Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: lethean Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121095  
Subject: Re: amt for 2013? Date: 8/31/2013 9:56 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
OK. In TT "what if" I backed out capital gains incrementally until relieved of AMT.

Relieved of AMT at cap gain of 48,795. Which means I backed out 22,640 of cap gain.

At 71,435 cap gain. Tax on full taxable income = 25,856

AT 48,795. Tax on full taxable income = 18,597.

Tax Difference = 7,259 on the 22,640 cap gain backed out. Yikes.

7,259/22,640 = 33% "effective" cap gain in AMT.

Wow. I really blew it. Roth was available. But I didn't want to use the Roth to save 15% cap gain tax. However, given the AMT status that I did NOT anticipate, it seems like I missed a GREAT opportunity to use the Roth to avoid AMT and an "effective" 33% cap gain rate on that 22,640 cap gain.

Sheesh. Lesson learned. Use "what if" BEFORE transacting. ALWAYS.

I HOPE that this sorry tale helps someone else avoid this situation.

Stupid. Stupid. Stupid.

ML
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Macro Economics

The Future, or What's Left of It
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement