Frank Kameny And Tax-Free (If Rueful) Capital Gains June 18, 2009March 15, 2017 AND SO IT BEGINS The President signed a memorandum yesterday extending certain benefits to LGBT Federal employees. It was the first time he’s addressed gay issues since taking office. If this is something you follow, the 4-minute video is worth watching. Acknowledging this was just a start, he concluded . . . We’ve got more work to do to insure that government treats all of its citizens equally, to fight injustice and intolerance in all its forms, and to bring about that more perfect union. I’m committed to these efforts, and I pledge to work tirelessly on behalf of these issues in the months and years to come. At which point he handed the pen, with an arm clasp, a smile, and a handshake, to Frank Kameny. “The arc of the moral universe is long,” asserted the abolitionist Reverend Theodore Parker in 1853, “but it bends toward justice.” For those unfamiliar with Frank Kameny’s story, click that link. Talk about courage. The mind – at least if it is as timid as mine – boggles. BUT . . . BUT . . . Michelle D. in Kansas City: “Federal benefits but no health insurance for employee spouses? What a crock! THAT’s what they give us, after insulting our marriages in that heinous Department of Justice brief?” ☞ The DOJ brief was inexcusable – not least because it so flew in the face of the President’s vision. His Administration was ill-served by whoever at DOJ allowed it to go through in the form it did. The lack of health benefits is mandated by the law – that same “Defense of Marriage Act” (DOMA) Justice was defending – which Obama wants repealed. DOMA was a brilliant Republican wedge. The Republicans’ first choice was that President Clinton veto it. They thought they could win back the White House in 1996, if he did – a pro-gay marriage president in 1996 – as they had just won back Congress in 1994. Their second choice, though, was that he sign it. Signing it would lessen gay support for the Democratic Party for decades. And has. BETTER TAX FILING? Emerson Schwartzkopf: “Re Monday’s note on estimated tax, you might want to streamline the delivery and use the IRS Electronic Federal Tax Payment System instead. I started doing this after the U.S. Postal Service managed to lose both my federal and state quarterly tax payments, which I’d sent via regular mail. The sign-up process is a bit cumbersome and takes a few weeks to get all the documentation in the mail (yes, it seems counterintuitive, but we’re dealing with the government), but it’s quick and easy. California is one of several states that also offers electronic transfers.” ☞ I love it: “cumbersome, quick, and easy.” (I trust you see me grinning. Thanks, Emerson!) NEW TAX-COGNIZANT STRATEGY? Jim Batterson: “A few weeks ago I asked for some advice on how the fact that I now have enough capital losses from 2008 to offset my capital gains for the rest of my life should influence my investment strategy. You thought it was an interesting question and said you would respond in you daily column. Well? In particular, why should I ever put another penny into an IRA account? And what can I do to make my investments produce (for me, tax-free) capital gains instead of dividends or interest? Does it change the balance between what I buy for my IRA versus my taxable account? If you don’t answer this I will demand my money back.” ☞ I’ve almost always suffered when I’ve let the tax tail wag the investment dog. My reasoning always goes this way: such-and-such stock is as likely to go further up as down over the next few weeks (what do I know?), so the tax code gives me a strong incentive to wait til it goes long-term, to be taxed at 20% instead of 40% (or whatever, with the local tax). So I wait, and . . . you know the rest. In hindsight, I would almost always have been far better off selling when all that really kept me from doing so was the higher tax. Maybe the reason is simply yin and yang. After stuff goes up dramatically enough to produce a tempting gain, it often comes back down. (Can you say, “oil stocks?”) In any event, a silver lining of all your tax losses (can you say, “FMD?”*) is not having to worry about this. So that’s the first and most obvious thing. You are now free to take a gain – “tax free!” – any time you think it may be a good time to do so. As for the rest of your question . . . if it were truly true your losses are so large and/or your life expectancy so short that you’d never again have capital gains tax to pay, I obviously wouldn’t bother putting any low dividend stocks in an IRA. (But if you do put new money into in an IRA, I’d recommend a Roth, not a traditional IRA.) Further, it sounds as though you should put your higher-interest and higher-dividend securities into the IRA and, as is probably always the case, keep your riskier, growth oriented and/or speculative securities in a (for you, tax-free) personal account. You probably deserve a longer answer, better thought out – but the beauty of your subscription is that includes all the helpful reader feedback a query like yours is likely to generate. *I can say, “I’m sorry,” but I know it won’t do anyone any good.