William Perry

Comments

• My wife and I started by having a face to face meeting with our adult child and their spouse. They decided which 529 plan to use and they picked their own state's plan which is different than the state where I live. Important to our discussion and their decision was a in person actual kitchen table review of Morningstar’s Guide to 529 Plans. My wife and I made a birth financial gift to our grand child's parents (Our child and their spouse) and they used our gift for the initial funding of the 529. The plan they selected is one of the Morningstar's gold rated plans and after establishing the account they checked a box which caused the 529 plan to invite me via email to set up a link which allows me to make future direct contributions to the 529. I did set up a link and I have established my own monthly reminder and I have made a monthly contribution every month since the grand child was born. I believe both our adult child and their spouse are caring and trustworthy people and do not feel the need to do any ongoing oversight of their future decisions regarding the 529. If I did think that oversight was necessary then I would have have created the 529 account myself. I hope my experience helps in your decision on how to proceed Will. Best, Bill

  Post: Saving for Grandchildren

  Link to comment from May 2, 2026

• There are typically new rules and clarifications about secondary impacts to taxpayers when new government tax driven savings plans for taxpayers are rolled out. One such secondary impact I am concerned about is how section 530A (Trump Accounts) could negatively affect FAFSA aid eligibility for grand children if these accounts are treated as student-owned assets (much like custodial accounts currently are) as the 530A assets would then be assessed at a high 20% rate in financial aid formula. I would hope something authoritative will be timely issued to address this question and likely the many other planning questions that will arise. John's willingness, ability and actions to save for his current and future grand children financial needs is the major factor, in my opinion, that will result in those needs being met. I am trying to keep my plans and actions on a simpler path using a 529 plan with our children controlling the assets for our grand child as beneficiary as I doubt I will be around when our youngest grandchild reaches college age.

  Post: Saving for Grandchildren

  Link to comment from May 2, 2026

• They are not going to put her in jail but the IRS system could go after the low hanging fruit by putting a lien against her bank account or garnishment of her SS benefit so it is good you reached out to the IRS on her behalf. You have taken reasonable and responsible actions to help your Mom resolve this issue. I suspect if I were in your shoes my next call or letter would be to the IRS Taxpayer Advocate Service or my congressional representative. Oh and if you are really wanting to worry your mom you could also let her know that the Social Security rules do provide that most benefit payments are suspended while an individual is incarcerated. You could also blame your brother for the whole mess. Neither of these thoughts would likely have a good outcome. I sincerely hope the issue is resolved quickly. Best, Bill

  Post: How Far Behind is the IRS?

  Link to comment from April 29, 2026

• In my employer 401(k) retirement plan the S&P 500 index fund at Vanguard was the lowest expense cost option and has often been the the only low expense cost option in many plans that I saw in tax clients plan options have over the years. After retirement I did a trustee to trustee direct rollover of my 401(k) balance to a traditional IRA to eliminate the quarterly administrative expense that the employer 401(k) plan charged in addition to the expense that the individual fund choices charged. My understanding is Mr. Bogle typically never praised the low expense index funds that included foreign equities but I have adopted the thinking of Jonathan Clements wrote about in How Much Abroad and I am now a happy owner of Vanguard Global index fund (VT) exchange traded class. Low cost index funds certainly have made my investing easier and more profitable. Now I just need to control myself and stay the course on my investing. Thanks for reminding me of the 50th.

  Post: Happy 50th!

  Link to comment from April 27, 2026

• Good morning Chris, While there are exemptions for certain sale transactions that are not reportable on a 1099-S by a title company many title company's choose to report all sales in my experience. If they do report on a 1099-S then the title company is subject to the reporting rules in the IRS instructions. I suggest asking the title company if they will file a 1099-S for your sale. If it were my return where I had inherited a house that I then sold I would include the sale on my personal return regardless of if a 1099-S was issued or not which would start the statute of limitation regarding the transaction. I would note that any potential IRC 121 gain exclusion availability ends upon the death of the owner. The beneficiary inheriting the house (or the estate) typically get a step-up in tax basis to the fair market value (FMV) on the date of death (DOD) of the owner. Typically, your sales costs and costs to prepare the house for sale combined with the DOD FMV eliminate any taxable gain. A home is a typically a personal asset to those inheriting so in the rare instances where there is a taxable gain then the gain is taxable. The loss on the sale of a personal asset is typically not deductible. If the plan is to hold the house for an extended time after the date of inheritance then a timely formal qualified appraisal to establish FMV at the date of death is often a best practice to establish the tax basis. Sale of such a inherited house would typically be reported as being held long term regardless of your actual holding period by reporting the date acquired as "Inherited" (or Inh'd) in the long term section on your tax return. The most common tax mistake I saw, only a few times, was when the parent worry about transferring title at death caused them to inappropriately re-title the house to the beneficiary during the parent's life via a quit claim. This caused the transfer to be a gift and not an inheritance. The unfortunate tax result was a gift where the parent does not get a IRC 121 home sale gain exclusion (as they did not sell), the beneficiary does not get a step up in basis on the gifted house (they get the parents tax basis) and a form 709 gift tax return is required for the tax year the quit claim title transfer occurred reporting the gift at FMV. Needless to say this was never news I ever wanted to tell to anyone nor news anyone wanted to hear. Why were these potential brand new tax clients, the inheritors, sitting in front of me three years after they sold Mom's house? The title company appropriately reported the sale on a closing statement substitute 1099-S and they had just received a letter from the IRS computer system asking why the sale had not been reported on their then three year previously filed 1040. Best, Bill

  Post: How it all pencils out–or at least, we hope so! (Our Big “Little” Move, Part 3)

  Link to comment from April 25, 2026

• Thanks for your post Andrew. In Jonathan's 10/18/2024 forum post Just the Facts he offered readers seven guidelines for claiming Social Security where he also wrote "the right strategy will vary from one person to the next, and it’s important not to get bulldozed into making the wrong choice". I agree. Your post expands those guidelines by adding an eighth, that as you say "flexibility matters when life doesn’t go as planned". I also agree. For those who have not yet made the claiming decision I would encourage them to know that the Social Security rules do have current limitations on the ability to change or reverse your social security claiming decision once made which generally becomes irrevocable 12 months after the initial entitlement. My recommendation for most things financial that is still taped to the top of my old calculator - "Anything is possible, and the unexpected is inevitable. Proceed accordingly." (From a strategic philosophy regarding friction, chance, and uncertainty in war, commonly attributed to the 19th-century Prussian general and military theorist Carl von Clausewitz) . Best wishes for a happy retirement Andrew. Bill

  Post: Rethinking the “Right” Time for Social Security

  Link to comment from April 23, 2026

• I have always found that the year when your taxable income is decreasing requires more attention and planning as you typically want to avoid potential underpayment by having 90% of your current year (2026) tax paid in. Your cash needs from buying a more expensive home means you likely will prefer not lending the government money interest free by overpaying your 2026 tax via withholding. Note the maximum loan for mortgage interest deduction purposes is $750K on the new mortgage. While any HELOC interest will likely not be deductible because of the overall $750K mortgage limit the HELOC could also provide funds to allow your husband to max out his tax deferred retirement contributions in 2026 and thus reduce your 2026 tax if it is likely your 2027 taxable income will fall in a lower bracket. I like the thought of a HELOC on the new house and getting one in place while there are still strong wage earnings. I still keep a large HELOC that is mostly unused as a backstop to our emergency funds. I hope the IRC 121 gain exclusion on the sale of your old home (condo) is such that the gain from sale will be excluded from both federal and state income taxes. I also note that most closing statements have fine print stating that it is also a substitute form 1099-S so to avoid a mismatch with what is reported on the sale by the title company to the IRS you should be sure to report the sale with the appropriate IRC 121 exclusion on your 2026 return. It is rare that I have seen the title company send you a separate 1099-S when the 2026 tax documents come out in early 2027. I hope my thoughts help. Best, Bill

  Post: How it all pencils out–or at least, we hope so! (Our Big “Little” Move, Part 3)

  Link to comment from April 22, 2026

• My understanding is yes if the state specific rules are followed and the disclaimer is filed timely. Dr. Dahle's post in the above linked post lists six key general aspects for a disclaimer to be valid. I think the need to file a disclaimer could often be eliminated with appropriate planning and action during life.

  Post: The IRA Decision That Affects Your Kids

  Link to comment from April 21, 2026

• Dana, You and others may find a 2025 post by Dr. Jim Dahle, founder of the White Coat Investor, titled Disclaiming an Inheritance: How, When, and Why an interesting read on the many reasons why disclaimers are filed and also why they are so rare. Best, Bill

  Post: The IRA Decision That Affects Your Kids

  Link to comment from April 21, 2026

• 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