William Perry

Comments

• One key tax factor about dividends paid on REIT's is that such dividends are typically taxed as ordinary income and not as qualified dividends which are taxed at capital gains rates for federal purposes. Different states may also tax REIT dividends differently than federal methodology. To the extent that a REIT distributes dividends in excess of it's accumulated earnings, which is a common event with REITs, then the excess typically reduces your tax basis in the investment. The REIT may be just giving you back your own money with its high distribution rate and that may result in a headache for you keeping up with your tax basis if the REIT does not keep up with your basis over the years. There can be further tax complexity if your REIT merges with another REIT which seems to happen a lot when a REIT is not performing well. I favor the simplicity and lower capital gain tax rates on qualified dividends for my equity investments in my taxable investment accounts. I feel the same way about making investments in publicly traded partnership interests and REITs and I have intentionally avoided investing in either.

  Post: What am I missing?

  Link to comment from April 14, 2026

• 2026 Update - While the AARP website tax calculator, as of today 4/14/2026, still has the 2025 tax calculator, the developer of that AARP software, Dinkytown, has recently posted their initial 2026 tax calculator to their website. I did note that the 2026 calculator appears to not yet deduct the 2026 limited charitable contributions in their calculation of taxable income (amount is listed, it just does not currently deduct from the total). The current 2026 version does use the 2026 brackets/rates and accounts properly for the $6K senior deduction for each age 65+ taxpayer on the projected return. It's anyone's guess if there will be additional 2026 tax law changes so I will not fine tune my tax planning until late in 2026.

  Post: AARP tax calculator changed to 2025

  Link to comment from April 14, 2026

• There is not a legal reason. My issue in not doing so currently is there would now be the additional legal expense to re-title and record the deed transfer to the RLT (in addition to the legal cost to initially create the revocable living trust (RLT) which we do not currently have) and it is also my understanding that the particular, mostly unused, large home equity line of credit (HELOC) that we have would also have to be re-established and I worry that since I have stopped working and my earned income has ended I do not know if I would be able to get a new HELOC with the high limit and terms that my current HELOC loan has. I expect that if my spouse dies first I would downsize my residence by moving and my wife would certainly have to move because of her current limited mobility should I die first. Thus when either of us dies or I become unable to maintain our current home a move is in our future. Where Dana lives, in California, I believe she can choose to include a transfer on death provision as part of the titling in a deed in lieu of using a RVT but my state currently does not allow for TOD provisions in deeds. Fortunately my state intestacy provisions currently matches our bequest intents when including post death transfers via beneficiary designations and joint ownership. In the unlikely event that my wife and I die at the same time I expect the probate process is not so onerous in my state for what assets I will expect will be left as my state allows for a simplified administration process for small estates.

  Post: A Big Little Move (by Dana/DrLefty)

  Link to comment from April 2, 2026

• One of my favorite comments about what drives the financial markets came from the movie Trading Places "The good part, William, is that, no matter whether our clients make money or lose money, Duke & Duke get the commissions." I am still a fan of low expense broad based index funds be them mutual or EFT variety and my holding period will hopefully be a problem for my heirs. I only wish I had learned my preference sooner. I enjoyed reading your post Mark.

  Post: Very Fast, Not Very Smart

  Link to comment from April 1, 2026

• Hi Dana, Some thoughts after reading your post - You may want to take a look at the tax rules regarding short term rentals. A potential trap exists if the average lease term for a property is seven days or less, then the taxing authority may consider your rental a trade or business activity. If determined to be a business the net income would be subject to self employment taxes as well as income tax. Additionally, short term rentals with personal use can add a lot of record keeping work as the expenses have to be allocated between rental and personal. You may want to look at IRS Topic no. 415, Renting residential and vacation property. If you ever sell this home the business depreciation, allowed or allowable, would likely be taxable and the gain on the sale would not be eligible for the exclusion under IRC 121. I would also be concerned about other related rental issues from renting such as - Does rental change how the property real estate tax rates are assessed? Does the mortgage interest rate change due to the rental? Does the rental impact your homeowners or other insurance? Do you need additional or different insurance because of the rental? I hope you have considered the possibility of having to live on the ground floor in the event future health issues precludes either you or your husband from walking up stairs. Your focus on this move is on your daughter. If I were making this change I would consider that focus to be the primary guiding criteria in deciding how to use the ADU. Our adult children have all scattered across our country and I can think of nothing better than having any or all of them nearby and in the backyard in a separate unit would be near perfection to me. One last thought, we have been in our house for almost 25 years and if I had the transaction to do over I wish we had put our home in a revocable living trust at purchase. Congratulations on your new home. Best wishes for years of enjoyment. Bill

  Post: A Big Little Move (by Dana/DrLefty)

  Link to comment from March 31, 2026

• The SSA has a update page titled Social Security Fairness Act: Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) update The update states - If you were already receiving benefits that were affected by WEP or GPO, the last month WEP or GPO applied was December 2023. Any payment adjustments due would begin for benefits payable starting in January 2024 (paid in February 2024). To receive increased payments for those months, you had to have been entitled to benefits that were either fully or partially reduced by WEP or GPO for those months. If you were not receiving benefits that were affected by WEP or GPO because you did not previously apply for those benefits, then you will need to contact us to file an application for benefits. The Social Security Fairness Act did not change the provisions of the Social Security Act that govern the retroactivity of benefit applications. Retroactivity for some retirement and survivor’s benefits is generally limited to six months before the month in which the benefit application is filed, although some claims based on disability may be entitled to 12 months of retroactive benefits. Those rules remain unchanged. Since the Social Security Fairness Act was signed, we have consistently encouraged people who had never applied or were not sure if they applied to consider applying for benefits because the date of your application might affect when your benefits begin. I read the above SSA comments to apply retroactivity to retirement and survivor’s benefits and thus may not apply to her spousal benefits the later of after 2023 or when you claimed your benefits 2 years ago. That being said I would think it would be prudent to file her claim ASAP, before the end of March 2026, to start the clock on any retroactive payments as it is unclear to me what the position the SSA may take.

  Post: Social Security Spousal Benefits

  Link to comment from March 27, 2026

• Thanks James, A good summary of the rules as the rules currently exist. With the projected depletion on the social security trust fund in the next six or seven years it will serve those who are nearing the time when they decide to claim their social security benefit to assure themself that there are no actual or proposed changes to the social security laws that will adversely impact the existing rules. Examples of such changes such as the proposal by The Committee for a Responsible Federal Budget published March 24, 2026 titled A Six Figure Limit for Social Security may upend the best decision in the future.

  Post: Social Security Spousal Benefits

  Link to comment from March 26, 2026

• I agree. For most of us the question is not if we will have large medical expenses in retirement at age 65+ but when. Much like a quality pillow choosing to go the traditional medicare route helps me to sleep better. Thanks for your post Richard.

  Post: Focus on the real healthcare financial risk in post age 65 retirement

  Link to comment from March 23, 2026

• He didn't. He made bequests lasting 200 years to help working tradesmen. The loans were able to accumulate tax free and without management fees as the cities he left the bequests to had agreed to do so as a condition of receiving the bequests. The summary from the book reads as follows - Benjamin Franklin was not a gambling man. But at the end of his illustrious life, the Founder allowed himself a final wager on the survival of the United States: a gift of two thousand pounds to Boston and Philadelphia, to be lent out to tradesmen over the next two centuries to jump-start their careers. Each loan would be repaid with interest over ten years. If all went according to Franklin’s inventive scheme, the accrued final payout in 1991 would be a windfall. 

  Post: Trump Accounts – An Update

  Link to comment from March 9, 2026

• Today, 3/9/2026, initial proposed regulations were published in the federal register. The summary reads as follows- ... proposed regulations relating to the Trump accounts contribution pilot program under which the Trump accounts of eligible children can receive $1,000 pilot program contributions. Eligible children must be U.S. citizens with valid Social Security numbers born in 2025 through 2028. The proposed regulations would provide guidance on making an election for the Trump account of an eligible child to receive a $1,000 pilot program contribution. The proposed regulations would affect eligible children and individuals who would make elections with respect to those children. I also like the thought that naming the starter financial account for children in honor of Mr. Franklin would have been an appropriate tribute to the life Ben Franklin lived. I have read the book Benjamin Franklin’s Last Bet and did so online through my access at my local public library. I feel I was following Benjamin Franklin's guidance to save a penny by my reading through a public library, actually 899 pennies for the Kindle version before sales tax.

  Post: Trump Accounts – An Update

  Link to comment from March 9, 2026