Just wanted to thank everybody for all of the responses. It's been a
great help I now have some things to look into and start thinking about.
- Ted

On Mar 1, 1:58 pm, Ted Hart <t...[at]vicon.net> wrote:
- quote -

My guess is you want to accumulate some after tax funds (i.e. not in a
retirement account) as a reserve and for future expenses. I suggest
you put about 2/3 of your windfall into index funds at Fidelity (where
you already have a retirement account). Call them up and they will
answer all your questions.

This is a reasonable way to learn about managing your money.

Frank

On Mar 1, 3:44 pm, Rich Carreiro <rlc...[at]animato.arlington.ma.uswrote:
- quote -

Stand corrected.

Ted Hart wrote:

- quote -

Elle's questions are all aimed at providing a well-reasoned answer. The
more details, the better the advice. For example, I'd suggest you
consider a Roth IRA. You put in post tax money, and it's never taxed
again. In an emergency, it may function as a source of funds, so it's
less 'tied up' than the 401(k). Debt free is good. Since it sounds like
you don't itemize deductions, the mortgage is costing you the full 6%,
and paying it down isn't a bad idea. (I know, there are some pretty high
end Town Houses so the real estate tax and mort interest may be over the
standard deduction). These are the things that can change a reply.
JOE

PeterL wrote:
- quote -

Aquisition date follows as well as cost basis, the clock for Long Term
Cap Gain doesn't start on the gift date.

JOE

"PeterL" <po.ning[at]gmail.com> writes:

- quote -

That's not true. Assuming the giver held the stock at a paper
gain when they were gifted, the recipient picks up the giver's
basis AND holding period. So what matters re: long-term/short-term
is when the giver acquired the stock, not when the gift was made.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

Ted Hart wrote:
- quote -

Ted, this is actually a complicated question. The way to phrase it is,
"will you be required to make estimated tax payments for 2007?" Maybe,
maybe not. See the instructions for Form 1040ES...here's a link to the
PDF from the IRS website - the packet explains estimated taxes in detail
and has vouchers for sending in payments:
http://www.irs.gov/pub/irs-pdf/f1040es.pdf

Your state should have a similar form/worksheet, the rules are different
in each state.

On that worksheet you'll need to enter your expected gain from this sale
of stock. Find out from the person who gave you the gift what their cost
basis and purchase date were -- both transfer over to you (with some
rare exceptions). The difference between that cost basis and the buy-out
price is your capital gain, and that's taxed at one of several rates
depending on your income level and how long the stock has been held.
Here's the IRS explanation of the taxes on that:
http://www.irs.gov/taxtopics/tc409.html

If you are required to make estimated payments, some money will be due
each quarter, beginning with the quarter after the date of the buy-out.
The due dates for quarterly estimated taxes each year are April 15, June
15, Sept 15, Jan 15 (shifted a day or two if it falls on a holiday).

If they aren't required, you can pay any balance due when you file your
taxes. But if you don't make required estimated payments, you're charged
interest for paying late, even if you pay in time come April.

-Tad

On Mar 1, 11:58 am, Ted Hart <t...[at]vicon.net> wrote:
- quote -

Because you can't give advice to someone without knowing the overall
financial circumstance of that person. If that person has a lot of
debt then maybe the advice would be to pay down that debt. If that
person is 60 yrs old then maybe the advice would be to be more
conservative.



- quote -

On Mar 1, 11:58 am, Ted Hart <t...[at]vicon.net> wrote:
- quote -


You won't have to pay taxes until after your shares are sold. If the
payout to shareholders occurs within one year of your acquiring the
stock, you'll have a short term capital gain event. Otherwise a long
term gain event. You'll need to find out from the individual who gave
you the stock what the cost basis of the stocks is, because that is
the cost basis you'll be using to calculate your gains.

"Ted Hart" <thart[at]vicon.net> wrote
- quote -

The mortgage is something to consider paying down (in part
or full) with your windfall, depending on the mortgage's
terms, your tax bracket, etc.

For someone with, say, a car loan at 10%, it's pretty
obvious that paying off the loan is the best place to put
some of one's windfall. This is why I asked about debts. But
with a home mortgage at around 6%, it's less clear.

kastnna wrote:

- quote -

I was gifted some stock by an individual, and the company is being sold.
Apparently there will be a payout to the shareholders. I was
wondering if I had to pay the taxes right away or could invest the lump
sum and pay the taxes next year?

darkness39[at]yahoo.com wrote:

- quote -

looks good, thx

On Mar 1, 2:00 am, Ted Hart <t...[at]vicon.net> wrote:
- quote -


Check out bankrate.com for current CD rates.

Elle wrote:

- quote -

I don't understand why all that would matter but here's my situation.

I'm debt free, I've been careful. Have a small 401k (fidelity) started
through my company, no matching. I just guessed at where to distribute
the money. It doesn't seem to grow very fast. I have a mortgage on a
townhouse (around 6%) I've been paying on it for 3 years. With that I
just make ends meet but at least I'm not paying rent.

I consider myself in good shape, I just have no reserve and a very small
retirement fund. So this will be a big leap ahead for me.

Besides that I plan to make a few small purchases. I need some
furniture and the rest is getting stashed away.

John A. Weeks III wrote:

- quote -

I don't think I'm having any life events except I'm getting a huge sum
of money I don't know what to do with. I like the money market/ reading
up idea. And I didn't know there were no restrictions. This is forcing
me to look into investing. Thx - Ted


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for a FEW lines to add context, the previous post is deleted.

- quote -


CD- Certificate of deposit. Available at local banks. Pays you
interest, their is a penalty if you pull money out before CD matures.
CD could be 3 months, 6 months, 1 year 3 year...

Money Markets. Available at local banks and brokerages. If the
stocks are held at a brokerage, you could sell the stocks and possibly
hold proceeds in a money market at the brokerage.

Savings accounts. Available online and at a local bank. Pays low
amount of interest.

I would be looking for a 4-6% interest rate. Most Money markets I see
are for 5% right now. 5% is adequate while you park the money and
wait (John Weeks gave good advice).

If the stocks were "given" to you. How they were "given" would affect
how they are taxed.

On Mar 1, 2:44 pm, "FranksPlace2" <FranksPla...[at]gmail.com> wrote:

- quote -

One shouldn't be worried about the 'for Dummies' titles. The books in
these series are typically full of helpful advice.

http://www.dummies.com/WileyCDA/Dumm...-PERSONAL.html

http://www.dummies.com/WileyCDA/Dumm...-PERSONAL.html

Re a windfall in the neighborhood of $65k:
I agree with the comments about double checking how to
minimize taxes on this windfall.

What, if any, are your debts? E.g. student loans, car loans,
home mortgage? Please give interest rates and time on each.

Where do you currently have financial accounts? E.g. a
certain brokerage? A bank? Who holds your IRA? Your 401(k)?
Answering these might help quickly narrow your choices for
the lowest risk, highest yield place to park your money.

On Mar 1, 4:00 am, Ted Hart <t...[at]vicon.net> wrote:
- quote -

I agree with John but also get a book about money. Pick one of the
top selling ones on Amazon. You have to learn to take care of your
money.

Frank

On Mar 1, 4:00 am, Ted Hart <t...[at]vicon.net> wrote:
- quote -

What is the source of the funds? Managing the tax consequences of the
scenario might be the best first move you could make.

After that, I'd listen to Mr. Weeks