Ben and Cameron. I've been listening since episode 1 and appreciate the effort you guys are putting into the podcast and videos. Thanks to both of you for helping to spread the word on financial literacy and the benefits of index and long term investing.
Hey guys. I really am really enjoying your videos and learning a lot - great content! I am an accountant in a CPA firm in California (I'll be taking part 3 of the CPA exam next month) with just over a year of tax preparation and audit experience. I still am quite inexperienced at this point in my career, so as a disclaimer to anyone reading this comment - please consult with your tax preparer before acting upon this information (don't sue me). With that being said, I wanted to bring something to your attention. Take a look at the IRS's publication 550 on the bond premium amortization election. In a nutshell, the IRS allows taxpayers an option to amortize the bond premium against taxable interest coming from a bond that was bought at a premium. As you said, I have seen many clients with this 'bond premium accrued' on their consolidated 1099's from their taxable brokerage account. Our firm always amortizes the premium against the interest income - for multiple reasons. Interest is taxed at ordinary rates, so converting a future capital loss (which would offset future capital gains taxed at a lower rate) for a present deduction against ordinary income is a no-brainer. Factor in time value of money and it's even more of a no-brainer. The amortization of the bond premium reduces the interest income so that the taxable interest is equivalent to the lower-yielding bond bought with no premium. Furthermore, the amortization of the bond premium reduces the basis in the bond over time so that there is no capital gain or loss on the bond at the time of Maturity. I just thought I would share this for you both and anyone else out there with this tax situation. Thanks again for the content and keep up the great work!
In a non-registered account and in a high income tax bracket, how much better does a USA equity (withhold fees, marginal tax rate) need to perform above a Canadian equity with eligible dividends in order to make investing in a USA equity a better decision?
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Ben and Cameron. I've been listening since episode 1 and appreciate the effort you guys are putting into the podcast and videos. Thanks to both of you for helping to spread the word on financial literacy and the benefits of index and long term investing.
Thanks for being a long-time listener, Peter!
Hey guys. I really am really enjoying your videos and learning a lot - great content! I am an accountant in a CPA firm in California (I'll be taking part 3 of the CPA exam next month) with just over a year of tax preparation and audit experience. I still am quite inexperienced at this point in my career, so as a disclaimer to anyone reading this comment - please consult with your tax preparer before acting upon this information (don't sue me). With that being said, I wanted to bring something to your attention. Take a look at the IRS's publication 550 on the bond premium amortization election. In a nutshell, the IRS allows taxpayers an option to amortize the bond premium against taxable interest coming from a bond that was bought at a premium. As you said, I have seen many clients with this 'bond premium accrued' on their consolidated 1099's from their taxable brokerage account. Our firm always amortizes the premium against the interest income - for multiple reasons. Interest is taxed at ordinary rates, so converting a future capital loss (which would offset future capital gains taxed at a lower rate) for a present deduction against ordinary income is a no-brainer. Factor in time value of money and it's even more of a no-brainer. The amortization of the bond premium reduces the interest income so that the taxable interest is equivalent to the lower-yielding bond bought with no premium. Furthermore, the amortization of the bond premium reduces the basis in the bond over time so that there is no capital gain or loss on the bond at the time of Maturity. I just thought I would share this for you both and anyone else out there with this tax situation. Thanks again for the content and keep up the great work!
In a non-registered account and in a high income tax bracket, how much better does a USA equity (withhold fees, marginal tax rate) need to perform above a Canadian equity with eligible dividends in order to make investing in a USA equity a better decision?