Jackburton
Gone Fish'n
Yeah, I have unrealized losses in a trade account in the 40k range, so I could offset the tax burden and almost break even on that transaction. Still sucks closing a negative 40k position.
ups 401k
- Thread starter Jkloc420
- Start date
You don't have to get out of the market just move it to a different investment
For instance if you had all that $40, 000 in s&P 500 sell it off and maybe move it to like a large cap fund you'd still be in the stock market but you could realize a capital loss
UpstateNYUPSer(Ret)
Well-Known Member
As long as you have at least 20% withheld for Federal taxes and at least 10% for state taxes the hit wouldn't be too bad. They are waiving the 10% early withdrawal penalty for anyone under 59 1/2.
That being said, it should be done only as a last resort.
Jackburton
Gone Fish'n
Yeah, problem is you’re only allowed 3k capital loss per year. The loss is 40k, so it would take some nice realized gains soon or I’m forwarding losses for 13 years against regular income. If I do the above I can wipe out my tax liability and place it in a tax free gain sheltered plan in one swoop.
Obviously I could farm the tax loss with some gains in future years, but the above mention plan would be better in the long run.
UpstateNYUPSer(Ret)
Well-Known Member
...or you can shift the 100K in to your SMA and buy the stocks yourself...
I don't think I'll let you convert your 401k money to a Roth in my honest opinion, I could be wrong but nothing wrong with harvesting tax losses and still keeping that money in the market
Jackburton
Gone Fish'n
Question remains, will the Prudential plan allow that, I’m thinking not. Either way I’ll get around to calling and find out.
UpstateNYUPSer(Ret)
Well-Known Member
Uh....no. They are only waiving the 10% early withdrawal penalty.
UpstateNYUPSer(Ret)
Well-Known Member
Why wouldn't they?
Jackburton
Gone Fish'n
Yeah, I’m thinking that’s going to be a no go as well. The other option was to just slam 2 IRA’s with the penalty free withdrawal and figure out taxes on next years filings.
Jackburton
Gone Fish'n
Because moving from a traditional to after tax would cause a taxable event. Secondly, the plan has rules, of which this might not be allowed to move between contributions, just future would be allowed.
Jkloc420
Do you need an air compressor or tire gauge
taxes are waived if you pay it back in 3 years
UpstateNYUPSer(Ret)
Well-Known Member
No, I am talking about shifting some of your pretax in to the SMA to take advantage of the downturn in the market.
UpstateNYUPSer(Ret)
Well-Known Member
I didn't hear about that part.
You definitely need to do the math on it
Jkloc420
Do you need an air compressor or tire gauge
the link to the story is in the first post i made in here
Jackburton
Gone Fish'n
This is super dangerous. There’s a reason 401k plans force you to pay taxes up front (I think it’s minimum 15% they keep and send to the IRS). They know people don’t end up paying the taxes with their withdrawal and end up peeing the IRS for years if they didn’t.
Jkloc420
Do you need an air compressor or tire gauge
i am just telling you what i read
I'm pretty sure it's 20%
Jackburton
Gone Fish'n
I understand what your saying, what I’m saying every companies 401k plans have different rules.
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