<p>Hehehe…</p>
<p>What exactly is a “real estate-linked derivative instrument”? Can I rent it to someone? ;)</p>
<p>I don’t know and I have trades derivatives for 30 years. :)</p>
<p>Looks like the etf is leveraged, concentrated, and has invested in foreign securities…</p>
<p>It has treasuries in its portfolio too. :)</p>
<p>The duration is 8 years so there is some interest rate risk…</p>
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<p>Wow !!! Are you including all your management costs, interest payments, taxes, repairs, insurance, turnovers?</p>
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<p>Me too.</p>
<p>I am talking about Vanguard Reit etfs, Simon Property, Federal Realty etc.</p>
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We manage them ourselves, the mortgages will be paid off so there won’t be any interest cost, and we do a bunch of our own maintenance. Yes it includes all that other stuff. If we decide to turn it over to a property manager some day, that will eat into our returns.</p>
<p>And I factored in some moderate rent increases of about 1-2% a year overall.</p>
<p>My original investment is usually around 30% of the cost of the property, between the down-payment and what I have to put in it fix it up. Although it gets dicey to calculate, because for most of them we used the HELOC on our primary residence to get the money to buy a place and fix it. So you could argue our investment is zero, giving me an infinite return. :D</p>
<p>Until the mortgages are paid off we are seeing returns in the 10% range. It goes up or down depending on how much repair work we have to do and how much snow we get.</p>
<p>The cap rate at that point will be closer to the 7-8% range, which is still not bad.</p>
<p>And this will be after 20+ years of hard work. It doesn’t happen overnight.</p>
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<p>So is Social Security sepaprate from the budget?</p>
<p>In HI, you have to be very good to have ANY positive cash flow from only 30% of the price of the property invested. It makes investing in property tough for folks who don’t have a lot of cash and aren’t interested in carrying a lot of negative for a very long time. Investing in properties when you don’t know the real estate market well in the area is a dicey proposition, at best. Absentee landlords have their own issues as well.</p>
<p>Just entered my W-2 into TurboTax (which got a new program update today). Only surprise was the amount of employer-sponsored healthcare: $18K. That was a big surprise. I had estimated the coverage that I had picked at around $10K because that’s what the flex credits and my contributions came to. It appears that there is a floor amount that they add in which is pretty big ($8K).</p>
<p>I was wondering if this was a “Cadillac” health-plan so I looked it up. No, a “Cadillac” health-plan is a plan where the premiums exceed $27,500. That boggles the mind - well at least my mind. I need to find someone with a high-deductible plan to see what the cost of their plan is to see if there is a big difference in overall premium cost.</p>
<p>I don’t expect my brokerage forms for another month so I can only work on little things for now.</p>
<p>BCE, do you get K-1s? I get mine first week of April which is really cutting it close.</p>
<p>The COBRA amount for the standard corporate-grade health plan I had at my last job was $1501 per month, and dental was $88 per month, which would put it at about $19,000 for the year. COBRA can only be at most 2% more than the full price of the group plan, so $18K sounds about right.</p>
<p>Maximum out-of-pocket for that plan was $7,500. Maybe the “Cadillac” plans have no deductibles, no co-insurance, and no co-pays. That would be pretty nice.</p>
<p>My W2 just says “Employer Benefits Cost”, it is not clear what exactly this covers.</p>
<p>I stayed out of MLPs last year so I am not expecting any K-1s unless I goofed.</p>
<p>When I compare the premium costs to what we use in services - I find it amazing. Obviously there are others that use more services to balance things out and there’s some in there for profits at service providers and the insurance company. It’s a good thing my company is making a ton of profits.</p>
<p>The last two years my family has been heavy consumers of health care. Other years have been a lot less, so I think it averages out.</p>
<p>Well-care has to be covered at 100% now - a physical and some blood tests can easily be $1000. Tweak a knee playing tennis, and that’s a $1000 MRI. My D takes a drug that costs about $6/day.</p>
<p>It doesn’t take much to add up to $18K, even at the discounted prices the insurance companies negotiate.</p>
<p>I heard the maximum allowed contribution to the flexible spending account has been (or will be?) lowered in order to increase the revenue for the federal government. There is no break there.</p>
<p>I exercised (and sold immediately) some stock options toward the end of the year. I noticed it was added to my W-2 as income on 12/31/2012 (vaguely called “adjustment of income.”) Does it mean that, since it is already included as a part of my income on W-2, I do not need to wait for some 1099 (?) forms from the broker and report it specifically for this income item?</p>
<p>Yes the maximum FSA Health Care amount has been reduced from $5000 to $2500. It takes effect in 2013.</p>
<p>TaxAct just updated. One of the changes was:</p>
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<p>Who knew Notary Public income got special treatment?</p>
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No. It is included as income on your W-2 and then as a sale on a 1099B. Since you already paid tax on the amount on your W-2, that will be your basis in the stock and you will have either a gain or a loss on the sale. Probably a very small loss due to the brokerage fees.</p>
<p>Non-qualified (NQSO) or incentive (ISO) stock options? I’m guessing NQSOs.</p>
<p>In the case of NQSOs, when you exercise the option, the difference between the exercise price and the option price is treated as regular income and gets added to your W2. Mine was reported as “Non Qualified Stock Option” on my W2, “adjustment of income” is sort of vague.</p>
<p>In addition, my company withheld taxes from the proceeds, and these were also added in to my W2.</p>
<p>Since you sold immediately, you will pay (or get a credit for) short term capital gain for the difference between the exercise price and the selling price. This is unlikely to be more than a few pennies per share either way since you sold immediately (and might even be zero), but now you get to fill out schedule D as well. Lucky you. At least you get to deduct the commission from the transaction.</p>
<p>I just looked it up from ADP which does our company’s payroll. It’s ISO.</p>
<p>It is actually called “iso earning”. The amount was just added to my W2 income on 12/31/2012 , and my company did not withhold any tax for this “iso earning.” (It is not a large amount though.) It was almost like an additional paycheck (like bonus) but without withholding any tax.</p>
<p>At the ADP site, this “iso earnings” statement is under the “pay adjustment” category. There are 3 categories – using one of 3 radio buttons to select one of them in order to see it: 1) pay statements (there are 24 pay statements per year, one pay statement semi-monthly. 2) pay adjustment (there is only one pay adjustment statement, called iso earnings. 3) W2.</p>
<p>I speculate that, since it is already reported as a part of my income, my tax will be computed based on the income and the tax rate for the short-term capital gain is the same as my income tax rate, I may not need to go through the hassle of reporting this iso earning separately. I pay the tax for my iso earnings as a part of the income tax. I had better be careful about paying the tax twice for my iso earning – first time as a part of my income, second time as the short-term capital gain. (I believe I made this mistake many (>10 years) years ago.)</p>
<p>It is confusing, because by reading my W2, nobody really can tell the difference between the income from my regular pay and this “pay adjustment” due to “iso earning.” This “iso earning” is not mentioned on my W2 at all but the “iso earning” is a part of my income reported on my W2.</p>
<p>We get a short report in the mail with the details of ISO exercises from our employer.</p>
<p>ISOs are treated differently. In a disqualifying disposition the company is not required to withhold taxes.</p>
<p>As for whether to report the STCG - it all depends on whether the IRS ever gets around to correlating 1099B’s with what is on your tax forms. If the IRS detects a missing transaction, you might get a letter in 3 years or so asking you why you didn’t report it.</p>
<p>What is the difference between the exercise price and the sale price? If you are showing a small loss the IRS will probably not bother you. On the other hand, why pass on a loss, no matter how small, for 10 minutes or less of work to fill out a form? 
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<p>ISOs… Gotta love those puppies and their tax treatment! BC is correct, you should get a report. I assume it was a same day sale, (“disqualified disposition”) so they are taxed at your ordinary income tax rate based on the difference between your option exercise price and the selling price.
For more infor, check this site:</p>
<p>[Incentive</a> Stock Options - TurboTax® Tax Tips & Videos](<a href=“http://turbotax.intuit.com/tax-tools/tax-tips/Investments-and-Taxes/Incentive-Stock-Options/INF12049.html]Incentive”>Incentive Stock Options - TurboTax Tax Tips & Videos)</p>
<p>Etrade also has a pretty detailed handout that explains how one should report stock option sales (it is dated 2009, so confirm with the current regulations):</p>
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<p>Hope this is helpful!</p>