Regarding income, I am retired and will have no earned income, Soc Sec or pension in 2005. I will be living off the sale of the highly appreciated stock, which for diversification reasons I want to sell in January 2005. My real question is whether it will be better to put the sale proceeds in a taxable or a tax-exempt money market account. If I put it in taxable MM account, each dollar of interest earned will be worth $0.10 (10%) less due to having to pay 15% vs. 5% on that increased dollar of income. If I put it in a T/E MM account, I will earn less (say only $0.80 instead of one dollar), but it will not reduce the amount that I can take advantage of the 5% capital gains rate. Having gone through this analysis, it seems I'd be better off putting my money in the taxable MM acount, and earning 20% more, even though it will reduce by 10% my capital gains taxes.Does this analysis sound right?Donfool
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