Docutech Community

 for those of you that are interested , i made a major asset allocation move at the market close last nite . my stock market asset allocation went from 2% to 50% . i was trying to catch the S & P below the 1250 level and when i placed my order with my Xerox 401(k) , it looked like i was going to get it about the 1240 level . but in the last hour of trading the market reacted to Bernanke's speech and i ended up getting in at the 1256 level .

my intent is to switch back to the Income fund at the end of this present rally in another month or so . and to buy back into the US Stock fund later this fall when the market decides to test the bottoms it's formed over the May 13th / 14th period . because of our new restriction on our 401(k) , the soonest i can make another transaction is July 18th .

by the way , what i'm doing is NOT suggested by most investment advisors . this is just an  FYI .

for the record : the link inserted under the words  "  stock market  "  , "  trading  "  and "  investment  "  were NOT done by me . our Xertech software did it . i don't object , just wanted to let ya know that i don't necessarily ' endorse ' the companies you may be linked to .

most of us ' serious ' market investors pay attention to the market and manage our own portfolios . and we usually do very well at it too . and i'm sure you'll agree with me that it's not a matter of ' smarts ' , but simplying a matter of teaching one's self how to ' track ' the market and decide for yourself .

haven't gotten full confirmation of my trade in GNMAs yet , but here is a post from suite101 that explains my investment : ( http://investment.suite101.com/discussion_print.cfm/541/12510 ) . by the way , the  "  nameless  "  friend mentioned in the post is a mutual friend of Big ' O ' and myself . 

Hello Big ' O ' ,

i can see that the trip with the ' milk drinker ' didn't ruin the rest of your life . was afarid you'd end up as crabby as he is  .......  permanently like he is     .

as far as i can read , you are correct that you can trade in our Xerox 401(k) as often as you want with no penality in and out of our Income fund and the Xerox stock fund . if it were me and i wanted to do so , i'd just give Xerox / Hewitt a quick phone call to verify that .

Clayt. is down on the Kenai now as i type this catching ' reds ' , his favorite eating fish . the run is in and with the fifth wheel set up now down in Soldotna at that gift store , he's ready for a summer's worth of fishing . thanks for helping Clayt. with that chore , usually i and Dick go with him to do that , and for stopping by to visit with us and let us know being stuck with Clayt. so long in the front seat of the cab of his pickup didn't ruin the rest of your life .   

for those interested , my year to date returns through the first half , June 30th , 2006 , are 8.517% . i have now exceeded last year's total returns , my best year since i retired in 2000 , by $1k . so this year is shaping up to be even better .   

first Toner , let me congradulate you on making it to retirement . when i look back at my career and all the past team mates i had that did  NOT     make it to retirement and that quit or got terminated for one fool reason or another . and when i look at my own struggles and how close i came to being fired by several  FSMs , i realize how lucky i was .

that having been said , the big  "  X  "  was excellent to work for and so far their promises have , for the most part , been honored . the retiree healthcare benefit has got to be the best benefit i've earned .

i rolled my  "  Transitional  "  account over to a rollover  IRA  with Schwab when i left in 2000 and left the rest of my 401(k) with Xerox . i've since rolled over an additional couple hundred thousand from my 401(k) just this year in January to fund additional Roth conversions . between the taxfree cash i had to take and the rollover , it came to $231k . when ever you rollover money from your 401(k) to a Traditional  IRA  , a certain portion has to come from your  "  after tax  "  account , if you had one , and a certain amount will come from your  "  before tax  "  account . Xerox / Hewitt will determine those amounts according to their formulas to satisfy  IRS  regulations . the  "  after tax  "   amount that you've already paid taxes on will come to you as a check with  NO  1099 , and the  "  before tax  "  portion that is rolled over , you won't pay taxes on  IF  it is rolled over to another deferred account . and if it is not rolled over and comes to you , then you will be taxed on that amount as ordinary income and a  1099  will be generated and that amount will be added to your gross income for that tax year .

i find the choices in our 401(k) to be excellent and earned  13.4%  on my Xerox 401(k) last year . i use the 401(k) to jump in and out of the market and usually move between the  US Stock fund and the  Income  fund . this , by the way , is  NOT  recommended by most experts and i  AGREE  with them . most people do  NOT  have a complete understanding of how our stock and bond markets work and when you guess  WRONG  , it can really cost you a bundle . as you've learned in this last correction we just came through . please check our archives ( thank you      Xertech  ) on this topic for investment ideas for your 401(k) . and feel free to ask questions here because we have many retirees here who are managing their own portfolios like i do .

 i agree with your assessment on losing money which is why i'm not a " buy and hold " investor . good luck on your retirement . be sure to check back and let us know how you're doing .

hello Kilo ,

IF your house you are selling has been your  PRIMARY  residence for the last  TWO  out of five years  AND  you file  JOINTLY  , there is a  HALF  MILLION  (  $500k  )  dollar exclusion on capital gains . in other words , it's taxfree for the first half million . IF the house you are selling has  NOT  been your primary residence and has been a investment or rental then you have to pay capital gains on your long term capital gains at the rate of  15%  if held longer than  ONE  year and will have to pay capital gains on the amount of depreciation you've taken at the rate of 25% .

suggest you get IRS publication 523 if it was the sale of your home and / or schedule  D  and  FORM  4797  IF  it was the sale of a investment or rental . and , of course , i strongly suggest that if all this is greek      to ya , that you consult your tax preparer for further details . cause with the prices houses are selling for now a days , it can really save ya alot in taxes so it's well worth paying an accountant to get it right for ya .

p.s. also forget to tell ya  Kilo  , IF this isn't your prime residence , there is another way you can sell this house  taxfree  and that's with a  1031  taxfree exchange . this is where you  EXCHANGE  "  like kind  "  investments like rentals for another like kind investment  taxfree . and please talk to a good realtor if this is  "  greek  "  to ya too . but it can be a way you could exchange a house in one location for a house in another location  WITHOUT  paying taxes .

Hi Kilo ,

IF you lived there for two out of five years , then your sale to your son was taxfree to you . and IF your son has lived there for the last two years , then the sale is taxfree to him . and you / him / us can pull this little trick  EVERY  TWO  years , which is why alot of people sell houses . especially now with houses really going up in value . it's a way to pull your equity out of your house taxfree . cause as long as they satisify the  IRS  regulations , you can pocket the equity gains on the sale of a house as long as you've lived there as your  PRIME  residence for  TWO  years .

keep in mind the capital gain exclusion is $250k  PER  INDIVIDUAL  or  $500k  per married copule as long as they file jointly . and if none of this makes any sense to ya ,  PLEASE  go see a tax guy or good realtor cause 15% or 25% capital gains rates on a couple hundred thousand dollar or more house sale can be a big deal .

by the way ,  IF  you didn't rent the house to your son ,  AND  all this took place within the last five years , there might be a way a good accountant can work this deal to yours and your son's benefit . the bad thing about having an accountant handle this for ya is that they are  NOT  going to  "  bend  "  the rules and sign your return for ya . that's one of the biggest benefits in fully understanding the tax code and doing your own taxes . in the end ,  IF  i'm caught in a mistake , it's easy enough for me to just bring my personal check book with me to an  IRS  audit and pay the taxes i would have owed anyway .   

if i were in your shoes , i would be handling this whole deal myself . but that would require much more knowledge of yours and your son's income tax data than is possible in this topic / forum . what is  CRITICAL  in your case is the  DATES . that's where the  IRS  rule of two out of the last  FIVE  years can work to your benefit . you'd have to chart out  WHEN  you left the house ,  WHEN  your son moved in ,  IF  you wanted or  HAD  to count this as a rental deal with your son , and then finally  WHEN  your son actually purchased the house and had it recorded in his name . and unless you have a really excellent understanding of the  IRS  tax code , you'd really screw this thing up .  HOWEVER  ,  IF you did have a really good understanding of the tax code and could formulate a  DEFENCE  , in  case you were audited , then it might be possible to do this whole thing  TAXFREE  and allow your son to possibily sell this same house in two more years and pocket all those gains taxfree too . 

the  "  cleanest  "  deal would have been to have just sold your son the house and have let him start his two year tracking period with the  IRS . you could have  "  GIFTED  "  him  $12k  taxfree and your wife could have gifted him the same amount of money taxfree . if he is married , you both could have gifted them both ( he and his wife ) similar amounts . if you had done this at the end of one tax year and the beginning of the next tax year , you could have given them over $48k with no strings attached and nothing to account for on anybodies tax returns .  the fact that you let your son live there , either rent free or even if you didn't charge them much rent , cause the  IRS  doesn't look kindly of renting to relatives for less than local rental market values complicates the arrangement from the standpoint of filing taxes . plus you have to deal with the missing time frame period from when you left the house and when you actually sold it to your son .

course , all of this in hindsight ( and hindsight is 20 / 20 ) is easy .