help w/ IRS wash sale rule

[spoonman27]

Paying money now vs. paying money later has a big effect on net worth. Time value of money.

 

[gnome]

Quote from spoonman27:

Paying money now vs. paying money later has a big effect on net worth. Time value of money.

Actually, it does not. Take for example, those duped into converting regular IRAs into Roth IRAs... "pay the taxes now and not later"... assuming the tax rate is the same, the results are the same either way.

 

[spoonman27]

So you are ambivalent between receiving $100 now or in fifteen years?

 

[gnome]

Quote from spoonman27:

So you are ambivalent between receiving $100 now or in fifteen years?

Your statement is soooooooooo far off point, it doesn't deserve an anser. Therefore, please forget I said this.

 

[Raystonn]

Actually, it does not. Take for example, those duped into converting regular IRAs into Roth IRAs... "pay the taxes now and not later"... assuming the tax rate is the same, the results are the same either way.

No they are not. I'd rather pay taxes on the money before I have built it up into a large fortune. The tax implications of an IRA allow a much increased growth rate. I'd rather pay 33% ($333) in taxes now to put $1000 into a Roth IRA, than pay 10% ($2000) on the resulting $20,000, assuming a measley 10% annual return on investment over 30 years. The savings get even better as the rate of return increases.

-Raystonn

 

[spoonman27]

Quote from gnome:


Whether taxes are paid in one year or the next has no impact on net worth... and therefore no impact on overall taxes.
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So you are ambivalent between receiving $100 now or in fifteen years?
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QUOTE]Quote from gnome:
Your statement is soooooooooo far off point, it doesn't deserve an anser. Therefore, please forget I said this.
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If I pay the IRS $5000 in ten years vs. now that has a difference in my net worth because I can invest the money in that time period.

 

[traderstatus]

Quote from gnome:
converting regular IRAs into Roth IRAs... "pay the taxes now and not later"... assuming the tax rate is the same, the results are the same either way.

Hmm we'll just disagree on too many issues So I'm leaving the wash sale rule discussion, where there a deferral of taxes for one or more years, or even the complete elimination of all taxes could have been accomplished with no economic risk... Even the 30 day rule isn't much, but it shut up the whiners pointing fingers at the rich man not paying his fair share of taxes because he could afford to hire a tax advisor and shuffle papers.

But onto Roth. It's pay taxes now rather than continue to defer the taxes, in exchange for the promise to NEVER pay any income taxes EVER again on the money in the Roth IRA.

Pre-pay taxes on an IRA of $100,000 today at age 40, and then at age 70 pull out $1,000,000 from the Roth tax free.

That's one heck of deal!