William Perry

Comments:

• My pre-retirement experiences with the California Tax Board (CTB) as an east of the Mississippi CPA were often unwelcome surprises for clients who had taken a business trip to Cali or had inherited CA real property and later sold the property. Per the CTB- As a nonresident, you pay tax on your taxable income from California sources. Sourced income includes, but is not limited to:

  • Services performed in California
  • Rent from real property located in California
  • The sale or transfer of real California property
  • Income from a California business, trade or profession
  I recall two client returns - one for a travel nurse and one for a staff attorney who had flown to California to take a deposition. Both clients ended up having to file a delinquent non resident return for less than two weeks working in California. Apparently, CTB auditors look for invoices for services billed to a CA based company from non California based firms and a couple of years later the individuals received a state tax notice. I think it is likely they would have preferred roaches in their lodging.

  Post: California Free by Ken Cutler

  Link to comment from October 7, 2024

• John Bogle in his book Common Sense on Mutual Funds 10th Edition has a entire chapter titled On Global Investing. In that chapter Mr. Bogle wrote - Overseas investments - holdings in the corporations of other nations - are not essential, nor even necessary, to a well-diversified portfolio. For investors who disagree - and there are some valid reasons for global investing - I would recommend limiting international investments to a maximum of 20 percent of a global equity portfolio. There appears to be substantial agreement in the conclusions of Bogle and Grossman as to their 20% recommendation of the maximum percentage of international holdings in a global portfolio for American investors.

  Post: Underwater Overseas

  Link to comment from October 6, 2024

• It is unclear to me that the IRS rules permit him to claim a QCD exclusion from taxable income from a distribution from a IRA inherited from his spouse as he stated he is not yet age 70 1/2. Per IRS Notice 2007-7 Q/A #37- Q-37. Is the exclusion for qualified charitable distributions available for distributions from an IRA maintained for a beneficiary if the beneficiary has attained age 70½ before the distribution is made?  A-37. Yes. The exclusion from gross income for qualified charitable distributions is available for distributions from an IRA maintained for the benefit of a beneficiary after the death of the IRA owner if the beneficiary has attained age 70½ before the distribution is made. https://www.irs.gov/pub/irs-drop/n-07-07.pdf

  Post: Our annual give it away meeting 🤑

  Link to comment from October 5, 2024

• I am currently reading John Bogle's Common Sense on Mutual Funds 10th Anniversary Edition (2010) which you, William Bernstein and others commented in the praise for section of that book's introduction. In the book Jack Bogle wrote -"The great paradox of this remarkable age is the more complex the world around us becomes, the more simplicity we must seek in order to realize our financial goals." which also seems to be a guiding principle in your thinking. You wrote "Jack Bogle cares passionately about everyday Americans-and that passion is palpable in these pages." I feel the same about your writings. Thanks for sharing your thinking. Best, Bill

  Post: They Said the Darndest Things by Jonathan Clements

  Link to comment from October 4, 2024

• I permanently lost my hearing in my right ear decades ago as part of a surgery. I quickly found out hearing with just one functioning ear that sound is very directional and learned that where I sit can impact my ability to hear those around me in close quarters or where I want to sit in a public forum. In wide open spaces I have trouble determining the direction the sound is coming from. Yep, Mom's reminder of looking both ways before crossing has saved me more than once 70 years after she first uttered that caring wisdom. After my sudden hearing loss I became very protective of my remaining ability to hear. I quickly adopted wearing noise protecting headphones anytime I am cutting the grass or running a blower. I recommend using such protective devices. I had heard of the study that you reference that found that regular hearing aid use is associated with a lower risk of early death from hazards in adults with hearing loss which seems reasonable to me. Here is a link to study - https://www.thelancet.com/journals/lanhl/article/PIIS2666-7568(23)00232-5/fulltext

  Post: Two Innovations That Can Improve Your Health by Dennis Friedman

  Link to comment from October 4, 2024

• In our never ending discussion regarding social security claiming I have recently added an additional blog source, Early Retirement Now, whose various Safe Withdraw Rate (SRW) series articles, comments and thinking combines SS claiming with other frequent retirement topics. For example I enjoyed reading Karsten Jeske's 59th blog in his SRW series- https://earlyretirementnow.com/2023/09/05/timing-social-security-swr-series-part-59/ A hour plus long Forget About Money podcast interview by David Bauchier of Mr. Jeske on 7/3/2014 discusses, among many things, Karsten's thinking about both safe rates and sequence of return risk. My take away is that in my personal financial planning I need to not fall in a trap of making a particular decision in isolation.

  Post: How might early retirement at say age 55 affect your FRA SS benefits?

  Link to comment from September 30, 2024

• Morgan Housel in his 2023 book Same as Ever has a chapter titled Risk Is What You Don't See. He states "We are very good at predicting the future, except for the surprises-which tend to be all that matters." Mr. Housel also quotes Carl Richards - "Risk is what's left over after you think you've thought of everything". The chapter goes on to give some great examples of such surprises and concludes - "the fact you can't see it (the risk) coming is exactly what makes it risky." He concludes there are two things that can push you in a more helpful direction - One is, quoting Nassim Taleb - "Invest in preparedness, not in prediction". The second is, "realize that if you're only preparing for the risks you can envision, you'll be unprepared for the risks you can't see every single time". My short comments do not do justice to the value I got from reading the entire book and my improved understanding of risk. Mr. Housel's counsel regarding steps I can take on my personal finances is, as I understand, boils down to building a sufficient cushion of safety margin in my financial matters. I am working on that.

  Post: Sequence of Return Risk

  Link to comment from September 27, 2024

• The quiet comfort provided by hospital chaplain's extends beyond the ill and their families, it is also invaluable to the our nurses and physicians. Thanks Don.

  Post: Anybody Listening? by Jonathan Clements

  Link to comment from September 27, 2024

• Yes, your understanding is correct. The Kitces article that Rick's reply links to is a good, no trying to sell a service, nonlegal, non state specific, read on both the pros and cons of adopting a community property trust. If I were still considering a community property trust for us I would then find a local attorney with appropriate experience for an in depth discussion as my next step. In my planning if I die before my wife she would likely sell our home and move to be near our daughter for non-tax reasons. Her sale of the home after I died, while a tax event that would require reporting in the year the sale occurs, is unlikely to have a taxable gain because of the IRC 121 home gain exclusion and the step-up of my 50% ownership of our home to FMV upon my death. The vast majority of my assets will pass via beneficiary designations or joint ownership to my wife. If my wife had the intent to live in our home for the remainder of her life after I die we would likely transfer the home to a revocable living trust (RLT) so the transfer of the home (or likely its value) to our children could occur without being subject to the probate process. We still have a small balance on a mortgage secured by our home and my understanding it is difficult to transfer a home to a RLT that still is encumbered with a mortgage. I am unsure of current legal costs and transfer costs of such a transfer but I expect they would not be nominal based on my past experience as a CPA. I am trying to make post death administrative matters simple while also taking appropriate actions to keep the tax cost low when possible.

  Post: Do you know about community property trusts? By Bill Perry

  Link to comment from September 25, 2024

• Good morning Richard, My understanding is that the the RSV vaccine is currently not an annual shot. Per the CDC website this morning- Three RSV vaccines are licensed by the U.S. Food and Drug Administration for use in adults ages 60 and older in the United States. CDC recommends everyone ages 75 and older get an RSV vaccine. CDC recommends adults ages 60–74 who are at increased risk of severe RSV disease get an RSV vaccine. If you have already gotten an RSV vaccine, you do not need to get another one at this time. You can get one at any time, but the best time to get vaccinated is in late summer and early fall. My two cents regarding getting COVID vaccines follows. Our daughter has a lot of letters behind her name ( RN, FNP-BC, DNP) and was front line actively employed at a major hospital on the COVID floors during the peak of COVID. The amount of needless early death she saw from the refusal of people eligible and advised, by their personal physicians, to get a preventative vaccine has had negative impact on health care personal as well as the health and lives of that individual, their families and others. If I choose not to be vaccinated I should also be willing to be a complete hermit and refuse to expose my grand children, family and friends or those health care professionals to disease or death from a contagious virus that I could mitigate by getting a vaccine shot.

  Post: Jabs Anyone?

  Link to comment from September 23, 2024