you send them a small token of appreciation, and you are unable to record it as a business expense, or some other deductible expense, you don't have to be concerned about how they claim it. They decide if they want to risk claiming it was a gift, or if they want to record it as an expense. Even if you say some magic phrase that you think will impress the IRS, the recipient can still decide declare it as income. To have any hope of being able to treat it as a gift they would have to be able to demonstrate that there is a non-business relationship. If you can claim it as a business expense, or a deductible expense, they will have to also claim it as income; because your documentation could point the IRS to their lack of documentation. Giving them a check or sending the payment electronically will require them to claim it as an income, since an audit could require them to explain every line on their bank statements.",
"title": ""
}
] |
fiqa
|
e0da94234e6bdc07c995fd5ae340c2e7
|
Federal taxes for nonresident alien whose only income in 2016 was a 2015 state tax return
|
[
{
"docid": "819197acdc0e88afc44350dcccd999eb",
"text": "\"I believe you have to file a tax return, because state tax refund is considered income effectively connected with US trade or business, and the 1040NR instructions section \"\"Who Must File\"\" includes people who were engaged in trade or business in the US and had a gross income. You won't end up having to pay any taxes as the income is less than your personal exemption of $4050.\"",
"title": ""
}
] |
[
{
"docid": "71895907b50a404d9be614264fbc3feb",
"text": "I did the reverse several years ago, moving from NH to MA. You will need to file Form 1-NR/PY for 2017, reporting MA income as a part-year residence. I assume you will need to report the April capital gain on your MA tax return, as you incurred the gain while a MA resident. (I am not a lawyer or tax professional, so I don't want to state anything about this as a fact, but I would be very surprised if moving after you incurred the gain would have any affect on where you report it.)",
"title": ""
},
{
"docid": "4d8e6721496b0d8ad288f2a00eb81a13",
"text": "It matters because that is the requirement for the 83(b) selection to be valid. Since the context is 83(b) election, I assume you got stocks/options as compensation and didn't pay for them the FMV, thus it should have been included in your income for that year. If you didn't include the election letter - I can only guess that you also didn't include the income. Hence - you lost your election. If you did include the income and paid the tax accordingly, or if no tax was due (you actually paid the FMV), you may try amending the return and attaching the letter, but I'd suggest talking to a professional before doing it on your own. Make sure to keep a proof (USPS certified mailing receipt) of mailing the letter within the 30 days window.",
"title": ""
},
{
"docid": "44f7f02ebc9b4bba410c9a805b9ed00d",
"text": "\"If you have income - it should appear on your tax return. If you are a non-resident, that would be 1040NR, with the eBay income appearing on line 21. Since this is unrelated to your studies, this income will not be covered by the tax treaties for most countries, and you'll pay full taxes on it. Keep in mind that the IRS may decide that you're actually having a business, in which case you'll be required to attach Schedule C to your tax return and maybe pay additional taxes (mainly self-employment). Also, the USCIS may decide that you're actually having a business, regardless of how the IRS sees it, in which case you may have issues with your green card. For low income from occasional sales, you shouldn't have any issues. But if it is something systematic that you spend significant time on and earn significant amounts of money - you may get into trouble. What's \"\"systematic\"\" and how much is \"\"significant\"\" is up to a lawyer to tell you.\"",
"title": ""
},
{
"docid": "85794d485be3d23157e21a9378a3e00f",
"text": "To start with, I should mention that many tax preparation companies will give you any number of free consultations on tax issues — they will only charge you if you use their services to file a tax form, such as an amended return. I know that H&R Block has international tax specialists who are familiar with the issues facing F-1 students, so they might be the right people to talk about your specific situation. According to TurboTax support, you should prepare a completely new 1040NR, then submit that with a 1040X. GWU’s tax department says you can submit late 8843, so you should probably do that if you need to claim non-resident status for tax purposes.",
"title": ""
},
{
"docid": "afe19c20847f0e7a9a756d6cabf039b6",
"text": "Having a large state return also means that there is a potential income tax liability created at the federal level for the following year, as the situation resulted from the deduction of more on one's federal return than should have been deducted. The state refund is treated as federal income in the year it is refunded. http://blog.turbotax.intuit.com/tax-tips/is-my-state-tax-refund-taxable-and-why-90/",
"title": ""
},
{
"docid": "58fd1222e8565395bee7290f7a71a3e3",
"text": "\"In the U.S., Form 1040 is known as the tax return. This is the form that is filed annually to calculate your tax due for the year, and you either claim a refund if you have overpaid your taxes or send in a payment if you have underpaid. The form is generally due on April 15 each year, but this year the due date is April 18, 2016. When it comes to filing your taxes, there are two questions you need to ask yourself: \"\"Am I required to file?\"\" and \"\"Should I file?\"\" Am I required to file? The 1040 instructions has a section called \"\"Do I have to file?\"\" with several charts that determine if you are legally required to file. It depends on your status and your gross income. If you are single, under 65, and not a dependent on someone else's return, you are not required to file if your 2015 income was less than $10,300. If you will be claimed as a dependent on someone else's return, however, you must file if your earned income (from work) was over $6300, or your unearned income (from investments) was over $1050, or your gross (total) income was more than the larger of either $1050 or your earned income + $350. See the instructions for more details. Should I file? Even if you find that you are not required to file, it may be beneficial to you to file anyway. There are two main reasons you might do this: If you have had income where tax has been taken out, you may have overpaid the tax. Filing the tax return will allow you to get a refund of the amount that you overpaid. As a student, you may be eligible for student tax credits that can get you a refund even if you did not pay any tax during the year. How to file For low income tax payers, the IRS has a program called Free File that provides free filing software options.\"",
"title": ""
},
{
"docid": "f606e46f617b6ebdb7a16cbc4008215d",
"text": "\"First you must understand your Marginal Tax Rate (Tax Bracket) The exemptions you claim are like saying to your employer \"\"tax me on $4050 less, or more\"\" for each change up or down of 1 exemption. Say you look at the table (2016 tables at my main site) and see you are in the 15% bracket. And your refund is $2000. 2000/.15 is $13,333. So you want that $13K to not be taxed. Raising exemptions by 3 (3x4050 = 12,150) will get you close. $1822 closer to your goal. For what it's worth, you can read through the instructions for the W4, of course. But this answer skips through the details and gets you to your goal. One point to note, since the exemption is in whole numbers, and $4050 is it, you will get close, +/- $608 if in the 15% bracket, but to get dead on, you'd need a mid year adjustment. Not worth it. A refund of under $608 should be enough for a 15%er. ($1012 for a 25%er) If you ready want to nail the taxes to a closer accuracy, you can use the line requesting additional dollars be withheld. Most W4 discussions miss this point. The exact number withheld by your employer comes from an IRS document known as Circular E, but retrieved as Publication 15. It will help you confirm the validity of my dirty shortcut method. What I do recommend is that you use a quick online tax calculator to do a dry run of you return, early in the year. If you see your withholding is off in either direction, best to adjust as soon as possible. (The numbers here now reflect 2016's $4050 exemption, recent question on Money.SE have linked to this one, prompting me to update for 2016)\"",
"title": ""
},
{
"docid": "2c3f715ad21d7342bb9dcc0b681bad51",
"text": "\"As ApplePie discusses, \"\"tax bracket\"\" without any modifiers refers to a single jurisdiction's marginal tax rate. In your case, this is either your California's \"\"tax bracket\"\" or your Federal \"\"tax bracket\"\" (not including marginal Social Security and Medicare taxes). But if someone says \"\"combined state and federal tax bracket\"\", they probably mean the combination of your state and federal income tax brackets (again, lot including sales taxes, business and occupational taxes, social security taxes, and medicare taxes). The math to combine the state and federal marginal tax rates is a bit tricky, because most people can deduct either their state and local income taxes, or their state and local general sales taxes when computing their income for federal income tax purposes. (The federal \"\"alternative minimum tax\"\" restricts this deduction for some people.) For a single person earning $ 100,000 of salaries and wages in California, whose state income taxes are close to their standard deduction, the calculations for the combined marginal income tax rate look something like this: As mentioned above, this understates the tax bite on marginal \"\"earned income\"\". To find the true marginal rate, we need to add in Social Security taxes, Medicare taxes, sales taxes, and business & occupation taxes. The Social Security and Medicare taxes are sometimes called \"\"self employment taxes\"\". This math omits unemployment insurance and workers' compensation insurance, because those taxes are typically capped well below $ 100,000 per year of income. This math also omits B & O taxes, because this question is California specific. If an employer wishes to increase an employee's pay by $ 1,076.50, the first $ 76.50 will go to the employer's share of Social Security and Medicare taxes. The remaining $ 1,000.00 will be subject to the combined marginal income tax rate discussed above, plus will have $ 76.50 go to the employee's share of Social Security and Medicare taxes. The employee might buy some extra things with some of their extra money, and pay sales tax on them. In 2016, a 9 % sales tax rate was common in California's largest cities. The IRS estimated that (for a single person with no dependents making $ 100,000 per year who did not buy a boat, RV, motor vehicle, or major home construction), about 9 % of their marginal gross income was subject to sales tax.\"",
"title": ""
},
{
"docid": "2d85c285b00fc847c24726b4047723ea",
"text": "This is a common occurrence, I know people who moved and then only remember the next spring during tax season that they never filed a new state version of a W-4. Which means for 3 or 4 months in the new year money is sent to the wrong state capital, and way too much was sent the previous year. In the spring of 2016 you should have filed a non-resident tax form with Michigan. On that form you would specify your total income numbers, your Michigan income numbers, and your other-state income numbers; with Michigan + other equal to total. That should have resulted in getting all the state taxes that were sent to Michigan returned. It is possible that the online software is unable to complete the non-resident tax form. Not all forms and situations can be addressed by the software. So you may need to fill out paper forms. You should be able to find what you need on the state of Michigan website for 2015 Taxes. A quick read shows that you will probably need the Michigan 1040, schedule 1 and Schedule NR You may run into an issue if your license, car registration, voter registration, and other documentation point to you being a resident for the part of the year you earned that income. That means you will have to submit Form 3799 Statement to Determine State of Domicile You want to do this soon because there are deadlines that limit how far back you can files taxes. The state may also get tax information from the IRS and could decide that all your income from 2015 should have applied to them, so they will be sending you a tax bill plus penalties for failure to file.",
"title": ""
},
{
"docid": "f4f65d96de623386d5e4864d46eaf2ed",
"text": "\"You are on the right track, for tax purposes its all ordinary income at the end of 2016. If the free lance \"\"employer\"\" will withhold fed,state and local tax, then that takes care of your estimated tax. If they can't or won't, you will need to make those estimates and make payments quarterly for the fed and state tax at your projected tax liability. Or, you can bump up withholding by your day job employer and cover your expected tax liability at year end without making estimated tax payments.\"",
"title": ""
},
{
"docid": "0f012c327a053717409f2d055434bc7a",
"text": "Basically, it will depend on the documents your employer gives you. If your employer gives you a 2015 W-2 then you would claim it as income on your 2015 taxes. If the first W-2 they give you is for 2016, then you claim it on your 2016 taxes.",
"title": ""
},
{
"docid": "c14d942d1cffc6f843d1aefbbc04b1f5",
"text": "\"1099's and other official tax forms are often reported to the IRS by the issuer, whether or not you include a copy in your return. You should not neglect to include this income in your 2016 return in an attempt to balance out the two tax years. It's up to you whether or not you feel like filing an amended 2015 return to recover over-payment of taxes from that tax year. You have up to three years to amend tax returns using form 1040X. Since you couldn't have furnished a 1099 for this when you filed your 2015 return (otherwise you wouldn't be in receipt of it for tax year 2016), I'm assuming you reported it simply as \"\"Other Income\"\" and therefore would have been [over] taxed your marginal rate on it. From irs.gov: When to amend a return. You should file an amended return if you need to correct your filing status, number of dependents, total income, tax deductions or tax credits. The instructions for Form 1040X, Amended U.S. Individual Income Tax Return, list additional reasons to amend a return.\"",
"title": ""
},
{
"docid": "b17812fbcc51ba2eaa7f18c455796b30",
"text": "Should I have a W-2 re-issued? A W-2 can be corrected and a new copy will be filed with the IRS if your employer incorrectly reported your income and withholding on a W-2 that they issued. In this case, though the employer didn't withhold those taxes, they should not reissue the W-2 unless they plan to pay your portion of the payroll taxes that were not withheld. (If they paid your share of the taxes, that would increase your gross income.) Who pays for the FICA I should have paid last year? Both you and your employer owe 7.65% each for FICA taxes. By law your employer is required to pay their half and you are required to pay your half. Both you and your employer owe additional taxes because of this mistake. Your other questions assume that your employer will pay your portion of the taxes withheld. You employer could decide to do that, but this also assumes that it was your employer's fault that the mistakes were made. If you transitioned to resident alien but did not inform your employer, how is that your employer's fault?",
"title": ""
},
{
"docid": "28d7f93ee7c7ab730f251aa41b95bf28",
"text": "\"If you are a permanent resident (and it wasn't taken away or abandoned), then you are a resident alien for U.S. tax purposes. (One of the two tests for being a resident alien is the \"\"green card test\"\".) Being a resident alien means all your worldwide income is subject to U.S. taxes, regardless of where you live or work. That doesn't necessarily mean you need to actually pay taxes on your income again if you've already paid it -- you may be able to use the Foreign Tax Credit to reduce your taxes by the amount already paid to a foreign government -- but you need to report it on U.S. tax forms just like income from the U.S., and you can then apply any tax credits that you may qualify for. As a resident alien, you file taxes using Form 1040. You are required to file taxes if your income for a particular year is above a certain threshold. This threshold is described in the first few pages of the 1040 instructions for each year. For 2013, for Single filing status under 65, it is $10000. The only way you can legally not file is if your income the whole year was below this amount. You should go back and file taxes if you were required to but failed to. Having filed taxes when required is very important if you want to naturalize later on. It is also one component of demonstrating you're maintaining residency in the U.S., which you're required to do as a permanent resident being outside the U.S. for a long time, or else you'll lose your permanent residency. (Even filing taxes might not be enough, as your description of your presence in the U.S. shows you only go there for brief periods each year, not really living there. You're lucky you haven't lost your green card already; any time you go there you run a great risk of them noticing and taking it away.)\"",
"title": ""
},
{
"docid": "de65a195799a90cbf017660532c71024",
"text": "Multistate Impact of the American Taxpayer Relief Act of 2012 In general, states with rolling conformity will follow this change. States with specific date conformity will continue to follow the date of conformity currently in effect and will not follow the change. A few states may have their own QSBS rules and will not conform to or be impacted by this provision of the Act. The chart that follows summarizes these principles as applied to the enumerated states: STATE: QSBS Exclusion Conformity: California statutes refer to the IRC QSBS provisions but modify and limit their applicability, and would not be impacted by this provision of the Act. However, California’s provisions were ruled unconstitutional in recent litigation and the California Franchise Tax Board has recently taken the position that gain exclusions and deferrals will be denied for all open tax years. Florida Florida does not impose an income tax on individuals and therefore this provision of the Act is inapplicable and will have no impact. Illinois Due to its rolling conformity, Illinois follows this provision of the Act. Because New York effectively provides for rolling conformity to the IRC, through reference to federal adjusted gross income as the state starting point, New York effectively follows this provision of the Act. Texas does not impose an income tax on individuals",
"title": ""
}
] |
fiqa
|
7f91cc8420f5d069dc599edf997dc969
|
Cash-basis accounting and barter
|
[
{
"docid": "e2e8a2005ee6a4a2493d39a3913215c3",
"text": "If you don't track the accrued costs involved, then it means that the valuation of the deal will be somewhat arbitrary, but it still can be made by looking at the value of equivalent or similar goods or services. It's rather similar to accounting treatment of (noncash) gifts, for example. You make up a valuation, and as there are obvious tax reasons to make it as low as possible, the valuation should be justifiable or you risk the wrath of IRS. If you sell the same goods or services for cash, then the value of the barter deal is obvious. If this barter is the only time you're handling this particular type of goods, a wholesale price of similar items (either of your items, or the items that you're receiving in barter) could work.",
"title": ""
}
] |
[
{
"docid": "c7a0db3a6ebee00e142ce84292f72158",
"text": "There are two basic issues here. First, there is the difference between accounting terms and their dictionary definitions. Second, once you dig into it there are dichotomies similar to put vs call options, long sales vs short sales, bond yield vs interest rate. (That is, while they are relatively simple ideas and opposite sides of the same coin, it will probably take some effort to get comfortable with them.) The salient points from the Wikipedia article on debits and credits: In double-entry bookkeeping debit is used for increases in asset and expense transactions and credit is used for increases in a liability, income (gain) or equity transaction. For bank transactions, money deposited in a checking account is treated as a credit transaction (increase) and money paid out is treated as a debit transaction, because checking account balances are bank liabilities. If cash is deposited, the cash becomes a bank asset and is treated as a debit transaction (increase) to a bank asset account. Thus a cash deposit becomes two equal increases: a debit to cash on hand and a credit to a customer's checking account. Your bank account is an asset to you, but a liability to your bank. That makes for a third issue, namely perspective.",
"title": ""
},
{
"docid": "977c491090bccd98c5020fd2ef786445",
"text": "If you can live with managing the individual category amounts yourself, this is trivial. Just set up a spreadsheet listing each category (and a column for the total amount of money in the account), adding or subtracting as you deposit or withdraw money to the account. To the bank it will be just one (physical) account, but to you, it can be any number of (accounting asset) accounts. You can choose to keep a history, or not. It's all up to how complex you want to make it. It doesn't even have to be a spreadsheet - you can just as well do this on paper if you prefer that. But the computer makes it easier. I imagine most personal finance software will help you, too; I know GnuCash can be coaxed into doing this with only a bit of creativity, and it almost certainly isn't the only one. I do this myself and it works very well. I don't know but imagine that companies do it all the time: there is no reason why there must be a one-to-one relationship between bank accounts and accounting asset accounts, and in fact, doing so would probably quickly become impractical.",
"title": ""
},
{
"docid": "1757b028d75e69e0e93402a12b746d1b",
"text": "One way you can accomplish this is on a cruise ship. Most cruise ships have casinos, and most will allow you to sign out chips at the casino cage. You can then exchange the chips for cash. The chips that were signed for are resolved as room charges. Those room charges can be charged to a CC. Those signed for chips are rolled into the total room charges and are thus not treated as a cash advance. The cost of the cruise not with standing, you could earn money in that form. Step off the boat, deposit cash in the bank, and send a check to the CC company. All that being said, it is an cheap and safe way to get cash while you are traveling in that method.",
"title": ""
},
{
"docid": "a146caa7bf18a4dd8ca61d8e4b35c5ef",
"text": "There are four sides to this transaction. You increase in money: A debit. (increases your Current Assets, if you will) You also gain the requirement to pay that money in the future. A credit: Definitely a Liability. When you repay the money, your cash will decrease: a credit, and your liabilities will also decrease, which is a debit (since you don't have to repay the money anymore). the account would be short-term loans, the money doesn't have a name, it's just cash and would go into whatever cash accounts you have. The bookkeeping entry would be the same as you would make for any short-term loan.",
"title": ""
},
{
"docid": "16c971d462a23ed54ab3fe14c517f1e1",
"text": "It's so wonderful. Through the magic of fractional reserve banking, a bank the vast majority of the time is loaning out money they created from thin air. And if you don't pay the obligation, they get a yacht, personal jet, or racehorse in return! Now, of course having to repossess something might be undesirable in an accounting context, but it still beggars belief that basically the entire economy and money supply of the developed world is based on obligations backed by nothing, by private parties, created out of thin air.",
"title": ""
},
{
"docid": "bcd38157a511bc50fe008087a8d2c7d3",
"text": "\"According to this discussion, there was a Tax Court ruling that likened deductibility for charitable giving by credit card to business expenses incurred by businesses operating under cash-basis accounting. (The point is made by Larry Hess on that site.) Short answer: According to this argument, you can claim the deduction when the charge is incurred. You don't have to wait until you pay it back. (Again this is for cash basis.) Publication 538 states that \"\"under the cash method of accounting, you generally deduct business expenses in the tax year you pay them.\"\" I think the ruling above was meant to clarify when the expense is \"\"paid\"\". In my totally unofficial opinion, I suppose this makes sense. If I go to Office Depot to buy a box of envelopes, I walk out with the envelopes at the same time regardless of whether I paid cash or swiped a credit card. I wouldn't walk out thinking: \"\"HA! I haven't actually paid for these yet.\"\" If the shoplifting alarm went off at the door and I was asked if I had bought those, I'd say yes, right? If this doesn't convince you, you can always get professional tax advice.\"",
"title": ""
},
{
"docid": "3d718680b0cd151f64d4cb4d777842e0",
"text": "\"Oh, I understand now -- we're having an absurd, meaningless conversation about an obscure theoretical point. When you can tell me how you can determine a \"\"minimum cash\"\" level from a public company's filings, we can continue the discussion. Otherwise, make a simplifying assumption and move on. I misunderstood -- I thought we were actually trying to understand the difference between enterprise value and equity value / understand the implication of an enterprise value multiple.\"",
"title": ""
},
{
"docid": "0dde42cb2eb328499f4a02f6e692de0e",
"text": "You report each position separately. You do this on form 8949. 7 positions is nothing, it will take you 5 minutes. There's a tip on form 8949 that says this, though: For Part I (short term transactions): Note. You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 1a; you are not required to report these transactions on Form 8949 (see instructions). For Part II (long term transactions): Note. You may aggregate all long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 8a; you are not required to report these transactions on Form 8949 (see instructions). If the 1099B in your case shows basis for each transaction as reported to the IRS - you're in luck, and don't have to type them all in separately.",
"title": ""
},
{
"docid": "10d9f9670fe70075b14cc479478ba1a2",
"text": "No, GnuCash doesn't specifically provide a partner cash basis report/function. However, GnuCash reports are fairly easy to write. If the data was readily available in your accounts it shouldn't be too hard to create a cash basis report. The account setup is so flexible, you might actually be able to create accounts for each partner, and, using standard dual-entry accounting, always debit and credit these accounts so the actual cash basis of each partner is shown and updated with every transaction. I used GnuCash for many years to manage my personal finances and those of my business (sole proprietorship). It really shines for data integrity (I never lost data), customer management (decent UI for managing multiple clients and business partners) and customer invoice generation (they look pretty). I found the user interface ugly and cumbersome. GnuCash doesn't integrate cleanly with banks in the US. It's possible to import data, but the process is very clunky and error-prone. Apparently you can make bank transactions right from GnuCash if you live in Europe. Another very important limitation of GnuCash to be aware of: only one user at a time. Period. If this is important to you, don't use GnuCash. To really use GnuCash effectively, you probably have to be an actual accountant. I studied dual-entry accounting a bit while using GnuCash. Dual-entry accounting in GnuCash is a pain in the butt. Accurately recording certain types of transactions (like stock buys/sells) requires fiddling with complicated split transactions. I agree with Mariette: hire a pro.",
"title": ""
},
{
"docid": "60e096d50149b10d70b6d360eeb8e2f8",
"text": "This is in the balance sheet, but the info is not usually that detailed. It is safe to assume that at least some portion of the cash/cash equivalents will be in liquid bonds. You may find more specific details in the company SEC filings (annual reports etc).",
"title": ""
},
{
"docid": "b987480a00109e250c5865bd585c4a7f",
"text": "\"If you are considering this to be an entry for your business this is how you would handle it.... You said you were making a balance sheet for monthly expenses. So on the Balance Sheet, you would be debiting cash. For the Income Statement side you would be crediting Owner's Equity to balance the equation: Assets = Liabilities + Owner's Equity So if you deposited $100 to your account the equation would be affected thus: $ 100 in Assets (Debit to Cash Account) = 0 Liabilities - $100 (Credit to Owner's Equity) It is correctly stated above from the bank's perspective that they would be \"\"Crediting\"\" you account with $100, and any outflow from the bank account would be debiting your account.\"",
"title": ""
},
{
"docid": "2cd90409b08fcc132c07d7a7e6bf9286",
"text": "Bartering is a tricky discussion. Yes, it definitely applies when you are self-employed and do a job that you would charge anyone else for, but what if you are helping a friend in your spare time? If you receive something in exchange, the value of the item you received would be your income, but what if you don't receive anything in exchange? If the company bought a computer that they loan to you to do occasional work for them, there's no reason you couldn't take the computer home and have that company retain ownership of the property. They could still expense the depreciation of the computer without giving it to you. If it were a car though, you would have to count mileage for personal use as income. What if you exchange occasional tech support for the use of an empty desk and Internet connection? As long as they aren't renting desks for money to others, there's probably no additional marginal cost to them if they allow you to use the space, so the fair market value question breaks down.",
"title": ""
},
{
"docid": "fd5a609ff0af22f0dfe21f960324295d",
"text": "\"It seems like this was a \"\"stock for stock\"\" transaction. That is, your company was acquired, not for cash, but for the stock of Company X in a deal that your company's board of directors \"\"signed off\"\" on. Your company no longer exists, and that's why your stock was cancelled. The acquirer will be sending you an equivalent amount of stock in their Company, X. You don't need to worry about taxes, only accounting, because this is a \"\"non-cash\"\" transaction. What this means that your cost basis in the stock of Company X will be what you paid for the original company's stock (not its value on the day of the merger, which may be higher or lower than what you paid).\"",
"title": ""
},
{
"docid": "bf0540111a2051185227f72005547c32",
"text": "\"Generally if you are using FIFO (first in, first out) accounting, you will need to match the transactions based on the number of shares. In your example, at the beginning of day 6, you had two lots of shares, 100 @ 50 and 10 @ 52. On that day you sold 50 shares, and using FIFO, you sold 50 shares of the first lot. This leaves you with 50 @ 50 and 10 @ 52, and a taxable capital gain on the 50 shares you sold. Note that commissions incurred buying the shares increase your basis, and commissions incurred selling the shares decrease your proceeds. So if you spent $10 per trade, your basis on the 100 @ 50 lot was $5010, and the proceeds on your 50 @ 60 sale were $2990. In this example you sold half of the lot, so your basis for the sale was half of $5010 or $2505, so your capital gain is $2990 - 2505 = $485. The sales you describe are also \"\"wash sales\"\", in that you sold stock and bought back an equivalent stock within 30 days. Generally this is only relevant if one of the sales was at a loss but you will need to account for this in your code. You can look up the definition of wash sale, it starts to get complex. If you are writing code to handle this in any generic situation you will also have to handle stock splits, spin-offs, mergers, etc. which change the number of shares you own and their cost basis. I have implemented this myself and I have written about 25-30 custom routines, one for each kind of transaction that I've encountered. The structure of these deals is limited only by the imagination of investment bankers so I think it is impossible to write a single generic algorithm that handles them all, instead I have a framework that I update each quarter as new transactions occur.\"",
"title": ""
},
{
"docid": "6da3ec1ab9296aa05074dbbc608a1c5c",
"text": "\"Exactly what accounts are affected by any given transaction is not a fixed thing. Just for example, in a simple accounting system you might have one account for \"\"stock on hand\"\". In a more complex system you might have this broken out into many accounts for different types of stock, stock in different locations, etc. So I can only suggest example specific accounts. But account type -- asset, liability, capital (or \"\"equity\"\"), income, expense -- should be universal. Debit and credit rules should be universal. 1: Sold product on account: You say it cost you $500 to produce. You don't say the selling price, but let's say it's, oh, $700. Credit (decrease) Asset \"\"Stock on hand\"\" by $500. Debit (increase) Asset \"\"Accounts receivable\"\" by $700. Credit (increase) Income \"\"Sales\"\" by $700. Debit (increase) Expense \"\"Cost of goods sold\"\" by $500. 2: $1000 spent on wedding party by friend I'm not sure how your friend's expenses affect your accounts. Are you asking how he would record this expense? Did you pay it for him? Are you expecting him to pay you back? Did he pay with cash, check, a credit card, bought on credit? I just don't know what's happening here. But just for example, if you're asking how your friend would record this in his own records, and if he paid by check: Credit (decrease) Asset \"\"checking account\"\" by $1000. Debit (increase) Expense \"\"wedding expenses\"\" by $1000. If he paid with a credit card: Credit (increase) Liability \"\"credit card\"\" by $1000. Debit (increase) Expense \"\"wedding expenses\"\" by $1000. When he pays off the credit card: Debit (decrease) Liability \"\"credit card\"\" by $1000. Credit (decrease) Asset \"\"cash\"\" by $1000. (Or more realistically, there are other expenses on the credit card and the amount would be higher.) 3: Issue $3000 in stock to partner company I'm a little shakier on this, I haven't worked with the stock side of accounting. But here's my best stab: Well, did you get anything in return? Like did they pay you for the stock? I wouldn't think you would just give someone stock as a present. If they paid you cash for the stock: Debit (increase) Asset \"\"cash\"\". Credit (decrease) Capital \"\"shareholder equity\"\". Anyone else want to chime in on that one, I'm a little shaky there. Here, let me give you the general rules. My boss years ago described it to me this way: You only need to know three things to understand double-entry accounting: 1: There are five types of accounts: Assets: anything you have that has value, like cash, buildings, equipment, and merchandise. Includes things you may not actually have in your hands but that are rightly yours, like money people owe you but haven't yet paid. Liabilities: Anything you owe to someone else. Debts, merchandise paid for but not yet delivered, and taxes due. Capital (some call it \"\"capital\"\", others call it \"\"equity\"\"): The difference between Assets and Liabilities. The owners investment in the company, retained earnings, etc. Income: Money coming in, the biggest being sales. Expenses: Money going out, like salaries to employees, cost of purchasing merchandise for resale, rent, electric bill, taxes, etc. Okay, that's a big \"\"one thing\"\". 2: Every transaction must update two or more accounts. Each update is either a \"\"debit\"\" or a \"\"credit\"\". The total of the debits must equal the total of the credits. 3: A dollar bill in your pocket is a debit. With a little thought (okay, sometimes a lot of thought) you can figure out everything else from there.\"",
"title": ""
}
] |
fiqa
|
44d497047792dbc1e14fac6511176b06
|
What is a trade exchange and are they reputable or not?
|
[
{
"docid": "40360b49e289a7118e858513501b2fb8",
"text": "I think this is off topic, but here is a stab: So these are cashless. It could be a way to smooth out the harsh reality of capitalism (I overproduced my product, I have more capacity than I can sell) and I can trade those good to other capitalists who similarly poorly planned production or capacity. Therefore the market for a system like is limited to businesses that do not plan well. Business that plan production or capacity to levels they can already sell for cash do not need a private system to offload goods. Alternatives to such a system include: (I don't know how many businesses are really in this over production / over capacity state. If my assumption that it isn't many is wrong, my answer is garbage.) This is a bartering system with a brokerage. I think we have historically found that common currencies create more trade and economic activity because the value of the note in your pocket, which is the same type of note in my pocket, is common and understood. Exchange rates typically slow down trade. (There are many other reasons to have different currency or notes on a global sale, but the exchange certainly is a hurdle to clear.) This brokerage is essentially adding a new currency (in a grand metaphor). And that new currency is only spendable on their brokerage, which is of limited use to society as a whole, assuming that society as a whole isn't a participating member of that brokerage. I can't really think of why this type of exchange is better than the current system we have now. I wouldn't invest in this as a business, or invest in this as a person looking for opportunity.",
"title": ""
}
] |
[
{
"docid": "0c2c9c130645d49832b4a83c7a1b772d",
"text": "I don't know if vanilla beans are traded on any organized exchange, and if they are, it's probably extremely obscure and very hard to access without having both of a lot of money and in-country connections. Edit: no, they're not. So there is no real way to short them. https://www.ft.com/content/e0e2fc16-28db-11e7-bc4b-5528796fe35c?mhq5j=e2",
"title": ""
},
{
"docid": "1bc83aba8d1e3c106be922149a80c466",
"text": "This guy is literally proposing a bucket shop. Trades against customers and copy their trades. No centralized clearing (it's not executing trades at all). And he thinks these are good things that customers should get him for. Scam. And a very old one at that.",
"title": ""
},
{
"docid": "a1f971e5df4506e6bc1077d7753c9161",
"text": "\"No, I'm sorry, but the fact that exchanges allow \"\"pay to play\"\" privelege to scalp orders is fairly well established at this time. It's skirts law simply because the exchanges don't profit *directly* from it. I understand that folks are upset that SEC is looking into turning off this free money faucet, but harranguing Katsayuma for opening a fair exchange that shuns the practice is a point of contention for me.\"",
"title": ""
},
{
"docid": "ce47a05f533def8a477949d494e2707e",
"text": "Have you looked at OptionsHouse? They charge $2.95 per trade and are one of the lowest when it comes to fees. Bare bones interface, but fast execution.",
"title": ""
},
{
"docid": "728e392d990ee0646c3ba5fc4c399afe",
"text": "\"You might consider learning how the \"\"matching\"\" or \"\"pairing\"\" system in the market operates. The actual exchange only happens when both a buyer and a seller overlap their respect quotes. Sometimes orders \"\"go to market\"\" for a particular volume. Eg get me 10,000 Microsoft shares now. which means that the price starts at the current lowest seller, and works up the price list until the volume is met. Like all market it trades, it has it's advantages, and it's dangers. If you are confident Microsoft is going to bull, you want those shares now, confident you'll recoup the cost. Where if you put in a priced order, you might get only none or some shares. Same as when you sell. If you see the price (which is the price of the last completed \"\"successful\"\" trade. and think \"\"I'm going to sell 1000 shares\"\". then you give the order to the market (or broker), and then the same as what happened as before. the highest bidder gets as much as they asked for, if there's still shares left over, they go to the next bidder, and so on down the price... and the last completed \"\"successful\"\" trade is when your last sale is made at the lowest price of your batch. If you're selling, and selling 100,000 shares. And the highest bidder wants 1,000,000 shares you'll only see the price drop to that guys bid. Why will it drop (off the quoted price?). Because the quoted price is the LAST sale, clearly if there's someone still with an open bid on the market...then either he wants more shares than were available (the price stays same), or his bid wasn't as high as the last bid (so when you sale goes through, it will be at the price he's offering). Which is why being able to see the price queues is important on large traders. It is also why it can be important put stops and limits on your trades, een through you can still get gapped if you're unlucky. However putting prices (\"\"Open Orders\"\" vs \"\"(at)Market Orders\"\") can mean that you're sitting there waiting for a bounce/spike while the action is all going on without you). safer but not as much gain (maybe ;) ) that's the excitement of the market, for every option there's advantages...and risks... (eg missing out) There are also issues with stock movement, shadowing, and stop hunting, which can influence the price. But the stuff in the long paragraphs is the technical reasons.\"",
"title": ""
},
{
"docid": "aa201189bdfec5bd9d4e1380f29f863d",
"text": "Most investors vote with their wallets. I expect ZERO glitches from a trading platform. If someone was actually causing trades to fail maliciously, their reputation would immediately suffer and their business would dry up over night. You can't just play dumb and not respond to a button click. I can watch and replay the traffic I'm sending out to their server and see if they are responding to verify this. If their system goes down and has no redundancy, that is their fault and opens them to lawsuits. No trading platform could withstand scrutiny from its users if it was dishonest in the scenario you imagine.",
"title": ""
},
{
"docid": "746fadc47e6606d3a1730a15c59391f2",
"text": "I just finished a high frequency trading project. Individuals can do it, but you need a lot of capital. You can get a managed server in Times Square for $1500/month, giving you access to 90% of the US exchanges that matter, their data farms are within 3 milliseconds of distance (latency). You can also get more servers in the same building as the exchanges, if you know where to look ;) thats all I can divulge good luck",
"title": ""
},
{
"docid": "b20c6a5a5c7ade576e954c164b0a7253",
"text": "How easy is it to take out your money? To they offer any trading? Do you have to put more money up on your own to trade with? This seems pretty sketchy. I am currently working at a prop trading firm and although some sketchy firms require you to make a deposit, most legit ones do not. Not to mention their commissions are incredibly high (I interviewed at another sketchy firm but only charges a couple cents for commission). >most of the time you get rebates on them If it is not explicitly stated in the contract of how they decide your rebates than don't expect much. Most of the trading industry is build around taking advantage of people where people's word soon becomes meaningless unless it is in writing.",
"title": ""
},
{
"docid": "41734e5f71ad45eb45327676b3ef67da",
"text": "\"The success rate is terrible. At the same time, what are the success rate for any business endeavor? Isn't it something like 80% of startups fail in the first 5 years? That's not far off for the success of traders. Just like all the success cliches say, it comes down to how bad you want it. What will you sacrifice to be a successful trader? How much will you work to be a successful trader? Will you accept the pain and failure it takes to be a trader? Who cares if \"\"soandso\"\" can do it? If you want it, you should be saying, \"\"I will do it because I say so\"\". Only you know if you're willing to take the risk. At the same time, you're a college student, what's the worst that will happen if it doesn't work out? Check out /r/getmotivated...\"",
"title": ""
},
{
"docid": "3a5c671699b2c194916502a7a365a692",
"text": "\"I think you're right that these sites look so unprofessional that they aren't likely to be legitimate. However, even a very legitimate-looking site might be a fake designed to separate you from your money. There is an entire underground industry devoted to this kind of fakery and some of them are adept at what they do. So how can you tell? One place that you can consult is FINRA's BrokerCheck online service. This might be the first of many checks you should undertake. Who is FINRA, you might ask? \"\"The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all securities firms doing business in the United States.\"\" See here. My unprofessional guess is, even if a firm's line of business is to broker deals in private company shares, that if they're located in the U.S. or else dealing in U.S. securities then they'd still need to be registered with FINRA – note the \"\"all securities firms\"\" above. I was able to search BrokerCheck and find SecondMarket (the firm @duffbeer703 mentioned) listed as \"\"Active\"\" in the FINRA database. The entry also provides some information about the firm. For instance, SecondMarket appears to also be registered with the S.E.C.. You should also note that SecondMarket links back to these authorities (refer to the footer of their site): \"\"Member FINRA | MSRB | SIPC. Registered with the SEC as an alternative trading system for trading in private company shares. SEC 606 Info [...]\"\" Any legitimate broker would want you to look them up with the authorities if you're unsure about their legitimacy. However, to undertake any such kind of deal, I'd still suggest more due diligence. An accredited investor with serious money to invest ought to, if they are not already experts themselves on these things, hire a professional who is expert to provide counsel, help navigate the system, and avoid the frauds.\"",
"title": ""
},
{
"docid": "f98342a46aadd4f3c7192e8b9415206c",
"text": "For starters, that site shows the first 5 levels on each side of the book, which is actually quite a bit of information. When traders say the top of the book, they mean just the first level. So you're already getting 8 extra levels. If you want all the details, you must subscribe to the exchange's data feeds (this costs thousands of dollars per month) or open an account with a broker who offers that information. More important than depth, however, is update frequency. The BATS site appears to update every 5 seconds, which is nowhere near frequently enough to see what's truly going on in the book. Depending on your use case, 2 levels on each side of the book updated every millisecond might be far more valuable than 20 levels on each side updated every second.",
"title": ""
},
{
"docid": "d410df70f15fa6b3c0b7476264502873",
"text": "Yeah, it can be a scam. Lots of unscrupulous companies try to generate commissions by encouraging frequent trading - I can't recall the term they use right now, but I don't like to use these people for advice. My bank has 100 free trades per year for each account, which is more than enough for me to never pay a commission.",
"title": ""
},
{
"docid": "1cf001967728581cbc9cf897c10f6944",
"text": "\"I've never used them myself, but Scottrade might be something for you to look at. They do $7 internet trades, but also offer $27 broker assisted trades (that's for stocks, in both cases). Plus, they have brick-and-morter storefronts all over the US for that extra \"\"I gotta have a human touch\"\". :-) Also, they do have after hours trading, for the same commission as regular trading.\"",
"title": ""
},
{
"docid": "b047dc87c3ad4c48201382f49eba180a",
"text": "Oanda.com is a very respectable broker. They don't offer ridiculous leverage options of 200 to 1 that prove the downfall of people starting out in Forex. When I used them a few years back, they had good customer service and some nice charting tools.",
"title": ""
},
{
"docid": "b8bc5ac6fc7eafb3ec03c29d82e651ec",
"text": "\"The London Stock Exchange offers a wealth of exchange traded products whose variety matches those offered in the US. Here is a link to a list of exchange traded products listed on the LSE. The link will take you to the list of Vanguard offerings. To view those offered by other managers, click on the letter choices at the top of the page. For example, to view the iShares offerings, click on \"\"I\"\". In the case of Vanguard, the LSE listed S&P500 ETF is traded under the code VUSA. Similarly, the Vanguard All World ETF trades under the code VWRL. You will need to be patient viewing iShares offerings since there are over ten pages of them, and their description is given by the abbreviation \"\"ISH name\"\". Almost all of these funds are traded in GBP. Some offer both currency hedged and currency unhedged versions. Obviously, with the unhedged version you are taking on additional currency risk, so if you wish to avoid currency risk then choose a currency hedged version. Vanguard does not appear to offer currency hedged products in London while iShares does. Here is a list of iShares currency hedged products. As you can see, the S&P500 currency hedged trades under the code IGUS while the unhedged version trades under the code IUSA. The effects of BREXIT on UK markets and currency are a matter of opinion and difficult to quantify currently. The doom and gloom warnings of some do not appear to have materialised, however the potential for near-term volatility remains so longs as the exit agreement is not formalised. In the long-term, I personally believe that BREXIT will, on balance, be a positive for the UK, but that is just my opinion.\"",
"title": ""
}
] |
fiqa
|
8a37d567dcd9ecd1cd2b87c02328530b
|
Understanding Gift taxes for mortgage downpayment
|
[
{
"docid": "cd08117069dd39c471f4e395776830a6",
"text": "You are using interchangeably borrow/loan and gift. They are very different. For the mortgage company, they would prefer that the money from friends and family be a gift. If it is a loan, then you have an obligation to pay it back. If they see money added to your bank accounts in the months just before getting the loan, they will ask for the source of the money. Anything you claim as a gift will be required to be documented by you and the person making the gift. You don't want to lie about it, and have the other person lie about it. They will make you sign documents, if they catch you in a lie you can lose the loan, or be prosecuted for fraud. If the money from friends and family is a loan, the payments for the loan will impact the amount of money you can borrow. From the view of the IRS the gift tax only comes into play if during one calendar year a person makes a gift to somebody else of 14,000 or more. There are two points related to this. It is person-to-person. So if your dad gives you 14K, and your mom gives you 14K, and your dad gives your wife 14k and your mom gives your wife 14K; everything is fine. So two people can give 2 people 56K in one year. Please use separate checks to make it clear to the IRS. If somebody gives a gift above the exclusion limit for the year, they will have to complete IRS form 709. This essentially removes the excess amount from their life time exclusion, in other words from their estate. Nothing to worry about from the IRS. The bank wants to see the documentation. Also you are not a charity, so they can't claim it as a donation. Why do you have 6,000 in cash sitting around. The mortgage company will want an explanation for all large deposits so you better have a good explanation. From the IRS FAQ on Gift Taxes: What can be excluded from gifts? The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts. Number 3 on the list is the one you care about.",
"title": ""
}
] |
[
{
"docid": "83a6da33df93352da81d0069474a4980",
"text": "I'm a long way from an expert on this, but it seems to me you can loan your fiance enough money to pay off her loans, and that incurs no tax penalty. When you are married you can write off the loan without a tax penalty since she is your spouse. I would expect that you can reclassify a gift as a loan for a tax year you haven't yet filed for - or she can give you the money back and you immediately make her a loan for the same amount. As the comments and this question would indicate, a loan at below an approved rate would be considered a gift. However you do appear to be able to loan her the money at an approved rate, and gift her the interest payments, which should be less than the gift tax limit. You would need to write up a loan document. Once you are married you should be able to make another gift to pay off the loan.",
"title": ""
},
{
"docid": "9f5ea3293efbf96f1c81666d56f4562a",
"text": "\"I transfer all their funds to my bank account Are they paying tax on that transfer? Gifts under $14,000 are excluded from taxation in the US, but they're going going to have a hard time arguing that it is a gift (since they expect it back). The taxes are almost certainly going to exceed the amount you can make from your investments in the short term, and if they aren't paid then your \"\"clients\"\" are going to be in hot water with the IRS. You need to have something set up that establishes you as merely managing the funds, and not receiving them personally as a transfer. The other answers have good suggestions.\"",
"title": ""
},
{
"docid": "dde6d3d89969be28d244d2d179f90a25",
"text": "First, the recipient is not responsible for any gift tax, the giver pays the tax. The gift is not taxable income to the recipient and so the recipient does not pay any income tax on the gift either. More than that, and they tap into their lifetime exclusion, currently (2015) $5.43M. All that's needed is a simple form. More convoluted, would be to lend you the full amount and then forgive $14,000 per year. Unnescesary paperwork, in my opinion.",
"title": ""
},
{
"docid": "dd865e96fd492e3189f843200cf4f59a",
"text": "Lenders pay attention to where your down payment money comes from. If they see a large transfer of money into your bank account within about a year before your purchase, this WILL cause an issue for you. Down payments are not just there to make the principal smaller; they are primarily used as an underwriting data-point to assess your quality as a borrower. If you take the money as loan, it will count against your credit worthiness. If you take the money as a gift, it will raise some other red flags. All of this is done for a reason: if you can't get a down payment, you are a higher credit risk (poor discipline, lack of consistent income), even if you can (currently) pay the monthly cost of a mortgage. (PS - The cost of home ownership is much higher than the monthly mortgage payment.) Will all this mean you WON'T get a loan? Of course not. You can almost always get SOME loan. But it will likely be at a higher rate than you otherwise would qualify for if you just waited a little bit and saved money for a down payment. (Another option: cheaper house.) EDIT: The below comments provide examples where gifts were/are NOT a problem. My experience from buying a house just a few years ago (and my several friends who bought house in the same period, some with family gifts and some without) is that it IS an issue. Your best bet is to TALK, IN PERSON with an actual mortgage broker in your area who can go through the options with you, and the downsides to various approaches.",
"title": ""
},
{
"docid": "6bb1a1a53e23d8262c0b57160f3d3244",
"text": "First of all, in the U.S., no Federal gift tax has to be paid by the recipient of the gift; it is the donor who has to pay gift tax, if any is due. Nor does the recipient have to pay Federal income tax on the gift; it is not considered taxable income. I do not believe that any states view matters differently for the purposes of state gift and income taxes, but I am always ready to be disabused of any such fondly-held notions. If your parents were required to pay any gift tax, that would have been at the time the gift was originally given and only if they gifted more than the maximum allowable exemption per person for that year. Currently the exemption is $14K from each donor per recipient per year. Additional gifts were made by your parents to you during your minority when your parents paid any income tax due on the distributions in your account, but these amounts would unlikely to have been larger than the exemption for that year. In any case, gift tax is none of your concern. If you have been declaring the income from distributions from the mutual funds all these years, then the only tax due on the distributions from the funds in 2013 is the Federal income tax for the 2013 tax year (plus a special assessment of Medicare tax on investment income if your income is large; unlikely based on your question and follow-up comment). If you sold all or part of your shares in the funds in 2013, then you would need to calculate the basis of your investments in the fund in order to figure out if you have capital gains or losses. Ditto if you are thinking of cashing out in 2014 and wish to estimate how much income tax is due. But if you want to just hang on to the funds, then there is no immediate need to figure out the basis right away, though taking care of the matter and keeping in top of things for the future will be helpful. As a final note, there is no tax due on the appreciation of the fund's shares. The increased value of your account because the fund's share price rose is not a taxable event (nor are decreases in the account deductible). These are called unrealized capital gains (or losses) and you do not pay tax on them (or deduct them as losses) until you realize the gains by disposing of the property.",
"title": ""
},
{
"docid": "d9f6f01fb966263395bd6d910790da55",
"text": "I'm not familiar with US tax law in particular, but the general principle around the world tends to be that interest-free or low-interest loans are taxed as gifts of the difference between a commercial interest charge and the actual interest charged. You could also forgive ($13,000 - waived interest) of the loan each year. Also, remember that there's a lifetime exemption (covering inheritance as well) of $1,000,000 which can be used for any amounts over the $13,000.",
"title": ""
},
{
"docid": "42003e90df048ff0e41fe8dbc47ad5eb",
"text": "Doom and gloom. Everything adjusts. Less tax break here compensated by lower overall tax rates. Actually, Realtors have less concern with this then you would think. Those really concerned are bankers. The financial industry has been messaging Americans for years that mortgage deductions are the best thing in the world. They are just another way to promote bank loans.",
"title": ""
},
{
"docid": "9bcc0c9036c690555368b96512ef7ed8",
"text": "\"A Tweep friend asked me a similar question. In her case it was in the larger context of a marriage and house purchase. In reply I wrote a detail article Student Loans and Your First Mortgage. The loan payment easily fit between the generally accepted qualifying debt ratios, 28% for house/36 for all debt. If the loan payment has no effect on the mortgage one qualifies for, that's one thing, but taking say $20K to pay it off will impact the house you can buy. For a 20% down purchase, this multiplies up to $100k less house. Or worse, a lower down payment percent then requiring PMI. Clearly, I had a specific situation to address, which ultimately becomes part of the list for \"\"pay off student loan? Pro / Con\"\" Absent the scenario I offered, I'd line up debt, highest to lowest rate (tax adjusted of course) and hack away at it all. It's part of the big picture like any other debt, save for the cases where it can be cancelled. Personal finance is exactly that, personal. Advisors (the good ones) make their money by looking carefully at the big picture and not offering a cookie-cutter approach.\"",
"title": ""
},
{
"docid": "5f00d237c510ee03758af5737bdc16f8",
"text": "\"you have 2 concerns: the lender and the irs. either way you should be fine the lender just wants to know that you have no legal claim to the property or other compensation. simply signing a gift declaration should clear that up, making this a \"\"gift\"\" from their perspective. they probably have some standard form you can sign. otherwise, just a simple note that says \"\"i, so-and-so, gave whats-er-name x$ on the y of june, 20## as a gift, with no expectation of repayment\"\". then, only way you could get charged with \"\"fraud\"\" is if you seek compensation for this \"\"gift\"\" in the future. even then, the bank would probably have to find out about the compensation and complain pretty strongly to get a prosecutor interested in a small dollar misrepresentation case with little or no provable intent. a bigger concern is the bank being uncomfortable with the future renter also giving a gift. that just \"\"smells weird\"\". and bankers hate anything weird. it probably won't prevent the mortgage from getting approved, but it might delay the underwriters a few days while the wring their hands about it. the irs is a bit more complicated. they tend to be the \"\"heads we win, tails you lose\"\" types. assuming they consider this a gift, then you are fine, since it is under the annual gift exclusion (~14k$ these days); you don't even have to tell them about it. however, if she gives you a large financial gift in the near future, they may decide to interpret those two events as a single transaction turning this into a no interest loan. even then, you should be fine since the irs generally doesn't care about loans under 100k$ with \"\"missing\"\" interest under 1k$/yr. since this is a small loan and interest rates are so low, you have no worries. further irs reading on gift loans: https://www.law.cornell.edu/uscode/text/26/7872\"",
"title": ""
},
{
"docid": "a1ebbc5a056464b41ab9e59830944367",
"text": "\"You are \"\"pool[ing] the sales from both houses as downpayment on the new house.\"\" But they are going to pay you rent. Your question as it stands, just opens more questions. What, exactly is the ownership of the new house? If your's (and your wife's) was the money a gift? Ignoring the gift, if that's what it is, and if the in-law suite is 25% of the house value, you have a rental. You claim 25% of the expenses, including property tax and mortgage interest, along with 25% of the utilities, unless their part has its own meters. That's a start, if you add details, I may edit my answer. (Not to be pedantic, but whose parents are they. They can't be \"\"our in-laws,\"\" can they?)\"",
"title": ""
},
{
"docid": "881acfadb43654b366bba3cfe8ab2237",
"text": "\"The IRS doesn't tax \"\"increased wealth\"\" They tax Revenue -- income. If this money or property came to you as a gift, you would owe no tax on it but the giver probably would owe gift tax. If it came to you as a loan, you would owe no tax on it but the lender would owe tax on any interest you pay (and must charge at least minimal interest, though they could give that to you as a gift and possibly not have it be taxable). But if came as payment for goods or services or investment or anything of that sort, and you aren't demonstrably tax-exempt, it is income and you are responsible for declaring it as such and paying tax on it.\"",
"title": ""
},
{
"docid": "0cf9d33d378ff00799e461f26c6fa9f9",
"text": "You say that you inherited the money from your mother, and are now paying these people using money that is already yours. Because of that, the money is considered a gift from you to them, and the fact that you are doing it in accordance with your mother's wishes doesn't change that. For it to be considered a bequest from your mother's estate directly to these beneficiaries, it would have had to be handled via the regular by-the-book inheritance procedure and been given to them directly rather than bequeathed to you with informal instructions to pass it on to them. If one gives another person more than $14K in any calendar year, there is the potential gift tax issue to address. I'll explain why it's more a matter of 'addressing' than 'paying', as there are a number of legal ways around this. Form 709 is what you'll use. In the end, you'll report the gifts over $14K but no tax will be due as they'll simply go against your lifetime gifting allowance, currently $5.49M per person. Note, 2 ways to avoid even this obligation. If you have a spouse, you have a combined $28K/yr gifting (per recipient) with no reporting required. Similarly, if the recipient has a spouse, you can gift them $14K. i.e. couple to couple can gift $56K/yr. Last, why not just gift $14K before December, and in January, give the second installment? If I had money coming in separate from a will, I'd be happy that you honored a verbal request, and wouldn't be so greedy as to expect you to risk a dime of your own finances to transfer the funds immediately.",
"title": ""
},
{
"docid": "f469e2fa5ef685010cd4b8febf2dc799",
"text": "In 2015 there's a $5.43M (That's million, as in 6 zeros) estate exemption. Even though it's $14K per year with no paperwork required, if you go over this, a bit of paperwork will let you tap your lifetime exemption. There's no tax consequence from this. The Applicable Federal Rate is the minimum rate that must be charged for this to be considered a loan and not a gift. DJ's answer is correct, otherwise, and is worth knowing as there are circumstances where the strategy is applicable. If the OP were a high net worth client trying to save his estate tax exemption, this (Dj's) strategy works just fine.",
"title": ""
},
{
"docid": "b13137b08509ded0d14669718b79b904",
"text": "It is correct, in general. Gift tax is indeed at 35%, but you have the first 14K of your gift exempt from it for each person you give to, yearly (verify the number, it changes every year). You can also use your lifetime exemption ($5.45M in 2016, subject to change each year), but at the amounts you're talking about it still will not be enough. Charitable (501(c)) organizations, paying for someone's tuition or medical expenses (directly to the providers), political donations, transfer between you and your spouse - these are all exempt from gift tax. If you have 10 millions to give, I'm sure you can afford a $200 consultation with a EA/CPA licensed in your state.",
"title": ""
},
{
"docid": "8d5478ef1db64563a3c20bda209e11f3",
"text": "looks like the US tax system needs an overhaul. You cant charge yourself arbitrary amounts to even out your bottom line. Wel you and I cant, but apparently we just need to make more money to do so....thanks BK for showing me the way!!",
"title": ""
}
] |
fiqa
|
1ae93ea5a0faf70577f9cbda14991afa
|
American living abroad and not working for an American company - tax reporting and bank accounts
|
[
{
"docid": "cc041b18ffe6b806ba4fbcb0c963b9b0",
"text": "\"The IRS taxes worldwide income of its citizens and green card holders. Generally, for those Americans genuinely living/working overseas the IRS takes the somewhat reasonable position of being in \"\"2nd place\"\" tax-wise. That is, you are expected to pay taxes in the country you are living in, and these taxes can reduce the tax you would have owed in the USA. Unfortunately, all of this has to be documented and tax returns are still required every year. Your European friends may find this quite surprising as I've heard, for instance, that France will not tax you if you go live and work in Germany. A foreign company operating in a foreign country under foreign law is not typically required to give you a W-2, 1099, or any of the forms you are used to. Indeed, you should be paying taxes in the place where you live and work, which is probably somewhat different than the USA. Keep all these records as they may be useful for your USA taxes as well. You are required to total up what you were paid in Euros and convert them to US$. This will go on the income section of a 1040. You should be paying taxes in the EU country where you live. You can also total those up and convert to US$. This may be useful for a foreign tax credit. If you are living in the EU long term, like over 330 days/year or you have your home and family there, then you might qualify for a very large exemption from your income for US tax purposes, called the Foreign Earned Income Exclusion. This is explained in IRS Publication 54. The purpose of this is primarily to avoid double taxation. FBAR is a serious thing. In past years, the FBAR form went to a Financial Crimes unit in Detroit, not the regular IRS address. Also, getting an extension to file taxes does not extend the deadline for the FBAR. Some rich people have paid multi-million dollar fines over FBAR and not paying taxes on foreign accounts. I've heard you can get a $10,000 FBAR penalty for inadvertent, non-willful violations so be sure to send those in and it goes up from there to $250k or half the value of the account, whichever is more. You also need to know about whether you need to do FATCA reporting with your 1040. There are indeed, a lot of obnoxious things you need to know about that came into existence over the years and are still on the law books -- because of the perpetual 'arms race' between the government and would be cheaters, non-payers and their advisors. http://www.irs.gov/publications/p54/ http://americansabroad.org/\"",
"title": ""
},
{
"docid": "1a03d16b327d83f757ce1680c3a11d3f",
"text": "\"I'll add a bit to Paul's excellent write up. Foreign Earned Income Exclusion (form 2555): notice the earned there. It doesn't exclude capital gains, interest, dividends, and basically everything that is not salary. You pay US taxes on it from the first cent. Foreign tax credit - foreign tax credit (form 1116) doesn't reduce your US tax dollar for dollar (even though it may appear that it does from the generic explanations). By using this form you may end up accumulating unused credit while still paying double taxes at the same time. Happened to me. Thank Congress for the logical and reasonable US tax laws. New FATCA form 8938: as opposed to FBAR (that goes to the FinCEN in the Treasury), this one goes to the IRS. it contains very similar info, but the threshold requirements are different. You may have to file FBAR, but not these, or you may have to file both. Being an American citizen, some European banks will refuse to provide services to you. Again, thank Congress for FATCA. It requires foreign banks to enforce US tax regulations on US citizens, and banks that won't will get penalized in the US. Many banks refuse to provide services to Americans because of that because what IRS requires is illegal in most countries. Some countries (like UK and some other EU countries) have signed treaties with the US to resolve this, but many haven't. Currency conversion - as I commented to Paul, you convert the amounts when you receive them, which may have your fixed EUR salary be converted to different dollar amounts every time. You need to make sure you do it right. Pensions, savings, investments - if you're doing these in non-US instruments prepare to be penalized. US taxes foreign investments much more aggressively than domestic. If you're investing in indexes/mutual funds, or you're a principle in a corporation, or you create a pension account - you'll get hit by additional reporting requirements and tax. Tax treaties - the US has tax treaties with many EU countries, and equalization treaties with some. The tax treaties affect the standard tax treatment by the US and some of the \"\"generic\"\" info you got here may not apply because of a tax treaty, and some other rules may apply. Equalization treaties work similarly with regards to the Social Security. Bottom line, and I know Paul disagrees with me on this - talk with a US-licensed adviser in the country you're going to. It is very important for your tax adviser to know the relevant treaty (and not read it the first time when you call him), and to understand each and every financial instrument in your country. Missing piece of paper in your tax return can cost you thousands of dollars in penalties (not exaggerating, not filing form 3520 triggers a $10000 penalty, even if there's no tax) and additional taxes.\"",
"title": ""
}
] |
[
{
"docid": "94c39b345a0eb3878d903cb081e28da2",
"text": "Are you planning to not pay taxes? Any time someone has income in the U.S., it is subject to U.S. taxes. You must file tax returns (and pay taxes if necessary) if you have income above a certain threshold, regardless of whether you're not authorized to work or not. If you plan to intentionally not pay taxes, then that's a whole other matter from working without authorization. Working without authorization is an immigration issue. It probably violates the conditions of your status, which will make you to automatically lose your status. That may or may not affect when you want to want to visit, immigrate to, or get other immigration benefits in the U.S. in the future; and at worst you may be deported. It's a complicated topic, but not really relevant for this site.",
"title": ""
},
{
"docid": "6448d72794b93dcc59f4c095e6589e8a",
"text": "One other consideration. If you are a US citizen or Resident Alien, you are going to owe US income taxes regardless of where you earn the money. Here it is straight from the horse's mouth: Tax guide for US Citizens living abroad",
"title": ""
},
{
"docid": "35c5605589b6b4dbdea21675a10af603",
"text": "There might be a problem. Some reporting paperwork will have to be done for the IRS, obviously, but technically it will be business income zeroed out by business expense. Withholding requirements will shift to your friend, which is a mess. Talk to a licensed tax adviser (EA/CPA) about these. But the immigration may consider this arrangement as employment, which is in violation of the visa conditions. You need to talk to an immigration attorney.",
"title": ""
},
{
"docid": "b28cb9a3b4e58993ea23f5b610229cd3",
"text": "You're asking three different questions... Q1: What's to stop people not reporting income earned in this manner? A: Nothing. Absolutely nothing. The IRS doesn't have the means to keep track of your cash flow and your reported taxes on the fly. Q2: How could the IRS possibly keep track of that? A: When you get audited. If it ever did come up that things didn't balance you would end up owing back taxes, with interest and possibly fines. Q3: Moral obligations aside... why report? A: Since you've dismissed 'doing your duty as a citizen' as a moral obligation, the only other real one is that it's a pain in the butt to get audited and it is expensive if you lie and get caught.",
"title": ""
},
{
"docid": "20453d9084fa515d30f1251b55b7f57e",
"text": "it just depends on your situation and sometimes accounting can't fix that. by mentor pays 35% even though he only goes back to the USA to visit. I go back less than 30 days a year so I can claim I'm a foreign resident but if all my income is in the USA I'm screwed. I can't even route my income through my wife who has never stepped foot in the USA because we must claim whatever she makes. US tax laws are so bad that it takes a lot just to get an account with HSBC in Hong Kong",
"title": ""
},
{
"docid": "3952f02414674a677415876312af53fe",
"text": "First, yes, your LLC has to file annual taxes to the US government. All US companies do, regardless of where their owners live. Second, you will also probably be liable to personally file a return in the US and unless the US has a tax treaty with India (which I don't believe it does) you may end up paying taxes on your same income to both countries. Finally, opening a US bank account as a foreign citizen can be very tricky. You need to talk to a US accountant who is familiar with Indian & US laws.",
"title": ""
},
{
"docid": "fdca9791c5848e431531ab00a32076f7",
"text": "Generally speaking, if you have significant revenue outside the US, then you're better off incorporating out of the US. The US has significantly higher corporate tax rates, and taxes on worldwide income not just revenue in the US. Setting up in an offshore country would have no corporate tax but would cost about $1000 a year in fees. For any non-US company, your US partner would need to file a 5471 form with his US personal tax which reports the company's finances. That costs about $1000 a year for an accountant to prepare. So you still need accounting on the company, even if you are not paying corporate tax. Setting up the company is reasonably easy, you just use a broker. The bank account may be more difficult but they can help with that too. You may find that your optimal personal tax strategy and your US partner's strategy are different. For example, if your partner is living overseas, then they are not taxed on salary in the US, but are taxed on dividends. So they would prefer to take any money out of the company as salary, resulting in no corporate profits. You, on the other hand, might prefer dividends.",
"title": ""
},
{
"docid": "5a285a126c4ec7591bb3e03afcd6adc6",
"text": "I agree with Joe, having the money deposited to the US bank account may land you in trouble. Technically, a US business paying a foreigner must withhold 30% of the payment, unless a tax treaty says otherwise. The US business should do that based on your W8-BEN/W8-ECI form that you should have given to the business before being paid. I'm guessing, that by paying to your US bank account, you (and your American counterpart) are trying to avoid this withholding. That may cause trouble for both of you. I would suggest you talking to a professional (EA/CPA licensed in the State where the business is located) and having the situation resolved ASAP. You may not be liable for the US taxes at all, but because of incorrectly reporting the income/expense - you and the US business may end up paying way more than the $0 you otherwise would have, in penalties.",
"title": ""
},
{
"docid": "05e8c53b517407752eec922e013273d9",
"text": "The US requires its (tax) residents to report foreign accounts if the balances (on all the accounts together) are $10K or more at any given day during the year. This is done through the FBAR system. In addition, you obviously need to report this income on your US tax return and pay taxes. If the balances on your foreign accounts exceed specific threshold, your tax return should also include form 8938. If you report everything and pay the taxes due - you can keep the money wherever you want and transfer it between your accounts as you may see fit. If you don't - the US government may come after you with huge penalties, and the Dubai bank may freeze your account. Its easy to become US tax resident. Stay in the US for more than half a year in a row - and here you are. Subject to the US taxation. Even if you're not a US citizen or green card holder, or at all illegal. Some immigration statuses may grant you an exemption, but none that allows you working for your Dubai employer, so I'm assuming you're a US tax resident.",
"title": ""
},
{
"docid": "2948cd0e63af02de801485656a7996bc",
"text": "\"Tax US corporate \"\"persons (citizens)\"\" under the same regime as US human persons/citizens, i.e., file/pay taxes on all income earned annually with deductions for foreign taxes paid. Problem solved for both shareholders and governments. [US Citizens and Resident Aliens Abroad - Filing Requirements](https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad-filing-requirements) >If you are a U.S. citizen or resident alien living or traveling outside the United States, **you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States.** Thing is, we know solving this isn't the point. It is to misdirect and talk about everything, but the actual issues, i.e., the discrepancy between tax regimes applied to persons and the massive inequality it creates in tax responsibility. Because that would lead to the simple solutions that the populace need/crave. My guess is most US human persons would LOVE to pay taxes only on what was left AFTER they covered their expenses.\"",
"title": ""
},
{
"docid": "fca1cb8601eadb6feb1e8883e0dfa401",
"text": "It makes no difference (to the UK) what country a bank account is in. What matters is whether you are resident in the UK or not while employed locally in a foreign country. You're taxed on where you are tax resident (which could be either country, both, or neither), not where the money is earned or banked. You can assume, with modern exchange of information agreements, that all money you put in bank accounts anywhere in the world will eventually be known to the UK authorities. The rules for when you are a UK tax resident changed recently, there is now a statutory test for residence (pdf). The rules are complex, but in general if you are outside the UK for less than one full tax year you're still resident, and in many cases where you're gone longer than that you may still be, depending on the length of your trips back to the UK and the ties you have there. So a 6-month winter job in Thailand teaching English as a foreign language will be subject to UK tax if you come back after, even if you leave all the money there or in a third country. If you pay local tax as well there are agreements between countries to avoid double taxation, but these do vary. What you do about National Insurance payments while gone for a short time is another complex area.",
"title": ""
},
{
"docid": "20c142df943348a0135a62c9553986d0",
"text": "\"I don't see why you would need an \"\"international tax specialist\"\". You need a tax specialist to give you a consultation and training on your situation, but it doesn't seem too complicated to me. You invoice your client and get paid - you're a 1099 contractor. They should issue you a 1099 at the end of the year on everything they paid you. Once you become full-time employee - you become a W2 employee and will get a W2 at the end of the year on the amounts paid as such. From your perspective there's nothing international here, regular business. You have to pay your own taxes on the 1099 income (including SE taxes), they have to withhold taxes from your W2 income (including FICA). Since they're foreign employers, they might not do that latter part, and you'll have to deal with that on your tax return, any decent EA/CPA will be able to accommodate you with that. For the employer there's an issue of international taxation. They might have to register as a foreign business in your state, they might be liable for some payroll taxes and State taxes, etc etc. They might not be aware of all that. They might also be liable (or exempt) for Federal taxes, depending on the treaty provisions. But that's their problem. Your only concern is whether they're going to issue you a proper W2 and do all the withholdings or not when the time comes.\"",
"title": ""
},
{
"docid": "3d0c97675c2f6fdd54208ed1b33c5fdf",
"text": "Banks do not report transactions within accounts except as required by law, usually as part of anti-money-laundering efforts. Generally those involve tracking large cash transactions. As far as large payments go, there are two reasons they might be reported to the government: taxes, and criminal investigations. For tax purposes, if the payment is considered a salary or wage (that is, you are an employee of the company and the payment is for your time working there), then the company paying you is responsible for reporting the wage and withholding applicable taxes from your salary. If you are considered an independent contract employee, then you yourself will be responsible for reporting the income to the IRS and paying the applicable taxes yourself. In the second case, unless you are already under investigation, I wouldn't worry about it. Banks are very touchy about financial records being kept private, and won't release them without a subpoena. One caveat is that this is under US law. Banks which maintain branches in multiple countries must, of course, comply with all local laws in the jurisdiction where they do business. The take away from this is that Bank of America is unlikely to report a single deposit of $75,000 into your account to anyone on their own. If it is a paper check being deposited they will probably place a hold on it to make sure it clears, but that is all.",
"title": ""
},
{
"docid": "11940f67a7adc7d7446a2b9884f2bcc6",
"text": "My concern is if I need to report and pay extra taxes for the part of the company that will be under my name Yes, d'uh. Of course. It's actually quite complicated when it comes to foreign companies owned by US people, and you'll need a good tax adviser (EA/CPA licensed in your State) who's fluent in that area. Citizenship has nothing to do with this, from tax perspective there's no difference between a green card holder and a citizen (except that green card holder cannot claim non-resident exemptions and certain tax treaties' exemptions).",
"title": ""
},
{
"docid": "6930ffd3459df51d2e594465b3b8a9f1",
"text": "There's nothing wrong with your reasoning except that you expect the tax laws to make perfect sense. More often than not they don't. I suggest getting in touch with a professional tax preparer (preferably with a CPA or EA designation), who will be able to understand the issue, including the relevant portions of the French-US tax treaty, and explain it to you. You will probably also need to do some reporting in France, so get a professional advice from a French tax professional as well. So, in my tax return, can I say that I had no US revenue at all during this whole year? I doubt it.",
"title": ""
}
] |
fiqa
|
8a15f7f6efeff0cf327e46dd839d2227
|
Legal restrictions for EU-foreigners to setup bank account in Czech republic
|
[
{
"docid": "722243166b6236c501137f08e8c5929c",
"text": "\"It depends on what exactly do you mean by \"\"seat of residence\"\". That term has different meanings (legally) in different countries and different contexts. If you're foreigner (even from within the EU), any czech bank will most likely ask you to provide a residence permit. Here are some details: http://www.mvcr.cz/mvcren/article/third-country-nationals-long-term-residence.aspx http://www.czech.cz/en/Business/How-it-works-here/Making-business/How-to-open-a-bank-account-%E2%80%93-Part-1\"",
"title": ""
}
] |
[
{
"docid": "2bcc07d2a1ecf891d4e6b74729d40f57",
"text": "In addition to the other answers, Harris Bank (now owned by BMO) allows Canadians living in Canada to open accounts, perhaps they consider other countries as well. They have excellent customer service.",
"title": ""
},
{
"docid": "d4df97f35153bdedf4bf9c3089a968a4",
"text": "You're most definitely being scammed. You're being asked all the information required to steal your identity and take over your bank account. And Austria is land-locked, it has no west coast (or any coast, for that matter).",
"title": ""
},
{
"docid": "a96d117587982e48e6551829af00c8bf",
"text": "Of course you can. My assumption is you are/will be in UK. I am a student from outside the UK and I am about to start studying at a UK university/college/school. How do I choose which bank is best for me? You should be able to open a ‘basic bank account’ with a number of different banks. A ‘basic bank account’ provides easy access to banking facilities for adults in the UK. Additionally, some banks offer a bank account tailored specifically for your needs as an international student. There is a table on pages 6 & 7 of this leaflet that has a list of basic accounts and other accounts that may be suitable along with brief descriptions of some of their features. Most banks don’t ask you to pay in any money to open a basic account. You should look around to see which bank and account suit you best and then visit the local branch of the bank you have chosen. You may also be able to get other types of account, as detailed in the next section. Please speak to a bank Go through the source I have linked. It is a bit old, but has relevant information for you. SOURCE",
"title": ""
},
{
"docid": "17299afec6fb8f94e38f7bee72aadc43",
"text": "\"Yes, it is, under some circumstances (basically, a piece of paper saying \"\"John Doe borrowed Josh Shoe 100 USD\"\" is not enough). Usually, the paper should include: This is the case for Czech Republic, I believe it's similar for other countries as well. Remember that without the repair date, you have very complicated position forcing the person to give you the money back. As well, there's a withdrawal of rights, i.e. after X years after the \"\"repair date\"\", you cannot force the person to give you the money. You have to send the case to the court in some period after the \"\"repair date\"\", if you don't have the money yet.\"",
"title": ""
},
{
"docid": "c09e0ca4cba8ddc88883306ee7d79eac",
"text": "\"This sounds like a FATCA issue. I will attempt to explain, but please confirm with your own research, as I am not a FATCA expert. If a foreign institution has made a policy decision not to accept US customers because of the Foreign Financial Institution (FFI) obligations under FATCA, then that will of course exclude you even if you are resident outside the US. The US government asserts the principle of universal tax jurisdiction over its citizens. The institution may have a publicly available FATCA policy statement or otherwise be covered in a new story, so you can confirm this is what has happened. Failing that, I would follow up and ask for clarification. You may be able to find an institution that accepts US citizens as investors. This requires some research, maybe some legwork. Renunciation of your citizenship is the most certain way to circumvent this issue, if you are prepared to take such a drastic step. Such a step would require thought and planning. Note that there would be an expatriation tax (\"\"exit tax\"\") that deems a disposition of all your assets (mark to market for all your assets) under IRC § 877. A less direct but far less extreme measure would be to use an intermediary, either one that has access or a foreign entity (i.e. non-US entity) that can gain access. A Non-Financial Foreign Entity (NFFE) is itself subject to withholding rules of FATCA, so it must withhold payments to you and any other US persons. But the investing institutions will not become FFIs by paying an NFFE; the obligation rests on the FFI. PWC Australia has a nice little writeup that explains some of the key terms and concepts of FATCA. Of course, the simplest solution is probably to use US institutions, where possible. Non-foreign entities do not have foreign obligations under FATCA.\"",
"title": ""
},
{
"docid": "69ba3ae6663acc704b2844e46809c81b",
"text": "U.S. citizens are allowed to own foreign bank and investment accounts. However, there are various financial and tax reporting requirements for owners of such accounts. Even when there is no foreign income involved. For example famous FBAR (Fincen Report Form 114), Form 8938, and even more forms if your assets/activities abroad become more complicated. Penalties, even for unintentional non-compliance can be Draconian. So just keep in mind, that once you start having foreign accounts, you will start having additional obligations and might spend more money and time on tax preparation. If you are ok with that, then its cool. But... assuming your gloomy predictions on Trump presidency come true. They might be accompanied by more strict capital control, reporting requirements, and may become even greater pain in the neck for people with foreign assets. Regarding recommendations, I am not sure about banks, but there are some foreign precious metal investing companies that are completely online based such as https://www.bullionvault.com/ and https://www.goldmoney.com/. These might also guard you from potential problems with US dollar.",
"title": ""
},
{
"docid": "ba2a0873a0a994e1a55a97a56a394542",
"text": "\"The answer is, unfortunately, along the lines of \"\"it depends\"\". It does depend a little on the bank - I've had a US bank account for years before moving to the US, and I didn't have an SSN or any status when I opened the account. What I did have however was an address in the US that they could send the statements to, and proof that I was living abroad (oh, and US citizen wife that had an account with the same bank). Not all banks will open a bank account for a foreigner with no status in the US, but it is generally possible. You will have to check with several banks and basically have paperwork showing your foreign address and proof of id (passport, possibly a drivers license as well).\"",
"title": ""
},
{
"docid": "e1dac56971cd12de901cc898d434ef11",
"text": "Why not open an USD account or subaccount in Czechia and then transfer the money using an UAE bank that supports transfers in USD. If you don't want to open an USD account in Czechia, it'll get converted when received there into the currency of your account but at their conversion rate which probably isn't good. Alternatively, use Transferwise which might or might not be cheaper.",
"title": ""
},
{
"docid": "f3ce8bacc740681e28a510fcf623ffdc",
"text": "\"This is an advanced fee scam you do not have any money in a foreign account nor will paying any taxes or fees get that money. A clue is that the Constitution of the United Kingdom has no mention of taxes and is also not organized into sections in a manner like \"\"4.11\"\". If you really want to confirm this. You should be able to contact the UK branch of Investec Bank. They would be able to confirm the means that they would use to contact individuals with account issues.\"",
"title": ""
},
{
"docid": "e3eaacc24784c090d2d5bdb857dcd3a9",
"text": "\"This doesn't answer your question, but as an aside, it's important to understand that your second and third bullet points are completely incorrect; while it used to be true that Swiss bank accounts often came with \"\"guarantees\"\" of neutrality and privacy, in recent years even the Swiss banks have been caving to political pressure from many sides (especially US/Obama), with regards to the most extreme cases of criminals. That is to say, if you're a terrorist or a child molester or in possession of Nazi warcrime assets, Swiss banks won't provide the protection you're interested in. You might say \"\"But I'm not a terrorist or a pervert or profiteering of war crimes!\"\" but if you're trying so hard to hide your personal assets, it's worth wondering how much longer until Swiss banks make further concessions to start providing information on PEOPLE_DOING_WHAT_YOU_ARE_DOING. Not to discourage you, this is just food for thought. The \"\"bulletproof\"\" protection these accounts used to provide has been compromised. I work with online advertising companies, and a number of people I know in the industry get sued on a regular basis for copyright or trademark infringement or spamming; most of these people still trust Swiss bank accounts, because it's still the best protection available for their assets, and because Swiss banks haven't given up details on someone for spamming... yet.\"",
"title": ""
},
{
"docid": "eeca0a2b4af05100ffe716150b4feb26",
"text": "\"I'm pretty sure that the banks here will only allow a joint account with either all citizens or all \"\"foreign resident\"\" or tourists. You may be able to do something with Leumi since they have a US branch in NYC. What many people do (who are US citizens) is open a bank account either at a physical branch or online and then it can be managed all online. Make sure no monthly balance fees or atm fees etc. If you need to transfer money most banks will \"\"buy\"\" a US check (I have done this with Leumi) or you can go to the ATM and pull out a few thousand shekel from the USA account and deposit it right back into the Israeli account. My wife and I did this when we first arrived. Discount Bank seemed to have no fees for pulling money out and a good USD/ILS rate. Just make sure you don't have foreign transaction fees / high rates on the US account. If you need to deposit checks for him you can use the remote deposit feature and just take a picture. בהצלחה!\"",
"title": ""
},
{
"docid": "0383a3d4efc2433af856ac82cdaa3e04",
"text": "\"Do you guys know any options that are accessible to any global citizen? Prepaid and stored value cards are anonymous. For an arbitrary reason, the really anonymous ones only allow you to load $500 but there is no regulation that dictates this amount. In the USA, these cards are exempt from being declared at border crossings. Not because they look like credit cards, but because they are exempt by the US Treasury and Customs. The cons is that there are generally fees to use them. US DOJ has done research showing that some groups take advantage of the exemption moving upwards of $50,000 a day between borders, but Congress is fine with this exemption and the burden is always on the government to determine \"\"illicit origin\"\". Stigmatizing how money is moved is only a 30 year old phenomenon, but many free nations do not really have capital controls, they only care that you pay taxes and that the integrity of their stock markets are upheld. Aside from that there are no qualms about anonymity, except from your neighbors but they dont matter for a global citizen. In theory, the UK should have more flexibility in anonymity options, such as stored value cards with higher limits.\"",
"title": ""
},
{
"docid": "0088bde6c38469a9d3f530543bfd529d",
"text": "\"The thing about the Swiss banks is that the accounts there were \"\"anonymous\"\", that's why it's such a famous example. Until not so long ago, the access to the account was by a password, and no-one knew whose account it is and to whom the money belongs. That's perfect for money laundering and various illegal activities (like hiding bribe money, stolen money, evading taxes and what not). The US pressured Swiss to cancel that policy, and now the Swiss banks are basically the same as everywhere else (there are other off-shore places that still allow similar anonymous accounts, I think). Having an account abroad is usually legal (depends on the country of your citizenship of course, I think in Canada there's no law against that, certainly not in the US), as long as you declare everything and the owners of the accounts are not anonymous, and their ID's were verified by the bank. By the way, one of the former Israeli Prime Ministers, Itzhak Rabin, had to resign his post because journalists found out that his wife had a bank account in the US. In that time (late 1970's) it was illegal for Israeli citizens to have accounts in foreign banks. Similar laws were in the USSR, and most (if not all) of the Eastern block. All of these countries no longer forbid foreign bank accounts.\"",
"title": ""
},
{
"docid": "c04c94c58cc1e469ef411466c4daa4f9",
"text": "\"The €100'000 limit is per bank, where \"\"bank\"\" is defined as a financial institution with a banking license from one of the ECB members. \"\"WeltSparen\"\", is operated by the MHB-Bank which is a German bank, recognized by the Bundesbank. That means your money is initially guaranteed by the Bundesbank. When it's moved to the final saving account, you'll be saving at other banks, which are identified in the individual offerings. This can be an effective technique to split capitals in excess of €100.000. You should obviously look for banks that are backed by ECB member banks, but keep in mind what happened to Iceland: the national banks can also fail. In particular, the Bank of Italy at the moment is looking a bit shaky because Monte dei Paschi di Siena is currently failing and will require a bail-out. There's no official back-up for failing national banks within the ECB system.\"",
"title": ""
},
{
"docid": "5b28e315b2bebc5522b126396f8d62c5",
"text": "\"Yes, kinda. Talk to local banks about a business account, and tell them you want to enable certain employees to make deposits but not withdrawals. They don't need to know you're all the same person. For instance I have a PayPal account for business. These allow you to create \"\"sub accounts\"\" for your employees with a variety of access privileges. Of course I control the master account, but I also set up a \"\"sub account\"\" for myself. That is the account I use every day.\"",
"title": ""
}
] |
fiqa
|
6881bb9b9d6f73ff31ddcad45ab6b5b6
|
Visiting vacation rental with immediate family
|
[
{
"docid": "ec14edf569fc9869a3b600e2a9221def",
"text": "No, you cannot deduct it. There's no business substance in such a trip, it is your vacation, and as such cannot be claimed as an expense against the rental income. You may be able to deduct the coffee you buy for the meeting with the property manager while there, but there's no way you can justify a 7-10 days vacation with your whole family as an expense to maintain the rental property. Since you will only have less than 2 weeks personal use, you won't need to prorate expenses, so you have that at least.",
"title": ""
},
{
"docid": "12d897b31bb6c93c879a2de36343bbe5",
"text": "If you and your wife are owners, your tickets might be a business expense against the rental income. 'Might' as in the IRS will be happy to audit you, seeing the kids went as well and prorating the expense as say 25% was really business, the rest, family vacation. If this $4000 write off is the make or break for this deal, don't do it.",
"title": ""
}
] |
[
{
"docid": "fe641ec5ad4250f5b01cdca09248e555",
"text": "What you haven't mentioned is the purchase risk. You say that she will buy but then say you will be on the loan. If you are on the loan, essentially you will be purchasing a rental property and renting to your mother. So that is the analysis you need to consider. You need to be financially able to take on this purchase and be willing to be a landlord. The ten year timeline looks good on paper. This may not be realistic, especially with an aging parent. What if after 4 years, she can't stay in that condo? What renting buys is flexibility. If she needs money for any reason, it is not tied up in an asset and unavailable. She is able it move if necessary. If she won't need the money, she should buy in cash. That, by far, gives her the best deal.",
"title": ""
},
{
"docid": "2ff18fce91f9e00ae614b18af671a83a",
"text": "More possible considerations: Comparability with other properties. Maybe properties that rent for $972 have more amenities than this one (parking, laundry, yard, etc) or are in better repair. Or maybe the $972 property is a block closer to campus and thus commands 30% higher rent (that can happen). Condition of property. You know nothing about this until you see it. It could be in such bad shape that you can't legally rent it until you spend a lot of money fixing it. Or it may just be run down or outdated: still inhabitable but not as attractive to renters, leading to lower rent and/or longer vacancy periods. Do you accept that, or spend a lot of money to renovate? Collecting the rent. Tenants don't necessarily always pay their rent on time, or at all. If a tenant quits paying, you incur significant expenses to evict them and then find a new tenant, and all the while, you collect no rent. There could be a tenant in place paying a much lower rent. Rent control or a long lease may prevent you from raising it. If you are able to raise it, and the tenant doesn't want to pay, see above. Maintenance and more maintenance. College students could be hard on the property; one good kegger could easily cause more damage than their security deposits will cover. Being near a university doesn't guarantee you an easy time renting it. It suggests the demand is high, but maybe the supply is even higher. Renting to college students has additional issues. They are less likely to have incomes large enough to satisfy you that they can pay the rent. Are you willing to deal with cosigners? If a student quits paying, are you willing to try to collect from their cosigning parents in another state? And you'll probably have many tenants (roommates) living in the house. They will come and go separately and unexpectedly, complicating your leasing arrangements. And you may well get drawn in to disputes between them.",
"title": ""
},
{
"docid": "00b414e442d21632884141ce59c4e87a",
"text": "\"You will need to see a tax expert. Your edited question includes the line For the short term, we will be \"\"renting\"\" it to my wife's grandmother at a deep discount. According to the instructions for schedule E If you rented out a dwelling unit that you also used for personal purposes during the year, you may not be able to deduct all the expenses for the rental part. “Dwelling unit” (unit) means a house, apartment, condominium, or similar property. For each property listed on line 1a, report the number of days in the year each property was rented at fair rental value and the number of days of personal use. A day of personal use is any day, or part of a day, that the unit was used by: I have no idea how this will work for Schedule C.\"",
"title": ""
},
{
"docid": "4224baa1404950971eeb2d436c65719a",
"text": "\"The first issue you'll find is that if you aren't going to immediately live in the house as a primary residence, this property counts as a \"\"second home\"\" or \"\"investment property\"\". You'll generally pay a higher interest rate, have a larger down payment, and qualify for less government-backed programs/incentives/subsidies than you would otherwise. The lending criteria on such properties is always more strict - and generally more costly - than an equivalent primary residence. Lenders won't really care that in 10 years you or your parents plan to move in - you can't be held to that, so they'll generally ignore that plan entirely. On a related note, you should be aware that insurance for the property will also generally cost more, but you'd need to get quotes to determine if that is at all significant in your situation. You'll need to talk with a few potential lenders, but from a first read it sounds like it would be best \"\"storied\"\" like so: you and your parents want to buy a 2nd home or vacation home, which you'll share the use of (vacations, etc, and being converted to a primary residence later). It'll need to be clear what plan to use the property for - if you intend to rent out the home in the interim years then instead make that clear and state it will be an investment home; if it is what you are planning it might make it easier, as expected rent for the property will be considered. Saying you want a mortgage for a home no one will live in for a decade probably isn't a good idea, as a general plan anyway. Either way, this can be called a \"\"joint mortgage\"\". When I was a loan officer we didn't use that term, but it's basically just a mortgage application with multiple people on it, all of whom are combined together to qualify for the loan. Everyone's income, debts, assets, and credit get included, which can work or one person's situation can cause the whole thing to collapse. From your description I think this could work for you, and one option is to set it up where only one of the parents is on the application if the other parent has problematic credit situation. Note that his possibility is often restricted by local law, so it may not be an option for you in your jurisdiction, but worth being aware of. An alternative is you just buy the property and the parents gift you the down payment, and you list them as beneficiaries in will/trust in case something happens to you before they retire, but I don't know if that would make any sense in your situation. This is a single applicant mortgage, and it means only you are considered as buying it, which sometimes is the only option depending on your parents current financial situation. It's usually something you try if the other option doesn't work, but it's a fallback plan. Some lenders will allow guarantors (co-signers in US parlance), but this will vary by lender and locale - often what they actually want is a joint mortgage, not really a guarantor/cosigner. Finally, you'll need to plan for what happens if things don't go as planned, regardless of what happens. What if your income changes, if either of your parents become deceased in advance of retirement, if they get a divorced from each other, or if either/both become ill or disabled and need assisted care? Planning for such unpleasant possibilities (even if they seem crazy and not going to happen in your mind right now) can save you all a tremendous amount of heart ache later on when the unexpected (including things I didn't mention) pops up.\"",
"title": ""
},
{
"docid": "2f94f31b43ce48120c2a0c01b820a93c",
"text": "\"Obviously you have done well financially in order to be able to purchase a condo for cash, presumably, without risk of your other obligations. To put things in perspective, we are probably talking about less than $5,000 in tax savings. If she is on the title then she is a co-owner. Are you okay with that? You would essentially be giving this child a 50% stake in a property without compensation. Will your other children be okay with it? As your question stated you would prefer to not have her as an owner. However, is it better to not have her as an owner, So I would buy the condo without her on the title and just pay the extra $100 per month in property tax. It is probably \"\"small potatoes\"\" in comparison to your net worth. I would also only charge her at most your cost of carrying the property as rent. While you will create income all of it (and probably more) could be written off as costs. There should be no income tax burden created from this situation. Your accountant can help with any paperwork that needs to be filed.\"",
"title": ""
},
{
"docid": "3e2719b026c9708a7d51c44bc55c3aff",
"text": "\"The Trustee has allowed me to act as his \"\"agent\"\", continuing to pay bills, and take care of much of the administrative affairs for my mother's estate since I did all of it for years before she passed away. I was not paid for any of this work. ... The expenses were more than $30K last year, and there is still a punch list to go this year. The trust should reimburse your expenses and deduct them on the trust tax return. Since the Trust owned the property in 2015, and I will receive ownership this month, can last year's expenses incurred for the Trust be deducted again future income for my property this year? Not exactly. The trust will file its own tax return and will report the income/loss attributed to the beneficiaries per the trust rules. What is attributed to you will flow to your Schedule E. From there you own it and if it is a passive activity where the loss is limited - you can carry it forward and offset with future gain. The trustee will have to deal with all the paperwork. Do 1099-misc forms need to be filed for the contractors who worked to get it ready for rental? It is my understanding that since 2010 (and before 2010) landlords who are not in real-estate trade or business are not required to send out 1099. But it won't hurt if you do, also. In any case - for all of these issues you should talk to a tax adviser (EA/CPA licensed in your State).\"",
"title": ""
},
{
"docid": "8c5aa064b387820dc05c7f309a1ffe17",
"text": "Schedule E is the form you'll use. It lists nearly all deductions you can take for a rental. TurboTax Deluxe will handle it and it includes State Filing.",
"title": ""
},
{
"docid": "97d0fd57e54d5530a5f805cf1518f7f5",
"text": "The Military Home owners wants to remain living in the home for 2 weeks after the closing date. You can include this provision in your contract. By putting the seller directly across the table, you can put your heads together and find win-win solutions to some issues that may arise.",
"title": ""
},
{
"docid": "6b152e811ea46812d2271bf92d52ae16",
"text": "That's a good point. I worry that it may look bad if I go on holiday or come in whenever I want. My dad suggested I swan in and check out different businesses whenever I want. Maybe I should do full employee hours for a week at each place or something, as opposed to just going in for a couple of hours randomly.",
"title": ""
},
{
"docid": "bb9ea76eef68b7af44e872e2f37d6569",
"text": "Sorry, but I think you really do need an attorney here. This is the kind of minefield where knowing all the precedents and edge cases can make a huge difference in what you can or can't do, and a misplaced comma can make or break your case. Note that AT BEST you could sell your own interest in the house -- owning the note does not mean owning the property, it only means that they issued the note on the strength of your share of the property. And a half-interest in a single family house has little value outside the family, except to sell it to whoever owns the other half. Which is probably the best answer: Sell your half to your Aunt, if she can afford to buy it. She then gets sole control of the house, and you get the money you seem to need right now, and everyone in the family is much less stressed.",
"title": ""
},
{
"docid": "e4bec4b0c95ec95619b283d75b8bdf3e",
"text": "Your reasoning is backwards. As others have pointed out, you cannot just decide how much you charge irrespective of the market. Let me paraphrase a little economics 101 to underline why you also should not think like this: You can see a rental property like your house (the same reasoning is usually explained with the example of hotel rooms) as a series of perishable goods. Your house represents the potential sale of the January rent (which perishes once January is over), plus the February rent etc. Your approach was to compute the total costs (all fixed and variable costs of owning that house as well as costs associated to renting specifically) and average them over the time period so that you know how much to ask at least. Assuming that you are only looking to rent it out, not sell it or let a family member live there, you can't think like this. Most of those costs that you averaged are what economists call sunk costs. You have already incurred the mortgage costs and they are not affected by your decision to rent or not to rent. These costs are irrelevant to your decision making process. You only need to think about marginal costs: those additional costs that you have when you rent but not when you don't. Look at the market prices for renting similar properties in that region and compare them with your marginal costs. As long as they are higher than your marginal costs, rent it out. This does not mean that you are sure to make profits, but it means that you are sure to make less losses than in your only alternative of not renting.",
"title": ""
},
{
"docid": "005db9a6ec7f3421984f8cbc462239c8",
"text": "\"My biggest concern with this plan is that there's no going back should you decide that it is not going to work, either due to the strain on the relationship or for some other reason. If you were borrowing from a relative in place of a mortgage or a car loan, you can always refinance, and might just pay a little more interest or closing costs from a bank. Student loans are effectively unsecured, so your only option for a \"\"refinance\"\" would be to get a personal, unsecured loan (or borrow against existing collateral if you have it). You are going to have a tough time getting another 50k unsecured personal loan at anywhere near student-loan rates. The other negative aspects (overall risk of borrowing from family, loss of possible tax deduction) make this plan a no-go for me. (I'm NOT saying that it's always a good idea to borrow from family for homes or cars, only that there's at least an exit plan should you both decide it was a bad idea).\"",
"title": ""
},
{
"docid": "ffb80c3cb2326ad48361b84743963ec9",
"text": "Also, does anyone know of any books on doing this sort of thing, i.e. renting out half of your home to a tenant and living in the ret? Head down to your local library. Mine has a state guide for renters and another one for landlords. There will likely be a lot of Nolo Press books around there too. You can also research the property tax on a lot; many counties run an arcGIS server that will tell you who owns a given property, what the assessed value is and the total tax bill, etc.",
"title": ""
},
{
"docid": "d1700ce173631fa8ff7771d55e1b4c98",
"text": "Rent the property?? Is that a possible solution? Since selling the house is not an option and living in it isn't either, then perhaps renting it is the way to go? Since no explanation for the sister's motives is given, i'd speculate it is a mixture of emotional and financial concerns. Maybe mostly emotional. I imagine letting go of the one physical thing that has memories of you and your parents attached to it is very difficult. I don't think getting a lawyer or doing what's convenient for only your boyfriend is the way to go...But that's my own personal opinion. Clearly, he only has one close family member left alive. Creating permanent wounds in that relationship will cost more along the way. And quite frankly, if the house is owned 50-50, don't you need both owners to sign the deed to sell the house anyways? If renting is not an option, then maybe refinancing the mortgage to lower payments? Or Airbnb it only half the time? Or rent it out for events to help with payments? Or ask the sister for a little money...Not for half the mortgage, but at least a few hundred dollars to maintain the house and heat. If she is indeed concerned with the property, then maintaining it to prevent serious damagae is in her interests, no matter her income.",
"title": ""
},
{
"docid": "a85446d8dde2c0b220b01dcfbf7094fc",
"text": "Yeah dang. Guess it's probably written deep in the contract that this can happen and nothing is absolutely guaranteed. Any specific experience on rental car chains? I've recently started using National and love the pick your own car experience...much faster and smoother but is more expensive (and luckily reimbursed mostly as well)",
"title": ""
}
] |
fiqa
|
b2a12c1c82fe6404f82e7925a543b11b
|
What purchases, not counting real estate, will help me increase my cash flow?
|
[
{
"docid": "897b1fcdfb82e4434aab17ca5ed7baa9",
"text": "You can increase your monthly cash flow in two ways: It's really that simple. I'd even argue that to a certain extent, decreasing expenses can be more cash-positive than increasing income by the same amount if you're spending post-tax money because increasing income generally increases your taxes. So if you have a chunk of cash and you want to increase your cash flow, you could decrease debt (like Chris suggested) and it would have the same effect on your monthly cash flow. Or you could invest in something that pays a dividend or pays interest. There are many options other than real estate, including dividend-paying stocks or funds, CDs, bonds, etc. To get started you could open an account with any of the major brokerage firms and get suggestions from their financial professionals, usually for free. They'll help you look at the risk/reward aspects of various investments.",
"title": ""
},
{
"docid": "03a0fb7b8594a2f775d15ddeccc01168",
"text": "Brownbag your lunch and make coffee at home. If your current lifestyle includes daily takeout lunches and/or barista-made drinks, a rough estimate is you have a negative cash flow of $8-20 per day, $40-100 per week, $2080-5200 per year. If you have daily smoothies, buy a blender. If you have daily lattes buy an espresso maker. I recently got myself a sodastream and it's been worth it. Until you have a six figure portfolio, you aren't going to swing a comparable annual return differential based on asset allocation.",
"title": ""
},
{
"docid": "3e502be83fed29fd4641cda992b6c127",
"text": "\"Mutual funds can be relatively low risk and a good starting point. Really it depends on you. What are your goals? This is a pretty open ended question. These can all be low risk and provide some return. Note \"\"Less Knowledge\"\" is never a good qualifier for an investment. Your money is your business and you are entitled to know what your business is up to.\"",
"title": ""
}
] |
[
{
"docid": "9a16a61b5e77e41d84d20a0c0d0e8781",
"text": "The best investment opportunity that guarantees unending cash flows. You will get a replicated website with your own payment button that opens unending and continuous flow of $5 payments directly into your account. There are other biz opportunities (complete home base business) inside the member area. All these opportunities will be yours in less than 10 minutes. Respond to this ad now and start your journey to prosperity",
"title": ""
},
{
"docid": "416ef7846826a6105c8771f921f2ad33",
"text": "\"You don't state a long term goal for your finances in your message, but I'm going to assume you want to retire early, and retire well. :-) any other ideas I'm missing out on? A fairly common way to reach financial independence is to build one or more passive income streams. The money returned by stock investing (capital gains and dividends) is just one such type of stream. Some others include owning rental properties, being a passive owner of a business, and producing goods that earn long-term royalties instead of just an immediate exchange of time & effort for cash. Of these, rental property is probably one of the most well-known and easiest to learn about, so I'd suggest you start with that as a second type of investment if you feel you need to diversify from stock ownership. Especially given your association with the military, it is likely there is a nearby supply of private housing that isn't too expensive (so easier to get started with) and has a high rental demand (so less risk in many ways.) Also, with our continued current low rate environment, now is the time to lock-in long term mortgage rates. Doing so will reap huge benefits as rates and rents will presumably rise from here (though that isn't guaranteed.) Regarding the idea of being a passive business owner, keep in mind that this doesn't necessarily mean starting a business yourself. Instead, you might look to become a partner by investing money with an existing or startup business, or even buying an existing business or franchise. Sometimes, perfectly good business can be transferred for surprisingly little down with the right deal structure. If you're creative in any way, producing goods to earn long-term royalties might be a useful path to go down. Writing books, articles, etc. is just one example of this. There are other opportunities depending on your interests and skill, but remember, the focus ought to be on passive royalties rather than trading time and effort for immediate money. You only have so many hours in a year. Would you rather spend 100 hours to earn $100 every year for 20 years, or have to spend 100 hours per year for 20 years to earn that same $100 every year? .... All that being said, while you're way ahead of the game for the average person of your age ($30k cash, $20k stocks, unknown TSP balance, low expenses,) I'm not sure I'd recommend trying to diversify quite yet. For one thing, I think you need to keep some amount of your $30k as cash to cover emergency situations. Typically people would say 6 months living expenses for covering employment gaps, but as you are in the military I don't think it's as likely you'll lose your job! So instead, I'd approach it as \"\"How much of this cash do I need over the next 5 years?\"\" That is, sum up $X for the car, $Y for fun & travel, $Z for emergencies, etc. Keep that amount as cash for now. Beyond that, I'd put the balance in your brokerage and get it working hard for you now. (I don't think an average of a 3% div yield is too hard to achieve even when picking a safe, conservative portfolio. Though you do run the risk of capital losses if invested.) Once your total portfolio (TSP + brokerage) is $100k* or more, then consider pulling the trigger on a second passive income stream by splitting off some of your brokerage balance. Until then, keep learning what you can about stock investing and also start the learning process on additional streams. Always keep an eye out for any opportunistic ways to kick additional streams off early if you can find a low cost entry. (*) The $100k number is admittedly a rough guess pulled from the air. I just think splitting your efforts and money prior to this will limit your opportunities to get a good start on any additional streams. Yes, you could do it earlier, but probably only with increased risk (lower capital means less opportunities to pick from, lower knowledge levels -- both stock investing and property rental) also increase risk of making bad choices.\"",
"title": ""
},
{
"docid": "001ad7f8030aa55b992aab75c2bd3b7d",
"text": "This is one way in which the scheme could work: You put your own property (home, car, piece of land) as a collateral and get a loan from a bank. You can also try to use the purchased property as security, but it may be difficult to get 100% loan-to-value. You use the money to buy a property that you expect will rise in value and/or provide rent income that is larger than the mortgage payment. Doing some renovations can help the value rise. You sell the property, pay back the loan and get the profits. If you are fast, you might be able to do this even before the first mortgage payment is due. So yeah, $0 of your own cash invested. But if the property doesn't rise in value, you may end up losing the collateral.",
"title": ""
},
{
"docid": "fc8424217a86294ba50e8a485dea0f79",
"text": "\"Pay cash. You have the cash to pay for it now, but God forbid something happen to you or your wife that requires you to dip into that cash in the future. In such an event, you could end up paying a lot more for your home theater than you planned. The best way to keep your consumer credit card debt at zero (and protect your already-excellent credit) is to not add to the number of credit cards you already have. At least in the U.S., interest rates on saving accounts of any sort are so low, I don't think it's worthwhile to include as a deciding factor in whether not you \"\"borrow\"\" at 0% instead of buying in cash.\"",
"title": ""
},
{
"docid": "266fde9704582a3f139f5690f61fda24",
"text": "What does your cash flow look like? If you can comfortably afford to pay the extra cost and ride out the mortgage, it can be a nice investment. Better if you can manage the property yourself and are somewhat handy. Realize you should be able to raise rents over time so that it is cash flow even eventually. If cash flow is tight, sell it and re-fi your current place",
"title": ""
},
{
"docid": "32a5505c4337f438c896c4c4fe254687",
"text": "\"A major thing to consider when deciding whether to invest or pay off debt is cash flow. Specifically, how each choice affects your cash flow, and how your cash flow is affected by various events. Simply enough, your cash flow is the amount of money that passes through your finances during a given period (often a month or a year). Some of this is necessary payments, like staying current on loans, rent, etc., while other parts are not necessary, such as eating out. For example, you currently have $5,500 debt at 3% and another $2,500 at 5%. This means that every month, your cashflow effect of these loans is ($5,500 * 3% / 12) + ($2,500 * 5% / 12) = $24 interest (before any applicable tax effects), plus any required payments toward the principal which you don't state. To have the $8,000 paid off in 30 years, you'd be paying another $33 toward the principal, for a total of about $60 per month before tax effects in your case. If you take the full $7,000 you have available and use it to pay off the debt starting with the higher-interest loan, then your situation changes such that you now: Assuming that the repayment timeline remains the same, the cashflow effect of the above becomes $1,000 * 3% / 12 = $2.50/month interest plus $2.78/month toward the principal, again before tax effects. In one fell swoop, you just reduced your monthly payment from $60 to $5.25. Per year, this means $720 to $63, so on the $7,000 \"\"invested\"\" in repayment you get $657 in return every year for a 9.4% annual return on investment. It will take you about 11 years to use only this money to save another $7,000, as opposed to the 30 years original repayment schedule. If the extra payment goes toward knocking time off the existing repayment schedule but keeping the amount paid toward the principal per month the same, you are now paying $33 toward the principal plus $2.50 interest against the $1,000 loan, which means by paying $35.50/month you will be debt free in 30 months: two and a half years, instead of 30 years, an effective 92% reduction in repayment time. You immediately have another about $25/month in your budget, and in two and a half years you will have $60 per month that you wouldn't have if you stuck with the original repayment schedule. If instead the total amount paid remains the same, you are then paying about $57.50/month toward the principal and will be debt free in less than a year and a half. Not too shabby, if you ask me. Also, don't forget that this is a known, guaranteed return in that you know what you would be paying in interest if you didn't do this, and you know what you will be paying in interest if you do this. Even if the interest rate is variable, you can calculate this to a reasonable degree of certainty. The difference between those two is your return on investment. Compare this to the fact that while an investment in the S&P might have similar returns over long periods of time, the stock market is much more volatile in the shorter term (as the past two decades have so eloquently demonstrated). It doesn't do you much good if an investment returns 10% per year over 30 years, if when you need the money it's down 30% because you bought at a local peak and have held the investment for only a year. Also consider if you go back to school, are you going to feel better about a $5.25/month payment or a $60/month payment? (Even if the payments on old debt are deferred while you are studying, you will still have to pay the money, and it will likely be accruing interest in the meantime.) Now, I really don't advocate emptying your savings account entirely the way I did in the example above. Stuff happens all the time, and some stuff that happens costs money. Instead, you should be keeping some of that money easily available in a liquid, non-volatile form (which basically means a savings account without withdrawal penalties or a money market fund, not the stock market). How much depends on your necessary expenses; a buffer of three months' worth of expenses is an often recommended starting point for an emergency fund. The above should however help you evaluate how much to keep, how much to invest and how much to use to pay off loans early, respectively.\"",
"title": ""
},
{
"docid": "983de4d284b10120ef321f3cfd394987",
"text": "There is (almost) always money involved somewhere, but it doesn't have to come from you. It can be investors, credit cards, or even seller-financing (I've done all 3). Examples: If you can find partners with the money to make the deals happen, then your job is to put the deal together. Find the properties, negotiate the price, even get the property under contract (all without any obligation or cost on your part... yes it absolutely can be done). Then your partners will fund the deal if it's good enough and their terms are met, etc. In some areas you can put a property on a credit card. If you find a house say for $25,000 that will rent for $300/month, and you can put it on a credit card (especially at zero percent for a year or something similar), then you can generate cashflow as a landlord without putting up any cash of your own on the purchase. Of course there are many risks associated with landlording and i could tell you horror stories... but we're not addressing that here. You can negotiate a sale with an owner who agrees to finance the entire purchase for you. I once purchased 3 properties at once this way from a seller who financed the entire sale, all closing costs, everything, this way. Of course they needed a lot of repair and such so I had to fund that another way, but at least the purchase itself cost me no money out of pocket. So these infomercials/courses are not inherently scams in the sense that what they are teaching is (usually... I'm sure there are exceptions) true. However they generally give you enough information to get into trouble, and not out. But that's what true learning is... it's getting into trouble and finding a way out that doesn't kill you. =) That's called experience, and you can't buy that for any price.",
"title": ""
},
{
"docid": "b95e7286d3620036ce1d7a554eb8d328",
"text": "Well, it really doesn't make sense to pay for either in cash. For these purchases, unless you're super wealthy, you won't be paying it in full. If you were to pay in full, then I don't see any practical point to withdraw that money in cash.",
"title": ""
},
{
"docid": "46ef1c349a7e585f5f3bd1e59c73d059",
"text": "Here's how I think about money. There are only 3 categories / contexts (buckets) that my earned money falls into. Savings is my emergency fund. I keep 6 months of total expenses (expenses are anything in the consumption bucket). You can be as detailed as you want with this area but I tend to leave a fudge factor. In other words, if I estimate that I spend approximately $3,000 a month in consumption dollars then I'll save $3,500 times 6 in the bank. This money needs to be liquid. Some people use a HELOC, other people use their ROTH contributions. In any case, you need to put this money some place you can get access to it in case you go from accumulation (income exceed expenses) to decumulation mode (expenses exceed income). This money is distinct from consumption which I will cover in paragraph three. Investments are stocks, bonds, income producing real estate, small businesses, etc. These dollars require a strategy. The strategy can include some form of asset allocation but more importantly a timeline. These are the dollars that are working for you. Each dollar placed here will multiply over time. Once you put a dollar here it shouldn't be taken out unless there is some sort of catastrophe that your savings can't handle or your timeline has been achieved. Notice that rental real estate is included so liquidating stocks to purchase rental real estate is NOT considered removing investment dollars. Just reallocating based on your asset allocation. This bucket includes 401k's, IRAs, all tax-sheltered accounts, non-sheltered brokerage accounts, and rental real estate. In general your primary residence is not included in this bucket. Some people include the equity of their primary residence in the investment column but it can complicate the equation and I prefer to leave it out. The consumption bucket is the most important bucket and the one you spend the most time with. It requires a budget. This includes your $5 magazine and your $200 bottle of wine. Anything in this bucket is gone. You can recover a portion of it by selling it on ebay for $3 (these are earned dollars) but the original $5 is still considered spent. The reason your thought process in this area is distinct from the other two, the decisions made in this area will have the biggest impact on your personal finances. Warren Buffett was famous for skimping on haircuts because they are worth thousands of dollars down the road if they are invested instead. Remember this is a zero-sum game so every $1 not consumed is placed in one of the other buckets. Once your savings bucket is full every dollar not consumed is sent to investments. Remember to include everything that does not fit in the other two buckets. Most people forget their car insurance, life insurance, tax bill at the end of the year, accountant bill, etc. In conclusion, there are three buckets. Savings, which serve as your emergency bucket. This money should not be touched unless you switch from accumulation to decumulation. Investments, which are your dollars that are working for you over time. They require a strategy and a timeline. Consumption, which are your monthly expenses. These dollars keep you alive and contribute to your enjoyment. This is a short explanation of my use of money. It can get as complicated and detailed as you want it to be but as long as you tag your dollars correctly you'll be okay IMHO. HTH.",
"title": ""
},
{
"docid": "e05e13d28a008dfdf53244a99276f6c0",
"text": "Since no one else mentioned it, there are sometimes amazing deals that require being the first person to take advantage of them. I'm not talking about black Friday sales, I'm talking about the woman who decided to sell the Porsche (she had bought for her cheating husband) for $1000. You might not run into those types of deals often, but having liquid investments will allow you to take advantage of them instead of kicking yourself. I just bought some real estate with some of my emergency fund that needed several months before I could properly finance it due to some legal issues with the deed that needed to go through court because there was a deceased person on the title. I will make far more on the deal when it's done than I ever could have made with that money invested in the market.",
"title": ""
},
{
"docid": "103149f9d033adf1cda71bb2ba4affe7",
"text": "Don’t go crazy with your salary and try to live similar to your college lifestyle for a while. Max out tax deferred investments and any matching your company offers. Put the rest of your savings in passively managed index funds not a savings account at your bank. Buy furniture over a few months and find deals. Try to keep your total auto expense under 10% of gross monthly income and you’re housing expense under 20% of gross monthly income. After a few months you’ll figure out your other monthly expenses and how much you feel comfortable saving. You can also let your credit card company know you have this income and they may raise your CC limit. A higher limit means your utilization rate will be lower which will help your credit as well.",
"title": ""
},
{
"docid": "4cf9bc141f3041ebc6991cb6d84786f9",
"text": "I'd invest in yourself. Start up a side business. Take a certification class that gets your foot in the door for something else (auctioneering, real estate sales, whatever). Bid on a storage auction and try to re-sell it. Learn Spanish (or whatever second language is best for your area). And so forth. Most of the suggestions thus far are either debt reduction or passive investment. You have good control on your debt, and most passive investments pay jack (though Lending Club might be a bit better than most). Build up another basket to put your eggs in and build equity and cash flow instead of interest and dividends. You're young. This is the time to learn how to do it.",
"title": ""
},
{
"docid": "e9f76816678c0a267f047910b324fe99",
"text": "With an investment, you tend to buy it for a very specific purpose, namely to make you some money. Either via appreciation (ie, it hopefully increases value after you take all the fees and associated costs into account, you sell the investment, realise the gains) or via a steady cashflow that, after you subtracted your costs, leaves you with a profit. Your primary residence is a roof over your head and first and foremost has the function of providing shelter for yourself and your family. It might go up in value, which is somewhat nice, but that's not its main purpose and for as long as you live in the house, you cannot realise the increase in value as you probably don't want to sell it. Of course the remortgage crowd would suggest that you can increase the size of the mortgage (aka the 'home atm') but (a) we all know how that movie ended and (b) you'd have to factor in the additional interest in your P&L calculation. You can also buy real estate as a pure investment, ie with the only objective being that you plan to make money on this. Normally you'd buy a house or an apartment with a view of renting it out and try to increase your wealth both due to the asset's appreciation (hopefully) and the rent, which in this scenario should cover the mortgage, all expenses and still leave you with a bit of profit. All that said, I've never heard someone use the reasoning you describe as a reason not to buy a house and stay in an apartment - if you need a bigger place for your family and can afford to buy something bigger, that falls under the shelter provision and not under the investment.",
"title": ""
},
{
"docid": "06e1b8afb9052c723e8242b969dd441f",
"text": "Real estate investment is a proven creator of wealth. Check into the history of the rich and you will find real estate investment. Starting your investment in multi-family is a great idea. It is a good way to gain experience in real estate while exponentially increasing cash flow. If you turn the properties over to a reputable property management company, your cash flow will be a little less but so will your headaches. (Expect to pay 8 - 10% of gross income.) You could start investing now by looking into discounted real estate such as foreclosures, tax sales, short sales etc while the market is still depressed. This way your return on investment should be higher. From there you could expand into land development (i.e. subdivision) or commercial investments. Commercial properties with triple net leases can be a great low-stress investment opportunity (but they take more cash upfront). Attending some local real estate investment classes would be a great idea for starters.",
"title": ""
},
{
"docid": "8a4f34e63f42deecfde00368d6d715fa",
"text": "\"Paying in physical cash is almost never a good idea for large purchases (unless you like being audited and/or having lots of attention from law enforcement). All purchases over $10k in cash need to have special forms filled out for the IRS and Financial Crimes Enforcement Network, so this is not a tinfoil hat conspiracy theory... if you do that on the regular, you ARE being investigated. When people say \"\"cash\"\" for normal purchases, they generally mean a wire transfer (e.g. buying a house \"\"cash\"\" = wire transfer between banks). In this case, purchasing a company \"\"cash\"\" is contrasted with purchasing with stock. So instead of getting $13.7B of AMZN, Amazon takes out a loan (or pulls their money from cash on on hand) and transfers it to the financial institution handling the sale. Everyone who owns WFM stock gets paid out in cash, as opposed to receiving some number of shares of AMZN.\"",
"title": ""
}
] |
fiqa
|
2d0f9919e5cc38c8e9f9f6e8f234d9cc
|
Paid credit card bill, but money didn't leave my checking account [duplicate]
|
[
{
"docid": "460dca0b3e5b5f08a08830116926fea6",
"text": "The fact that your credit card has seen the payment is strong evidence that the transaction did in fact take place. But it's not unusual for there to be a delay of one or two business days before transactions show up in your online banking records. Saturday and Sunday are not business days. I bet you will see it on Monday. If it's not there by Tuesday, you could call the bank.",
"title": ""
},
{
"docid": "fc4458560c98f0bde72d8260c85fd17d",
"text": "You probably don't need to call the bank. Today is Sunday, so three days ago was probably Friday (or Thursday depending on how you count the days). Banks normally don't post transactions on weekends - and transactions that do happen on the weekend sometimes don't get posted until Tuesday. I would give it till Tuesday and then call them if you still don't see it show up on your account.",
"title": ""
},
{
"docid": "e035cf8095b7f043254c4e5ead6f0785",
"text": "This is normal for credit cards. As long as you make the credit card company's cutoff time, they will make the funds available on your credit card rather than make you wait for them to actually get the funds from your bank. The amount of time this takes actually can vary significantly from bank to bank. You do want to make sure funds are available in your bank account for them to withdraw when they do take them though. If not, the payment would get returned and can set red flags on your credit card account that take a while to drop off.",
"title": ""
}
] |
[
{
"docid": "fd38139ef1ff50c0c080ab457dd92245",
"text": "How about finding a friend with Paypal and sending them the money so they can pay your bill using a card? Withdrawals from Paypal are typically instant now.",
"title": ""
},
{
"docid": "6a45bf0e2322aebf82b61762e7d69c82",
"text": "\"As with many questions here, while littleadv is correct, the real answer is \"\"each bank may handle this differently.\"\" In my case, I was experimenting with my balance to see the impact of utilization, and I overpaid the current bill before the bill was issued. The prior balance was paid, but then I sent a payment to bring my account to a credit balance. Further down the statement appears the line - Your account has a credit balance. We can hold and apply this balance against future purchases and cash advances, or refund it. If you would like a check mailed to you in the amount of the credit balance, simply call us and speak to a representative. You can also see that the \"\"revolving credit available\"\" is above the line of credit, implying that someone with a $5000 credit line wanting to charge a $6000 engagement ring can send a higher payment to the account and then make that charge.\"",
"title": ""
},
{
"docid": "44309cd550236d0b4bb90aa00c1efe11",
"text": "I use online banking and bill pay for all accounts where I can control when and how much is paid, where I push the funds out. The bills from those companies that want to be allowed to reach into my account and pull money automatically (e.g. my Chase mortgage) I simply will not enroll - they get a paper check in the mail. There is no way I am giving these cocksucker criminals *permission* to take money out of my accounts.",
"title": ""
},
{
"docid": "ccc83c20986bc4ce66ffc6f1c1bd529f",
"text": "Most merchants (also in Europe) are reasonable, and typically are willing to work with you. credit card companies ask if you tried to work with the merchant first, so although they do not enforce it, it should be the first try. I recommend to give it a try and contact them first. If it doesn't work, you can always go to the credit card company and have the charge reversed. None of this has any effect on your credit score (except if you do nothing and then don't pay your credit card bill). For the future: when a transaction supposedly 'doesn't go through', have them write this on the receipt and give it to you. Only then pay cash. I am travelling 100+ days a year in Europe, using my US credit cards all the time, and there were never any issues - this is not a common problem.",
"title": ""
},
{
"docid": "a0262e62400a430bc8aa3b783e8b4e84",
"text": "Maybe his accountant not taking care of things meant that there was a miscommunication about his debts. He could've had outstanding loans, back taxes, etc and he didn't have a clear enough picture about what his cash balance would be after his transaction.",
"title": ""
},
{
"docid": "3bf1cfcfad220756d3e5d8255f98729a",
"text": "I actually did this once. I wrote a large check along with a letter indicating that I would not be around to receive the next bill so I was prepaying. Not only did they credit the entire check, they didn't send that bill and listed the charges on the next month's bill. They must have done that by hand because there's no way the machines would have understood.",
"title": ""
},
{
"docid": "5ffeb4e741fb823d17a81aa85e8c2ea3",
"text": "Once, back when I had a bank account, I tried to pay a large emergency dental bill with my debit card. It rejected it as it turned out the bill was less than a dollar over what I had in the account. I thought there was enough money so I tried again, 3 times. They charged me an overdraft for each attempt even though the debit never went through. This was without overdraft protection, as overdraft protection would have allowed the debit and charged me one overdraft. I don't know the details but federal regulations have changed how they do this. To me overdraft protection rejects any debit that attempts to overdraft my account and doesn't charge me with an overdraft that didn't actually occur as a result of the charge being rejected, but that's not how it works.",
"title": ""
},
{
"docid": "5fa31bc1e67933188329a7f3d31e7b99",
"text": "Most bank accounts offer automatic bill pay as well. They don't rely on support from the bill you're paying, I think they basically just mail a check with your account number on it",
"title": ""
},
{
"docid": "f7a396f4f01017517d2af9035b684198",
"text": "Using the bank's bill pay always seemed like a hassle to me. There are lots of mistakes to be made by me that can result in late payments and not too many benefits other than some convenience, and being able to pay bills online for accounts that require paper payment. (Although the banking systems often screw up those payments) Plus, there is usually a fee associated with bill pay, at least to some extent. I generally use the websites of my credit cards or other entities to pay bills. Then again, maybe I'm a bit of a weirdo here... I don't see mailing a check 3 days ahead of the due date as a particular hassle.",
"title": ""
},
{
"docid": "3324341128f77a61d22d572bfaca98f0",
"text": "Is this the time of year this board attracts question regarding the law and how to skirt it? I've done as you suggested. I happened to have a month that I was going to blow through the $12000 limit I had on my credit card. So as the balance crossed $8000, I paid that amount, and when the bill was cut, it was just $4000 or so. Scrutiny would show the reason for partial payments was obvious, I wanted to avoid going over limit. I wouldn't have done so just to avoid the $10,000 transaction. Since then, I've asked that the limit be raised in case I have another wild month.",
"title": ""
},
{
"docid": "794789e2f0d5bff964cb0e03e8c4bdd6",
"text": "Things are generally fine. A credit balance is not a horrible thing. The argument against maintaining a credit balance is that you are essentially loaning the credit card issuer money at 0% interest. You probably have alternative investments that would pay better interest, so it's usually better to park your money there. All that said, it's unlikely that the interest on whatever balance you have is enough to be more than pennies. The way that a credit card works, you run up a balance in one period. Then there is a grace period. If you don't pay off the balance during the grace period, they start charging you interest. You also may have a minimum payment to make. If you don't make that payment, they'll charge you a late fee. The typical period to rack up charges is from the first to the last day of a month. The typical grace period is through the 20th or 25th of the next month. Your card may be different. So check the documentation (user agreement) for your card if you want the real data. It sounds like you paid off some purchases while you were still in the period where you rack up charges. While those purchases were posted to the account, they may not be counted in the balance calculation. If your credit balance exactly matches the payment you made, that's probably what happened. It's also possible that you overpaid the balance. If your credit balance is just a small amount, that's probably what happened. If you really want to be sure, you should call the credit card issuer and ask them. At best we can tell you how it normally works. Since this is your first month, you could just wait for your first bill and respond to that. So long as you pay off the entire balance shown there by the deadline, everything should be fine. Don't wait until the last day to pay. It's usually best to pay a week or so early so as to leave time for the mail to deliver the check and for them to process it. You can wait longer for an online payment, but a few business days early to give you a chance to handle potential problems is still good.",
"title": ""
},
{
"docid": "c8f7a3ce6a223974c1913148af62ded8",
"text": "\"To avoid nitpicks, i state up front that this answer is applicable to the US; Europeans, Asians, Canadians, etc may well have quite different systems and rules. You have nothing to worry about if you pay off your credit-card statement in full on the day it is due in timely fashion. On the other hand, if you routinely carry a balance from month to month or have taken out cash advances, then making whatever payment you want to make that month ASAP will save you more in finance charges than you could ever earn on the money in your savings account. But, if you pay off each month's balance in full, then read the fine print about when the payment is due very carefully: it might say that payments received before 5 pm will be posted the same day, or it might say before 3 pm, or before 7 pm EST, or noon PST, etc etc etc. As JoeTaxpayer says, if you can pay on-line with a guaranteed day for the transaction (and you do it before any deadline imposed by the credit-card company), you are fine. My bank allows me to write \"\"electronic\"\" checks on its website, but a paper check is mailed to the credit-card company. The bank claims that if I specify the due date, they will mail the check enough in advance that the credit-card company will get it by the due date, but do you really trust the USPS to deliver your check by noon, or whatever? Besides the bank will put a hold on that money the day that check is cut. (I haven't bothered to check if the money being held still earns interest or not). In any case, the bank disclaims all responsibility for the after-effects (late payment fees, finance charges on all purchases, etc) if that paper check is not received on time and so your credit-card account goes to \"\"late payment\"\" status. Oh, and my bank also wants a monthly fee for its BillPay service (any number of such \"\"electronic\"\" checks allowed each month). The BillPay service does include payment electronically to local merchants and utilities that have accounts at the bank and have signed up to receive payments electronically. All my credit-card companies allow me to use their website to authorize them to collect the payment that I specify from my bank account(s). I can choose the day, the amount, and which of my bank accounts they will collect the money from, but I must do this every month. Very conveniently, they show a calendar for choosing the date with the due date marked prominently, and as mhoran_psprep's comment points out, the payment can be scheduled well in advance of the date that the payment will actually be made, that is, I don't need to worry about being without Internet access because of travel and thus being unable to login to the credit-card website to make the payment on the date it is due. I can also sign up for AutoPay which takes afixed amount/minimum payment due/payment in full (whatever I choose) on the date due, and this will happen month after month after month with no further action necessary on my part. With either choice, it is up to the card company to collect money from my account on the day specified, and if they mess up, they cannot charge late payment fees or finance charge on new purchases etc. Also, unlike my bank, there are no fees for this service. It is also worth noting that many people do not like the idea of the credit-card company withdrawing money from their bank account, and so this option is not to everyone's taste.\"",
"title": ""
},
{
"docid": "7d8c99e9bac67a591e86e04fbf077c19",
"text": "The answer is - the money got bounced back to their account :(",
"title": ""
},
{
"docid": "9c94d24ea670df4c1baf45394ac352fa",
"text": "some of that article is misleading, some of it is just plain wrong. Very wrong... like you end up drawing an incorrect conclusion type wrong. Corporate transaction accounts, whose balances are up recently due to TAG (expires 12/31), are subject to reserve requirements. When you purchase something with a credit card, the bank's asset of your credit increases and the bank's asset of cash decreases (it goes wherever you purchased). There is no change to your deposit account and no change to reserves. The incoming bank's cash account and liability account associated with that business transaction account increase, and it is trivial to transfer the % of cash necessary to reach minimum reserve requirements to the Fed. Secondly, anyone with a smidgen of accounting can tell that his balance sheet won't balance.",
"title": ""
},
{
"docid": "6ce8759db51b2ce834797cbbd3ed6464",
"text": "\"IMHO It is definitively not too early to start learning and thinking about personal finances and also about investing. If you like to try stock market games, make sure to use one that includes a realistic fee structure simulation as well - otherwise there'll be a very unpleasant awakening when switching to reality... I'd like to stress the need for low fees with the brokerage account! Sit down and calculate how much fees different brokers take for a \"\"portfolio\"\" of say, 1 ETF, 1 bond, 1 share of about $500 or $1000 each (e.g. order fee, annual fee, fee for paying out interest/dividend). In my experience, it is good if you can manage to make the first small investing steps before starting your career. Real jobs tend to need lots of time (particularly at the beginning), so time to learn investing is extremely scarce right at the time when you for the first time in your life earn money that could/should be invested. I'm talking of very slowly starting with a single purchase of say an ETF, a single bond next time you have saved up a suitable amount of toy money, then maybe a single share (and essentially not doing anything with them in order to avoid further fees). While such a \"\"portfolio\"\" is terrible with respect to diversification and relative fees*, this gives you the possibility to learn the procedures, to see how the fees cut in, what to do wrt taxes etc. This is why I speak about toy money and why I consider this money an investment in education. * An order fee of, say, $10 on a $500 position are terrible 4% (2 x $10) for buying + selling - depending on your local taxes, that would be several years of dividend yield for say some arbitrary Dow Jones ETF. Nevertheless, purchase + sale together are less than 3 cinema tickets.\"",
"title": ""
}
] |
fiqa
|
b88d65d16f532ae4b94dec03d21c3f1a
|
Money Structuring
|
[
{
"docid": "4dda835616037c706767369d1efac27a",
"text": "\"See \"\"Structuring transactions to evade reporting requirement prohibited.\"\" You absolutely run the risk of the accusation of structuring. One can move money via check, direct transfer, etc, all day long, from account to account, and not have a reporting issue. But, cash deposits have a reporting requirement (by the bank) if $10K or over. Very simple, you deposit $5000 today, and $5000 tomorrow. That's structuring, and illegal. Let me offer a pre-emptive \"\"I don't know what frequency of $10000/X deposits triggers this rule. But, like the Supreme Court's, \"\"We have trouble defining porn, but we know it when we see it. And we're happy to have these cases brought to us,\"\" structuring is similarly not 100% definable, else one would shift a bit right.\"\" You did not ask, but your friend runs the risk of gift tax issues, as he's not filing the forms to acknowledge once he's over $14,000.\"",
"title": ""
},
{
"docid": "97ccccec31fb0dd649a0ae28d41d3726",
"text": "There's a difference between your street level drug dealer sending you sales proceeds of $20,000 in $5,000 increments to avoid sending you $10,000 or $20,000 at once to avoid the scrutiny of a government agency that might not be thrilled with your business venture, and a tire shop paying a wholesaler $5,000 each time funds are available up to the amount owed of $20,000. The former is illegal for a few reasons, and the latter is business as usual.",
"title": ""
},
{
"docid": "8f6d0075e62e2c655b39f049dba249df",
"text": "Structuring, as noted in another answer, involves breaking up cash transactions to avoid the required reporting limits. There are a couple of important things to note. And, the biggest caveat - there have been many cases of perfectly legitimate transactions that have fallen foul of the reporting requirements. One case springs to mind of a small business that routinely deposited the previous day's receipts as cash, and due to the size of the business, those deposits typically fell in the $9,000-$9,500 range. This business ended up going through a lot of headaches and barely survived. Some don't. A single batch of transactions, if it is only 2 or 3 parts and they are separated by reasonable intervals, is not likely in and of itself to be suspicious. However, any set of such transactions does run the risk of being flagged. In your case, you also run afoul of the Know Your Customer rules, because it's not even you depositing the cash - it's your friend. (Why can your friend not simply write you a check? What is your friend doing with $5k of cash at a time? How do you know he's not generating illegal income and using you to launder it for him?) Were I your bank, you can be very certain I'd be reporting these transactions. Just from this description, this seems questionable to me. IRS seizes millions from law-abiding businesses",
"title": ""
},
{
"docid": "7bc0ca2a3f1be2d286c1a259a8c7fbdc",
"text": "In the Anti-Money Laundering World ( AML) , structuring consists of the division ( breaking up) of cash transactions, deposits and withdrawals, with the intent to avoid the Currency Transaction Reporting ( CTR) filings. In your case the issue is not structuring but the fact that you have another person ( unknown to the bank) depositing cash , event if it is above the CTR threshold, for you to withdraw later . The entire scenario raises a lot of questions.",
"title": ""
}
] |
[
{
"docid": "efc0e864bbf6af6afaa295022d4b712f",
"text": "Illustrating with a shorter example: Suppose I deposit 1,000 USD. Every year I deposit another 100 USD. I want to know how much money will be on that savings account in 4 years. The long-hand calculation is Expressed with a summation And using the formula derived from the summation (as shown by DJohnM) So for 20 years Note in year 20 (or year 4 in the shorter example) the final $100 deposit does not have any time to accrue interest before the valuation of the account.",
"title": ""
},
{
"docid": "0f8bff4246bf5e8c9e8ded7affa5caa8",
"text": "\"Gnucash is first and foremost just a general ledger system. It tracks money in accounts, and lets you make transactions to transfer money between the accounts, but it has no inherent concept of things like taxes. This gives you a large amount of flexibility to organize your account hierarchy the way you want, but also means that it sometimes can take a while to figure out what account hierarchy you want. The idea is that you keep track of where you get money from (the Income accounts), what you have as a result (the Asset accounts), and then track what you spent the money on (the Expense accounts). It sounds like you primarily think of expenses as each being for a particular property, so I think you want to use that as the basis of your hierarchy. You probably want something like this (obviously I'm making up the specifics): Now, when running transaction reports or income/expense reports, you can filter to the accounts (and subaccounts) of each property to get a report specific to that property. You mention that you also sometimes want to run a report on \"\"all gas expenses, regardless of property\"\", and that's a bit more annoying to do. You can run the report, and when selecting accounts you have to select all the Gas accounts individually. It sounds like you're really looking for a way to have each transaction classified in some kind of two-axis system, but the way a general ledger works is that it's just a tree, so you need to pick just one \"\"primary\"\" axis to organize your accounts by.\"",
"title": ""
},
{
"docid": "abd5282cdbc6b70ad70b329b15f6454e",
"text": "The key to understanding where your money is going is to budget. Rather than tracking your spending after the fact, budgeting lets you decide up front what you want to spend your money on. This can be done with cash envelopes, on paper, or on Excel spreadsheets; however, in my opinion, the best, most flexible, and easiest way to do this is with budgeting software designed for this purpose. As I explained in another answer, when it comes to personal budgeting software, there are two different approaches: those in which you decide what to spend your money on before it is spent, and those that simply show you how your money was spent after it is gone. I recommend the first approach. Software designed to do this include YNAB, Mvelopes, and EveryDollar. My personal favorite is YNAB. You'll find lots of help, video tutorials, and even online classes with a live teacher on YNAB's website. Using one of these packages will help you manage spending, whether it is done electronically or with cash. When you pay for something with a credit card, you enter your purchase into the software, and the software adjusts your budget as if the money is already spent, even if you haven't technically paid for the purchase yet. As far as strategy goes, here is what I recommend: Get started on one of these, and set up your budget right away. Assign a category to every dollar in your account. Don't worry if it is not perfect. If you find later on that you don't have enough money in one of your categories, you can move money from another category if you need to. As you work with it, you'll get better at knowing how much money you need in each category. My other recommendation is this: Don't wait until the end of the month to download your transactions from the bank and fit everything into categories. Instead, enter your spending transactions into the software manually, every day, as you spend. This will do two things: first, you'll have the latest, up-to-date picture of where your accounts are in your software without having to guess. Second, it will help you stay on top of your spending. You'll be able to see early on if you are overspending in a particular category. YNAB has a mobile app that I use quite a bit, but if I don't get a chance to enter a purchase right when I spend it, I make sure to keep a receipt, and enter the transaction in that evening. It only takes a couple of minutes a day, and I always know how I stand financially.",
"title": ""
},
{
"docid": "6e6eb756cc10517e78138928fe576fa8",
"text": "\"Depositum irregulare is a Latin phrase that simply means \"\"irregular deposit.\"\" It's a concept from ancient Roman contract law that has a very narrow scope and doesn't actually apply to your example. There are two distinct parts to this concept, one dealing with the notion of a deposit and the other with the notion of irregularity. I'll address them both in turn since they're both relevant to the tax issue. I also think that this is an example of the XY problem, since your proposed solution (\"\"give my money to a friend for safekeeping\"\") isn't the right solution to your actual problem (\"\"how can I keep my money safe\"\"). The currency issue is a complication, but it doesn't change the fact that what you're proposing probably isn't a good solution. The key word in my definition of depositum irregulare is \"\"contract\"\". You don't mention a legally binding contract between you and your friend; an oral contract doesn't qualify because in the event of a breach, it's difficult to enforce the agreement. Legally, there isn't any proof of an oral agreement, and emotionally, taking your friend to court might cost you your friendship. I'm not a lawyer, but I would guess that the absence of a contract implies that even though in the eyes of you and your friend, you're giving him the money for \"\"safekeeping,\"\" in the eyes of the law, you're simply giving it to him. In the US, you would owe gift taxes on these funds if they're higher than a certain amount. In other words, this isn't really a deposit. It's not like a security deposit, in which the money may be held as collateral in exchange for a service, e.g. not trashing your apartment, or a financial deposit, where the money is held in a regulated financial institution like a bank. This isn't a solution to the problem of keeping your money safe because the lack of a contract means you incur additional risk in the form of legal risk that isn't present in the context of actual deposits. Also, if you don't have an account in the right currency, but your friend does, how are you planning for him to store the money anyway? If you convert your money into his currency, you take on exchange rate risk (unless you hedge, which is another complication). If you don't convert it and simply leave it in his safe, house, car boot, etc. you're still taking on risk because the funds aren't insured in the event of loss. Furthermore, the money isn't necessarily \"\"safe\"\" with your friend even if you ignore all the risks above. Without a written contract, you have little recourse if a) your friend decides to spend the money and not return it, b) your friend runs into financial trouble and creditors make claim to his assets, or c) you get into financial trouble and creditors make claims to your assets. The idea of giving money to another individual for safekeeping during bankruptcy has been tested in US courts and ruled invalid. If you do decide to go ahead with a contract and you do want your money back from your friend eventually, you're in essence loaning him money, and this is a different situation with its own complications. Look at this question and this question before loaning money to a friend. Although this does apply to your situation, it's mostly irrelevant because the \"\"irregular\"\" part of the concept of \"\"irregular deposit\"\" is a standard feature of currencies and other legal tender. It's part of the fungibility of modern currencies and doesn't have anything to do with taxes if you're only giving your friend physical currency. If you're giving him property, other assets, etc. for \"\"safekeeping\"\" it's a different issue entirely, but it's still probably going to be considered a gift or a loan. You're basically correct about what depositum irregulare means, but I think you're overestimating its reach in modern law. In Roman times, it simply refers to a contract in which two parties made an agreement for the depositor to deposit money or goods with the depositee and \"\"withdraw\"\" equivalent money or goods sometime in the future. Although this is a feature of the modern deposit banking system, it's one small part alongside contract law, deposit insurance, etc. These other parts add complexity, but they also add security and risk mitigation. Your arrangement with your friend is much simpler, but also much riskier. And yes, there probably are taxes on what you're proposing because you're basically giving or loaning the money to your friend. Even if you say it's not a loan or a gift, the law may still see it that way. The absence of a contract makes this especially important, because you don't have anything speaking in your favor in the event of a legal dispute besides \"\"what you meant the money to be.\"\" Furthermore, the money isn't necessarily safe with your friend, and the absence of a contract exacerbates this issue. If you want to keep your money safe, keep it in an account that's covered by deposit insurance. If you don't have an account in that currency, either a) talk to a lawyer who specializes in situation like this and work out a contract, or b) open an account with that currency. As I've stated, I'm not a lawyer, so none of the above should be interpreted as legal advice. That being said, I'll reiterate again that the concept of depositum irregulare is a concept from ancient Roman law. Trying to apply it within a modern legal system without a contract is a potential recipe for disaster. If you need a legal solution to this problem (not that you do; I think what you're looking for is a bank), talk to a lawyer who understands modern law, since ancient Roman law isn't applicable to and won't pass muster in a modern-day court.\"",
"title": ""
},
{
"docid": "e579c480f632018d2e79008cd1ccaa4b",
"text": "Line one shows your 1M, a return with a given rate, and year end withdrawal starting at 25,000. So Line 2 starts with that balance, applies the rate again, and shows the higher withdrawal, by 3%/yr. In Column one, I show the cumulative effect of the 3% inflation, and the last number in this column is the final balance (903K) but divided by the cumulative inflation. To summarize - if you simply get the return of inflation, and start by spending just that amount, you'll find that after 20 years, you have half your real value. The 1.029 is a trial and error method, as I don't know how a finance calculator would handle such a payment flow. I can load the sheet somewhere if you'd like. Note: This is not exactly what the OP was looking for. If the concept is useful, I'll let it stand. If not, downvotes are welcome and I'll delete.",
"title": ""
},
{
"docid": "53c1121a7e3907d355f4a4576bd57bd1",
"text": "\"A DCF includes changes in working capital which is a source or use of cash. I also don't like your characterization of enterprise value as \"\"cashless\"\" because it's also \"\"debtless\"\". It's capital structure independent -- just like a DCF is. **That's the common theme.**\"",
"title": ""
},
{
"docid": "39430e9e2b7e42a65b94a9ad0d7d55bf",
"text": "\"Correct! But this is only true when a central bank is involved. So if there's a single institution that has a territorial monopoly on the production of money (and competing currencies aren't allowed via \"\"legal tender laws\"\"), then the debt-based money system OP describes isn't actually the system being used. That's the problem with his post: he's trying to make it seem like our current system of fiat currencies is somehow natural or emergent. It's not. What we have now is the result of a legal monopoly.\"",
"title": ""
},
{
"docid": "41d2b73e1ee4366764534c224b142964",
"text": "\"Other than the inconvienent fact that Treasury cannot sell to the Fed by law your theory is nice. You forget the step where the open market buys from the Treasury since they desire bonds to invest in, and the Fed can buy only from the open market. Secondly, the Fed does not give cash to the Treasury. The mint (a branch of the Treasury, not the Fed) prints cash. So it seems your understanding of how the money system works is quite wrong, yet since this is the Economy subreddit instead of the Economics subreddit, I expect you to get upvotes for saying what is popular even though it is laughably incorrect. You seem to not like cash that was not \"\"even existing previously\"\". All cash was not existing previously. How do you expect people to make transactions? Barter? You call them interest free loans (but above claimed they will never be paid back?), but then the Fed is making a profit on them? It seems you contradict yourself with all that handwaving. It would be interesting for you to explain how (and why) money (not cash) gets added and removed to the economy. Yay for ignorance!\"",
"title": ""
},
{
"docid": "84a77dd96b9464296004aeb92854269c",
"text": "So how would you regulate the financial sector to keep one ridiculous horde or powerhouse of cash from ruling it, and keep money flowing through the whole system rather than stagnating or spiraling to a small sector? These questions also bring to mind rivers versus blood vessels. In rivers, you get eddies and pools. In the circulatory system, eddies and pools lead to health issues, much like hording and enclosed loops create stagnation or poor financial health. Just an observation.",
"title": ""
},
{
"docid": "db9b7098da16d8ce4d3a07a3e55bfe35",
"text": "There is no slack of money. People who are saving their money don't have it stored under their mattress. Instead they have it saved in a bank that is in turn being loaned out at the lowest rates in history. All of this manipulation of the economy has finally caught up to us and the last thing we need is more manipulation. We just have to let the bad investments and the misallocations weed out first. I agree with you that it's a tough thing to endure in the short term but it will help us in the long term.",
"title": ""
},
{
"docid": "3643d7beeb720ccb8b716a16c50eaae2",
"text": "\"The best I could come up with would be to simply ask for the amount of \"\"notes\"\" and \"\"coins\"\" you would like, and specify denominations thereof. The different currency labels exist for the reason that not all of them are valued the same, so USD 100 is not the same as EUR 100. To generalize would mean some form of uniformity in the values, that just isn't there.\"",
"title": ""
},
{
"docid": "730426820d883cc22c2fb9d03728ceba",
"text": "\"This is the biggest blunder I see in money handling. \"\"Oh I'm a good person and everyone knows my intentions are good. And they're really happy with me right now, so it'll stay that way forever, right? So I can just do anything and they'll trust me.\"\" And then in hindsight 10 years later, the person realizes \"\"wow, I was really stubborn and selfish to just assume that. No wonder it blew up.\"\" Anyway, to that end, your requirement that all the money be in one account and \"\"this will simplify taxes\"\" is horsepuckey. No one will believe a legitimate financial advisor needs that, but it's exactly what a swindler would do. And that's the problem. If anything goes wrong, their trust in you will be forgotten, some will say you intended to scam all along, and the structure will be the first thing to convict you. Money makes everyone mistrusting. Ironically, the concept is called a \"\"trust\"\", and there's a wide body of law and practice for Person X responsibly handling the money of Person Y. The classic example is Person Y is a corporation (say, a charity) and Person X is on the Board of Directors. It's the same basic thing. The doctrine is:\"",
"title": ""
},
{
"docid": "471649a91d866690eaed3d821dc0c8de",
"text": "That sounds interesting.. As I was looking through some articles on [wealth management](http://www.millionairemindevents.com/) the same question came into my mind. Where did money originated. It would be interesting to read some books about it. Thanks for the suggestion.",
"title": ""
},
{
"docid": "86d35eb31c8cdc76b6c33c4a7c9da582",
"text": "I agree with mbhunter's suggestion of labeling your columns, 'income' and 'expenses'. However, to answer your question, money coming in (a paycheque, for example) is credited to your account. Money going out (a utility bill, for example) is debited from your account. There's no real 'why'... this is simply the definition of the words.",
"title": ""
},
{
"docid": "f4b4cbc777e165b8bcd8a1cbc3d93c1b",
"text": "Can you offer an alternative solution? Sounds like you are not well versed in the reasoning for fiat money. Before trying to pass opinions that you have not formed on your own I would do some research. So go ahead, I challenge you. What is a better way?",
"title": ""
}
] |
fiqa
|
693132806ed90f1fca106051fd4e8d3b
|
Optimal way to use a credit card to build better credit?
|
[
{
"docid": "e691b6e7366ed7139f4b518953281dd1",
"text": "\"First I would like to say, do not pay credit card companies in an attempt to improve your credit rating. In my opinion it's not worth the cash and not fair for the consumer. There are many great resources online that give advice on how to improve your credit score. You can even simulate what would happen to your score if you did \"\"this\"\". Credit Karma - will give you your TransUnion credit score for free and offers a simulation calculator. If you only have one credit card, I would start off by applying for another simply because $700 is such a small limit and to pay a $30 annual fee seems outrageous. Try applying with the bank where you hold your savings or checking account they are more likely to approve your application since they have a working relationship with you. All in all I would not go out of my way and spend money I would not have spent otherwise just to increase my credit score, to me this practice is counter intuitive. You are allowed a free credit report from each bureau, once annually, you can get this from www.annualcreditreport.com, this won't include your credit score but it will let you see what banks see when they run your credit report. In addition you should check it over for any errors or possible identity theft. If there are errors you need to file a claim with the credit agency IMMEDIATELY. (edit from JoeT - with 3 agencies to choose from, you can alternate during the year to pull a different report every 4 months. A couple, every 2.) Here are some resources you can read up on: Improve your FICO Credit Score Top 5 Credit Misconceptions 9 fast fixes for your credit scores\"",
"title": ""
},
{
"docid": "a3fce490685e386e16b16c2e938b82cf",
"text": "Great question. First, my recommendation would be for you to get a card that does not have a yearly fee. There are many credit cards out there that provide cash back on your purchases or points to redeem for gift cards or other items. Be sure to cancel the credit card that you have now so you don't forget about that yearly fee. Canceling will have a temporary impact on your credit score if the credit card is your longest held line of credit. Second, it is recommended not to use more than 20% of all the available credit, staying above that line can affect your credit score. I think that is what you are hearing about running up large balances on your credit card. If you are worried about staying below the 20% line, you can always request a larger line of credit. Just keep paying it off each month though and you will be fine. You already have a history of credit if you have begun paying off your student loans.",
"title": ""
},
{
"docid": "65d9835f86fa210b70fdb53be783b9df",
"text": "\"I answered a similar question, How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score?, in which I show a graph of how utilization impacts your score. In another answer to Should I keep a credit card open to maintain my credit score?, I discuss the makeup of your score. From your own view at Credit Karma, you can see that age of accounts will help your score, so now is the time to get the right cards and stay with them. My background is technology (electrical engineer) and MBA with a concentration in finance. I'm not a Psychology major. If one is undisciplined, credit can destroy them. If one is disciplined, and pays in full each month, credit is a tool. The quoting of billionaires is a bit disingenuous. I've seen people get turned away at hotels for lack of a credit card. $1000 in cash would not get them into a $200/night room. Yes, a debit card can be used, but the rental car and hotel \"\"reserve\"\" a large amount on the card, so if you don't have a high balance, you may be out of town and out of luck. I'll quote another oft-quoted guru: \"\"no one gets rich on credit card rewards.\"\" No, but I'm on track to pay for my 13 year old's last semester in college with the rewards from a card that goes right into her account. It will be great to make that withdrawal and not need to take the funds from anywhere else. The card has no fee, and I've not paid them a dime in interest. By the way, with 1-20% utilization ideal, you want your total available credit to be 5X the highest monthly balance you'd every hit. Last - when you have a choice between 2% cash reward, and the cash discount Kevin manages, take the discount, obviously.\"",
"title": ""
},
{
"docid": "3b64b7488d616ae026c37b3cf64919b2",
"text": "In addition to the already good answers: I am assuming you are playing a long game and have no specific need for a high credit score in the next couple of years. This list is just good practice that will raise you score.",
"title": ""
},
{
"docid": "3dfae77394018b4ded73741d3303cda0",
"text": "\"Or here's a better idea: don't have a credit card at all. They offer no real benefits and plenty of dangers. Don't take my word for it, though: \"\"I tell every student class I get, high school students, university students, you know, they'd be better off if they never used credit cards\"\" - Warren Buffet (Net worth: $44 billion) Before anyone says anything about using credit cards \"\"wisely\"\" and getting the rewards points, I can save 15% on many kinds of large purchases ($100+) using cash. You won't find a reward system offering that level of incentive. Two recent examples of cash discounts: After I bought my house I needed a lawnmower and a my wife wanted a new vacuum cleaner. Went to Lowe's and found the ones we wanted. They were $600 combined. Found the manager, stuck five $100 bills in his hand and said \"\"this is what I have, and that is what I need.\"\" 16.6% saved. Bought my daugher a bed recently. Queen box spring and mattress were on sale for $300 but it didn't come with the rails, which they wanted $50 extra for. Went to the bank and got $320 in cash from the bank, walked in, set it in his hand and said, \"\"I need the bed box spring and rails, tax included.\"\" He replied, \"\"Sorry man, I can't. I'm already taking a loss on...\"\" Then he stopped mid sentence, looked down at the cash again and said \"\"Hold on. Let me ask my manager.\"\" Manager walks over, guy explains what I said, manager looks at the cash and says \"\"Make it happen\"\" 14.3 % saved. As for purchasing a home, it is a myth that you need a credit score to obtain a mortgage for a home. Lending institutions can do manual underwriting instead of just relying on your credit score. It is a little tougher to do and banks usually have stricter requirements, but based on the information the OP has given in this and other questions, I think he can easily meet them.\"",
"title": ""
},
{
"docid": "360efed62e0be8d7fcb21739b691634e",
"text": "If you have self control and a good handle on your finances, which it sounds like - I suggest the following: Note: #3 is important - if you're not able to pay it off each month don't do this because it will cost you a lot in interest. Make sure to check how interest is calculated in case you don't pay it off in full or miss the due date for a month. If you can do this you'll earn some good benefits from the card using money that you're going to spend anyway, as well as build your credit profile. Regarding annual fees -",
"title": ""
},
{
"docid": "1d0aed06ac08c89d6005ebe963993335",
"text": "Most business credit cards do not report to the personal credit report unless the person pays the card late. Given that fact, any debt carried on these cards does not hurt the credit score if it is not reported. You can carry credit card debt on these cards without hurting your credit score. Just apply for business credit cards now to start building this segment of your credit.",
"title": ""
},
{
"docid": "d41d8cd98f00b204e9800998ecf8427e",
"text": "",
"title": ""
}
] |
[
{
"docid": "4571505cd5e76a598b1090e109add091",
"text": "\"A lot of credit card companies these days uses what they call \"\"daily interest\"\" where they charge the interest rate for the number of days till you pay off what you spent. This allows them to make more money than the \"\"period billing\"\". The idea of credit, theoretically, is that there isn't really a day when you can borrow without paying interest - in theory\"",
"title": ""
},
{
"docid": "c3fcbad362ce5138359e0b7103fc7650",
"text": "\"The comments section to Dilip's reply is overflowing. First - the OP (Graphth) is correct in that credit scoring has become a game. A series of data points that predicts default probability, but of course, offers little chance to explain why you applied for 3 loans (all refinancing to save money on home or rentals) got new credit cards (to get better rewards) and have your average time with accounts drop like a rock (well, I canceled the old cards). The data doesn't dig that deep. To discuss the \"\"Spend More With Plastic?\"\" phenomenon - I have no skin in the game, I don't sell credit card services. So if the answer is yes, you spend more with cards, I'll accept that. Here's my issue - The studies are all contrived. Give college students $10 cash and $10 gift cards and send them into the cafeteria. Cute, but it produces no meaningful data. I can tell you that when I give my 13yr old $20 cash, it gets spent very wisely. A $20 Starbucks card, and she's treating friends and family to lattes. No study needed, the result is immediate and obvious. Any study worth looking at would first separate the population into two groups, those who pay in full each month and those who carry a balance. Then these two groups would need to be subdivided to study their behavior if they went all cash. Not a simply survey, and not cheap to get a study of the number of people you need for meaningful data. I've read quotes where The David claimed that card users spend 10% more than cash users. While I accept that Graphth's concern is valid, that he may spend more with cards than cash, there is no study (that I can find) which correlates to a percentage result as all studies appear to be contrived with small amounts to spend. As far as playing the game goes - I can charge gas, my cable bill, and a few other things whose dollar amounts can't change regardless. (Unless you're convinced I'll gas up and go joy-riding) Last - I'd love to see any link in the comments to a meaningful study. Quotes where conclusions are stated but no data or methodology don't add much to the discussion. Edit - Do You Spend More with Cash or Credit? is an article by a fellow Personal Finance Blogger. His conclusion is subjective of course, but along the same path that I'm on with this analysis.\"",
"title": ""
},
{
"docid": "ee7f43ee585e6ce72415a9fbc96d715f",
"text": "\"Personally, I use my credit cards for everything because I get reward points (or, cash back, depending on the card), and I build credit history. I've had credit cards since I was 18 (now 22), and my credit score is in the higher end 700s which I'm told is pretty good for my age. Additionally, since I put my rent and large purchases on my credit card, I have a lot of reward points. I use these to buy things I wouldn't normally buy to try them out and see if they bring any value into my life. If not, I didn't really lose anything, but I have found value in some of those things. I realize most of this is gamification and consumerism at play, but getting that extra little thing once in a while for \"\"free\"\" which is pretty nice.\"",
"title": ""
},
{
"docid": "01264d3bf1b37ab9fb671b8d57b01293",
"text": "I've read multiple times that the way to rebuild the credit score is to get a credit card and then have some minor charges on it every month and have them paid in full every month. Old negative events age and this disciplined activity rebuild the score to some not to horrible levels. Now it's true that it's hard to get reasonably good credit cards when your credit score is poor. Yet it's not necessary to have a good credit card for this case - such things as large credit limit are not needed. All that's needed is a long grace period so that there's no interest between the moment a charge is done and a moment the bill is paid in full at the end of the month. Yes, the card may have rather high interest and rather low credit limit, but it doesn't really matter. I've read once on MSN Money that people are offered credit even while they're in the middle of bankruptcy, so it's not impossible to get a credit card in the described situation. Goes without saying that a lot of discipline will be needed to have all this implemented.",
"title": ""
},
{
"docid": "29fdf38ff4ab2c12206a69cea90ea65b",
"text": "\"good vs \"\"bad\"\" debt in the context of that post. At least in the UK this can be a good tactic to reduce the cost of credit card debt. Some things to consider\"",
"title": ""
},
{
"docid": "3cc6c9116769ff348070c66a1ed49129",
"text": "\"A credit card is a way to borrow money. That's all. Sometimes the loans are very small - $5 - and sometimes they are larger. You can have a credit card with a company (bank or whatever) that you have no other relationship with. They're not a property of a bank account, they are their own thing. The card you describe sounds exactly like a debit card here, and you can treat your Canadian debit card like your French credit card - you pay for things directly from your bank account, assuming the money is in there. In Canada, many small stores take debit but not credit, so do be sure to get a debit card and not only a credit card. Now as to your specific concerns. You aren't going to \"\"forget to make a wire.\"\" You're going to get a bill - perhaps a paper one, perhaps an email - and it will say \"\"here is everything you charged on your credit card this month\"\" along with a date, which will be perhaps 21 days from the statement date, not the date you used the card. Pay the entire balance (not just the minimum payment) by that date and you'll pay no interest. The bill date will be a specific date each month (eg the 23rd) so you can set yourself a reminder to check and pay your bill once a month. Building a credit history has value if you want to borrow a larger amount of money to buy a car or a house, or to start a business. Unlike the US, it doesn't really have an impact on things like getting a job. If you use your card for groceries, you use it enough, no worries. In 5 years it is nice to look back and see \"\"never paid late; mostly paid the entire amount each month; never went over limit; never went into collections\"\" and so on. In my experience you can tell they like you because they keep raising your limit without you asking them to. If you want to buy a $2500 item and your credit limit is $1500 you could prepay $1000 onto the credit card and then use it. Or you could tell the vendor you'd rather use your debit card. Or you could pay $1500 on the credit card and then rest with your debit card. Lots of options. In my experience once you get up to that kind of money they'd rather not use a credit card because of the merchant fees they pay.\"",
"title": ""
},
{
"docid": "6db3089f91d39270c2273289148ff738",
"text": "Ways to build credit without applying for credit cards: It takes some time for these types of actions to positively affect you. I'd say at the very least 6 months. You won't get the full benefit for several years. However, the earlier you get started, the better.",
"title": ""
},
{
"docid": "5e84ad1a155299c3cc4cad8018e600cf",
"text": "\"I would not call this a \"\"good\"\" idea. But I wouldn't necessarily call it a bad idea either. Before you even consider it, you need to do a little bit of soul searching. If there is ANY chance that having multiple credit cards could entice you to spend more than you otherwise would, then this is definitely a bad idea. Avoiding temptation is the key to preventing regrettable actions (in all aspects of life). Psychoanalysis aside, let's take a mathematical approach to the question. I believe your conclusion is correct if you add some qualifiers to it: A few years from now, then your credit score will probably be higher than if you just had 1 credit card. Here are some other things to consider: And, saving the best for last: As for the hard inquiries, they should only have an effect on your credit score for 1 year (though they can be seen on your report for 2 years). Final thought: if you decide to do this (and I personally don't recommend it), I would keep the number of applications smaller (3-5 instead of 10-15). I also would only choose cards that have no annual fee. Try to choose 1 card that has 1-2% cash back and make that your regular card.\"",
"title": ""
},
{
"docid": "8488ea9ff8079c25fe41b97703b2ccc6",
"text": "this post offers excellent pointers that can help you choose a suitable line of credit you can use for financing your day-to-day expenses. please help up promote it to all your friends especially to those who are planning to apply for and get secured and prepaid credit cards!",
"title": ""
},
{
"docid": "3369ef70fc77b2dbaa0460f96c37ed79",
"text": "For many folks these days, not having a credit card is just not practical. Personally, I do quite a bit of shopping online for things not available locally. Cash is not an option in these cases and I don't want to give out my debit card number. So, a strategy is this: use a credit card for a purchase. Then immediately, or within a couple days, pay the credit card with that amount. Sounds simple but it takes a little effort to do it. This strategy gives you the convenience of a credit card and decreases the interest enormously.",
"title": ""
},
{
"docid": "2548412c71407b02dd63b488ad8538f5",
"text": "No, don't open a credit card. Get used to paying cash for everything from the beginning. The best situation you can be in is not to have any credit. When it comes time to buy a house, put down %30 percent and your 0 credit score won't matter. This will keep you within your means, and, with governments gathering more and more data, help preserve your anonimity.",
"title": ""
},
{
"docid": "e674ed76f3aa585ef0cb15210fb3b9bb",
"text": "\"You don't need to have a bunch of credit cards lying around; just a couple is fine. Get a \"\"rewards\"\" card (without annual fee) that pays you back for use, and use it regularly to buy groceries, for example. Pay it off promptly each month, using the rewards, if you like, to reduce the amount you have to send in. Or you can use the rewards for other purchases; some merchants offer $25 worth of merchandise for $20 in rewards. It used to be the case that you could negotiate a discount for paying cash rather than use a credit card, but that is a lot harder to do now, in many cases because credit-card company contracts with merchants prohibit this practice. Also, merchants often prefer credit cards rather than cash because money-handling is an issue (pay for an armored car to come pick up the day's receipts, or risk getting mugged on the way to the bank, possible burglaries if you leave the money overnight in the store, daily balancing of cash-register trays, etc.) So, not being in debt and being rich enough to not need to be in debt are laudable goals, and you have my best wishes that you will reach them soon, but getting rid of all your credit cards as a part of not being in debt may be more trouble than it is worth. Keep a couple, pay them off promptly, and if you are concerned about being in debt, you can time your charges so that you are in debt at most 2 or 3 days each month.\"",
"title": ""
},
{
"docid": "b324d756f11286a3f2de6da4a67af60b",
"text": "\"In the UK, using a credit card adds a layer of protection for consumers. If something goes wrong or you bought something that was actually a scam, if you inform the credit card company with the necessary documents they will typically clear the balance for that purchase (essentially the burden of 'debt' is passed to them and they themselves will have to chase up the necessary people). Section 75 of the Consumer Credit Act I personally use my credit card when buying anything one would consider as \"\"consumer spending\"\" (tvs, furniture ect). I then pay off the credit card immediately. This gives me the normal benefits of the credit card (if you get cashback or points) PLUS the additional consumer credit protection on all my purchases. This, in my opinion is the most effective way of using your credit card.\"",
"title": ""
},
{
"docid": "322a5c40e4c81d952476c0acfbd4c64e",
"text": "\"One of the factors of a credit score is the \"\"length of time revolving accounts have been established\"\". Having a credit card with any line of credit will help in this regard. The account will age regardless of your use or utilization. If you are having issues with credit limits and no credit history, you may have trouble getting financing for the purchase. You should be sure you're approved for financing, and not just that the financing option is \"\"available\"\" (potentially with the caveat of \"\"for well qualified borrowers\"\"). Generally, if you've gotten approved for financing, that will come in the form of another credit card account (many contracting and plumbing companies will do this in hopes you will use the card for future purchases) or a bank loan account (more common for auto and home loans). With the credit card account, you might be able to perform a balance transfer, but there are usually fees associated with that. For bank loan accounts, you probably can't pay that off with a credit card. You'll need to transfer money to the account via ACH or send in a check. In short: I wouldn't bet on paying with your current credit card to get any benefit. IANAL. Utilizing promotional offers, whether interest-free for __ months, no balance transfer fees, or whatever, and passing your debt around is not illegal, not fraudulent, and in many cases advised (this is a link), though that is more for people to distribute utilization across multiple cards, and to minimize interest accrued. Many people, myself included, use a credit card for purchasing EVERYTHING, then pay it off in full every month (or sometimes immediately) to reap the benefit of cash back rewards and other cardholder benefits. I've also made a major payment (tuition, actually) on a Discover card, and opened up a new Visa card with 18-months of no interest and no balance transfer fees to let the bill sit for 12 months while I finished school and got a job.\"",
"title": ""
},
{
"docid": "d14711729b97add28c20e2e8b1141186",
"text": "\"I'm the contrarian on this forum. Since you asked a \"\"should I ...\"\" question, I'm free to answer \"\"No, you shouldn't increase your limit. Instead, you should close it out\"\". A credit card is a money pump - it pumps money from your account to the bank's profit margins. When I look at my furniture and the bank's furniture, I know exactly who needs my money more (hint: it's not the bank). Credit cards change people's spending patterns. In my first day of training as a Sears salesman, the use of the card was drummed into our heads. People purchase on average 25% more when they use a card than when they pay cash. That's good if you're a retailer or the lender (at that time Sears was both), but no good if you're a consumer. Build up a $1,000 emergency fund (for emergencies only, not \"\"I need a quick latte because I stayed up too late last night\"\"), then savings for 6 to 12 months living expenses. Close and cut up the credit card. Save up and pay cash for everything except possibly your house mortgage. If you have that much cash in the bank, the bankers will be as willing to talk to you as if you had an 800+ score. I have lived both with and without debt. Life without debt is well worth the short term sacrifice early on.\"",
"title": ""
}
] |
fiqa
|
dcd6e776a2ccad33d366a9d148fbbce5
|
Is it legal for a vendor to reuse credit details from a previous transaction
|
[
{
"docid": "b93eab82c45c90d807ad18d332fc8fac",
"text": "It is very much legal and in fact depending on the fine print of the purchase you make, you have now established a business relationship among which gives the business the right to hold on to your information (unless privacy policy states otherwise) and reuse it under certain circumstances (such as auto shipments) and when they called and asked you if you wanted it and you said OK, you acknowledged authorization. All legal even if pushy and less than pretty.",
"title": ""
}
] |
[
{
"docid": "8be8ac7ecbba0a10b649f7028804137c",
"text": "I've had a card cloned 15 years ago and used to buy over 5k of goods in another country. So the inconvenience of having a card closed and re-issued is quite annoying even though the charges were reversed and I was made whole. But these days most CC fraud isn't from a card scanned by a waiter and cloned then used elsewhere. Mostly it is poorly secured databases or point of sale terminal malware. The latter is getting curtailed by chipped cards and the largest source of fraud is now online transactions (so called card not present) where the merchant has your CC number. If their system is breached the bad guys have a wealth of card numbers they sell in an E-bay like site on the dark web. This is where the Citi virtual CC comes in handy. Here's how it works to protect the bank and the hassles you go through when a card as to be re-issued. Citi's virtual CCs let you generate an actual credit card, complete with security code and expiration date. What is unique is that once the virtual CC is used it can only be used subsequently by that same merchant and is declined by any other. You can also set a total limit on what the merchant can charge as well as an expiration date. I use them for all my online accounts because they are, for all practical purposes, immune to the malware that steals CC info. Even if somehow the virtual CC is used before the merchant makes the initial charge that locks in the CC to their account the charge can be reversed without closing your actual card which has a different number. You can manage multiple Citi virtual CCs and view charge status, close, or adjust limits over time so managing them is quite easy with no risk to your primary account.",
"title": ""
},
{
"docid": "724f4aa42a46fe16ff32b4f2087a57a4",
"text": "I think you're off base here. The bureaus only remove information if the creditor cannot verify any dispute within 30 days, or if the information's super old. If the creditor can provide corrected information, then the credit bureau is required to apply it to its own database. A dispute can be about the entire account, or it can be about payment status within a given span (or spans) of time. Of course, it's the consumer who has to initiate the dispute.",
"title": ""
},
{
"docid": "fd4e136401631719b477bcecbdb36789",
"text": "\"Yes and No. There's always a \"\"fee\"\". The difference in credit vs debit usually determines how much that fee is and how it's paid. Each vendor who accepts the major credit card is under contract to pay for equipment and meet certain standards. The same is true for debt card transactions. How much the \"\"fee\"\" is can vary based on the contract the vendor has with MasterCard/Visa/AMEX. But in general most debt transactions go back to the bank who distributed the card.\"",
"title": ""
},
{
"docid": "ca9c5511d15fe54b47293c8e20c70d94",
"text": "\"As indicated in comments, this is common practice in the US as well as EU. For example, in this Fox Business article, a user had basically the same experience: their card was replaced but without the specific merchant being disclosed. When the reporter contacted Visa, they were told: \"\"We also believe that the public interest is best served by quickly notifying financial institutions with the information necessary to protect themselves and their cardholders from fraud losses. Even a slight delay in notification to financial institutions could be costly,” the spokesperson said in an e-mail statement. “Visa works with the breached entity to collect the necessary information and provides payment card issuers with the affected account numbers so they can take steps to protect consumers through independent fraud monitoring, and if needed, reissuing cards. The most critical information needed is the affected accounts, which Visa works to provide as quickly as possible.” What they're not saying, of course, is that it's in Visa's best interests that merchants let Visa know right away when a leak occurs, without having to think about whether it's going to screw that merchant over in the press. If the merchant has to consider PR, they may not let the networks know in as timely of a fashion - they may at least wait until they've verified the issue in more detail, or even wait until they've found who to pin it on so they don't get blamed. But beyond that, the point is that it's easier for the network (Visa/Mastercard/etc.) to have a system that's just a list of card numbers to submit to the bank for re-issuing; nobody there really cares which merchant was at fault, they just want to re-issue the cards quickly. Letting you know who's at fault is separate. There's little reason for the issuing bank to ever know; you should find out from the merchant themselves or from the network (and in my experience, usually the former). Eventually you may well find out - the article suggest that: [T]he situation is common, but there is some good news: consumers do in many cases find out the source of the breach. But of course doesn't go into detail about numbers.\"",
"title": ""
},
{
"docid": "7e8c76ba62572ca0f714d3b8568c6417",
"text": "\"Your biggest risk with a vendor like this is not that your Credit Card Number will be stolen in transit, it is that it will be stolen from the vendor. I agree with @mhoran that using a one-time number is the best plan, provided you have a bank that offers such numbers. Bank of America calls it \"\"Shop Safe\"\" while Citibank calls it \"\"Virtual Account Numbers\"\". I think Discover card has something similar, but less useful, in that they aren't really one-time use, and I think American Express discontinued their service. AFAIK no one else offers anything like it. If you can't get a one-time number, then I was going to suggest buying a Visa gift card, until I put together the fact that you are making a purchase in Asia and the gift cards are not authorized for international payments (due to PATRIOT act restrictions). Visa does offer the V.me service which might help, but I doubt your vendor participates (or would even be allowed to participate) if they don't offer a secure order form. You can open a pre-paid Visa card account, which is probably what I'd do. You can buy pre-paid Visa cards the same way you buy Visa gift cards, the difference being you have to register the pre-paid cards (thanks, PATRIOT act) before you can use them. But it's not that big a deal to register one, you just fill out the online form your your SSN etc and you're good to go. Load it up with enough money to cover your purchase and the FX fees and then cut it up.\"",
"title": ""
},
{
"docid": "52b93ea21402f1d2f3d73a6d680c120c",
"text": "I have already talked to them over the phone and they insist they haven't charged me yet, and I will not be charged. When I informed them I had in fact been charged they agreed it would be reversed. So I have tried to resolve the issue and I don't have any confidence they will reverse the charge as it has not been done yet. They are difficult to communicate which makes the whole process more difficult. Your best next step is to call the credit card company and share this story. I believe the likely result is that the credit card company will initiate a charge back. My question is, is this a valid reason to file a chargeback on my credit card? Yes. If you attempted to work it out with the vendor and it is not working out, this is an appropriate time to initiate a charge back.",
"title": ""
},
{
"docid": "1f1da2383bf77d16e0fca936499ad01e",
"text": "\"In the United States, the Fair Credit Reporting Act allows companies to buy your credit information for \"\"legitimate business needs.\"\" The legitimate use of credit scores and credit reporting varies state to state, but like it or not, you can expect a lot more non-lending use of your credit information in the future. Companies and individuals use credit reports as an assessment of general behavior because, unfortunately, they work. You've seen the disclaimers about \"\"past performance…\"\", but unfortunately in this case… past performance really has been shown to be a pretty reliable indicator of future behavior. So…\"",
"title": ""
},
{
"docid": "7aec18814f3c28ae1a6b570030bfeae5",
"text": "There are rules and regulations as to how the credit card information must be stored, and I assume Square adhere to these rules. The point is that the barber doesn't need to see your credit card at all, and doesn't have to keep its number for keeping tabs, you only share the information with Square and they remit payments to everyone else. This is very similar to Paypal, Amazon and Google checkout systems, except that Square combine it with physical card processing.",
"title": ""
},
{
"docid": "c5d5523842c31bc0949236014e496797",
"text": "When you give your credit card number and authorize a merchant to charge your credit card, the merchant then gives the information to their merchant processor which in turns bills the bank that issued the card (it's a little more complex and it all happens instantly unless the merchant is using the very old fasion imprinting gizmos). It is possible for a merchant to attempt to charge you more than you authorized but if they do they risk a fine ($25-$50 for a chargeback) from their processor, the legitimate portion of the charge as well as increasing the processing fees charged by their processor or even the possibility of loosing their merchant account entirely and being permanently blacklisted by Visa/Mastercard. In short no legitimate business is going to intentionally over charge your credit card. There really isn't significant risk in using a reputable online retailer's order forms. There is the possibility that their database could be compromised but that risk is lower than the risk of having an employee steal your credit number when you give it to them in person. Besides in the US at least the most you can legally be held liable for is $50 assuming you notice the discrepancy within 60 days of statement the charge appears on and most banks limit liability to $0. Over the years I have had a number of different credit card numbers stolen and used fraudulently and I have never had to pay any fraudulent charges.",
"title": ""
},
{
"docid": "e8ac7c336553d8cc5346b8e340e22fd2",
"text": "\"A bona-fide company never needs your credit card details, certainly not your 3-digit-on-back-of-card #, to issue a refund. On an older charge, they might have to work with their merchant provider. But they should be able to do it within the credit card handling system, and in fact are required to. Asking for details via email doesn't pass the \"\"sniff test\"\" either. To get a credit card merchant account, a company needs to go through a security assessment process called PCI-DSS. Security gets drummed into you pretty good. Of course they could be using one of the dumbed-down services like Square, but those services make refunds ridiculously easy. How did you come to be corresponding on this email address? Did they initially contact you? Did you find it on a third party website? Some of those are fraudulent and many others, like Yelp, it's very easy to insert false contact information for a business. Consumer forums, even moreso. You might take another swing at finding a proper contact for the company. Stop asking for a cheque. That also circumvents the credit card system. And obviously a scammer won't send a check... at least not one you'd want! If all else fails: call your bank and tell them you want to do a chargeback on that transaction. This is where the bank intervenes to reverse the charge. It's rather straightforward (especially if the merchant has agreed in principle to a refund) but requires some paperwork or e-paperwork. Don't chargeback lightly. Don't use it casually or out of laziness or unwillingness to speak with the merchant, e.g. to cancel an order. The bank charges the merchant a $20 or larger investigation fee, separate from the refund. Each chargeback is also a \"\"strike\"\"; too many \"\"strikes\"\" and the merchant is barred from taking credit cards. It's serious business. As a merchant, I would never send a cheque to an angry customer. Because if I did, they'd cash the cheque and still do a chargeback, so then I'd be out the money twice, plus the investigation fee to boot.\"",
"title": ""
},
{
"docid": "f2ae18b2ef3ae9d1111258c6199420f3",
"text": "\"To answer the heart of your question, it would be illegal for any credit bureau or creditor to somehow \"\"penalize\"\" you just for trying to make sure that what's being reported about you is accurate. That's why the Fair Credit Reporting Act exists -- that's where the rights (and mechanisms) come from for letting you learn about and request accurate reporting of your credit history. Every creditor is responsible for reporting its own data to the bureaus, using the format provided by those bureaus for doing so. A creditor may not provide all of the information that can be reported, and it may not report information in as timely a manner as it could or should (e.g., payments made may not show up for weeks or even months after they were made, etc.). The bottom line is that the credit bureaus are not arbiters of the data they report. They simply report. They don't draw conclusions, they don't make decisions on what data to report. If a creditor provides data that is within the parameters of what the bureaus ask to be provided, then the bureaus report precisely that -- nothing more, nothing less. If there is an inaccuracy or mistake on your report, it is the fault (and responsibility) of the creditor, and it is therefore up to the creditor to correct it once it has been brought to their attention. Federal laws spell out the process that the bureau has to comply with when you file a dispute, and there are strict standards requiring the creditor to promptly verify valid information or remove anything which is not correct. The credit bureaus are simply automated clearinghouses for the information provided by the creditors who choose to subscribe to each bureau's system. A creditor can choose which (or none) of the bureaus they wish to report to, which is why some accounts show on one bureau's report on you but not another's. What I caution is, just because a credit bureaus reports on your credit doesn't mean they have anything to do with the accuracy or detail of what is being reported. That's up to the creditors.\"",
"title": ""
},
{
"docid": "39ce77a9a6f73da8194f996943405e13",
"text": "\"It's very straightforward for an honest vendor to refund the charge, and the transaction only costs him a few pennies at most. If you initiate a chargeback, the merchant is immediately charged an irreversible fee of about $20 simply as an administrative fee. He'll also have to refund the charge if it's reversed. To an honest merchant who would've happily refunded you, it's unfair and hurtful. In any case, now that he's out-of-pocket on the administrative fee, his best bet is to fight the chargeback - since he's already paid for the privilege to fight. Also, a chargeback is a \"\"strike\"\" against the merchant. If his chargeback rate is higher than the norm in his industry, they may raise his fees, or ban him entirely from taking Visa/MC. For a small merchant doing a small volume, a single chargeback can have an impact on his overall chargeback rate. The \"\"threshold of proof\"\" for a chargeback varies by patterns of fraud and the merchant's ability to recover. If you bought something readily fungible to cash - like a gift card, casino chips, concert tickets etc., forget it. Likewise if you already extracted the value (last month's Netflix bill). Credit card chargeback only withdraws a payment method. Your bill is still due and payable. The merchant is within his rights to \"\"dun\"\" you for payment and send you to collections or court. Most merchants don't bother, because they know it'll be a fight, an unpleasant distraction and bad for business. But they'd be within their rights. Working with the merchant to settle the matter is a final resolution.\"",
"title": ""
},
{
"docid": "1321dc071d64c45d197ac4f381d77ac9",
"text": "\"It surely doesn't HURT to keep a receipt. I tend to pile up receipts in my desk drawer, never look at them, and then every few months throw them all out. If a vendor writes a receipt by hand or if the cash register is not tied in to the credit card system, keeping a receipt could give you evidence against mistakes or fraud. Like if the vendor gives you a receipt for $10 and then sends a transaction to the credit card company for $20, you could use the receipt as evidence of the problem. But if the vendor is trying to really cheat you, the most likely thing for him to do is run the legitimate transaction through, and then some time later run a fake transaction. So say today you go to vendor X, buy something for $20, and he bills your credit card $20. Then a few days later he bills you another $100 even though you never came back to the store. Sure, you have a receipt for $20. But you don't have a receipt for the $100 because you never authorized that transaction. Your receipt proves nothing -- presumably you're not disputing the $20. If you complain to the bank or go to the police or whatever, saying, \"\"Hey look, I don't have a receipt for the $100\"\" doesn't prove anything. How do they know you didn't just throw it away? It's difficult to prove that you never had such a receipt.\"",
"title": ""
},
{
"docid": "e5173b4baf00f45b2cd4262eb0d06c1c",
"text": "\"Here's an excerpt from VISA's Card Acceptance Guidelines for Visa Merchants (PDF) The merchant name is the single most important factor in cardholder recognition of transactions. Therefore, it is critical that the merchant name, while reflecting the merchant’s “Doing Business As” (DBA) name, also be clearly identifiable to the cardholder. This can minimize copy requests resulting from unrecognizable merchant descriptors. Merchant applications typically list the merchant name as the merchant DBA. This may differ from the legal name (which can represent the corporate owner or parent company), and may differ from the owner’s name which, for sole proprietorships, may reflect the business owner. I think that the key statement above is \"\"Therefore, it is critical that the merchant name [...] be clearly identifiable to the cardholder.\"\" Since this merchant was not clearly identifiable to the cardholder, they are in breach of a critical point in these guidelines. This is from VISA, but I would assume that all other major credit cards would have similar guidelines for their merchants. However keep in mind that these are \"\"guidelines\"\", and not (necessarily) rules.\"",
"title": ""
},
{
"docid": "69244fe41231d70ad9024bb0c7344d57",
"text": "It sounds like the items shipped directly from the vendor need to be recorded into your system when the order is confirmed, that way cost of goods sold and revenue don't get lost. You'll have a record of re-orders and cancels and other such things too.",
"title": ""
}
] |
fiqa
|
6f92516104329b1847542b96993e49f0
|
car loan but 2 people on title
|
[
{
"docid": "e50b5bb1e442c035db4970ad52e0f7bb",
"text": "Yes, but then either of you will need the other's permission to sell the car. I strongly recommend you get an agreement on that point, in writing, and possibly reviewed by a lawyer, before entering into this kind of relationship. (See past discussions of car titles and loan cosigners for some examples of how and why this can go wrong.) When doung business with friends, treating it as a serious business transaction is the best way to avoid ruining the friendship.",
"title": ""
}
] |
[
{
"docid": "887b6da259f747c3ebaa6117d49b4758",
"text": "Not sure if it is the same in the States as it is here in the UK (or possibly even depends on the lender) but if you have any amount outstanding on the loan then you wouldn't own the vehicle, the loan company would. This often offers extra protection if something goes wrong with the vehicle - a loan company talking to the manufacturer to get it resolved carries more weight than an individual. The laon company will have an army of lawyers (should it get that far) and a lot more resources to deal with anything, they may also throw in a courtesy car etc.",
"title": ""
},
{
"docid": "893f4647c49ce9b1a99d36fda912461e",
"text": "You could have the buyer go to the bank with you so that he can get evidence that the loan will be paid in full and that the lien will be lifted. The bank won't sign over the title (and lift the lien) until the loan is paid back in full. DMV.org has a pretty good section about this. (Note: not affiliated with the actual DMV) Selling to a Private Party Though more effort will be required on your part, selling a car with a lien privately could net you a higher profit. Here are a few things you'll need to consider to make the process easier: Include the details of the lien in your listing. You'll list an advertisement for your car just as you would any other vehicle, with the addition of the lien information that buyers will need so as to avoid confusion. Sell in the location of the lienholder, if possible. If the bank or financial institution holding the lien is located in the area you're trying to sell, this will make the transaction much easier. Once you make an agreement with the buyer, you can go directly to the lender to pay off the existing lien. Ownership can then be transferred in person from the financial institution to the buyer. Consider an escrow service. If the financial institution isn't in your area, an escrow service can help to ensure a secure transaction. An escrow service will assume responsibility for receiving payments from the buyer and will hold the title until the purchase is complete. Advantages of an escrow service include: Payoff services, which will do most of the work with the financing institution for you. Title transfer services, which can help to ensure a safe and legitimate transaction and provide the necessary paperwork once the sale is complete.",
"title": ""
},
{
"docid": "2ef47bc6e77a08529092f461b85d993b",
"text": "\"The lead story here is you owe $12,000 on a car worth $6000!! That is an appalling situation and worth a lot to get out of it. ($6000, or a great deal more if the car is out of warranty and you are at risk of a major repair too.) I'm sorry if it feels like the payments you've made so far are wasted; often the numbers do work out like this, and you did get use of the car for that time period. Now comes an \"\"adversary\"\", who is threatening to snatch the car away from you. I have to imagine they are emotionally motivated. How convenient :) Let them take it. But it's important to fully understand their motivations here. Because financially speaking, the smart play is to manage the situation so they take the car. Preferably unbeknownst that the car is upside down. Whatever their motivation is, give them enough of a fight; keep them wrapped up in emotions while your eye is on the numbers. Let them win the battle; you win the war: make sure the legal details put you in the clear of it. Ideally, do this with consent with the grandfather \"\"in response to his direct family's wishes\"\", but keep up the theater of being really mad about it. Don't tell anyone for 7 years, until the statute of limitations has passed and you can't be sued for it. Eventually they'll figure out they took a $6000 loss taking the car from you, and want to talk with you about that. Stay with blind rage at how they took my car. If they try to explain what \"\"upside down\"\" is, feign ignorance and get even madder, say they're lying and they won, why don't they let it go? If they ask for money, say they're swindling. \"\"You forced me, I didn't have a choice\"\". (which happens to be a good defense. They wanted it so bad; they shoulda done their homework. Since they were coercive it's not your job to disclose, nor your job to even know.) If they want you to take the car back, say \"\"can't, you forced me to buy another and I have to make payments on that one now.\"\"\"",
"title": ""
},
{
"docid": "3eec08f53ddb437a4e142b74fbd3492f",
"text": "Is your name on the title at all? You may have (slightly) more leverage in that case, but co-signing any loans is not a good idea, even for a friend or relative. As this article notes: Generally, co-signing refers to financing, not ownership. If the primary accountholder fails to make payments on the loan or the retail installment sales contract (a type of auto financing dealers sell), the co-signer is responsible for those payments, or their credit will suffer. Even if the co-signer makes the payments, they’re still not the owner if their name isn’t on the title. The Consumer Finance Protection Bureau (CFPB) notes: If you co-sign a loan, you are legally obligated to repay the loan in full. Co-signing a loan does not mean serving as a character reference for someone else. When you co-sign, you promise to pay the loan yourself. It means that you risk having to repay any missed payments immediately. If the borrower defaults on the loan, the creditor can use the same collection methods against you that can be used against the borrower such as demanding that you repay the entire loan yourself, suing you, and garnishing your wages or bank accounts after a judgment. Your credit score(s) may be impacted by any late payments or defaults. Co-signing an auto loan does not mean you have any right to the vehicle, it just means that you have agreed to become obligated to repay the amount of the loan. So make sure you can afford to pay this debt if the borrower cannot. Per this article and this loan.com article, options to remove your name from co-signing include: If you're name isn't on the title, you'll have to convince your ex-boyfriend and the bank to have you removed as the co-signer, but from your brief description above, it doesn't seem that your ex is going to be cooperative. Unfortunately, as the co-signer and guarantor of the loan, you're legally responsible for making the payments if he doesn't. Not making the payments could ruin your credit as well. One final option to consider is bankruptcy. Bankruptcy is a drastic option, and you'll have to weigh whether the disruption to your credit and financial life will be worth it versus repaying the balance of that auto loan. Per this post: Another not so pretty option is bankruptcy. This is an extreme route, and in some instances may not even guarantee a name-removal from the loan. Your best bet is to contact a lawyer or other source of legal help to review your options on how to proceed with this issue.",
"title": ""
},
{
"docid": "46129c258ecb12f5a85af074100f5744",
"text": "\"This will probably require asking the SO to sign a quitclaim and/or to \"\"sell\"\" him her share of the vehicle's ownership and getting it re-titled in his own name alone, which is the question you actually asked. To cancel the cosigner arrangement, he has to pay off the loan. If he can't or doesn't want to do that in cash, he'd have to qualify for a new loan to refinasnce in his name only, or get someone else (such as yourself) to co-sign. Alternatively, he might sell the car (or something else) to pay what he still owes on it. As noted in other answers, this kind of mess is why you shouldn't get into either cosigning or joint ownership without a written agreement spelling out exactly what happens should one of the parties wish to end this arrangement. Doing business with friends is still doing business.\"",
"title": ""
},
{
"docid": "c4bcf33a97cb8a616ed24cfdb17bee27",
"text": "An auto title loans are typically utilized by those that wish to obtain a funding with bad credit rating or no credit in any way. An auto-mobile title lending frequently called a vehicle title lending or merely title funding as well as pink slip funding’s. You merely should have a vehicle that is paid off or nearly paid off and also you could make use of the auto title as security to obtain the cash money you require, enabling you to continue driving your vehicle while paying your loan. Get Auto Car Title Loans Chino CA and nearby cities Provide Car Title Loans, Auto Title Loans, Mobile Home Title Loans, RV/Motor Home Title Loans, Big Rigs Truck Title Loans, Motor Cycle Title Loans, Online Title Loans Near me, Bad Credit Loans, Personal Loans, Quick cash Loans Contact Us: Get Auto Car Title Loans Chino CA 12403 Central Ave # 274, Chino, CA 91710 909-325-3099 chinogatl@gmail.com http://getautotitleloans.com/car-and-auto-title-loans-chino-ca/",
"title": ""
},
{
"docid": "25c80accc613ec73f5527afe291d030d",
"text": "\"The wording of this question is very confusing because \"\"primary signer\"\" would, in ordinary parlance, mean the person borrowing the money and the co-signer (not consigner) would mean the one who is guaranteeing the repayment of the loan: if the borrower does not pay, the co-signer is liable for making the payments. Whose name is on the title of the car? Who borrowed the money to buy the car? Is the loan in your name and your son co-signed the loan to induce the bank to loan you money to purchase the car, or is it the other way around, that your son borrowed the money and you co-signed the loan in order to induce the bank to loan your son the money? If the car title and the loan are in your name, are you defaulting on the loan and so your son is making the loan payments that should have come from you? Or is it that your son borrowed the money to buy the car, his name is on the title, he is making the payments, and you are no longer interested in backing him up in case he defaults and the bank comes after you for the money?\"",
"title": ""
},
{
"docid": "6b189dfcc0b4606dc340e6fc8447c3cc",
"text": "\"She may be right. If she gets the usual thing of half the family assets gained during marriage, she's also entitled to half the car. Well, not quite. Imagine you had sold the car at the time of divorce. You would have gotten some cash for it (this is typically shown in the Blue Book). And then you would have had to pay off the loan. So the cash value at that time, minus the loan owed at that time, was the equity in the car at that time. That would be a family asset and she'd have been entitled to half of it. A lot of auto loans are a ripoff, so this might not be much money. Or could be zero. Or could even be negative - it's common to owe more on a car than it's worth, especially the first year after you buy it. In which case she owes you LOL. The judge already dealt with this, and he did it by saying \"\"you two get together and try to work it out\"\", and come back to me with a proposed settlement.\"\" If you are at loggerheads, you can go back to the judge, but he may not give an answer you like.\"",
"title": ""
},
{
"docid": "c4ab4a6c8c6f18d4ded356b3bcfc548b",
"text": "You are not perfectly clear, but I will assume that your ex-girlfriend owns the car and that her name is the only one on the title. The fact that you paid off the loan and repaired the car is completely irrelevant. From a court's point of view you gifted the car to your girlfriend. If you are listed on the title, then your best move is to steal the car and hide it so she can't steal it back. Note that you are not actually stealing it if you are listed on the title since you own the car. (Try to steal it when it is parked in some public place. Avoid going onto her property.) Wait until she gets hungry, then offer her $500 if she agrees to remove her name from the title. By the way, after you steal the car, send a certified letter to her informing her that you have possession of the car. This is so that she has no grounds to report it stolen. Check with the police periodically to make sure she doesn't report it stolen anyway. If she reports it stolen AFTER you have notified her that you have possession, then it is a crime (making a false report).",
"title": ""
},
{
"docid": "46e0fd4a0513b1e04e20f5ec1819ed82",
"text": "Sometimes I think it helps to think of the scenario in reverse. If you had a completely paid off car, would you take out a title loan (even at 0%) for a few months to put the cash in a low-interest savings account? For me, I think the risk of losing the car due to non-payment outweighs the tens of dollars I might earn.",
"title": ""
},
{
"docid": "92ae2f7b8529560c43c556fdb3d354ad",
"text": "Everything on Earth can go wrong. Including, god forbids, your MIL being hit by a bus the next day and your ex inheriting all of her belongings and none of her promises to you. This is a bad idea. What I would suggest doing would be for your MIL to buy your ex a cheap and simple clunker to move herself around without you being ever involved. If you still want to go into this adventure, I'd advise to do these things: A written contract with MIL that details all the terms and agreements. Cover the potential unfortunate events like the one I made up in the first sentence. A written contract with your ex about how and when she can use your car. Insurance to cover all the potential damages and liabilities she can cause, in your name, with her as additional insured. Be ready to bear all the costs associated with the car. You're not a co-signer in this scenario - you're the only signer. The dealership will come after you and you alone.",
"title": ""
},
{
"docid": "ed3a04403eb605af7ed68d5a4c79621c",
"text": "The buyer can get another cosigner or you can sell the car to pay off the loan. These are your only options if financing cannot be obtained independently.",
"title": ""
},
{
"docid": "6375ca2adc112dc33b5be6b576328cda",
"text": "It is a legal issue for two reasons. In the United States if both names were on the title both people would have had to sign the paperwork in order to transfer the title. If the car was collateral for the loan, then the bank would have had to be involved in the transaction. The portion of the check need to repay the loan would have had to have been made out to the bank. If the car was sold to a dealership, then paperwork must have been forged. If the car was sold to a person then it is possible that they were too naive to know what paperwork was required, but it is likely still fraud. You need legal advice to protect your money, and your credit score. They should also be able to tell you who needs to be contacted: DMV, the police, the dealership, the bank.",
"title": ""
},
{
"docid": "e8e6c38c95e169f5d01c19699cb2e6f0",
"text": "Update: here is a message the seller just sent me. Does this make sense? I spoke with my bank again and they explained it a little better for me. I guess how it works is they will print out something for you that is called an affidavit in lieu of title that states they are no longer the lein holder and to release it to you. You then take that to the dol and they get it put in your name. He says that's how they do it all the time. When we get to the bank, the teller just verifies the check and I deposit it and they release the funds to pay off the account and that's when you would get the paperwork. You would be there for the whole process so nothing is sketchy. Sorry it's such a pain, I didn't understand how that worked. We've never sold a car with a loan on it before.",
"title": ""
},
{
"docid": "ff0eb373e33424d8d23565b07f33a629",
"text": "Does the full time PHD student extend to 70-80 hours/week or more? If not, can you pick up an extra job to aid with living expenses? Also, whose name is the debt in? Is your wife paying to avoid the black mark on her credit record or her mother's? Basically what it looks like to me is that you guys currently have a car you cannot afford and that her mother doesn't seem to be able to afford either, at a ridiculous interest rate on top. Refinancing might be an option but at a payoff amount of 12k you're upside down even when it comes to the KBB retail value. I'm somewhat allergic to financing a deprecating asset (especially at a quick back of the envelope calculation suggests that she's already paid them around $18k if you are indeed three years into the loan). What I would be tempted to do in your situation is to attempt to negotiate a lower payoff to see if they're willing to settle for less and give you clean title to the car - worst thing they can say is no, but you might be able to get the car for a little less than the $12k, then preferably use your emergency money to pay off the car and put it up for sale. Use some of the money to buy her a cheaper car for, say, $4k-$5k (or less if you're mechanically inclined) and put the rest back into your emergency fund. The problem I see with refinancing it would be that it looks like you're underwater from a balance vs retail value perspective so you might have a problem finding someone to refinance it with you throwing some of your emergency money at it in the first place.",
"title": ""
}
] |
fiqa
|
f49af46448d6e285e3d908d15e3768e1
|
How is income tax calculated in relation to selling used items?
|
[
{
"docid": "771a2ab38927b91dce0db9536c7a3ac1",
"text": "If the items you sold are items you previously bought for a higher price, the money you get selling them is not income, as you are taking a loss. However, you cannot deduct such losses. If you sell anything for more than what you paid for, the difference is a gain and is taxable. See this IRS web site for the explanation: https://www.irs.gov/businesses/small-businesses-self-employed/tax-tips-for-online-auction-sellers",
"title": ""
},
{
"docid": "0831ba49c07783c11cda19799c2448d6",
"text": "If I sell it for $50 can I write off the $50 loss. Only if you can establish that it is a normal part of your business and that you did not get $50 worth of use out of it. That's the technical, legal argument. As a practical matter, it's unlikely that they'll ding you for selling something after using it, as they won't know. If they did catch you, you would be in trouble. You can't deduct loss due to personal use. The larger problem is that if you sell one TV for a $50 loss, they aren't going to believe that you are in the business of selling TVs. If you sell a larger amount for a loss, then they still are unlikely to believe that you are in business. If you sell a large amount for an overall gain, they are unlikely to notice that you took a loss on one TV. They could only notice that if they were already auditing you, as that wouldn't be visible in your tax forms.",
"title": ""
},
{
"docid": "df72925f51029c060510200978db244d",
"text": "Yes. This income would be reported on schedule SE. Normally, you will not owe any tax if the amount is less than $400. Practically, $100 in a garage sale is not why the IRS created the form SE. I wouldn't lose sleep over keeping track of small cash sales over the course of a year. However, if you have the information I'm not going to tell you not to report it.",
"title": ""
}
] |
[
{
"docid": "5712bdc7208402f56051e2fd71d54a61",
"text": "Let me restate question for clarity. Facts: Question: Are there any taxes for this transaction? Answer: (Added improvements provided by Eric) Generally No. Generally, it is not considered income until you sell and the sale price is greater than the purchase price. But with currency differences, there is an additional complication, section 988 rules apply. It could result in ordinary income or loss.",
"title": ""
},
{
"docid": "8f401c1a8bde35baed1cdaa8e98a1189",
"text": "My experience (two purchases, Ontario, Canada) is that the property taxes are paid by whomever is the owner on the date the tax bill comes due. The bill might be due before the owners even decide to sell. However: A part of the closing process is a Statement of Adjustments, in which various costs that span the tenure of two owners are split on a per-diem basis. In your case, there would have been a charge against you of 2/365 of the tax bill on this statement at the time of closing (if you hadn't paid any 2014 taxes) The statement also includes things like flat-rate water bills, monthly cable bills, security system monitoring... All paid by one owner or the other, but split fairly on a per diem basis at the time of closing...",
"title": ""
},
{
"docid": "b9e300e15d7fc0259b17bb812af02b9a",
"text": "IRS Pub 561 says you have to use fair market value. You cannot simply use a depreciated value. You should attempt to determine what people normally pay for comparable items, and be prepared to defend your determination with evidence in the event of an audit.",
"title": ""
},
{
"docid": "727f230efc36832b7da944692d36d904",
"text": "If significant amounts are involved, that would be a good time to consult a tax professional (EA/CPA licensed in your state). Generally, sale of a business is an ordinary income and you can only deduct tangible expenses, as Joe said. That would be laptops, bills, expenses per receipt, of course they must all be directly attributable to the business. You will need to be able to show that the laptops has only been used in business, recapture depreciation, etc. Same with all the rest of the expenses. If you're incorporated (i.e.: you hold this software under an S-Corp), then you're selling stocks, not business, and the tax treatment may be different, but I'm guessing this is not the case for you.",
"title": ""
},
{
"docid": "bd8039236f2a4d410de176efedbf9201",
"text": "I think that author does a disservice by writing such seemingly sensible articles without actually knowing how things work. If I didn’t know better, I would think this guy was teaching me something. It’s a shame he did not do research before he started writing. Let’s say you buy a classic car. You take super good care of it, all original, mint condition. You paid cash for it out of your savings. This is a balance sheet transaction that has nothing to do with income. You traded your cash asset for a classic car asset. Now let’s say this car is so rare and you keep it in such good condition that it gains value every year. Maybe it was worth $15k when you bought it, but this year it’s already worth $17k. Great job on making a great purchase! But is that $2k gain counted as income to you? No, it is not. The value of that asset on your balance sheet went up, but you did not make anything off of that increase in value because you have not sold it. If you had to pay taxes on the increase in value every year, those taxes would essentially force you to sell that car to pay the taxes just because you took care of it. Additionally, in the long term, no one would want to own anything, so this would destroy the value of everyone’s stuff, but I digress. In this example, amazon stock is the car. The author is seeing the increase in stock value adding to the balance sheets of the investors who bought the stock and confusing that with income. Back to our example, let’s say your car increased in value $2k a year for two years and you decide to sell it for $19k - now we are about to realize some income! Since you bought it for $15k and sold for $19k, you earned an income of the difference, or $4k. Your income wasn’t $19k, because you originally put $15k in cash into the car. That cash was already saved from income you made in the past, and it is not counted again as income in this sale. Because you did not work for this new car sale income, but it was derived from asset growth, the income is called capital gains. You invested your capital ($15k) into the asset (car), and that asset appreciated. When you sold it, you received capital (money) back in exchange for that asset. The capital you received is more than what you invested, which is to say you gained $4k of capital by investing in and then selling your asset (car). Because you held the car for two years, you qualify for lower long term capital gains tax rate on that $4k. Had you sold it after year 1, you would’ve paid your regular normal income tax rate on those capital gains. Either way, you owe the tax when you sell the asset, not when it appreciates. I’m sure you realize this already, but if we change the car to amazon stock in my story, this is exactly how it works with investors. The author gets several things wrong 1 - amazon profits are not passed through to shareholders for income tax purposes. If amazon paid dividends, those dividends would be taxed at payout at the long term capital gains rate, and they would be paid out of cash amazon has left after it already paid corporate taxes on profits. Amazon has decided they can add more value to investors by using cash to grow instead of paying dividends. When the investors sell the stock, they will owe capital gains on the growth of that stock. If amazon is correct that using cash to grow, then investors will effectively pay more when they sell the stock than they would pay today if dividends were paid. 2 - asset appreciation is not income. Those investors will realize the income when they sell the stock, and they will pay the tax then. 3 - he is missing the point entirely on why amazon runs a low profit or how business strategy translates into financials. Low prices are not a function of low profitability. Low profitability could be an adverse result of low pricing, but being low profit in order to be low price is a ridiculous and failing strategy. Amazon’s low pricing is a function of their unparalleled buying power, unparalleled consumer and product data, amazing logistics prowess, clever loyalty programs like amazon prime, and many other brilliant things they’ve done. Their low profitability is a function of their investment in things like amazon fresh, amazon Alexa, drone delivery, automated convenience stores, building out cloud computing infrastructure, and many other R&D projects, $4 billion in original content spending for amazon prime video, and all kinds of expenditures years ahead of when they become profitable. By the time consumers want it, amazon already built it three years ago - this is the power of amazon. Sometimes multi billion dollar experiments fail, and all that money was for nothing. Sometimes they lose money for a few years and then become the infrastructure that runs a third of the internet. Amazon does not let fear of failure stop them, they invest in growth with their cash. This is how Bezos thinks - how do we build the future, not how can I avoid tax I do need to make a disclaimer here - there could be special tax treatment of classic cars that makes my example not work. Also classic cars may not appreciate in value. I don’t know anything about classic cars, I just picked a politically neutral thing to put in my story and made some assumptions to illustrate how capital gains work. My story is definitely how stocks work, and probably cars, but I just want to point out that I don’t know shit about car collecting.",
"title": ""
},
{
"docid": "0701446cd152b86c8ec06263ef506004",
"text": "It doesn't go on Schedule E at all, it goes on form 4797. The fridge should have been depreciated, over 5 years. If you sold it after 5 years, all the proceeds are taxable income taxed as depreciation recapture (25% rate) up to the allowable depreciation (your original cost basis), above which it is taxable capital gain. Whether you actually have depreciated it or not, it is really your problem, IRS doesn't care. So if 5 years of ownership passed - just write it all as taxable income on the form 4797. Otherwise, allowable depreciation prorated (and you can still amend forms 3 years back to get at least part of it). The new fridge should also be depreciated over the 5 years of its expected useful life. See form 4562. Talk to a licensed tax professional (EA/CPA licensed in your state) for details.",
"title": ""
},
{
"docid": "a5e5d2517a9b70e783fc80f34f3ce7f7",
"text": "What you are doing is barter trade. Most countries [if not all] would tax this on assumed fair value. There are instances where countries may relax this norm in border areas for a small amount. Barter is not just for gold – one can virtually do this for any goods, i.e. sell garments in exchange for oil, sell electronic chips in exchange for consumer goods, etc. Quite a few business would flourish doing this and not exchange currency at all, hence the need for government to tax on the [assumed / calculated / arrived/ derived] fair value. A word of caution: at times this may not be fair at all and may actually cost more than had one done a transaction using currency.",
"title": ""
},
{
"docid": "be443f0165b1dd058028841d3e5487d1",
"text": "The way the wash sale works is your loss is added to your cost basis of the buy. So suppose your original cost basis is $10,000. You then sell the stock for $9,000 which accounts for your $1,000 loss. You then buy the stock again, say for $8,500, and sell it for $9,000. Since your loss of $1,000 is added to your cost basis, you actually still have a net loss of $500. You then buy the stock again for say $10,500, then sell it for $9,500. Your $500 loss is added to your cost basis, and you have a net loss of $1,500. Since you never had a net gain, you will not owe any tax for these transactions.",
"title": ""
},
{
"docid": "70426153e638963056b8ea7b41223de3",
"text": "Yes -- you can refund the sales tax and adjust your return. Make sure you have a copy of your customer's reseller permit on file. If the item sold was for their own use (instead of resale), then sales tax is due, so you might want to check with the customer and ask them what they want to do.",
"title": ""
},
{
"docid": "b26f06f3a6c027a98a382acad7e41bd2",
"text": "The buyer of such an account is likely treating it as an asset, and if they ever resell it capital gains (or loss) would be realized. I don't see why this would be any different for the person that created the account initially, except that the basis starts at $0 making the entire sale price taxable. How you figure the value of the account before the initial sale would be more difficult, but fortunately you may not ever need to know the value (for tax purposes) until you actually sell it.",
"title": ""
},
{
"docid": "f35f977f4958bf5092e2f8145f753a2f",
"text": "Australian Goods and Services Tax is charged on the sale amount. Whatever internal accounting you do before billing the customer is of no interest to the Australian Tax Office.",
"title": ""
},
{
"docid": "b3bb25844cb10bfb674a0e794e241cf7",
"text": "Capital gains taxes for a year are calculated on sales of assets that take place during that year. So if you sell some stock in 2016, you will report those gains/losses on your 2016 tax return.",
"title": ""
},
{
"docid": "1577e21bf4ad3391c4631197ed104014",
"text": "I would say when starting with Gnucash to start with the level of granularity you are comfortable with while sticking to the double entry bookkeeping practices. So going through each one: Refund for Parking Pass. Assuming you treat the Parking Pass as a sunk cost, i.e. an Expense account, its just a negative entry in the Expense account which turns into a positive one in your Bank account. Yes it may look weird, and if you don't like it you can always 'pay from Equity' the prior month, or your Bank Account if you're backfilling old statements. Selling physical items. If you sold it on eBay and the value is high enough you'll get tax forms indicating you've earned x. Even if its small or not done via eBay, treat it the same way and create a 'Personal Items/Goods' Income account to track all of it. So the money you get in your Bank account would have come from there. Found jacket money would be an Equity entry, either Opening Balances into Cash or Bank account. Remember you are treating Equity / Opening Balances as the state before you started recording every transaction so both the value going into Assets (Banks,Stock,Mutual Funds) and Liabilities (Mortgage, Student Debt, Credit Card Debt) originate from there.",
"title": ""
},
{
"docid": "e2e8a2005ee6a4a2493d39a3913215c3",
"text": "If you don't track the accrued costs involved, then it means that the valuation of the deal will be somewhat arbitrary, but it still can be made by looking at the value of equivalent or similar goods or services. It's rather similar to accounting treatment of (noncash) gifts, for example. You make up a valuation, and as there are obvious tax reasons to make it as low as possible, the valuation should be justifiable or you risk the wrath of IRS. If you sell the same goods or services for cash, then the value of the barter deal is obvious. If this barter is the only time you're handling this particular type of goods, a wholesale price of similar items (either of your items, or the items that you're receiving in barter) could work.",
"title": ""
},
{
"docid": "36933c8b079e518d1fe172462a6c9355",
"text": "It's better to use the accounting equation concept: Asset + Expenses = Capital + Liabilities + Income If you purchase an asset: Suppose you purchased a laptop of $ 500, then its journal will be: If you sell the same Laptop for $ 500, then its entry will be:",
"title": ""
}
] |
fiqa
|
4f75afe9506c3e97a752513d833f83f8
|
What's the most conservative split of financial assets for my portfolio in today's market?
|
[
{
"docid": "04222a44c6726ee87bd6ae80436e1e2e",
"text": "Before investing, absolutely follow the advice in mbhunter's answer. There is no safe investment (unless you count your mattress, and even there you could find moths, theives, or simple inflation taking a chunk out of your change). There is only maximizing your reward for a given level of risk - and there is always risk. This question should be enshrined somewhere on the Q&A site for its comprehensive list of sources for information on asset allocation. The tag is also going to have tons of good information for you. To answer your question on what slice of the pie is devoted to what, you can check out some common portfolios given by U. S. experts for U. S. investors - these should be convertible into Australian funds. Another portfolio that is, like all those above, loosely based on Modern Portfolio Theory for maximizing reward for a given level of risk is the Gone Fishin' Portfolio. A common denominator amongst these portfolios is that they emphasize index funds over mutual funds for their long-term performance and preference lazy management (yearly rebalancing is a common suggestion as the maximum level of involvement) over active management. You can see more Lazy Portfolios.",
"title": ""
},
{
"docid": "ca08e689fcc2c9d406480c808f9c09c8",
"text": "This is a somewhat complicated question because it really depends on your personal situation. For example, the following parameters might impact your optimal asset allocation: If you need the money before 3 years, I would suggest keeping almost all of it in cash, CDs, Treasuries, and ultra safe short-term corporate bonds. If however, you have a longer time horizon (and since you're in your 30s you would ideally have decades) you should diversify by investing in many different asset classes. This includes Australian equity, international equity, foreign and domestic debt, commodities, and real estate. Since you have such a long time horizon market timing is not that important.",
"title": ""
},
{
"docid": "9b69b3a68a1a82649455e15faa0085ff",
"text": "You don't say your level of consumer debt. You don't say how much of an emergency fund you have. If you have debt, pay it off before you invest. If you don't have an emergency fund (X months' expenses, pick your own X) get that before investing. If you have neither, get a small emergency fund, and then throw as much as you can to getting rid of debt. Beyond that, look for prudent investments. They're not the same as conservative investments. To know what's prudent, learn about the ones you listed and what determines their prices. Learn how or why they go up or down in value.",
"title": ""
},
{
"docid": "6364703e78f43605fee86e784493e31a",
"text": "\"If you can afford the time and are looking for more deep, and fun, investment tips, check out http://gurufocus.com. Great for more fundamental analysis of \"\"Intelligent Investor\"\" type Benjamin Graham-style businesses. No use scatter-shooting the stock exchange hoping to find good value businesses. Even blue-chips have an increasingly uncertain future (except IMHO certain world dominators like KO, WMT, XO and MCD).\"",
"title": ""
},
{
"docid": "0ce624b0a62f54657bca647d8d3f3c8e",
"text": "The safest place to put money is a mixture of cash, local municipal bond funds with average durations under two years and US Treasury bond funds with short durations. Examples of good short term US municipal funds: I'm not an active investor in Australian securities, so I won't recommend anything specific. Because rates are so low right now, you want a short duration (ie. funds where the average bond matures in < 2 years) fund to protect against increased rates. The problem with safety is that you won't make any money. If your goal to grow the value of your investment while minimizing risk, you need to look at equities. The portfolios posted by justkt are a great place to start.",
"title": ""
}
] |
[
{
"docid": "a957e26c9c2338bb6e50c5611c3d019e",
"text": "\"This is always a judgement call based on your own tolerance for risk. Yes, you have a fairly long time horizon and that does mean you can accept more risk/more volatility than someone closer to starting to draw upon those savings, but you're old enough and have enough existing savings that you want to start thinking about reducing the risk a notch. So most folks in your position would not put 100% in stocks, though exactly how much should be moved to bonds is debatable. One traditional rule of thumb for a moderately conservative position is to subtract your age from 100 and keep that percentage of your investments in stock. Websearch for \"\"stock bond age\"\" will find lots of debate about whether and how to modify this rule. I have gone more aggressive myself, and haven't demonstrably hurt myself, but \"\"past results are no guarantee of future performance\"\". A paid financial planning advisor can interview you about your risk tolerance, run some computer models, and recommend a strategy, with some estimate of expected performance and volatility. If you are looking for a semi-rational approach, that may be worth considering, at least as a starting point.\"",
"title": ""
},
{
"docid": "1034f141e13d0ab627501a394187997c",
"text": "You can look the Vanguard funds up on their website and view a risk factor provided by Vanguard on a scale of 1 to 5. Short term bond funds tend to get their lowest risk factor, long term bond funds and blended investments go up to about 3, some stock mutual funds are 4 and some are 5. Note that in 2008 Swenson himself had slightly different target percentages out here that break out the international stocks into emerging versus developed markets. So the average risk of this portfolio is 3.65 out of 5. My guess would be that a typical twenty-something who expects to retire no earlier than 60 could take more risk, but I don't know your personal goals or circumstances. If you are looking to maximize return for a level of risk, look into Modern Portfolio Theory and the work of economist Harry Markowitz, who did extensive work on the topic of maximizing the return given a set risk tolerance. More info on my question here. This question provides some great book resources for learning as well. You can also check out a great comparison and contrast of different portfolio allocations here.",
"title": ""
},
{
"docid": "61e08f0d238c2474a7eb648aac96c339",
"text": "\"TL;DR - go with something like Barry Ritholtz's All Century Portfolio: 20 percent total U.S stock market 5 percent U.S. REITs 5 percent U.S. small cap value 15 percent Pacific equities 15 percent European equities 10 percent U.S. TIPs 10 percent U.S. high yield corp bonds 20 percent U.S. total bond UK property market are absurdly high and will be crashing a lot very soon The price to rent ratio is certainly very high in the UK. According to this article, it takes 48 years of rent to pay for the same apartment in London. That sounds like a terrible deal to me. I have no idea about where prices will go in the future, but I wouldn't voluntarily buy in that market. I'm hesitant to invest in stocks for the fear of losing everything A stock index fund is a collection of stocks. For example the S&P 500 index fund is a collection of the largest 500 US public companies (Apple, Google, Shell, Ford, etc.). If you buy the S&P 500 index, the 500 largest US companies would have to go bankrupt for you to \"\"lose everything\"\" - there would have to be a zombie apocalypse. He's trying to get me to invest in Gold and Silver (but mostly silver), but I neither know anything about gold or silver, nor know anyone who takes this approach. This is what Jeremy Siegel said about gold in late 2013: \"\"I’m not enthusiastic about gold because I think gold is priced for either hyperinflation or the end of the world.\"\" Barry Ritholtz also speaks much wisdom about gold. In short, don't buy it and stop listening to your friend. Is buying a property now with the intention of selling it in a couple of years for profit (and repeat until I have substantial amount to invest in something big) a bad idea? If the home price does not appreciate, will this approach save you or lose you money? In other words, would it be profitable to substitute your rent payment for a mortgage payment? If not, you will be speculating, not investing. Here's an articles that discusses the difference between speculating and investing. I don't recommend speculating.\"",
"title": ""
},
{
"docid": "60dbfff8b0fc19a14a628170f4c6aa8d",
"text": "\"The question is asking for a European equivalent of the so-called \"\"Couch Potato\"\" portfolio. \"\"Couch Potato\"\" portfolio is defined by the two URLs provided in question as, Criteria for fund composition Fixed-income: Regardless of country or supra-national market, the fixed-income fund should have holdings throughout the entire length of the yield curve (most available maturities), as well as being a mix of government, municipal (general obligation), corporate and high-yield bonds. Equity: The common equity position should be in one equity market index fund. It shouldn't be a DAX-30 or CAC-40 or DJIA type fund. Instead, you want a combination of growth and value companies. The fund should have as many holdings as possible, while avoiding too much expense due to transaction costs. You can determine how much is too much by comparing candidate funds with those that are only investing in highly liquid, large company stocks. Why it is easier for U.S. and Canadian couch potatoes It will be easier to find two good funds, at lower cost, if one is investing in a country with sizable markets and its own currency. That's why the Couch Potato strategy lends itself most naturally to the U.S.A, Canada, Japan and probably Australia, Brazil, South Korea and possibly Mexico too. In Europe, pre-EU, any of Germany, France, Spain, Italy or the Scandinavian countries would probably have worked well. The only concern would be (possibly) higher equity transactions costs and certainly larger fixed-income buy-sell spreads, due to smaller and less liquid markets other than Germany. These costs would be experienced by the portfolio manager, and passed on to you, as the investor. For the EU couch potato Remember the criteria, especially part 2, and the intent as described by the Couch Potato name, implying extremely passive investing. You want to choose two funds offered by very stable, reputable fund management companies. You will be re-balancing every six months or a year, only. That is four transactions per year, maximum. You don't need a lot of interaction with anyone, but you DO need to have the means to quickly exit both sides of the trade, should you decide, for any reason, that you need the money or that the strategy isn't right for you. I would not choose an ETF from iShares just because it is easy to do online transactions. For many investors, that is important! Here, you don't need that convenience. Instead, you need stability and an index fund with a good reputation. You should try to choose an EU based fund manager, or one in your home country, as you'll be more likely to know who is good and who isn't. Don't use Vanguard's FTSE ETF or the equivalent, as there will probably be currency and foreign tax concerns, and possibly forex risk. The couch potato strategy requires an emphasis on low fees with high quality funds and brokers (if not buying directly from the fund). As for type of fund, it would be best to choose a fund that is invested in mostly or only EU or EEU (European Economic Union) stocks, and the same for bonds. That will help minimize your transaction costs and tax liability, while allowing for the sort of broad diversity that helps buy and hold index fund investors.\"",
"title": ""
},
{
"docid": "1f0cca52044dd1b928369fc8e2ad8a9e",
"text": "\"First, decide on your asset allocation; are you looking for a fund with 60% stocks/risky-stuff, or 40% or 20%? Second, look for funds that have a mix of stocks and bonds. Good keywords would be: \"\"target retirement,\"\" \"\"lifecycle,\"\" \"\"balanced,\"\" \"\"conservative/moderate allocation.\"\" As you discover these funds, probably the fund website (but at least Morningstar.com) will tell you the percentage in stocks and risk assets, vs. in conservative bonds. Look for funds that have the percentage you decided on, or as close to it as possible. Third, build a list of funds that meet your allocation goal, and compare the details. Are they based on index funds, or are they actively managed? What is the expense ratio? Is the fund from a reputable company? You could certainly ask more questions here if you have several candidates and aren't sure how to choose. For investing in US dollars one can't-go-wrong choice is Vanguard and they have several suitable funds, but unfortunately if you spend in NIS then you should probably invest in that currency, and I don't know anything about funds in Israel. Update: two other options here. One is a financial advisor who agrees to do rebalancing for you. If you get a cheap one, it could be worth it. Two is that some 401k plans have an automatic rebalancing feature, where you have multiple funds but you can set it up so their computer auto-rebalances you. That's almost as good as having a single fund, though it does still encourage some \"\"mental accounting\"\" so you'd have to try to only look at the total balance, not the individual fund balances, over time. Anyway both of these could be alternatives ways to go on autopilot, besides a single fund.\"",
"title": ""
},
{
"docid": "ce9537c51f2349ef3b2921eeeec8a658",
"text": "It's all about risk. These guidelines were all developed based on the risk characteristics of the various asset categories. Bonds are ultra-low-risk, large caps are low-risk (you don't see most big stocks like Coca-Cola going anywhere soon), foreign stocks are medium-risk (subject to additional political risk and currency risk, especially so in developing markets) and small-caps are higher risk (more to gain, but more likely to go out of business). Moreover, the risks of different asset classes tend to balance each other out some. When stocks fall, bonds typically rise (the recent credit crunch being a notable but temporary exception) as people flock to safety or as the Fed adjusts interest rates. When stocks soar, bonds don't look as attractive, and interest rates may rise (a bummer when you already own the bonds). Is the US economy stumbling with the dollar in the dumps, while the rest of the world passes us by? Your foreign holdings will be worth more in dollar terms. If you'd like to work alternative asset classes (real estate, gold and other commodities, etc) into your mix, consider their risk characteristics, and what will make them go up and down. A good asset allocation should limit the amount of 'down' that can happen all at once; the more conservative the allocation needs to be, the less 'down' is possible (at the expense of the 'up'). .... As for what risks you are willing to take, that will depend on your position in life, and what risks you are presently are exposed to (including: your job, how stable your company is and whether it could fold or do layoffs in a recession like this one, whether you're married, whether you have kids, where you live). For instance, if you're a realtor by trade, you should probably avoid investing too much in real estate or it'll be a double-whammy if the market crashes. A good financial advisor can discuss these matters with you in detail.",
"title": ""
},
{
"docid": "f3b46a3bcf094f4b1063d750d505eb04",
"text": "From Vanguard's Best practices for portfolio rebalancing:",
"title": ""
},
{
"docid": "271b245c66784da2295c00234b95afee",
"text": "Not knowing the US laws at all, you should worry more about having the best stock portfolio and less about taxes. My 0,02€",
"title": ""
},
{
"docid": "eac11a4d733d751de25624ac4dd2d817",
"text": "\"Without knowing anything else about you, I'd say I need more information. If all of your investments are in stocks, then that's not really diversified, regardless of how many stocks you own. There are other things to invest in besides stocks (and bonds, for that matter). What countries? \"\"International\"\" is pretty broad, and some countries are better bets than others at the moment. If you're old, I'd say very little of your money should be in stocks anyway. I'd also seek financial advice that is tailored to your goals, sophistication, etc.\"",
"title": ""
},
{
"docid": "56290eb39d292df78b8af33f4e308903",
"text": "Mostly you nailed it. It's a good question, and the points you raise are excellent and comprise good analysis. Probably the biggest drawback is if you don't agree with the asset allocation strategy. It may be too much/too little into stocks/bonds/international/cash. I am kind of in this boat. My 401K offers very little choices in funds, but offers Vanguard target funds. These tend to be a bit too conservative for my taste, so I actually put money in the 2060 target fund. If I live that long, I will be 94 in 2060. So if the target funds are a bit too aggressive for you, move down in years. If they are a bit too conservative, move up.",
"title": ""
},
{
"docid": "4c00e188521bb82ead41c19c72e51825",
"text": "\"Aggressiveness in a retirement portfolio is usually a function of your age and your risk tolerance. Your portfolio is usually a mix of the following asset classes: You can break down these asset classes further, but each one is a topic unto itself. If you are young, you want to invest in things that have a higher return, but are more volatile, because market fluctuations (like the current financial meltdown) will be long gone before you reach retirement age. This means that at a younger age, you should be investing more in stocks and foreign/developing countries. If you are older, you need to be into more conservative investments (bonds, money market, etc). If you were in your 50s-60s and still heavily invested in stock, something like the current financial crisis could have ruined your retirement plans. (A lot of baby boomers learned this the hard way.) For most of your life, you will probably be somewhere in between these two. Start aggressive, and gradually get more conservative as you get older. You will probably need to re-check your asset allocation once every 5 years or so. As for how much of each investment class, there are no hard and fast rules. The idea is to maximize return while accepting a certain amount of risk. There are two big unknowns in there: (1) how much return do you expect from the various investments, and (2) how much risk are you willing to accept. #1 is a big guess, and #2 is personal opinion. A general portfolio guideline is \"\"100 minus your age\"\". This means if you are 20, you should have 80% of your retirement portfolio in stocks. If you are 60, your retirement portfolio should be 40% stock. Over the years, the \"\"100\"\" number has varied. Some financial advisor types have suggested \"\"150\"\" or \"\"200\"\". Unfortunately, that's why a lot of baby boomers can't retire now. Above all, re-balance your portfolio regularly. At least once a year, perhaps quarterly if the market is going wild. Make sure you are still in-line with your desired asset allocation. If the stock market tanks and you are under-invested in stocks, buy more stock, selling off other funds if necessary. (I've read interviews with fund managers who say failure to rebalance in a down stock market is one of the big mistakes people make when managing a retirement portfolio.) As for specific mutual fund suggestions, I'm not going to do that, because it depends on what your 401k or IRA has available as investment options. I do suggest that your focus on selecting a \"\"passive\"\" index fund, not an actively managed fund with a high expense ratio. Personally, I like \"\"total market\"\" funds to give you the broadest allocation of small and big companies. (This makes your question about large/small cap stocks moot.) The next best choice would be an S&P 500 index fund. You should also be able to find a low-cost Bond Index Fund that will give you a healthy mix of different bond types. However, you need to look at expense ratios to make an informed decision. A better-performing fund is pointless if you lose it all to fees! Also, watch out for overlap between your fund choices. Investing in both a Total Market fund, and an S&P 500 fund undermines the idea of a diversified portfolio. An aggressive portfolio usually includes some Foreign/Developing Nation investments. There aren't many index fund options here, so you may have to go with an actively-managed fund (with a much higher expense ratio). However, this kind of investment can be worth it to take advantage of the economic growth in places like China. http://www.getrichslowly.org/blog/2009/04/27/how-to-create-your-own-target-date-mutual-fund/\"",
"title": ""
},
{
"docid": "075700e1a0c8d91865339a4c8c4fdc1f",
"text": "\"As you note, your question is inherently opinion-based. That said, if I were in your situation I would sell the stock all at once and buy whatever it is you want to buy (hopefully some index ETF or mutual fund). According to what I see, the current value of the HD stock is about $8500 and the JNJ stock is worth less than $500. With a total investment of less than $10,000, any gain you are likely to miss by liquidating now is not going to be huge in absolute terms. This is doubly true since you were given the stock, so you have no specific reason to believe it will do well at all. If you had picked it yourself based on careful analysis, it could be worth keeping if you \"\"believed in yourself\"\" (or even if you just wanted to test your acumen), but as it is the stock is essentially random. Even if you want to pursue an aggressive allocation, it doesn't make sense to allocate everything to one stock for no reason. If you were going to put everything in one stock, you'd want it to be a stock you had analyzed and picked. (I still think it would be a bad idea, but at least it would be a more defensible idea.) So I would say the risk of your lopsided allocation (just two companies, with more than 90% of the value in just one) outweighs any risk of missing out on a gain. If news breaks tomorrow that the CEO of Home Depot has been embezzling (or if Trump decides to go on the Twitter warpath for some reason), your investment could disappear. Another common way to think about it is: if you had $9000 today to buy stocks with, would you buy $8500 worth of HD and $500 worth of JNJ? If not, it probably doesn't make sense to hold them just because you happen to have them. The only potential exception to my advice above would be tax considerations. You didn't mention what your basis in the stock is. Looking at historical prices, it looks like if all the stock was 20 years old you'd have a gain of about $8000, and if all of it was 10 years old you'd have a gain of about $6000. If your tax situation is such that selling all the stock at once would push you into a higher tax bracket, it might make sense to sell only enough to fit into your current bracket, and sell the rest next year. However, I think this situation is unlikely because: A) since the stock has been held for a long time, most of the gains will be at the lower long-term rate; B) if you have solid income, you can probably afford the tax; and C) if you don't have solid income, your long-term capital gains rate will likely be zero.\"",
"title": ""
},
{
"docid": "c7b99052068ae7cb6abb83d7591cd932",
"text": "Theoretically there is limited demand for risky investments, so higher-risk asset classes should outperform lower-risk asset classes over sufficiently long time periods. In practice, I believe this is true, but it could be several decades before a risky portfolio starts to outperform a more conservative one. Stocks are considered more risky than most assets. Small-cap stocks and emerging market stocks are particularly high-risk. I would consider low-fee ETFs in these areas, like VB or VWO. If you want to seek out the absolute riskiest investments, you could pick individual stocks of companies in dire financial situations, as Bank of America was a couple years ago. Most importantly, if you don't expect to need the money soon, I would maximize your contribution to tax-advantaged accounts since they will grow exponentially faster than taxable accounts. Over 50 years, a 401(k) or IRA will generally grow at least 50% more than a taxable account, maybe more depending on the tax-efficiency of your investments. Try to contribute the maximum ($17,500 for most people in 2014) if you can. If you can save more than that, I'd suggest contributing a Roth 401k rather than a traditional 401(k) - since Roth contributions are post-tax, the effective contribution limit is higher. Also contribute to a Roth IRA (up to $5,500 in 2014), using a backdoor Roth if necessary.",
"title": ""
},
{
"docid": "b814e2e4f943f77864610939f302e619",
"text": "\"I find it interesting that you didn't include something like [Total Bond Market](http://stockcharts.com/freecharts/perf.html?VBMFX), or [Intermediate-Term Treasuries](http://stockcharts.com/freecharts/perf.html?VBIIX), in your graphic. If someone were to have just invested in the DJI or SP500, then they would have ignored the tenants of the Modern Portfolio Theory and not diversified adequately. I wouldn't have been able to stomach a portfolio of 100% stocks, commodities, or metals. My vote goes for: 1.) picking an asset allocation that reflects your tolerance for risk (a good starting point is \"\"age in bonds,\"\" i.e. if you're 30, then hold 30% in bonds); 2.) save as if you're not expecting annualized returns of %10 (for example) and save more; 3.) don't try to pick the next winner, instead broadly invest in the market and hold it. Maybe gold and silver are bubbles soon to burst -- I for one don't know. I don't give the \"\"notion in the investment community\"\" much weight -- as it always is, someday someone will be right, I just don't know who that someone is.\"",
"title": ""
},
{
"docid": "cafffcc507a7d7a0376e05fbf08013fd",
"text": "Nobody can give you a safe 6% return with that portfolio under current conditions. It looks like the current 10 year treasury is yielding about 2.2%. With 60% in bonds, the stocks would have to yield about 12%, which just isn't happening safely now.",
"title": ""
}
] |
fiqa
|
069bcafdcd9c6c876da5ce47fe756d4a
|
How do rich people guarantee the safety of their money, when savings exceed the FDIC limit?
|
[
{
"docid": "f0042193f945e999cc51ee7b75a7469d",
"text": "They might not have to open accounts at 12 bank because the coverage does allow multiple accounts at one institution if the accounts are joint accounts. It also treats retirement accounts a separate account. The bigger issue is that most millionaires don't have all their money siting in the bank. They invest in stocks, bonds, government bonds, international funds, and their own companies. Most of these carry risk, but they are diversified. They also can afford advisers to help them manage and protect their assets.",
"title": ""
},
{
"docid": "0f0d2806fddac004c3cdc11e569e2489",
"text": "\"Rich people use \"\"depositor\"\" banks the same way the rest of us use banks; to keep a relatively small store of wealth for monthly expenses and a savings account for a rainy day. The bulk of a wealthy person's money is in investments. Money sitting in a bank account is not making you more money, and in fact as Kaushik correctly points out, would be losing value to inflation. Now, all investments have risk; that's why interest exists. If, in some alternate universe, charging interest were illegal across the board, nobody would loan money, because there's nothing to be gained and a lot to lose. You have to make it worth my while for me to want to loan you my money, because sure as shootin' you're going to use my loan to make yourself wealthier. A wealthy person will choose a set of investments that represent an overall level of risk that he is comfortable with, much like you or I would do the same with our retirement funds. Early in life, we're willing to take a lot of risk, because there's a lot of money to be made and time to recover from any losses. Closer to retirement, we're much more risk-averse, because if the market takes a sudden downturn, we lose a significant portion of our nest egg with little hope of regaining it before we have to start cashing out. The very wealthy have similar variances in risk, with the significant difference that they are typically already drawing a living from their investments. As such, they already have some risk aversion, but at the same time they need good returns, and so they must pay more attention to this balancing act between risk and return. Managing their investments in effect becomes their new job, once they don't have to work for anyone else anymore. The money does the \"\"real work\"\", and they make the executive decisions about where best to put it. The tools they use to make these decisions are the same ones we have; they watch market trends to identify stages of the economic cycle that predicate large movements of money to or from \"\"safe havens\"\" like gold and T-debt, they diversify their investments to shield the bulk of their wealth from a sudden localized loss, they hire investment managers to have a second pair of eyes and additional expertise in navigating the market (you or I can do much the same thing by buying shares in managed investment funds, or simply consulting a broker; the difference is that the wealthy get a more personal touch). So what's the difference between the very wealthy and the rest of us? Well first is simple scale. When a person with a net worth in the hundreds of millions makes a phone call or personal visit to the financial institutions handling their money, there's a lot of money on the line in making sure that person is well looked-after. If we get screwed over at the teller window and decide to close our acocunts, the teller can often give us our entire account balance in cash without batting an eyelid. Our multimillionaire is at the lower end of being singlehandedly able to alter his banks' profit/loss statements by his decisions, and so his bank will fight to keep his business. Second is the level of control. The very wealthy, the upper 1%, have more or less direct ownership and control over many of the major means of production in this country; the factories, mines, timber farms, software houses, power plants, recording studios, etc that generate things of value, and therefore new wealth. While the average Joe can buy shares in these things through the open market, their investment is typically a drop in the bucket, and their voice in company decisions equally small. Our decision, therefore, is largely to invest or not to invest. The upper 1%, on the other hand, have controlling interests in their investments, often majority holdings that allow them far more control over the businesses they invest in, who's running them and what they do.\"",
"title": ""
},
{
"docid": "aaa8aad4c12291860d68cfacd8f7b6ed",
"text": "I found out there is something called CDARS that allows a person to open a multi-million dollar certificate of deposit account with a single financial institution, who provides FDIC coverage for the entire account. This financial institution spreads the person's money across multiple banks, so that each bank holds less than $250K and can provide the standard FDIC coverage. The account holder doesn't have to worry about any of those details as the main financial institution handles everything. From the account holder's perspective, he/she just has a single account with the main financial institution.",
"title": ""
},
{
"docid": "bb4d887a729760610520284af03e61a8",
"text": "Most people who have over $250,000 in liquid cash savings would not want to start putting their money into regular savings accounts in different banks, especially with interest rates as ridiculously low as they are now in 2014-15. People with money will want to diversify their investments in ways that will potentially earn them more money, and they can also afford to seek the advice of financial planners who can help them do this wisely. Even if you decide to put $250,000 into various accounts at different banks, I wouldn't necessarily trust that the FDIC will be able to help you recover your money in the event that your banks go under. The amount of money available to the FDIC to cover such losses pales in comparison to the actual amount of money that Americans have in their bank accounts.",
"title": ""
},
{
"docid": "fa8cc03843dd6506bc631e247fd19868",
"text": "Even assuming hypothetically that you are able to split money in different bank accounts to get full coverage and all your accounts are in top ranking financial institutions in USA, you can not rely on FDIC if all or most of those banks go broke. Because FDIC just has a meagre 25 billion dollars to cover all bank accounts in the USA. And you know the amount of bank deposits in USA run in at least a trillion of dollars. US Deposits & FDIC Insurance figures",
"title": ""
},
{
"docid": "3d4e2ae1a529e77472855bdaa6f802a7",
"text": "The FDIC has been pretty good at recovery lost money from failed banks. The problem is the temporary loss from immediate needs. The best thing for anyone to do is diversify in investments and banks with adequate covered insurance for all accounts. Immediate access to available cash is always a priority that should be governed by the money manager in this case yourself.",
"title": ""
},
{
"docid": "4fdc0c096584047dd029d2407e86289d",
"text": "With a lot excess cash you eventually have two goals: Since interest on cash bank deposits does not exceed inflation and you have currency risk, you may want to get into other asset classes. Options that might be, but not limited to are:",
"title": ""
}
] |
[
{
"docid": "b3a7ea7a18655ce93d4b616d9b56a7dc",
"text": "To store $1 milion in a bank with full FDIC insurance currently requires 4 separate bank accounts, each at 250k. It's not that difficult, particularly if you are married and your spouse can have 2 in his/her name. (This is dependent on the FDIC limit; they raised it to 250k after the 2008 crash).",
"title": ""
},
{
"docid": "cf3bc8530ff8a4c61381016dc51ebae5",
"text": "In most cases of fraud, your liability is limited to $50 if you report it within certain number of days (I think 2). After that the liability grows to something like $500. You are covered even if your negligence has caused the breach. In addition VISA guarantees credit cards - in most cases you have 0 liability. Finally checking & savings accounts are FDIC insured up to $250,000 in case the bank goes bankrupt. The $250,000 is a total for all accounts at the given bank. It's up to you to report and ask for refund though and sometimes you have to jump through hoops to get it but usually it's fairly straightforward and it usually takes only 2 or 3 days.",
"title": ""
},
{
"docid": "0813109a518c4556c2b14a0b0b8bc4ff",
"text": "The FDIC insures deposits up to $250,000 per depositor, per bank, for each ownership category. The ownership categories are: You and a spouse could collectively have $750,000 of insured deposits at a single bank if you each had a single account, and a joint account together.",
"title": ""
},
{
"docid": "30036900c61f555fd1276bf5e10425c8",
"text": "\"Why would a bank buy government bonds? Why couldn't they just deposit their money in another bank instead? Generally, banks are limited by laws and regulations about how much they must set aside as reserves. Of the money they receive as deposits, they may loan a certain amount, but must keep some as a reserve (this is called \"\"fractional reserve banking\"\"). Different countries have a different amount that they must set aside in reserves. In countries where bank deposits are guaranteed, there is almost always some upper limit to how much is guaranteed. The amount of money that a bank would deposit in another bank would be far greater than the guarantee.\"",
"title": ""
},
{
"docid": "ddd515b9ee7e1314156eac28ec463373",
"text": "Remind me again who held and was willing to loan out that debt? The investor classes partly created the risk environment that they now want protection from. convenient. If they're going to sit on their savings, they're going to comparatively lose more to inflation, so what you think will happen probably wouldn't happen. And even if they do, savings don't receive preferential tax treatment anyways.",
"title": ""
},
{
"docid": "ef15667412971eea6b43a973276ba24b",
"text": "In the US, pension benefits promised by employers are tightly regulated by a law called ERISA. One of the requirements is that money be deposited in a trust that is out of the reach of the employer and the employer's creditors, so even if the employer falls on hard times or goes bankrupt, the money to pay the pensions is still there. In addition, the benefits are guaranteed by the federal government through the Pension Benefit Guaranty Corporation (usually called the PBGC). Relative to most investments, pensions are a safe bet.",
"title": ""
},
{
"docid": "336b6996b017bb551981361ee8664699",
"text": "You don't mention how much money you are talking about but one option is to use reward checking accounts that are FDIC/NCUA insured. They pay 3-4% interest but generally have a few requirements such as 10-12 debit card transactions and sometimes require direct deposit as well as a limit of 10-50k deposits earning the top rate.",
"title": ""
},
{
"docid": "af8d1a231445e40ec2269437e4e6821e",
"text": "http://www.fdic.gov/deposit/deposits/index.html FDIC currently insures up to $250,000. (I would have put that as a comment to Jeffery but it says it was locked.) You don't want to put all your eggs in one basket. If you shop around, and keep shopping all the time you can keep your accounts in a single place so long as that single place provides the best deal. Don't have any loyalty to your banking institutions because they don't have any loyalty to you. Also, having lots of accounts means you are familiar with lots of institutions, so you are likely better at shopping around. Things I consider. For fewer institutions: For more institutions:",
"title": ""
},
{
"docid": "c3be5d3a72a70dcebc60ef2851f5f9a6",
"text": "And set to get higher. Wait until the super rich start eating the poorer super rich. We don't even know what the 1% really has because the sample sizes are so small. We do know there's trillions in offshore accounts but we don't know who owns it.",
"title": ""
},
{
"docid": "8953063491a0162c87cdf123213b6f1a",
"text": "I think it's because there are people who build entire wealth-gain strategies around certain conditions. When those conditions change, their mechanism of gaining wealth is threatened and they may take a short term loss as they transform their holdings to a new strategy.",
"title": ""
},
{
"docid": "f2be2bbdb0a7ff1bfde794353ad8c0e0",
"text": "\"You can store millions of dollars in deposit accounts, you just lose the explicit FDIC guarantee. So you look for rock-solid banks. Bankrate.com has \"\"Safe and Sound Ratings\"\" that show the relative strength of various banks. You put your excess deposits in those banks, and you are pretty safe. Note that in addition to the explicit FDIC guarantee, there is now an implicit guarantee that certain institutions have been deemed too \"\"big to fail\"\", and will be backed by the full faith and credit of the US Government, without regard to the capitalization of the bank. Bank of America, for example, is not well capitalized and is carrying billions of dollars of \"\"assets\"\" that have little or no value. Yet government policy keeps the bank afloat and your deposits secure. Another strategy is to use municipal money market accounts, which provide secure (but not guaranteed) deposit-like accounts as well as a tax benefit. If you have > $1M in liquid assets, you probably need a financial professional and attorney advising you to make sure that you are aware of and are controlling for risk in a way consistent with your longer-term goals.\"",
"title": ""
},
{
"docid": "88f929d4ba467b6a84f2f43272191d01",
"text": "I didn't realize that! Thanks for the correction. A bit of google-fu provided this: >[Stolen funds may be covered by what's called a banker's blanket bond, which is a multi-purpose insurance policy a bank purchases to protect itself from fire, flood, earthquake, robbery, defalcation, embezzlement and other causes of disappearing funds. In any event, an occurrence such as a fire or bank robbery may result in a loss to the bank but should not result in a loss to the bank's customers.](http://www.fdic.gov/consumers/consumer/information/fdiciorn.html)",
"title": ""
},
{
"docid": "cfb8eb76f144b9bc12d00e547c5e16c9",
"text": "\"I'd refer you to Is it true that 90% of investors lose their money? The answer there is \"\"no, not true,\"\" and much of the discussion applies to this question. The stock market rises over time. Even after adjusting for inflation, a positive return. Those who try to beat the market, choosing individual stocks, on average, lag the market quite a bit. Even in a year of great returns, as is this year ('13 is up nearly 25% as measured by the S&P) there are stocks that are up, and stocks that are down. Simply look at a dozen stock funds and see the variety of returns. I don't even look anymore, because I'm sure that of 12, 2 or three will be ahead, 3-4 well behind, and the rest clustered near 25. Still, if you wish to embark on individual stock purchases, I recommend starting when you can invest in 20 different stocks, spread over different industries, and be willing to commit time to follow them, so each year you might be selling 3-5 and replacing with stocks you prefer. It's the ETF I recommend for most, along with a buy and hold strategy, buying in over time will show decent returns over the long run, and the ETF strategy will keep costs low.\"",
"title": ""
},
{
"docid": "2ac5ffe36c101ca43bf5aead9409f206",
"text": "None of your options seem mutually exclusive. Ordinarily nothing stops you from participating in your 401(k), opening an IRA, qualifying for your company's pension, and paying off your debts except your ability to pay for all this stuff. Moreover, you can open an IRA anywhere (scottrade, vanguard, etrade, etc.) and freely invest in vanguard mutual funds as well as those of other companies...you aren't normally locked in to the funds of your IRA provider. Consider a traditional IRA. To me your marginal tax rate of 25% doesn't seem that great. If I were in your shoes I would be more likely to contribute to a traditional IRA instead of a Roth. This will save you taxes today and you can put the extra 25% of $5,500 toward your loans. Yes, you will be taxed on that money when you retire, but I think it's likely your rate will be lower than 25%. Moreover, when you are retired you will already own a house and have paid off all your debt, hopefully. You kind of need money now. Between your current tax rate and your need for money now, I'd say a traditional makes good sense. Buy whatever funds you want. If you want a single, cheap, whole-market fund just buy VTSAX. You will need a minimum of $10K to get in, so until then you can buy the ETF version, VTI. Personally I would contribute enough to your 401(k) to get the match and anything else to an IRA (usually they have more and better investment options). If you max that out, go back to the 401(k). Your investment mix isn't that important. Recent research into target date funds puts them in a poor light. Since there isn't a good benchmark for a target date fund, the managers tend to buy whatever they feel like and it may not be what you would prefer if you were choosing. However, the fund you mention has a pretty low expense ratio and the difference between that and your own allocation to an equity index fund or a blend of equity and bond funds is small in expectation. Plus, you can change your allocation whenever you want. You are not locked in. The investment options you mention are reasonable enough that the difference between portfolios is not critical. More important is optimizing your taxes and paying off your debt in the right order. Your interest rates matter more than term does. Paying off debt with more debt will help you if the new debt has a lower interest rate and it won't if it has a higher interest rate. Normally speaking, longer term debt has a higher interest rate. For that reason shorter term debt, if you can afford it, is generally better. Be cold and calculating with your debt. Always pay off highest interest rate debt first and never pay off cheap debt with expensive debt. If the 25 year debt option is lower than all your other interest rates and will allow you to pay off higher interest rate debt faster, it's a good idea. Otherwise it most likely is not. Do not make debt decisions for psychological reasons (e.g., simplicity). Instead, always chose the option that maximizes your ultimate wealth.",
"title": ""
}
] |
fiqa
|
b917f425a814aa6dfbc74ff3d98bfd78
|
Tax implications of having some self-employment income?
|
[
{
"docid": "6ef443450b7a2e0334cec2673e52f06d",
"text": "\"You would put your earnings (and expenses, don't forget) on Schedule C, and then do a Schedule SE for self-employment tax. http://www.irs.gov/businesses/small/article/0,,id=98846,00.html 1040ES isn't used to compute taxes, it's used to pay taxes. Generally you are supposed to pay taxes as you go, rather than when you file. There are exceptions where you won't be penalized for paying when you file, \"\"most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller\"\" from http://www.irs.gov/taxtopics/tc306.html i.e. there's a safe harbor as long as you pay as much as you owed the year before. If you owe a lot at the end of the year a second time in a row, then you get penalized.\"",
"title": ""
},
{
"docid": "e7ccac55c68e68fb150691852e53e0c9",
"text": "Havoc P's answer is good (+1). Also don't forget the other aspects of business income: state filing fees, county/city filing fees, business licenses, etc. Are there any taxes you have to collect from your customers? If you expect to make more this year, then you should make estimated quarterly tax payments. The first one for 2011 is due around the same time as your federal income tax filing.",
"title": ""
}
] |
[
{
"docid": "1d6a6791ce3ec6df6dfd451ae2ffb6d3",
"text": "Your taxable income is your total income from however many sources of income you have. If you are in employment and doing self-employed job at the same time, your taxable income will be a combination of both incomes. For example if in employment you make £10000 and self employed you make another £10000 - your total income is £20000 and this is your taxable income. And even if your self-employed job does not bring you more than personal allowance, how would HMRC know that without you filling-in tax return?",
"title": ""
},
{
"docid": "b53a96763ca7c8a044099cc57e193c1e",
"text": "\"I did a little research and found this article from 2006 by a Villanova law professor, titled \"\"No Thanks, Uncle Sam, You Can Keep Your Tax Break\"\". The final paragraph of the article says: Under these circumstances, it is reasonable to conclude that a taxpayer is not required to claim a allowable deduction unless a statutory provision so requires, or a binding judicial precedent so specifies. It would be unwise, of course, to forego a deduction that the IRS considers mandatory such as those claimed by self-employed individuals with respect to their self-employment, whether for purposes of the self-employment tax or the earned income tax credit. Until the statute is changed or some other binding authority is issued, there is no reason taxpayers who wish to forego deductions, such as the dependency exemption deduction, should hesitate in doing so. (The self-employment tax issues in the quote cited by CQM are explicitly discussed in the article as one of a few special kinds of deduction which are mandatory.) This is not a binding statement: it's not law or even official IRS policy. You could never use it as a defense in the event that this professor turned out to be wrong and the IRS decided to go after you anyway. However, it is a clear statement from a credible, qualified source.\"",
"title": ""
},
{
"docid": "2d11e107b45fdc610c799bfd97e53ba5",
"text": "\"This seems to depend on what kind of corporation you have set up. If you're set up as a sole proprietor, then the Solo 401k contributions, whether employee or employer, will be deducted from your gross income. Thus they don't reduce it. If you're set up as an S-Corp, then the employer contributions, similar to large employer contributions, will be deducted from wages, and won't show up in Box 1 on your W-2, so they would reduce your gross income. (Note, employee contributions also would go away from Box 1, but would still be in Box 3 and 5 for FICA/payroll tax purposes). This is nicely discussed in detail here. The IRS page that discusses this in more (harder to understand) detail is here. Separately, I think a discussion of \"\"Gross Income\"\" is merited, as it has a special definition for sole proprietorships. The IRS defines it in publication 501 as: Gross income. Gross income is all income you receive in the form of money, goods, property, and services that is not exempt from tax. If you are married and live with your spouse in a community property state, half of any income defined by state law as community income may be considered yours. For a list of community property states, see Community property states under Married Filing Separately, later. Self-employed persons. If you are self-employed in a business that provides services (where products are not a factor), your gross income from that business is the gross receipts. If you are self-employed in a business involving manufacturing, merchandising, or mining, your gross income from that business is the total sales minus the cost of goods sold. In either case, you must add any income from investments and from incidental or outside operations or sources. So I think that regardless of 401(k) contributions, your gross income is your gross receipts (if you're a contractor, it's probably the total listed on your 1099(s)).\"",
"title": ""
},
{
"docid": "eee3787af4484907157a31db91c64902",
"text": "You need to register as self-employed with HMRC (it is perfectly fine to be self-employed and employed by an employer at the same time, in exactly your kind of situation). Then, when the income arrives you will need to declare it on your yearly tax return. HMRC information about registering for self-employment and declaring the income is here: https://www.gov.uk/working-for-yourself/overview There's a few extra hoops if your clients are outside the UK; the detail depends on whether they are in the EU or not. More details about this are here: https://www.gov.uk/online-and-distance-selling-for-businesses/selling-overseas .",
"title": ""
},
{
"docid": "1d7d8e8d7d26758e0fa9d7e3531f56cc",
"text": "In some circumstances losses from self-employment can be offset against total income and/or capital gains. If this applies to you may be able to claim back some of the tax taken by PAYE from your day job. You can also to some extent carry the loss backwards into previous tax years or forward into the next one if you can't use it fully this year. HMRC have some information available on the current rules: When you can claim losses You can claim: But You can’t claim:",
"title": ""
},
{
"docid": "07b1bf8262c1ae737d88e0063c01632c",
"text": "I agree with your strategy of using a conservative estimate to overpay taxes and get a refund next year. As a self-employed individual you are responsible for paying self-employment tax (which means paying Social Security and Medicare tax for yourself as both: employee and an employer.) Current Social Security Rate is 6.2% and Medicare is 1.45%, so your Self-employment tax is 15.3% (7.65%X2) Assuming you are single, your effective tax rate will be over 10% (portion of your income under $ 9,075), but less than 15% ($9,075-$36,900), so to adopt a conservative approach, let's use the 15% number. Given Self-employment and Federal Income tax rate estimates, very conservative approach, your estimated tax can be 30% (Self-employment tax plus income tax) Should you expect much higher compensation, you might move to the 25% tax bracket and adjust this amount to 40%.",
"title": ""
},
{
"docid": "5fb1034e13a97b1e3a37becc28ec0b0b",
"text": "No, it's not possible. Even if you had no deduction or credits, your federal tax on $16,604 would be: $9075 @ 10% = $907.50 + $7529 @ 15% = $1129.35 = $2036.85 That assumes you are filing as single. There must be more to the story. Typo in your income numbers? Also, what do you mean by a self-employment tax deduction? Maybe update your question to include a breakdown of everything you entered? Edit: As noted in Loren's answer, it seems that it is indeed possible in at least one case (self-employment taxes).",
"title": ""
},
{
"docid": "fa823f87dc7c9574d811c0030e7ece80",
"text": "Generally, unless you explicitly elect otherwise, LLCs are transparent when it comes to taxes. So the money in the LLC is your money for tax purposes, there's no need to pay yourself a salary. In fact, the concept of salary for LLC members doesn't exist at all. It is either distributions or guaranteed payments (and even that is mostly relevant to multi-member LLCs). The only concern is the separation of personal and LLC finances - avoiding commingling. Mixing your personal and business expenses by using the same accounts/cards for both business and personal spending may cause troubles when it comes to the liability protection in case of a lawsuit. I'd suggest discussing this with a FL-licensed attorney. Bottom line - technically the withdrawal is just writing yourself a check from the business account or moving money between your personal and business accounts. If you're a sole member - you need not more than that. Make sure the operating agreement explicitly empowers you to do that, of course. There are no tax consequences, but as I mentioned - there may be legal consequences.",
"title": ""
},
{
"docid": "a2449af7ae6b5038bbbe8a7aa1f5f66b",
"text": "If your business name is your name, you are automatically considered a sole-proprietorship and any income you generate and expenses you incur can be calculated on your personal tax return. You can use QuickTax Home & Business tax software to lead you through the steps; you don't even need an accountant. One drawback of a sole-proprietorship in your name is liability. You are personally responsible for the business because you are the business. If you get sued, you can lose everything. To limit that liability you can look into opening a corporation. If the corporation gets sued you are insulated from that; the corporation goes bankrupt, not you. A lawyer and an accountant will be required to give you solid advice on this direction.",
"title": ""
},
{
"docid": "72444a1e64993e7ab98a68200e75d954",
"text": "Your total salary deferral cannot exceed $18K (as of 2016). You can split it between your different jobs as you want, to maximize the matching. You can contribute non-elective contribution on top of that, which means that your self-proprietorship will commit to paying you that portion regardless of your deferral. That would be on top of the $18K. You cannot contribute more than 20% of your earnings, though. So if you earn $2K, you can add $400 on top of the $18K limit (ignoring the SE tax for a second here). Keep in mind that if you ever have employees, the non-elective contribution will apply to them as well. Also, the total contribution limit from all sources (deferral, matching, non-elective) cannot exceed $53K (for 2016).",
"title": ""
},
{
"docid": "f50dce422efe7e78e33ebb056a7cd9e5",
"text": "\"If you have a CPA working for you already - this is a question you should be asking that CPA. Generally, NOL only affects the tax stemming from the Internal Revenue Code (Title 26 Subtitle A of the US Code). Social Security and Medicare, while based on income, are not \"\"income tax\"\", these are different taxes stemming from different laws. Social Security and Medicare withheld from your salary are FICA taxes (Title 26 Subtitle C of the US Code). They're deducted at source and not on your tax return, so whatever changes you have in your taxable income on the tax return - FICA taxes are not affected by it. Self Employment tax (Schedule SE) on your Schedule C earnings in the carry-back years will also not be affected, despite being defined in the IRC, because the basis of the tax is the self-employment income while the carryback reduces the AGI.\"",
"title": ""
},
{
"docid": "c6019c84871971a919272101d493033a",
"text": "I would talk to your HMRC tax office they do have guidance on this issue here http://www.hmrc.gov.uk/working/intro/employed-selfemployed.htm",
"title": ""
},
{
"docid": "2cb5e43eba512b55cfa5d13bc941d656",
"text": "In Australia, any income you earn is taxable despite where it came from. Using your example your taxable income is $70,000. Keep in mind that with a business even as a sole trader any business expenses that contribute to the earning of your business income is deductible, reducing the final amount of tax you'll have to pay. The ATO website has lots of good information and examples to look at including tax rates. If your total income is pushing into a higher tax bracket over 30c tax per $1 earned, it may be worth looking at shifting your business to operate under a company structure that just has a fixed tax rate around 30c per $1. That said, for me, I don't want the paperwork overhead of a company yet so I'm running my side business as a sole trader too. I'd rather do that and keep it easy for now while my business gets profitable that waste time on admin structures for tax reasons even if in the shortterm it may mean slightly higher tax. In the end, you only pay tax on profit (income minus expenses) as opposed to raw/gross income. For more info there are good books in the bookshops or local library (to read free) on starting a business on the side while still working. They discuss these issues too.",
"title": ""
},
{
"docid": "f61047fb54b551445d857275dd22d5d3",
"text": "\"These kinds of questions can be rather tricky. I've struggled with this sort of thing in the past when I had income from a hobby, and I wanted to ensure that it was indeed \"\"hobby income\"\" and I didn't need to call it \"\"self-employment\"\". Here are a few resources from the IRS: There's a lot of overlap among these resources, of course. Here's the relevant portion of Publication 535, which I think is reasonable guidance on how the IRS looks at things: In determining whether you are carrying on an activity for profit, several factors are taken into account. No one factor alone is decisive. Among the factors to consider are whether: Most of the guidance looks to be centered around what one would need to do to convince the IRS that an activity actually is a business, because then one can deduct the \"\"business expenses\"\", even if that brings the total \"\"business income\"\" negative (and I'm guessing that's a fraud problem the IRS needs to deal with more often). There's not nearly as much about how to convince the IRS that an activity isn't a business and thus can be thrown into \"\"Other Income\"\" instead of needing to pay self-employment tax. Presumably the same principles should apply going either way, though. If after reading through the information they provide, you decide in good faith that your activity is really just \"\"Other income\"\" and not \"\"a business you're in on the side\"\", I would find it likely that the IRS would agree with you if they ever questioned you on it and you provided your reasoning, assuming your reasoning is reasonable. (Though it's always possible that reasonable people could end up disagreeing on some things even given the same set of facts.) Just keep good records about what you did and why, and don't get too panicked about it once you've done your due diligence. Just file based on all the information you know.\"",
"title": ""
},
{
"docid": "0068be76f8e30082d3ecc91d92b35add",
"text": "This calculation arrives at the correct answer. However, it uses the formula for an annuity due. This means the payments are made at the beginning of the month and the last month of the 10 year period has interest accrued. See the section, Calculating the Future Value of an Annuity Due. The rate is given as an effective rate. with In Excel, =FV((1+0.12)^(1/12)-1,120,3500,0,1)",
"title": ""
}
] |
fiqa
|
1f3001f518429803caeed72b9b9f666a
|
Can an International student of F1 VISA accept money in her US bank account on behalf of someone else?
|
[
{
"docid": "35c5605589b6b4dbdea21675a10af603",
"text": "There might be a problem. Some reporting paperwork will have to be done for the IRS, obviously, but technically it will be business income zeroed out by business expense. Withholding requirements will shift to your friend, which is a mess. Talk to a licensed tax adviser (EA/CPA) about these. But the immigration may consider this arrangement as employment, which is in violation of the visa conditions. You need to talk to an immigration attorney.",
"title": ""
}
] |
[
{
"docid": "a96d117587982e48e6551829af00c8bf",
"text": "Of course you can. My assumption is you are/will be in UK. I am a student from outside the UK and I am about to start studying at a UK university/college/school. How do I choose which bank is best for me? You should be able to open a ‘basic bank account’ with a number of different banks. A ‘basic bank account’ provides easy access to banking facilities for adults in the UK. Additionally, some banks offer a bank account tailored specifically for your needs as an international student. There is a table on pages 6 & 7 of this leaflet that has a list of basic accounts and other accounts that may be suitable along with brief descriptions of some of their features. Most banks don’t ask you to pay in any money to open a basic account. You should look around to see which bank and account suit you best and then visit the local branch of the bank you have chosen. You may also be able to get other types of account, as detailed in the next section. Please speak to a bank Go through the source I have linked. It is a bit old, but has relevant information for you. SOURCE",
"title": ""
},
{
"docid": "b5ee0e5ee25552262506cdaf9a8f6403",
"text": "\"You can wire the money to the university. If your friend is a registered student, then they will have an account at the school. Contact the school directly and ask for the \"\"bursar's office\"\" (assuming it is an English speaking school). The bursar will tell you how to wire the money so that it reaches the proper account. Normally, you will wire to a general university account at a bank and the memo on the wire will include the student's account number. Your friend can wire money to your account at your bank. Go to your bank and ask them for the procedure. By the way, there is a 90% chance your \"\"friend\"\" will not pay you back.\"",
"title": ""
},
{
"docid": "118b7cdb68dfddbd40d4ac3fb00c6b6b",
"text": "Yes, you can transfer money to your account, any bank will do it. The conversion charges will be there i.e. the diff between USD and the rate at which the bank sells it, usually Rs. 2/-, appx. In addition, transaction charge (not very high). As for taking from friends & repaying in India, check UAE tax treatement for taking money from friends (is it considered as your income & are you liable for taxes). As for giving back, get some documentation done as a loan, otherwise your friends may be considered to be taking gift/consideration/income from you and taxed. Most straight forward way is to transfer the money from your mother's account.",
"title": ""
},
{
"docid": "8b45e548d7249ae24266bede29b37465",
"text": "I will not pay any taxes in the Us, since I am not working for an US company What you will or will not pay is up to you of course, but you definitely should pay taxes in the US, as you're working in the US. Since you mentioned being from Japan, I'll also suggest checking whether you're allowed to perform any work in the US under the conditions of your visa. If you're a F1/J1 student - you'll be breaking the immigration law and may be deported. You might be liable for taxes in Germany, as well, and also in Japan. I'll have to edit this to allow people who downvoted the answer without knowing the legal requirements to change their vote. F1 student cannot be a contractor without a valid EAD. Period. There's no doubt about it and legal requirements are pretty clear. Anyone who claims that you wouldn't be breaking the terms of your visa is wrong. Note, I'm neither a lawyer nor a tax professional, for definite advice talk to a professional.",
"title": ""
},
{
"docid": "b5c208aa15db85fd959b6995ab8b9298",
"text": "In short getting funds converted outside of the Banking channel is illegal in India as Foreign Exchange is still regulated. If you show only a credit from your friend's NRE account to your NRO account [note it can't be your NRE account], it would be treated as GIFT and taxed accordingly, else you would have to show it as loan and pay back. You may show the payback in USD. But then there is a limit of Fx every individual can get converted/repatriate out of India and there is a purpose of remittance, all these complicate this further.",
"title": ""
},
{
"docid": "fe5cc026007dcec1e20591574cf671a4",
"text": "Nothing happens. A bank is a business; your relationship with the bank doesn't change because your visa or immigration status changes. Money held in the account is still held in the account. Interest paid on the account is still taxable. And so on. If the account is inactive long enough, abandoned account rules may apply, but that still has nothing to do with your status.",
"title": ""
},
{
"docid": "81b702bd57c5ca1a9422cc1c74918b24",
"text": "\"As a general proposition, no, you do not need to report money transfers into the US. If a transaction exceeds $10,000 then the bank must report it anyway. Note that \"\"structuring\"\" your transactions to avoid a $10,000 deposit is illegal, so be careful if you are moving lots of money. As a general rule, no, transferring your own individual money from a foreign account to a US account does not incur taxes. Only lawyers are authorized to practice law in the US. They should generally be bar licensed in the state of practice. Certified public accountants can assist you with tax preparation and return positions, though tax lawyers may be necessary for some situations or for formal tax opinions. Be sure to use an experienced advisor to file your tax returns and information reporting.\"",
"title": ""
},
{
"docid": "c92eab5ac3d5d3b95ad478ef01af3752",
"text": "Your sister-in-law should know that anybody, US citizen or not, can open a US bank account. She should do that and then pay her 20k fee to the company. I'm a Canadian citizen and I have a US bank account and I don't even live nor work in the United States. I only use it when I travel for leisure and order online. This looks like a scam, but if you know well your sister-in-law, it may not be.",
"title": ""
},
{
"docid": "e75eceb1b2ab7c39bcb9e9670364114b",
"text": "This will end badly, the only question is how long it will take. Performing bank transfers is not difficult and there is no way a 3rd party would be paying her large sums of money to perform these transfers unless the purpose was illegitimate and they were taking advantage of her. In my experience it is as simple as entering the target bank account routing and account #, entering the name (this is not double-checked by the bank to associate with the target account), entering a dollar amount and then agreeing to the terms of the transfer--there are not people out there who have a lot of money but would rather pay somebody $2000+ to do 2 minutes of work in an unofficial capacity instead of just doing it themselves unless they are trying to hide something and/or take advantage of a mark.",
"title": ""
},
{
"docid": "08248f5214e8b3782b0d58a4351d7af1",
"text": "He cannot get money from someone else account. Your US resident friend in New York can send money to your Indian friend in Atlanta via Western Union which has presence in almost every corner of the US. Most definitely in the city of Atlanta. Your Indian friend can receive the Western Union transfer, in cash, within minutes after the friend in New York sends it. Here's the site for location search. The sender doesn't need to go anywhere, can send online, so your New York friend doesn't even need to waste much time. In fact - you don't need to bother your friend in New York, you can send it online yourself (assuming you're American/have US bank account). In order to receive the money, your Indian friend will obviously need a proper identification (i.e.: passport).",
"title": ""
},
{
"docid": "b55c9ab7182e830d25cd7db9d3e80f7c",
"text": "You should check with the Office of Student Affairs (or equivalent) at your University to see if you can accept Credit Cards. Many will only allow you to accept student organization dues paid in cash, check, or money order. Many universities will also provide your organization with basic operating funds, if you request it. Your first point of contact should be your faculty adviser, though. Your best bet would be to just use cash. Learn where the nearest ATMs are. If you are set on using credit cards, set up a PayPal account and just use it to reimburse the person who fronts the money (cover the markup). Everyone will have to have a PayPal account set up, linked to their credit card. You can avoid fees by using a bank account. If you're so inclined, you can set up a Business account and have a PayPal Debit Card, but you'll want to check with your adviser / University by-laws to see if you're allowed. Don't expect any of these to work as website implementations. As you're a University group, you will undoubtedly be meeting in person such that an exchange of cash/check/money order would be trivial In short, you'll need to check into the rules of your University. Credit cards generally carry processing fees, charged to the merchant, which (on its own) carries some tax implications.",
"title": ""
},
{
"docid": "ed7f6e1d3fdc84d50b5109a5767fead5",
"text": "\"The other answers describe why this is highly likely to be a scam. This answer describes why you don't want to get involved, even in the unlikely case that it isn't a scam. I'm describing this using US law (which I'm not particularly familiar with, so if I go astray I'd suggest others fix any flaws in this answer), but most other countries have similar laws as these laws are all implementations of a small number of international treaties have very large memberships. The service you describe (accepting money transfers from one party and transferring them to another) is one which, if you engage in it for profit, would classify you as a \"\"financial institution\"\" under 31 USC 5312, specifically paragraph (a)(2)(R): any other person who engages as a business in the transmission of funds, including any person who engages as a business in an informal money transfer system Because you would be acting as a financial institution: Failure to follow such requirements can lead to a fine of up to $250,000 or a 5 year prison sentence (31 USC 5322). See also: Customer Identification Program and Know Your Customer.\"",
"title": ""
},
{
"docid": "79c22338193a3f1a2c9fa3b0730fc78e",
"text": "As an F1 student, I have been investing (and occasionally buying and selling within few weeks) for several years, and I have never had problems (of course I report to IRS gains/losses every year at tax time). On the other hand, the officer in charge of foreign students at my school advised me to not run ads on a website and make a profit. So, it seems to me that investing is perfectly legit for a F1 student, as it's not considered a business activity. That's obviously my personal understanding, you may want to speak with an immigration attorney to be on the safe side.",
"title": ""
},
{
"docid": "67525a00d56b3e4c7396761c4f96f362",
"text": "Either approach will put a strain on your friendship, unless you are willing to treat it as a gift which may or may not be returned rather than a loan. I agree that paying it direct to the dealer (or giving her a check that is made out to the dealer) avoids the risk of the money getting sidetracked.",
"title": ""
},
{
"docid": "dc7fda7d3c5fb49456dd9db0fe564a1b",
"text": "I was in a similar (but not quite as bad situation) a couple years ago, and I had a stroke of luck that helped me, but your friend might be able to force a similar situation. My parents refused to take out the huge parent loan (understandably so), but my dad made enough money that I wasn't eligible for much aid. My stroke of luck came when they got divorced; I could refile my FAFSA with only one parent (using my mom with very little income), my aid shot through the roof and nearly covered my undergrad (this happened in California, I don't know if this works in other states). My advice for your friend would be to take the 6 units/part time job option, but do what she can to earn enough to pay her own rent/food/other bills. I think the requirement for filing as an independent is that you supply >50% of your own income. It won't kick in right away, but for next school year this would end up getting her a lot more money from the state/federal governments. For me it was enough to cover my school, food, rent, gas, car payment, and still have a little left over. (I don't know if this is still possible, and I know it doesn't work for graduate school, or if it applies to every state. It might be an option worth pursuing though)",
"title": ""
}
] |
fiqa
|
a4f630f76edf2d2870e11eb45b1729e4
|
Found Mistake on 2013 1120S Form
|
[
{
"docid": "7cd4bc1c1743be97be65b364924cfbaa",
"text": "\"I don't know if it's common or necessary to include capital stock as a liability? Yes, if you look at the title of the nonasset part of the balance sheet it actually is titled \"\"Liabilities and Shareholders' Equity\"\". Your capital stock is a component of Equity. This sounds like it was reported in a reasonable manner. \"\"$2,582 listed under Loans from Shareholders (Line 19).\"\" Did you have a basis issue with your distributions? That is did you take shareholder distributions more than your adjusted basis that you have been taxed on? I have seen the practice of considering distributions in excess of basis as short term loans to prevent the additional taxation of the excess distribution. Be careful when you adjust this entry, your balance sheet had to roll from one year to the next. You must have a reasonable transaction to substantiate the removal of the shareholder loan.\"",
"title": ""
}
] |
[
{
"docid": "eb83ca5442a18d421fab68113cd1df8b",
"text": "\"I doubt there is anything you can do to convince them you paid, outside of just talking to them, which it seems you already tried. These are the possibilities I can think of for how this happened: IMHO, the most likely scenario is #4. If 1 or 3 happened you'll never see your money again, but the other 3 possibilities leave open the option of the error being discovered in the future. My suggestion, if the copay is small, is to pay it again, ask for a receipt, and ask them to make a note in the system that you claim you already paid, and ask them to \"\"be on the look-out\"\" for any discrepancies in that amount. This way, (with a good amount of luck), if they find it or discover the error (from another customer asking about the credit, or an accounting cash surplus), they can refund it to you.\"",
"title": ""
},
{
"docid": "84016dea6a0bc566afa2c0dd291cd850",
"text": "\"What you should do is called \"\"re-characterization\"\". See the instructions for form 8606 for details (that is also the form to use to report the incident). See example 3: You made a contribution to a Roth IRA and later recharacterized part or all of it to a traditional IRA. Report the nondeductible traditional IRA portion, if any, on Form 8606, Part I. If you did not recharacterize the entire contribution, do not report the remaining Roth IRA portion of the contribution on Form 8606. Attach a statement to your return explaining the recharacterization. If the recharacterization occurred in 2012, include the amount transferred from the Roth IRA on Form 1040, line 15a; Form 1040A, line 11a; or Form 1040NR, line 16a. If the recharacterization occurred in 2013, report the amount transferred only in the attached statement, and not on your 2012 or 2013 tax return. You re-characterize it back to traditional IRA contribution, which will not be deductible. You then convert it back to a Roth IRA. Basically you end up at exactly the same place, except that if you already had some gains on that amount - you'll have to pay tax on them now (for the conversion, since because of the re-characterization, it will now be gains in a traditional IRA). You should of course contact your broker to do the re characterization (reassigning of the amount and its gains from a Roth IRA account to a traditional IRA account).\"",
"title": ""
},
{
"docid": "0f02d14b3b88c6a19f10f13209e2455d",
"text": "I've talked to several very experienced accountants that deal with startup shares, stock 83(b)'s, etc. weekly (based in SF, CA) as this issue would have had a massive impact on me. The most important part of filing an 83(b) is notifying the IRS within 30 days. The law requires the written notification within the 30 day window. Adding it to that years tax return is an IRS procedure. Forgetting to include a copy of that years tax return is apparently a common occurrence when no tax was owed (0 spread, you actually paid the FMV). And the accepted method to resolve this is to simply file a blank amendment for that years return and include the copy of the 83(b) election.",
"title": ""
},
{
"docid": "bf0330082ac65d66aa4934120480a8fe",
"text": "You need to give specific dates! In the United States, you have three years to file an amended tax return. https://www.irs.gov/uac/Newsroom/Ten-Facts-about-Amended-Tax-Returns Did the restaurant fail in 2012? If so, that's probably the year to take the loss. If you need to amend your 2012 return, which you filed in 2013, you should have until 2016 to file this. The exact date may be based on when you filed 2012 taxes!",
"title": ""
},
{
"docid": "09cb7679a6622307a4a0930d9926cce1",
"text": "I just want to point out something that seems to be generally true: If you are supposed to report something to the IRS, and you don't, the IRS will probably send you a letter assuming the maximum possible tax liability, and it's up to you to prove that scenario is incorrect. In your case you obviously owe no tax, but since you didn't report it, the IRS simply assumed that you do owe tax until you prove otherwise. You're one form away from fixing the issue. I have first hand experience that this is also true if you forget to report an HSA distribution. I received a letter considering my entire distribution as if it was for non eligible medical expenses. This made the amount taxable and had an additional 20% penalty to boot. Of course I have medical receipts for all of the distributions which makes them not taxable, and had I simply put the correct number on my return to begin with I wouldn't have had to fill out the additional form to correct my mistake.",
"title": ""
},
{
"docid": "973cfdc20978cd862876108bc3168cc6",
"text": "If the correction results in you owing them money, you typically just need to pay them the appropriate amount. I believe they charge back-dated interest on the amount if it was supposed to have been paid in the past, but if it's for this year's taxes then payment isn't due until the end of April and so interest would not apply. In some circumstances, they may apply fines or press charges for tax evasion, but only if they have reason to believe you intentionally/knowingly attempted to misrepresent your tax return in order to avoid paying taxes. You can challenge their decision to fine you, but you are considered guilty until proven innocent. Obviously that's the opposite for any criminal charges. The good news is, lots of people accidentally enter the wrong numbers and the CRA is aware of this and rarely takes action against them, other than making them pay what they owe. They have ways to look for suspicious behavior and differentiate that from innocent mistakes. So don't worry, you should be fine, not fined.",
"title": ""
},
{
"docid": "ab60ff3d34ff776f877eb92c0f2a2706",
"text": "\"This is an unfortunate situation for you. You have zero chance at your question number 1, if someone was going to bend this rule for you it would have happened already. The answer to question number 2 is pursue solution number 3. The overriding issue is that the IRS makes these rules, not the employer/plan sponsor or the administrator. You can't talk the plan administrator in to reimbursing you, their system likely doesn't even have a function to do so. FSA timing issues can be complex and I think that's the root of your issue because when an expense can be incurred (date of service versus date of payment) and when a claim must be filed are different things. It's really common to bend the rules on when a claim is submitted, but not when it was incurred. It's really common for an exiting employee to have 30 days to submit expenses for reimbursement. FSA expenses must always be incurred within the specified plan year, or within your dates of employment if you weren't employed for the entire plan year, this is specified by the IRS. It seems like some wires were crossed when you asked this question. You were asking \"\"can I still incur claims\"\" and they were hearing \"\"how long do I have to submit an expense that has already been incurred.\"\" Some plans allow COBRA continuation on FSA which generally does not make sense. Your contributions to the plan would use after tax dollars but for folks who know they have an eligible expense coming it can make sense to continue via COBRA in retain your eligibility under the plan so you can incur a claim after your employment termination. Regarding number 3. This sort of reimbursement would be outside the plan, no precedent is necessary. You've gotten them to claim it was their mistake, they're going to reimburse you for their mistake, it has nothing to do with the FSA. Good luck.\"",
"title": ""
},
{
"docid": "96b8fbf19e0d9bba77b45d071ea95197",
"text": "\"Turbotax community had a similar question. They claim you just put it into \"\"Office Expense\"\". I never understood why there are so many categories when they are just summed up and subtracted from your income. How can you possibly get in trouble for putting something in a wrong column if the final tax liability doesn't change.\"",
"title": ""
},
{
"docid": "91284308cba499b85643f7b82623a40f",
"text": "Underwriting manager here. It's not a big deal. Call your processor or loan officer tomorrow to make sure it's been cleared. My guess is that the underwriter or loan officer noted the discrepancy and corrected it in their systems. You'll have to sign a updated 1003 and 4506T at closing with correct info. In other words...no biggie, no worries. Not a show stopper at all.",
"title": ""
},
{
"docid": "d1513d548321287b8b1ab7d6ac433981",
"text": "\"Buried on the IRS web site is the \"\"Fillable Forms Error Search Tool\"\". Rather than including an explanation of errors in the rejection email itself, you're expected to copy and paste the error email into this form, which gives more details about what's wrong. (Don't blame me; I didn't design it.) If I copy your error message in, here's the response I get: There is an error with the “primary taxpayer’s Date of Birth” in Step 2 Section 4. The date of birth that was entered does not match IRS records. Make sure you enter the correct birth date, in the correct format, in the correct space. Scroll down, and enter the current date (“Today’s date”). Today’s date is the day you intend to e-file the return again. Also, if you are making an electronic payment you must re-date that section. E-File your return. You say that you've already checked your birthday, so I don't know as this is particularly helpful. If you're confident that it's correct and in the right place, I think your next step needs to be contacting the IRS directly. They have a link at the bottom of the error lookup response on how to contact them specifically about their solution not working, or you could try contacting your local IRS office or giving them a call.\"",
"title": ""
},
{
"docid": "d42df4b19921edac9589e2d0d8ad984a",
"text": "\"The FTB, as any government agency, is understaffed and underpaid. Even if someone took a glance and it wasn't just an automated letter - consider the situation: you filed as a LLC and then amended to file as a partnership. Unless someone really pays attention - the obvious assumption would be that you had a limited partnership. Yes, you'll need to call them and work with them on fixing this. They do have all the statements you've attached. However, there's a lot of automation and very little attention to details when it comes to matching errors, so don't get surprised if no-one even looked at these statements. Next time your elected government officials talk about \"\"small government\"\" and \"\"cutting government expenses\"\" - you can remind yourself how it looks in action with this experience.\"",
"title": ""
},
{
"docid": "b240c8733992c78e273ab69c01482f22",
"text": "\"If she reported the income on the business return, I'd treat this as a \"\"mail audit\"\". Try to get a clear statement from Square confirming what they reported, under which SSN/EIN, for what transactions. Make a copy of that. If at all possible, get them to send a letter to the IRS (copy to you) acknowledging that they reported it under the wrong number. Copy the IRS's letter. Square's letter, and both personal and business 2012 returns. Write a (signed) cover letter explaining what had happened and pointing out the specific line in the business return which corresponded to the disputed amount, so they can see that you did report it properly and did pay taxes on it as business income. End that letter with a request for advice on how to straighten this out. Certified-mail the whole package back to the IRS at whatever address the advisory letter gives. At worst, I'm guessing, they'll tell you to refile both returns for 2012 with that income moved over from the business return to the personal return, which will make everything match their records. But with all of this documentation in one place, they may be able to simply accept that Square misreported it and correct their files. Good luck. The IRS really isn't as unreasonable as people claim; if you can clearly document that you were trying to do the right thing, they try not to penalize folks unnecessarily.\"",
"title": ""
},
{
"docid": "cd95509e847580c275bb372e84f35c71",
"text": "An amended return is required for situations that impact tax owed, or your tax refund. 8606 purpose is to track non-deducted IRA deposits. I'd recommend you gather all your returns to form a paper trail, and when filing your 2016 return, show a proper 8606 as if you'd tracked it all along.",
"title": ""
},
{
"docid": "0e099e701dd6df16a91d3ffbb155fbb2",
"text": "I would behave exactly as I would expect it from others. If you were the one giving away too many points by accident you would be thankful if somebody notifies you about this error. You can write a letter or call them. I would not use the points (of course only not use the points which are added in error). Other options are possible but I would advise against them. It's just about fair play and the points are clearly not yours.",
"title": ""
},
{
"docid": "90ac357b1ab65e33ccc03a8fbdc10b0f",
"text": "Yes, you can send in a 2012 1040-ES form with a check to cover your tax liability. However, you will likely have to pay penalties for not paying tax in timely fashion as well as interest on the late payment. You can have the IRS figure the penalty and bill you for it, or you can complete Form 2210 (on which these matters are figured out) yourself and file it with your Form 1040. The long version of Form 2210 often results in the smallest extra amount due but is considerably more time-consuming to complete correctly. Alternatively, if you or your wife have one or more paychecks coming before the end of 2012, it might be possible to file a new W-4 form with the HR Department with a request to withhold additional amounts as Federal income tax. I say might because if the last paycheck of the year will be issued in just a few days' time, it might already have been sent for processing, and HR might tell you it is too late. But, depending on the take-home pay, it might be possible to have the entire $2000 withheld as additional income tax instead of sending in a 1040-ES. The advantage of doing it through withholding is that you are allowed to treat the entire withholding for 2012 as satisfying the timely filing requirements. So, no penalty for late payment even though you had a much bigger chunk withheld in December, and no interest due either. If you do use this approach, remember that Form W-4 applies until it is replaced with another, and so HR will continue to withhold the extra amount on your January paychecks as well. So, file a new W-4 in January to get back to normal withholding. (Fix the extra exemption too so the problem does not recur in 2013).",
"title": ""
}
] |
fiqa
|
5d07c2bdeaf965341def439360948ce2
|
Why Are Credit Card Rates Increasing / Credit Limits Falling?
|
[
{
"docid": "52feda2bfa5b003fa24d3ee131ed0895",
"text": "Because people are going deeper into debt and filing for bankruptcy more often, there is more risk on behalf of the credit company. Therefore, they limit their risk by lower limits and increasing interest. For every person that goes bankrupt, there might be 10 that pay that new higher interest rate, thereby netting a profit even though they lost out completely on the one customer. The recent legislation limited how and under what circumstance rate are adjusted and raised, but not forbidden. As for the fact that these banks took tax money under the idea (we all thought) I see two points of view. We never should have had the credit we did, so they are correcting and you (like me and millions of others) are suffering for their prior mistakes. It is an honest attempt to correct the system for long term stability even if we suffer in the short term. We gave them tax money, they need to not screw us over. In response to the still frozen credit markets I would suggest penalty taxes to companies that do not lend. Penalties to companies that do not modify mortgages. The second you take government money is the last second a you are entitled to a profit of anything. Furthermore, we the people bought you and we the people get to decide your salary. The bottom line is there is truth in both statements. Things are totally screwed up right now because we ALL made mistakes in the past trying to get a bigger profit or own a bigger house. There are those among us who didn't make a mistake, and those among us who made nothing but mistakes. As a society, we have to pay the piper either way. The best thing you can do now is pay down your debts, live simply and spend your money wisely.",
"title": ""
},
{
"docid": "b7d475ac985236303a07bffee976baea",
"text": "Of course your situation is very hurtful at a personal level, and I sympathize. I just don't get your point about being driven further into debt? It would seem that with a lower credit score you are prevented from taking on more debt. That can absolutely be hurtful especially to someone who runs a business that relies on short term credit. As for why they do this, they do it to reduce their risk - they don't want to lend more money, they are afraid that you will lose your job and default. Of course it is not as personal as I am writing it, not for you (they don't target you personally - they target your credit profile) and not for them (it is a matter of how the market views the debt and how much they can trade on such debt, not what they want to do personally). As for the TARP bailouts not releasing enough credit - this is reality. Goverment always thinks it can influence the situation more than it actually can. In order to unfreeze credit there needs to be a growing economy that makes the risk look acceptable. No amount of Goverment nudging will really change that more than marginally. By the way, legislation like this (forcing credit card companies to not raise their rates) can lead to credit restrictions. By artifically forcing the rates down the risk has to be ballanced somewhere - so it will be ballanced by lowering credit lines or by other means. Like any price control, if you restrict the price, it causes shortages. Intrest rates are the price of credit.",
"title": ""
}
] |
[
{
"docid": "055049ff07087e73c9e065bffc2b48a0",
"text": "\"On a longer time scale, the plot thickens: It almost looks random. A large drop in real rates in the mid-70s, a massive spike in the early 80s, followed by a slow multi-decade decline. The chaos doesn't seem to be due to interest rates. They steadily climbed and steadily fell: All that's left is inflation: First, real rates should be expected to pay a moderate rate, so nominal rates will usually be higher than inflation. However, interest rates are very stable over long time periods while inflation is not. Economists call this type of phenomenon \"\"sticky pricing\"\", where the price, interest rates in this case, do not change much despite the realities surrounding them. But the story is a little more complicated. In the early 1970s, Nixon had an election to win and tried to lessen the impacts of recession by increasing gov't spending, not raising taxes, and financing through the central bank, causing inflation. The strategy failed, but he was reelected anyways. This set the precedent for the hyperinflation of the 1970s that ended abruptly by Reagan at the beginning of his first term in the early 1980s. Again, interest rates remained sticky, so real rates spiked. Now, the world is not growing, almost stagnating. Demand for equity is somewhat above average, but because corporate income is decelerating, and the developed world's population is aging, demand for investment income is skyrocketing. As demand rises, so does the price, which for an investor is a form of inverse of the interest rate. Future demand is probably best answered by forecasters, and the monetarist over and undertones still dominating the Federal Reserve show that they have finally learned after 100 years that inflation is best kept \"\"low and stable\"\": But what happens if growth in the US suddenly spikes, inflation rises, and the Federal Reserve must sell all of the long term assets it has bet so heavily on quickly while interest rates rise? Inflation may not be intended, but it is not impossible.\"",
"title": ""
},
{
"docid": "312d32a49042514a7405bb87a35c97c5",
"text": "I disagree with the reply. Your both impressions are correct. - Do not close old credit cards because they keep your credit rating high (fico score) - Also low utilization that credit cards report to credit rating companies, improves your rating.",
"title": ""
},
{
"docid": "3324341128f77a61d22d572bfaca98f0",
"text": "Is this the time of year this board attracts question regarding the law and how to skirt it? I've done as you suggested. I happened to have a month that I was going to blow through the $12000 limit I had on my credit card. So as the balance crossed $8000, I paid that amount, and when the bill was cut, it was just $4000 or so. Scrutiny would show the reason for partial payments was obvious, I wanted to avoid going over limit. I wouldn't have done so just to avoid the $10,000 transaction. Since then, I've asked that the limit be raised in case I have another wild month.",
"title": ""
},
{
"docid": "c7b991de97e591aec303c936350c676c",
"text": "\"So basically, the bar has been lowered due to the fact that so many people don't qualify for credit. The medical debt issue is one thing, but the fact that only 28% of home purchases these days are first time home buyers instead of 40% says more about our unaffordable higher educational system, labor market and people's ability to earn decent income than it does about credit being \"\"too tight\"\". If anything this is a loosening of standards since the banks have no alternative in order to drum up new sales. They're 12% off the mark and they're finding ways to close the gap. Wages probably won't get better, so they're better off accepting lower quality customers and rolling the dice on their ability to pay off debts over the life of the loans they issue. Sounding familiar?\"",
"title": ""
},
{
"docid": "c08db17711eb452e35317801bdf55f13",
"text": "There is one massive catch in this which I found out when I went to Nationwide to ask for a loan. I've got a credit card which they kept increasing my credit limit, it's now at something ridiculous - nearly £10,000 but they keep increasing it. I never use that card, when I went to Nationwide though they said they couldn't give me a loan because I had £10,000 credit already and if I reduced this credit this would affect my credit rating and they could potentially give me a loan. I then realised what MBNA had craftily done. I have two cards with this bank, one with really low interest and the other with really high interest (and a high credit limit) - even though the other card has a zero balance loan companies still see it as money I could potentially go and spend, it doesn't matter to them that I've not spent any money on that card in about 12 months, to them it's the fact that they could give me a loan and then I could go and spend another £10,000 on that card (as you can see extremely risky). Of course this means that what MBNA are craftily doing is giving me such a high credit, knowing full well that I'm not going to use it, but it also prevents their competitors from offering me a loan, even at a lower rate, because I've already got too much credit available. So yes there is a catch to giving you a high credit limit on your cards and it's to prevent you from either leaving that bank or getting a lower interest rate loan out to clear the debt.",
"title": ""
},
{
"docid": "42929083c698a48194e5d581fc766706",
"text": "Most of the bankruptcy is due to taking [or building over a period of time] a loan that one cannot service, if the interest rates rise, then the amount of money to repay the loan increases, when one doesnt pay the revised amount and keeps paying less, the over all debt keeps shooting through the roof ... a lower interest rate means that one can continue to pay the same amount ... and few missed payments do not cause as much as damage as it does when the rates are high.",
"title": ""
},
{
"docid": "b4da24f321fb782c3eadaf9e189c1c90",
"text": "Is my understanding okay ? If so, it seems to me that this system is rather error prone. By that I mean I could easily forget to make a wire some day and be charged interests while I actually have more than enough money on the check account to pay the debt. Which is where the credit card company can add fees so you pay more and they make more money. Don't forget that in the credit case, you are borrowing money rather than using your own. Another thing that bothers me is that the credit card apparently has a rather low credit limit. If I wanted to buy something that costs $2500 but only have a credit limit of $1500, can I make a preemptive wire from my check account to the VISA account to avoid facing the limit ? If so, what is the point for the customer of having two accounts (and two cards for that matter...) ? If you were the credit card company, do you believe people should be given large limits first? There are prepaid credit cards where you could put a dollar amount on and it would reject if the balance gets low enough. Iridium Prepaid MasterCard would be an example here that I received one last year as I was involved in the floods in my area and needed access to government assistance which was given this way. Part of the point of building up a credit history is that this is part of how one can get the credit limits increased on cards so that one can have a higher limit after demonstrating that they will pay it back and otherwise the system could be abused. There may be a risk that if you prepay onto a credit card and then want to take back the money that there may be fees involved in the transaction. Generally, with credit cards the company makes money on the fees involved for transactions which may come from merchants or yourself as a cash advance on a credit card will be charged interest right away while if you buy merchandise in a store there may not be the interest charged right away.",
"title": ""
},
{
"docid": "a81fcec8b06a16d323ca49071561d6e7",
"text": "My first thought was that it must be due to inflation, which causes such differences in many cases since a creditor needs to make back more than the rate of inflation in order not to effectively lose money. But it seems that Paraguay currently has only a very modest rate of inflation, about 3%. Other possible reasons for different credit rates: The latter is most likely. It means that if debtors are generally poor and are often completely unable to pay back the loan, or if there is no effective way to force uncooperative debtors to pay (e.g. when there are weak laws or overworked courts), then creditors will lose a lot of money to defaults and have to raise rates to compensate for this.",
"title": ""
},
{
"docid": "e9fadccb388697eef8e9da6cb7fdfe97",
"text": "I'm not sure what raising your credit limit would do to your score in the short term. I don't think it's a clear win, though. Your percent utilization will go down (more available credit for the same amount of debt) but your available credit will also go up, which may be a negative, since potentially you can default on more debt. If you're interested in monitoring your score, Credit Karma will let you do that for free.",
"title": ""
},
{
"docid": "7d87c699d1503768a304fa752a29f7e3",
"text": "Your score is real-time, updating every time new data hits the reporting agencies. Dilip is correct, go over 20%, and it will hit the report, but then the score returns to normal after the next bill shows a sub-20% utilization. Say your average spending is $1000, but your limit is $5000. There's no harm in asking for a small increase in the limit, or simply pay a bit toward the bill before the statement is cut. The bill and reported balance will be lower and your score, unaffected.",
"title": ""
},
{
"docid": "bbff14d0604cfd236b9c40dcd9f54084",
"text": "\"A credit card is basically a \"\"revolving\"\" loan, in which you're allowed to borrow up to a certain amount (the limit), and any time you borrow, you pay interest. If you were to *borrow* $100 to pay for something via a credit card, you'd have a $100 balance on the card. If you then pay $70 cash to the card, there would be $30 remaining. That $30 balance could accrue interest. The timing of that interest charge could vary. The 20% you've quoted is almost certainly \"\"APR,\"\" of which the \"\"A\"\" stands for \"\"annual,\"\" so that 20% would be an annual rate. It makes the most sense, mind you, to keep a minimal balance on a credit card, as the interest rate is higher than most other loans.\"",
"title": ""
},
{
"docid": "8751321bca0cdc9b78979f64f7c8f2b7",
"text": "Unfortunately, this is a customer service issue. The bank has a set of term and conditions (Ts and Cs) which you received with the card or when you applied. It included your limit, and what happens when you go over, likely, a penalty for going over the limit. At the very least, they expect you to pay the overage or you'll see an over-limit charge next cycle too. In the future, I'd suggest checking your account on line to monitor your balance. Some accounts offer an alert email, mine will let me set an alert for when my balance goes over $xxx, which is helpful, as I can send in an early payment to bring that balance down. It still never hurts to ask. They might waive fees if any, if this is your first time. You can still try calling them, explain the odd timing, and see if you can get a temporary increase in credit line. In the end, you need to review your finances. Carrying balances month to month at 12-18% is no way to have a successful financial future. It's one of the first things to getting your situation under control. After that, a small savings account, an emergency fund, is the next step. One month of charges should never put you in this bad situation.",
"title": ""
},
{
"docid": "59e5ecb0fe258452782762d4a7e06459",
"text": "Even if you can get a credit card with a $0 limit, that doesn't necessarily mean that the charges won't succeed. Some of my credit cards have gone over limit by a significant amount (e.g. 140% of limit) without any transactions being declined. The limit just means that the bank is allowed to decline the transaction, but they are also allowed to approve it anyway. So basically what you would have is a credit card where any transaction can always be declined or approved.",
"title": ""
},
{
"docid": "9803f597eb3d7a5ba67d66094d3a4d74",
"text": "Imagine that your normal mode of using credit gets you a score of X. As time goes by your score trends upward if the positive items (length of credit) outweigh your negative items. But there are no big increases or decrease in your score. Then you make a one time change to how you use credit. If this is a event that helps your score, there will be a increase in your score. If it is bad thing your score will drop. But if you go back to your standard method of operating your score will drift back to the previous range. Getting a car loan for a few months to get a bump in your credit score, will not sustain your score at the new level indefinitely. Overtime the impact will lessen, and the score will return your your normal range. Spending money on the loan just to buy a temporary higher credit score is throwing away money.",
"title": ""
},
{
"docid": "3a5e579b13be145ba602a0f1c0448c12",
"text": "\"It can be pretty hard to compute the right number. What you need to know for your actual return is called the dollar-weighted return. This is the Internal Rate of Return (IRR) http://en.wikipedia.org/wiki/Internal_rate_of_return computed for your actual cash flows. So if you add $100 per month or whatever, that has to be factored in. If you have a separate account then hopefully your investment manager is computing this. If you just have mutual funds at a brokerage or fund company, computing it may be a bunch of manual labor, unless the brokerage does it for you. A site like Morningstar will show a couple of return numbers on say an S&P500 index fund. The first is \"\"time weighted\"\" and is just the raw return if you invested all money at time A and took it all out at time B. They also show \"\"investor return\"\" which is the average dollar-weighted return for everyone who invested in the fund; so if people sold the fund during a market crash, that would lower the investor return. This investor return shows actual returns for the average person, which makes it more relevant in one way (these were returns people actually received) but less relevant in another (the return is often lower because people are on average doing dumb stuff, such as selling at market bottoms). You could compare yourself to the time-weighted return to see how you did vs. if you'd bought and held with a big lump sum. And you can compare yourself to the investor return to see how you did vs. actual irrational people. .02, it isn't clear that either comparison matters so much; after all, the idea is to make adequate returns to meet your goals with minimum risk of not meeting your goals. You can't spend \"\"beating the market\"\" (or \"\"matching the market\"\" or anything else benchmarked to the market) in retirement, you can only spend cash. So beating a terrible market return won't make you feel better, and beating a great market return isn't necessary. I think it's bad that many investment books and advisors frame things in terms of a market benchmark. (Market benchmarks have their uses, such as exposing index-hugging active managers that aren't earning their fees, but to me it's easy to get mixed up and think the market benchmark is \"\"the point\"\" - I feel \"\"the point\"\" is to achieve your financial goals.)\"",
"title": ""
}
] |
fiqa
|
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