Category Archives: Lemons to Lemonade

Time To Sell Year End Capital Losses?

by

It’s the end of the year and time to consider if it’s wise to sell capital losses from investments or not!  I had some stinkers from “The Great Recession” still lingering, so I do have some losses to apply!

Of course, I don’t always get to apply capital losses (luckily) every year because I don’t always have stock losses, but this year I do.

In addition to countering the capital gains I had this year, I decided to use some of my capital losses counter the gains in the earnings I have from blogging.  Since my earned income from blogging is low, the capital losses from selling stocks help to reduce my income taxes.

The rules of applying capital losses to earned income is as follows:

Capital losses. Losses on sales of capital assets offset capital gains on a dollar-for-dollar basis. That makes your gains potentially tax-free. Any excess losses can offset as much as $3,000 in other non-capital income. Losses in excess of this $3,000 annual limit in 2005 will be carried forward into your 2006 pot. How much is the $3,000 loss worth at tax time: if you’re in the 25% bracket this year, it’s worth $750. If you’re in the 28% bracket, it’s worth $840. At the top rate of 35%, the deduction trims your taxes by $1,050 — more than a third of the total loss.  Check out the article “Sharing your losses with Uncle Sam”  from Forbes, that this excerpt was taken from for more details!

So in a nutshell, once your capital losses exceeds your capital gains, you can take up to $3,000 of the losses against other forms of income (earned income in my case this year).  If you have capital losses greater than $3,000, you must take that excess loss and apply it to the future year(s).  Luckily, I don’t have to carry my loss forward!

So what is a capital gain and a capital loss?
A capital gain is the results when the price of an investment rises above its purchase price when the security is sold (realized gain).

If you bought stock A for $200 and today you sold if from $350, you capital gain is $150.  (sell price – investment cost) = capital gain if it’s positive, or capital loss if negative.

The opposite (a capital loss) is if you bought stock B for $100 and today you sold if from $50, you would have a capital loss of -$50.  (sell price – investment cost) = capital loss if it’s negative, or capital gain if positive.

So this is my battle plan against the upcoming tax bite, what strategies do you have?

-MR

Did you like this Article?  Then please subscribe to my RSS feed so you can check out new articles when they become available.  You will help this blog grow by doing so!  Thanks!

Early Thanksgiving Dinner, A New Family Tradition

by
A New Thanksgiving Tradition

A New Thanksgiving Tradition

Every since I’ve been married, our Thanksgiving Dinner would consist of driving to both of our parent’s houses and stuffing ourselves twice.  While Thanksgiving dinner was always good when I was single, as a married couple, we always felt bad about leaving so soon to go to the my wife’s parents (that was usually the 2nd stop).

Another thing that really made the experience less enjoyable was the fact that we ate twice as much as we wanted to eat.  But to make both sets of our parents happy, we did so anyway.

My sister followed our footsteps, which I thought was crazy since she lived 2 hours away and her husband’s parents lived at least 4 hours away for my parent’s house!  But my sister and my brother-in-law continued to do this for the past few years, until…

Along comes Baby:

My sister’s first baby was born in February, and that has made all the difference!

Now for the baby’s sake, my sister doesn’t want to drive 2 hours and then later 4 more hours in one day, so after some discussion, the decision has been made to have Thanksgiving Dinner a week earlier at my parent’s house!

We had Thanksgiving dinner at my parent’s house this past weekend, and it was great!  We all enjoyed the great meal, and since we weren’t rushed trying to hit two houses, we didn’t leave my parent’s house until 9:00pm.

Games were played, discussions were enjoyed and the baby had plenty of attention!  Nobody felt guilty since we spent the entire day there!  And instead of having 2 big meal that would later give us indigestion, we enjoy just 1 meal and felt fine after we went home!

If you find yourself in a similar situation, have you considered splitting Thanksgiving dinner up?

We did, and it was great!  This is another classic Lemons to Lemonade example.

Thanksgiving is once again an enjoyable  holiday for us!!!

-MR

Did you like this Article?  Then subscribe to my RSS feed so you can check out new articles when they come available.

Family Time – Lemons To Lemonade

by

Family Time is worth more than money! 

So in this Lemons to Lemonade series, I’m going to cover how to maximize your Family Time with the kids.  In particular, I’m going to describe how we turned the sports our kids are in, from Lemons to Lemonade!

First, let me say that Family Time with your kids is worth more than money!  It’s something that most of us don’t realize until much later in life, so experience and enjoy it as much as you can.  It’s something you can’t buy more of later with money!!!

A friend told my wife that she doesn’t let her kids play sports because she cherishes their family time too much.

This got my wife to think about family time and if sports like soccer was gobbling up too much valuable family time…

She came to the conclusion that it wasn’t and here are the reasons why:

  • Watching and rooting for you kids in sports is great for the entire family.  And it give our kids a confidence boost knowing that the family (including grandparents, aunts and uncles) came out to support them.
  • We have 2 kids, so while one is out, we interact with the other one.  Sometimes, when my son is on the bench for a rotation, we’ll practices soccer stuff with my daughter, and of course vice versa.  Often we have a good time because it gets silly .  This time is enjoyed by all of us!
  • The driving time is practically forced time for the kids to interact with us socially.  Both my wife and I really enjoy the chats in the car when driving the kids to their games!
  • We interact with other parents, and they’ll cheer our kids on (and we cheer their kids on too).  As a kid, I would think it’s extra exciting hearing non-family members cheer for you!
  • Many times, we’ll go out to eat after the games, especially on longer, away games.  This is a treat for us all, in addition to the extra family time we experience.

So the lemons to lemonade process that we accomplished with the kid’s soccer games is to take an activity that could be considered a chore (Mom’s taxi service, etc), and converted it into an excellent opportunity for quality family time!

Often I find that it only takes a little to change a negative to a positive. 

Do you have any lemon to lemonade stories that you would like to share?

-MR

Did you like this kind of story, if so, check out my first in the “Lemon to Lemonade” series: Lemons to Lemonade Series #1 – Long Commute Drives

Also, related to this Lemon to Lemonade series is my guest post on Cash Flow Sherpas called:  Saving Money and Time With Audiobooks!

Lemons to Lemonade – Mowing To Excercise and Save Money

by

I’ve been mowing lawns every since I was 7 or 8 years old.  Of course I got paid for it when I was younger, so while I didn’t enjoy it at least I got paid for the job.  It was a miserable experience for me since I have both grass and tree pollen allergies(we didn’t know that at the time though).

Flash Forward to Today:

I’ve had a series of immunization shots for my allergies, so my allergies has been taken care of, but now I don’t get any benefit from mowing the lawn… or do I?

Although I don’t get paid, I do derive benefit from mowing my lawn.  First, I have a push mower, so I get a small workout of sorts just by mowing my lawn myself.  While this is not enough in itself as an exercise program, it can be one piece in a weekly exercise routine.  I also save money by not having someone else mow my lawn.  Both of the previous points are obvious.

The not so obvious benefit is that I’m able to to have time to myself, no interrupts from kids, in fact, nobody bothering me with anything at all!  It’s my own “Temple of Solitude“, albeit a noise one.

Have you learned to take an activity that you hated when you were younger and convert it into something beneficial today?  The mind is a funny thing, and if we try hard enough we can effectively change the way we perceive our surroundings.

-MR