To: w0z who wrote (68788)	6/7/2015 1:02:38 PM
From: Kirk ©	of 68810
That is an interesting idea. What do you do if margin rates jump? To: Elroy who wrote (68783) 6/6/2015 7:13:09 AM From: w0z Read Replies (3) of 68811 I've been retired for >20 years (now age 70). I've had the good fortune of having large capital gains in my taxable account and have used low levels of margin to supplement my income instead of selling stock. This has several tax advantages: 1. Zero income taxable income for me. 2. Margin interest is deductible as an investment expense against other taxable income. 3. Capital gains basis for beneficiaries reset to at market price on the day I die (i.e. new cost basis replaces original low cost basis). I'm not doing this anywhere near the limit of a margin call, which I've never had. This may not be for everyone but could make sense if you hold large capital gains in a taxable account. I'd want to make sure you used up the zero bracket on capital gains, perhaps for others by delaying Social Security until age 70 to keep total income low. Once you sell the stock to get the 15% bracket filled, then you can use excess cash to buy back the shares and have a higher basis. irs.gov The tax rate on most net capital gain is no higher than 15% for most taxpayers. Some or all net capital gain may be taxed at 0% if you are in the 10% or 15% ordinary income tax brackets. However, a 20% rate on net capital gain applies in tax years 2013 and later to the extent that a taxpayer’s taxable income exceeds the thresholds set for the new 39.6% ordinary tax rate ($406,750 for single; $457,600 for married filing jointly or qualifying widow(er); $432,200 for head of household, and $228,800 for married filing separately). For more information, refer to Publication 505, Tax Withholding and Estimated Tax.