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Notes on 1982 Taxes
1) It looks like all income will either be earned or non-taxable so my marginal bracket, for deductions will be about 50%. 2) Avoid any short term gains. They'll only give you 37% [noted in green ink] NO! [/note] 3) Leverage as much as possible so I can use that interest as a deduction; even if only at 50% 4) Remember Fed Gov't pays half of Cal State Tax. I'm willing to pay other half, but unfortuantely I have to carry that for a year! 5) Get IRA for '83 ASAP so its funds can be sheltered too
!!!! JUST KEEP A BALANCE BONDS GROWTH STOCKS (2 or 3) (via NOLOAD MUT FUND) ----------------------------------------------------------------100% [delta] 0 50 50 20 80
AND BACK AGAIN [noted in green ink with arrow to delta] BUT CAN I FIND A FUND WHICH DOES THIS TOO [/note]
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[green ink] In conclusion, written Mon Jan 18 [/green ink]
After telling York Harris what I felt, I was told that 1) PAX tax for unearned income is 50% in 1982 2) If 14.25[subscript]R[/subscript] = (1-.4*.5)(x)R x = 17.8% from long term stocks And return from short term is 28.5% 3) But because stocks are in such a slump, and because Group Health is a new issue bond, and because mutual funds didn't do well last year, I went ahead with bonds. $20000 worth. 4) But I will continue to study which mututal fund to buy. [Noted to left in red ink] When stocks look better switch to them, maybe mid year 50-50 + then to 80-20 + back again [/note]
ONLY other alternative is new issues where it seems like you can make lots of little killings that mount up. LOOK INTO IT SOMETIME.
TWO THINGS TO CONSIDER 1) Is it worth my time when I have so little cash to work with. On 20,000 at 50% growth, and 50% tax I earn $5000. On 14% bond, I get $2800. Is $2200 worth the time? 2) DOES IT REALLY PROVIDE A FUNCTION IN THE MARKET? I DON'T HAVE TIME TO KNOW WHAT I'M DOING, SO AM I BEING PRODUCTIVE? SAME ARGUMENT AS AGAINST TRADER. [Noted to left in red ink] See notes on "New Issues" Newsletters in the "stocks" box. [/note]
