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Investing/Strategies / Retirement Investing
|Subject: Re: FF and a tax (lc) fool||Date: 8/2/1999 8:16 PM|
|Author: x4a54||Number: 12740 of 82850|
The dividends are taxed as regular income, which is 28% (or whatever your marginal rate is).
The captial gain (the increase in price) is taxed at 20% (10% if you're in the 15% tax bracket).
That assumes that you hold it for at least a year-plus-one-day (to make it a long-term capital
So, if you are in the 28% bracket, you would want to subtract 28% of dividends plus 20% of the
difference in stock prices to cover your taxes.
There is no guarantee that this would work perfectly, since a good year might slip you into a
Keeping in mind , since the FF is a Long Term strategy,
that these numbers are correct today. May be different
tomorrow. And will almost certainly be different 5yrs
from now . Which is just to say that tax-planning can
never be Precise.
FWIW --mine's in a taxable acct and i plan to pay the taxes
from outside the F4 bucket.
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