Vanilla Bean and Country Style are good enough for me.
Googling around, the recipes for various vanillas are so similar or so different (pudding vs whipped vs heavy cream;3-4-6 eggs) that I would need the manufacturer to tell me what's in a particular "flavor"
I found five dollars. On the sidewalk, right near my building a few hours ago, there it was lying.
French Vanilla implies eggs, so I would guess that any eggless ice cream would have met their needs.
Tsk.
Yes, "Natural Vanilla", it seems was indeed good enough. And...
then you found five loaves of Wonder Bread!
max
['Mr. Honky to the white courtesy phone, Mr. Honkey to the white courtesy phone.']
I'd have gone for Vanilla Bean myself, but I know about as much about ice cream as Stanley does.
french vanilla is yellow and sort of weird. i'm with the tasker on that one. i don't even think it's just caused by eggs. there's like extra weird yellowtude.
otoh, i can't imagine an ice cream situation that wouldn't be improved by Vanilla Bean's little flecks of authenticity, but to each one's own.
Meanwhile, too soon for a threadjack?
I'm bothered by a ridiculous near-argument I had with an acquaintance today about ... taxes. His father-in-law died recently, and they're being taxed income tax on the $120,000 windfall that remained in his IRA. My acquaintance is incensed that this is rendered as income rather than, say, capital gains, taxes. "What a bite in the ass," he kept saying.
Someone -- father-in-law's financial advisor -- screwed up here, he kept saying. We'll be taxed at a higher bracket for this! The money should have been moved out of the IRA into some other form of investment vehicle so that the beneficiaries would be taxed for capital gains at best, not freakin' income tax rates!
I don't know a thing about the ins and outs of such things, but I cautioned that in the absence of an explanation, he might be jumping to conclusions. IRAs in the event of death -- how do they work? I don't know, and he doesn't either.
We unfortunately got to the point at which I was saying things like, "That's what a progressive tax system is like -- higher income people pay more," while he was saying (after pausing, becoming irritated, trying not to curl his lip), "Well, we got screwed, that $120,000 is only going to be like $80,000, and I would think that if you're trying to pass your money on to your children, you don't want to it to just be frittered away due to negligence."
It ended with a mutual understanding that we should drop the subject, after I said, "$80,000, man, that's really awful."
Anybody know who's right?
11: I believe that if it is taken as income, yes becomes income for them, but I believe there is some kind of inherited IRA that has more favorable tax rules but which cannot be accessed immediately (or not in its entirety anyway). I am not an anything, however, and there are different sorts of IRAs that might have different rules--am most certain of the IRA as cash=taxed as income for the recipient part, and it makes sense if you think about it.
"taken as income" s/b "taken as cash"
He's right that it's taxed as income ( I have to say "probably" here because tax discussions are always very detail-dependent, so I'm just talking about the ordinary scenario), but that's because the whole point of an IRA is income-tax deferral, so no taxes were ever paid on the income that was invested in the IRA.
"Well, we got screwed, that $120,000 is only going to be like $80,000, and I would think that if you're trying to pass your money on to your children, you don't want to it to just be frittered away due to negligence."
I'm not sure I understand what sort of negligence is being alleged here. There may be some tax-planning strategies that would have reduced the tax bite, but without anything fancy a redemption of the IRA during F-I-L's life would have triggered income taxes for F-I-L on the redeemed amounts, leaving him with... about $80,000 to pass on to his children. The taxes would need to be paid, and whether that happened before his death or after shouldn't affect the total dollar amount of the transfer. (I guess if son-in-law is in a higher tax bracket than F-I-L, that might make a difference in the total tax bill, but again, that's fact dependent.)
Maybe it would have been more psychologically satisfying for his children if the IRA had been cashed out during F-I-L's life, so the kids just got an $80k windfall rather than being teased with a $120k headline number. Loss aversion and all that.
I believe there is some kind of inherited IRA that has more favorable tax rules but which cannot be accessed immediately
There are some special rules for surviving spouses, which might be what you're thinking of, although those don't apply to children.
However, you raise a good point--if they don't want to pay the income taxes now, I believe they can just maintain the IRA in the name of the deceased for a while (maybe as long as they want to? or maybe there's a time limit, I don't know), and they'll only pay taxes when they ultimately distribute the proceeds of the IRA. So they can defer it for a while, if they don't need the money immediately (and capital gains will continue to accumulate in the account, tax-free). But, it will still ultimately be taxed as income when it's distributed.
Anybody know who's right?
I'm actually not sure I understand this question? His position was that it's taxed as income? And yours is... that he's being a greedy ass about something he should regard as a windfall? It sounds like you're both right.
You might be able to set up a trust or a rollover account, but you don't get the money then. Instead it gets invested. When you do pull it out to spend it (as income) you still have to pay taxes on it, and it would be taxed at the same rate, unless you took it out in very small chucks, which would avoid some level of taxation, depending on then current level of income.
If he had won the lottery he would still have to face the same taxes.
max
['I guess someone else should pay for it, huh?']
I'm alone on the internet again, aren't I...?
15.last: That is probably what I had heard of. Something like that.
I do think that inheritance in general tends to bring out the worst in people (and does not probably help that it hits at an emotionally challenging time).
14: (I guess if son-in-law is in a higher tax bracket than F-I-L, that might make a difference in the total tax bill, but again, that's fact dependent.)
Yes, the idea is that the son-in-law is at a higher tax bracket than the father-in-law had been after his retirement. The allegation of negligence has to do with the idea that the financial advisor should have understood that an IRA, as a tax-deferred plan, only works to save tax dollars if it's taken as cash payouts (or whatever the terminology is) by a person now at a lower tax bracket, namely the F-I-L while he was alive.
15.2, 17.1: Yes, I gather that an IRA with (stated?) beneficiaries can just be rolled over, without being cashed out in toto, as it were. Apparently the F-I-L's surviving family didn't do that, but just cashed out.
Having done a small amount of reading on this, it seems that that may have been the error (if any): my acquaintance seems to understand that cashing out in small chunks, per 17.1, would have been a good idea, but he feels this should have been done during the F-I-L's lifetime. He thinks a gradual cashing out during FIL's life, with a transferring of the money to some other investment, would have garnered just capital gains taxes for the surviving family. And that the financial advisor was absolutely stupid not to have made this happen.
I think it probably is true that there's generally no good reason to die with funds in an IRA, if the death isn't unexpectedly early.
20.2: Maybe my family, friends and acquaintances are all just shits, but there always seems to be something that gets up people's noses even over the most trivial shit and/or smallest estate. (In addition there is the new absence of the deceased changing or removing certain constraints on the dynamics of families and siblings that were wobbly anyway. Also what various folks did or didn't do in the final years/months/weeks of the life of the deceased.)
I keep all my assets in S & H Green Stamps so no worries for my heir.
Also remember that the financial advisor was supposed to be looking out for F-I-L's interests, not for his heirs' interests. One of F-I-L's interests was undoubtedly leaving his heirs as much inheritance as he could, but another of his interests (that likely conflicted with that) might have been trying to ensure that he had enough money to live on if he lived ten or fifteen years longer than his life-expectancy.
This kind of thing does indeed bring out the worst in people. I'm unfortunately seeing more and more of it in my acquaintance, not just in connection with the inheritance questions (though he seems a bit uninformed knee-jerk and reactionary there).
We really did end that conversation somewhat tight-lipped. When I got home and mulled it over -- this is actually a fairly good friend of mine -- all I could come up with was an imagined truly honest reply to him: I'm more of a socialist than you are, friend, and you're becoming some kind of libertarian capitalist who bitches at length when you get a $50 parking ticket while you were at the symphony.
People are becoming very protective of their money, and becoming very rude and obnoxious about it.
26: might have been trying to ensure that he had enough money to live on if he lived ten or fifteen years longer than his life-expectancy.
A great point.
On the Internet no one knows if you're alone.
26: Also remember that the financial advisor was supposed to be looking out for F-I-L's interests, not for his heirs' interests.
Heh. I said something like that in conversation with my friend, to the effect that the financial advisor may not have been instructed to maximize the heirs' income, and that's when the conversation really went sour: my friend segued to thoughts about how Well! One would think that everyone wants to look after the happiness of his or her surviving loved ones, and frittering away money needlessly like that is a royal screw-up!
Mm. You can see how the conversation went south.
||Memo to self, starting oxtail stew late insures hunger pangs and a ridiculously late dinner. On the other hand I get to sip the remains of the white I used and I've got food for days>|
I meant to pick up on this earlier:
22: I think it probably is true that there's generally no good reason to die with funds in an IRA, if the death isn't unexpectedly early.
The F-I-L's death actually wasn't unexpectedly early, but that's not the point right now.
What does one do to drain out the funds in a IRA -- just do some calculation about how long you expect to live, or since that's a bit unpossible, just take out as much annually as viable (according to detailed tax accountings) ... and then do what with that money? I'm assuming you'll be needing it to live on. Just put it in the bank? I'm getting a little tired of this now, actually.
What does one do to drain out the funds in a IRA
Find a cocktail waitress with poor eye sight, soft skin, and too many student loans.
You know, I thought about putting some 6th-grade bathroom humor reference in this comment, but honestly, I've done that to death. And it was completely lame the first time. And the second time. And every time after that that. Truthfully, I'm just not very good at this.
But you guys? You guys are the BEST!
Seeing the way investment firms and the like write up things like the IRA rules is putting me into a blind rage (maybe it's just 20.2 coming into effect). There is a continual subtext (and sometimes not so subtle) of how to keep yourself or your heirs from being ripped off--Tapping your IRA, of course, means you'll also get stuck with the resulting income-tax bills. In fact, the whole reason your friends in Congress enacted the minimum withdrawal rules was to force you to hand over the government's share of your IRA sooner rather than later. form the WSJ's Smart Money, emphasis added. Yeah, you're going to pay taxes on income you never fucking paid taxes on before.
I did actually appreciate an intro sentence on Motley Fool's article on inherited IRA: Assume that you're not the surviving spouse of the deceased IRA owner, but this person was kind enough to name you as the beneficiary of the IRA. Now what happens? Clearly pars's friend assumes the kindness of father-in-laws is a given.
34.last: For regular IRAs past 70 1/2 you are required to pull money out according to a schedule that involves life expectancy. But you can take it out more of it out earlier and do whatever the fuck you want with it (after paying taxes).
too many student loans.
I was having sad thoughts tonight about how if all people care about is hoarding money, I should provide my friend (because yes, that conversation with him really bothered me) with an announcement that I would be looking for a sugar-daddy forthwith. That being the only sensible thing to do.
39: Obviously, somebody was go want something more than money for the sugar daddy thing to work.
Your comment fails to make sense to me.
I believe the idea of finding a sugar-daddy is that you join in partnership with him, and his money comes your way. He is not wanting money himself. He is wanting something like a partner. Sure. People partake of such relationships all the time. Sometimes they don't leave a marriage because of the money. Sometimes they enter into a marriage because of it. Modern Love will tell you that it makes nothing but sense; it will tell you have you're a fool if you don't settle. People have to look after their well-being.
Oops. "it will tell you have you're a fool" s/b "it will tell you that you're a fool"
I don't even have Steve Jobs to blame.
my acquaintance seems to understand that cashing out in small chunks, per 17.1, would have been a good idea, but he feels this should have been done during the F-I-L's lifetime. He thinks a gradual cashing out during FIL's life, with a transferring of the money to some other investment, would have garnered just capital gains taxes for the surviving family.
Ah. Nope. If FIL cashed out and spent it, it would have been taxed as capital gains (the original investment would have been taxed as income, excepting of course, this is an IRA) depending on whether it was actually capital gains or not. (I don't remember how the income is differentiated with an IRA.)
However, once he did that, if he reinvested it, it would then become exactly equivalent to the IRA for inheritance purposes. The trick being that once you inherit something, it's income, period. (FIL could have given a tax free gift of 10K$ to the daughter once per year if he had wanted.) Rolling over via some kind of trust just defers the income tax, which actually produces real gains, since the initial capital is larger, thus (hopefully) producing larger returns. That just means you have more money to tax!
There is no 'taxfree inheritance' unless it's in unreported property.
27: People are becoming very protective of their money, and becoming very rude and obnoxious about it.
They had an article in the Fiscal Times all about how people who made 250K a year, lived in one of the best public school districts in the country in a 750k house, took one vacation a year and spent lots of money on the young kids would come up 'short' by about 5K a year, 'because' they were paying about one-third of their income in taxes (all taxes). Of course, they were short 5K a year because they were putting away something like 8K a year for college and 33K a year for retirement. The author was too busy anguishing about how poor the family would be to mention that they could just put away say, 28K a year and be in balance. (Which, after thirty years, would have meant they owned their own home, had 840K in investments, not including 30 years of various investment gains, and their kids would be through college, meaning they could live cheaply of just the interest on the original 840K.)
It was very sad piece, highlighting the plight of the poor, trodden-upon middle class.
max
['I laughed so hard, I cried.']
46: However, once he did that, if he reinvested it, it would then become exactly equivalent to the IRA for inheritance purposes. The trick being that once you inherit something, it's income, period.
I don't understand this, max. I thought that if you inherited stocks, then sold them, you were taxed for capital gains. Maybe we should take this off-blog, though. I'm tired enough that I'm getting confused about this stuff.
I don't understand either. I don't think rest helps.
Well, presumably we can find understanding. Once we're better rested.
If that's the case, anybody with a Posturepedic could graduate law school.
Maybe all the Ambien around explains all the lawyers around these days.
I don't think it's that complicated, Moby. I suspect that what's been confusing me is the difference between income taxes paid by the estate vs. paid by the beneficiaries personally. I went around on this a lot with the lawyer regarding my mom's estate, and my grasp was always a bit tenuous; I don't know where I got the idea of capital gains from. But I may also be confounding things even further, and will await the light of day and further clarification before I make any more guesses.
I think that whatever you are taxed at becomes the new baseline for your capital gains tax.
47
I don't understand this, max. ...
Possibly because it is wrong. For federal tax purposes inheritances are generally tax free. The estate may have to pay estate tax but the heirs don't have to pay tax on whatever is distributed after the estate tax is paid. That's why it is called an estate tax not an inheritance tax. Some states do have inheritance taxes on property you inherit.
... I thought that if you inherited stocks, then sold them, you were taxed for capital gains. ...
Only if they have gone up in value since you inherited them. In other words your basis in inherited stock for capital gains purposes is the value on the date of death (or maybe the date of distribution I don't remember the details, this is the so called stepped up basis). No one is taxed on any unrealized gains present on the date of death.
Disclaimer: I am not a tax professional.
Seeing the way investment firms and the like write up things like the IRA rules is putting me into a blind rage (maybe it's just 20.2 coming into effect). There is a continual subtext (and sometimes not so subtle) of how to keep yourself or your heirs from being ripped off--Tapping your IRA, of course, means you'll also get stuck with the resulting income-tax bills. In fact, the whole reason your friends in Congress enacted the minimum withdrawal rules was to force you to hand over the government's share of your IRA sooner rather than later. form the WSJ's Smart Money, emphasis added. Yeah, you're going to pay taxes on income you never fucking paid taxes on before.
I think all newspapers are at the point where they presume that the only thing the government does is make you pay taxes. The first paragraph of the front-page article about our new Republican governor, the day after he was elected, told us that his goals were to "go easier on business" and "lighten the load on taxpayers". Wow! It's win-win!
Thanks, James.
For federal tax purposes inheritances are generally tax free.
Except for IRAs, apparently. Which is why I see my friend's point that (from his personal financial perspective) the $120K shouldn't have been left in the IRA. Of course urple's point upthread at 26 remains: somebody's going to pay income tax on the IRA funds, and it might behoove a F-I-L not to be the one who does it.
Only if they have gone up in value since you inherited them.
Right.
Man, you guys can really liven up a discussion of plain ice cream.
Yeah, sorry about that, Stanley. Sometimes you just gotta address the nuts and bolts rather than the Raspberry Swirl, though.
58: Nothing to be sorry about. But if your ice cream has bolts in it, something's gone wrong. (Nuts are fine, as long as you're not allergic.)
Yeah, sorry about that, Stanley. Sometimes you just gotta address the nuts and bolts rather than the Raspberry Swirl, though.
That old chestnut?
56
Except for IRAs, apparently. Which is why I see my friend's point that (from his personal financial perspective) the $120K shouldn't have been left in the IRA. Of course urple's point upthread at 26 remains: somebody's going to pay income tax on the IRA funds, and it might behoove a F-I-L not to be the one who does it.
The IRA rules are a bit complicated and it is possible a mistake (such as a failure to name a beneficiary) was made. But like you I don't see any clearcut advantage in distributing all the money before death. Perhaps this would save some money if the decedent was in a much lower tax bracket than the heirs.
I'd started to say Rocky Road, then decided the images were all wrong for my intended message -- address the nuts and bolts rather than the Rocky Road? um, (mumble) invites something about shock absorbers, (mumble, scratch head) bad metaphor-making, dude, abandon, abandon! Raspberry Swirl, then! Whatever!
Who knew that Tori was paying attention to subtext?
61: is in a much lower tax bracket than the heirs.
Thought about this a bit more overnight and it all went worse for your friend--specifically around this point. Per his rough math (and likely income) this might get him into the 33% (or possibly 28%). A few points on that:
1) The whole extra amount will most likely not get taxed at 33% (33% kicks in at $209K taxable for joint, ~$170K for single this year--marginal tax rates, how do they work?) unless their taxable is already that high and in that case the bitching looks worse.
2) F-I-L was in a lower bracket but let's assume any drawdown would at least be at 25% (if it were 15% he'd have less than ~$30K taxable income if single, which I am assuming he was). So the difference is likely a few %--the $120K is a kind of a mythical number in this liekly scenario, with drawdown it would likely have been ~$90K.
3) If it really would have been taxed at something like 15% for the F-I-L then WTF? It would be amazing for someone living that cheaply in retirement to have left him anything at all.
63: Well, let's see:
1) My friend was talking about 33%, yes. (I did have to tell him that his *entire* income would not be taxed at 33%, just that portion over approximately $200K, and this seemed to be news to him. I began to become annoyed right then, unfortunately.)
2) FIL was just barely single at time of death, in his mid-80s -- his wife had died mere months before he did. So I have no idea what his income and taxes looked like, and actually my friend doesn't either: his wife's family is handling all this, and he's fuming on the sidelines about perceived mishandling while not having any facts.
FIL had massive medical expenses (frankly, he had been more or less bed- or chair-ridden and almost drooling, I'm sorry to say, for over a year, with round-the-clock in-home caretakers to help his wife, who happened to die before he did, to everyone's surprise). I do know his wife had stocks and mutual funds and whatnot; together they owned two properties free and clear.
3) That was my thought as well. Absent some adroit financial management -- having to do with deduction of the medical expenses? -- the FIL's tax bracket ... well, I don't know.
---
unless their taxable is already that high and in that case the bitching looks worse
Ultimately, I feel the bitching just looks pretty bad, which is why I switched during the course of the argument to remarks about progressive taxation systems, and eventually started being a tad snarly and dismissive. I don't say this was the right thing to do.
61: it is possible a mistake (such as a failure to name a beneficiary) was made
To be honest, I suspect this was it.
I did have to tell him that his *entire* income would not be taxed at 33%, just that portion over approximately $200K, and this seemed to be news to him
The number of otherwise intelligent (and progressive!) American adults who don't understand how the country's marginal income tax rates work is astounding. Then again, I think I came to understand it only in the last year. (And the pony/baby horse distinction was even more recent. So.)
It is astounding. I could look past it if it weren't for the fact that it was central to the recent debates over extending the Bush tax cuts.
To realize that someone with whom you were -- in a seemingly informed and sophisticated manner -- discussing these things a matter of months ago never actually understood marginal tax rates is disturbing.
It doesn't quite match the time that I discovered that a friend of mine didn't realize that there are two houses of Congress -- the House and the Senate -- but the "Whoa, full stop, screeching halt" aspect is still there.
People don't ask questions when they don't quite understand. Therefore they don't learn.
(/end grimace)
Then again, I think I came to understand [marginal income tax rates] only in the last year. (And the pony/baby horse distinction was even more recent. So.)
Don't worry; only the portion of the horse over 14.2 hands is taxed at the higher rate.
It is my understanding that IRAs, 401(k) accounts, etc. are taxable when inherited (unlike, generally, other assets) because the income tax on these amounts (to the decedent) was deferred until distribution. The phrase taxation "in respect of the decedent" is ringing a vague bell...
Don't worry; only the portion of the horse over 14.2 hands is taxed at the higher rate.
Is this regarding inheritance again? Because I'd hate to be blogging a dead horse.
I'm never going to beat Donkey Kong, am I? So, so hard.
I bet you guys could beat it, though. THE! BEST!
Stanster, just watched The Parking Lot Movie and unless C'ville is bigger than I recall was thinking you might have some relevant knowledge and/or opinions. A good movie for this place although I'm sure many folks here would thoroughly despise it.
73: I enjoyed it and know a lot of the people involved. It's a pretty fair (if slightly exaggerated?) take on the divide between Typical University Student/Parent and Everyone Else (Atypical University Students/Parents, Townies, etc.). I recommended it here previously, although I can't find it in the hoohole.
And people here hate everything, so whatever.
Oh, and we parked there today for brunch. $2.
74.2: Raspberry Swirl is pretty good. As is orange sherbet (pretty much all sherbets are good), and coffee ice cream. Also Vanilla, but not French Vanilla so much. Maple Walnut is gross, however. That vanilla with chocolate swirls in it is pleasant.
75,76: And I guess I should have asked what the gate said, if anything.
78: Something like "CAPTAIN BEEFMASTER". My housemate works there now but wasn't working today. They change that gate all the time.
I hope we're piquing everyone's curiosity enough to stream it on Netflix.
That's what I did. And Exit Through the Gift Shop yesterday. A nice slow weekend around here without football and after having shipped the three college age boys who'd been here all month out on the midnight train to Chicago Friday night.