Be Diligent with Your IRA

In the morning, sow your seed, and at evening withhold not your hand, for you do not know which will prosper, this or that, or whether both alike will be good.

Hi, I'm Rob West. That verse, Ecclesiastes 11.6, tells us the importance of diligence. Today I'll give you some ways you can be diligent with and take full advantage of your IRA. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Okay, so the first way you can be diligent about your IRA is to make a very basic decision, traditional versus Roth. Money contributed to a traditional IRA goes in pre-taxed, meaning you can deduct that amount from your adjusted gross income at tax time. Money going into a Roth IRA, of course, is after tax, meaning you can't deduct it. Later in life, when you withdraw those funds, you're taxed on your traditional IRA contributions and earnings, but your withdrawals from a Roth account are tax-free. And because of that, a lot of folks automatically assume that a Roth IRA is better.

Well, don't make that assumption. The Roth is only the better option if you expect that your retirement income will actually be more than you're making now. And generally, that means the Roth is better for younger investors. It's better to pay the tax on those contributions now rather than later when they may be in a higher tax bracket. But at a certain stage in your working life, your expected retirement income will be less than you're making at that point. That makes the traditional IRA a better option for older investors who will pay taxes on their withdrawals later when they expect to be in a lower tax bracket. So when you're deciding between a traditional or Roth IRA, you have to ask, on the day I retire, am I likely to be making more or less than right now? Now, I realize that may be a difficult question to answer, especially for folks in the middle of their working years.

But there's an easy solution. If you can't decide, do both. Ecclesiastes 11 2 even tells us of the need to diversify our holdings.

It reads, give a portion to seven or even to eight for you do not know what disaster may happen on the earth. If you can't decide between a traditional or Roth IRA, open both and split the maximum contribution between the two. That way you'll have a taxable and non-taxable income stream in retirement.

Another great way to diversify. Another way to be diligent with your IRA is paying attention to when you make your contributions. The IRS allows you to make them all the way up to tax day, April 15th, and still have them apply to the prior tax year. But doing that means you'll lose up to 15 months when your contributions could be making compound earnings.

Now, why would someone do that year after year? Well, for example, it might seem to make sense for folks who expect an annual bonus at the end of the year. They wait for it and then use it for IRA contributions after the first of the year, maybe even waiting until the April 15th deadline.

Other folks might just procrastinate again, waiting for the deadline before acting. Well, it's far better to make consistent contributions to your IRA all through the year, which again, will give your holdings more time for compound earnings. If you're expecting a year in bonus, adjust your budget so you can contribute that amount through the year instead of waiting. You can also be diligent about contributing the maximum allowed amount to your IRA. That's $6,000 a year or $7,000 if you're 50 or older.

But did you know that some people can actually double that amount? IRA contributions must be made from earned income, but what if you have a non-working spouse? Well, you can open another IRA in the spouse's name and again contribute the maximum amount as long as you, the working spouse, make enough to equal the combined maximum of $12,000 or $14,000 if you're both over 50. And that could actually be a better option than maxing out your contributions to a company 401k if it's loaded with fees and has few investing options. Another way to be diligent with your IRA is to start investing early. The key there, let compound earnings work for you. Be diligent and systematic in your contributions to your IRA, either traditional or Roth, and start as early as possible.

By the way, even students with earned income can start them at the youngest of ages. Don't miss that opportunity. All right, your calls are next. 800-525-7000.

That's 800-525-7000. I'm Rob West and this is Money Wise Live, biblical wisdom for your financial decisions. We'll be right back.

Stick around. Great to have you with us today on Money Wise Live. I'm Rob West, your host, taking your calls and questions today on anything financial.

The number to call is 800-525-7000. We've got some lines open as we talk God's money. How can we apply biblical truth to the financial decisions and choices you're making today so you can be a good steward, wise and faithful in your management of God's resources? Well, we can talk spending plans, debt repayment, giving, long-term savings, investing. And speaking of investing, another huge day in the market today.

It seems like this is becoming the norm. Shh, don't tell anybody. Dow Jones up more than 2.5%, 800 points. The S&P up nearly 2.5, 93 points.

The NASDAQ nearly 3% as tech has been selling off. Well, not today. And so we're looking to notch here four straight winning weeks on Wall Street.

Wow, that's a surprise, right? We'll take it. We certainly can use a reprieve from what we have been experiencing prior to that. Hey, whatever's on your mind today, again, we'd love to hear from you.

800-525-7000. Before we head back to the phones, let me remind you here on the last working day of October. Well, actually, the 31st is Monday, isn't it?

Well, I'll say it anyway. As we press toward the end of the month, we could certainly use your financial assistance. As a not-for-profit, listener supported ministry, we rely on your gifts here at MoneyWise Media.

And as we head toward the end of the month, we always try to stay on pace with what we need to fund the work of the ministry. And so if you would be willing to consider a gift to the ministry, we'd certainly be grateful. It's quick and easy to do. Just head to MoneyWise.org and click the Give button. Again, MoneyWise.org and click Give.

You'll see between now and the end of the year, we're offering a wonderful 31-day devotional on money from God's perspective from our friend, Jim Neuheiser. Be sure you request that when you make your gift. Again, we could use that gift between now and the end of October at MoneyWise.org. Again, just click Give. All right, let's head to the phones today.

We're going to begin in Boca Raton. Hey, Kearney, thank you for calling. Go right ahead. Yes, can you hear me?

Yes, sir. I received some stock a few years ago at $40 a share. I had thought things would go up, but they've gone down consistently and now it's under 20. And I'm just wondering, should I just go ahead and sell it or just hope it goes up in the future? Yeah, Kearney, you know, there's no way to really know, given that obviously this is ownership in a particular company. So it's going to come down to how is that company performing and in what sector is that company and how does that fit in with where our economy is at right now and a whole host of other issues. But it also kind of begs the question around diversification. One of the challenges is when we're allocated toward one particular investment, we're highly concentrated at that point. So our investment success relies heavily on the performance of one company, which puts us at a disadvantage. Now, this may not represent the total of your investable assets. I recognize that, but we just need to make sure you're not too highly concentrated in one particular investment. Now, as to the merits of this investment, again, I wouldn't be able to weigh in on that.

I don't know the company. And even if I did, we don't get specific stock recommendations. So what I would be looking at is, you know, number one, depending on the amount of money you have here, you could engage an advisor who would actually look at the fundamentals of this company, what sector it's in, and give you some perspective on really, should I wait for it to recover? Is this really more affected by the economy at large? Or is it some particular issue with the company itself? Because if it's a situation where it's just down with the market, maybe it's out of favor, or it's uniquely susceptible to the inflationary pressures or a looming recession, there's a great likelihood that this particular company would recover with the market when that happens.

And we've certainly seen some strength the last four weeks, hopefully, you've seen a bit of a bounce. If not, and it's related to this particular company, then the question is, well, should I go ahead and just cut my losses, so to speak, and then make this more broadly diversified with a longer term strategy? So I'm not counting on the merits of one particular investment. So I think that's really the next step is either to do that research yourself or engage an advisor. If you want an advisor, you can find someone at our website moneywise.org.

Just click find a CKA that stands for Certified Kingdom Advisor. And again, what they would be looking at is, is this 50% decline in value related to a broad market sell off? Or is it something a particular issue with the company because obviously, it's down quite a bit more than the market. But again, a lot of that's going to determine what sector is it in and how is it performing versus its peers.

All of that information will give you a clue as to whether you should stick with it and let it recover only then to diversify or go ahead and realize the loss now and diversify immediately. Does all that make sense? Oh, yeah. Very good. Thank you.

Okay, excellent, Kearney. Well, appreciate your call. All the best to you as you make this decision. I know it can be a difficult one to make when we have one particular investment we're focused on. We appreciate it.

To Fort Worth, Texas. Hey, Nancy, thank you for calling. Go right ahead. How can I help you? Oh, great. First of all, I want to thank you for your program. This year, I was able to actually give a gift for the first time to your ministry and I was so glad to do that. Well, that's delightful. Thank you, Nancy.

I know and it is so easy to do. So I was like, oh, this won't be a problem. Oh, that's great.

I'm glad you mentioned that. But my question is about capital gains. I sold my home this summer.

I've only owned one home. And so I was able to glean a really, for me, large profit. So my portion, I think, that I'll be responsible for paying taxes on is $292,000. And I'm 70 years old.

And from my research, I saw that I'll probably be waived $250,000. Is that correct? That's right.

So you said this was your only home. So therefore, you meet the requirement that you've lived there two out of the last five years. And if so, as a single person, in terms of your filing status, you would get $250,000 worth of gain, not the selling price, but the profit up to 250,000 would be tax free. And then anything beyond that would be considered a long term capital gain.

And that would come down to the income that you have. So if you have income of between zero and $41,600, in the year that you realize the gain, then you would have a 0% capital gain rate. Anything over $41,600, all the way up to $459,000, you'd have a 15% capital gain tax rate, again, only on that portion that extends beyond $250,000 in profits. And before I get too excited, because I know I'm under that $41,000, I will be taxed, but it'll be how to say it again, just that portion. Well, so there is a zero and now you always want to run this by a CPA just to make sure there's not any, you know, unusual circumstances. But generally speaking, for a single person, in terms of your tax filing status, if you make less than $41,675 in income, adjusted gross income for that tax year that you sold the property, the tax rate, the capital gain rate is zero. So you would not have any capital gains. And I was looking for just a simple resource where I could review the capital gains laws. Can you direct me to something that would be simple?

If you just do a Google search for capital gain, long term capital gains tax rate, you'll see an article at nerdwallet.com and I'd look at that. We appreciate your call, Nancy. God bless you. And we'll be right back on MoneyWise Live. Hey, great to have you with us today on MoneyWise Live.

I'm Rob West, your host. This is where we apply God's wisdom to your financial decisions and choices. What's on your mind today?

Let's talk about it. 800-525-7000 is the number to call. Again, that's 800-525-7000. Hey, we started today by talking about IRAs and retirement savings. You know, if you believe that you need professional help on this particular topic of retirement savings or investing, well, it's important to speak with someone who can provide counsel, not only that's competent, but also aligns with your values. And for that reason, we recommend a local certified kingdom advisor. These financial, insurance and legal professionals have completed a certification program to give biblically wise financial advice as a part of their practice.

They've met high standards and character and competence and experience. And you can find a local CKA professional by just heading over to moneywise.org and click find a CKA. It's right there at the top of the homepage.

Again, moneywise.org. Click find a CKA. There's more than 1300 across the country and up into Canada as well. And you'll find them on our website. All right, back to the phones we go. We've got a few lines open.

800-525-7000 to Iowa. Nancy, thank you for your patience. Go right ahead.

Yes. Hello. My question is, I'm 69. I'm already, well, semi-retired anyway. And I'm taking half of my husband's social security until I hit 70. And then I'm going to take my full social security. My husband had an accident several years back, had a big settlement. And so we had a bunch of money all at once. And most of that is still sitting in his savings account.

He is very much against stocks and bonds, I guess. On the other hand, I have an IRA. That's really what I'm asking about is my 401k.

I mean, from one of my jobs, it's only got like just shy of $10,000. Would you advise at my age to roll that over into an IRA and then invest that in bonds and stocks so it'd just be a small portion? Yeah.

So you're not wondering about contributing more to it. You're just wondering if you should leave it there or roll it out and invest it inside an IRA? Right. Okay.

Yeah, very good. Yes, I like that option a lot because you're going to have more flexibility inside an IRA than you would in a 401k. You have limited options inside the 401k. Whereas when you roll it out to the IRA, you're going to have unlimited options. Now it's a smaller amount of money from an investment standpoint. So you'll just want to pick a couple of high quality mutual funds. If you want some faith aligned mutual funds, you can look at Timothy Plan or Eventide or Crossmark or Praxis, one of the fund families you'll find on our website at MoneyWise.org and just kind of set it and forget it.

You'll want to factor this into what your time horizon is. I assume you're not counting on using this money for any reason that you know of today and if that's the case and you have at least a 10-year time horizon, I think you could look at a balanced mutual fund that would have a mix of stocks and bonds and just let that money grow and that would be a great thing to have down the road as you perhaps need it. If the Lord tarries and you're in good health, you need this money to last perhaps decades or more and so keeping that money invested is the very best way for it to overcome or offset the effects of inflation which apart from it being invested means that it's losing purchasing power.

One option to consider for the money that you said was more conservative, your husband didn't want to invest it, today is essentially the last day to open an account at treasurydirect.gov and take advantage of what are called I bonds. These are US government backed and issued inflation bonds. They're paying 9.62% right now for the next six months and then it'll reset we think to about 6%. We'll find out in a few days but you'd have to leave the money in for a year but the good part about them Nancy is that they are backed and by the full faith and credit of the United States government. They're paying 9.62% for six months. Even if you got six for the second six months, that's a very attractive rate of return with essentially zero risk but those will expire today because after today you will be subject to the new rate that comes out in November. You'd take advantage of that at treasurydirect.gov but you can't put qualified money in this so it can't be an IRA or 401k or a retirement account.

It has to be more like cash that you would have in a checking or savings account but here's the key, don't put money that's a part of your emergency fund that you need ready access to because you can't touch it for 12 months but hopefully that gives you at least an idea with the more conservative cash you have available and then with the 401k I'm on board with this idea of rolling it out to the IRA. Okay thank you and I can do that for the bank right? Yes ma'am you sure can Nancy thank you for your call today 800-525-7000 to Andover Minnesota. Hey Sherry thanks for calling go right ahead. Hey Rob thanks for taking my call I love your program. Okay this is going to sound silly but I want your opinion on it. I was online and there's a program not a program but a gimmick or gimmick or whatever that you get a hundred envelopes you number them one to one hundred and then each day you pick them you kind of mess them up so they're not all in order you pick them randomly and if you pick number 58 you put 58 dollars in that envelope after you do this for a hundred days you've got five thousand over five thousand dollars.

That's right. Any comment on it? Well it is a gimmick but you know I think so often the idea behind savings is having some incentive and motivation to do it because out of sight out of mind you know we we set savings goals for purchasing a new car or being able to bolster our down payment for a house or whatever it is but lifestyle creep gets in the way and we just don't do it and these kinds of gimmicks whether it's a rounding up through acorns or the hundred day envelope challenge I think can be effective so essentially you described it right a hundred envelopes a hundred days you'll have five thousand fifty dollars put one to a hundred on each one you pull one out every day whatever's on the outside you put that cash in the key though Sherry is if you get sixty seven dollars one day you gotta have sixty seven dollars laying around and then you get ninety nine the next and so I mean you've got to have five thousand fifty dollars at at your disposal in order to do it but if that's what gets you to save then I'm all for it but at the end of the day it is a gimmick thanks for your call Sherry we appreciate it we'll be right back on MoneyWise Live. Thanks for joining us today on MoneyWise Live as we apply God's wisdom to your financial decisions and choices if you have a question today we'd love to tackle it we've got some lines open whatever's on your mind 800-525-7000 again 800-525-7000 let's go back to the phones Len thanks for calling sir go ahead.

Hey how are you Rob? Great thanks. Hey um if it's a good time to take some cash and invest in some treasury bonds I think you I'd mentioned something about it earlier and how do I go about purchasing them?

Yeah are you talking about the iBonds in particular? Uh yeah I think so yeah the iBonds just yeah yeah actually today is the last day if you want to lock in the current rate on the iBonds which is 9.62 percent the reason being the treasury has said if you're not in by the 28th they can't guarantee that you're going they're going to have your account open and the bonds actually purchased by the end of the month which is when this current rate expires there's only one place to purchase iBonds and that's at treasurydirect.gov treasurydirect.gov now what you will find is that they are overwhelmed I saw just recently over 28 billion dollars has gone into iBonds in just the last few months because of what's going on with this interest rate right now and with today being the last day to get the 9.62 percent I was reading some articles earlier today about that site crashing and don't even bother to try to call anybody because you you won't get through but if you can get the account open and start the process of attaching a checking or savings account and then doing the transfer electronically it's worth it in my opinion as long as it's money that you can part with for 12 months and because you can't redeem it for 12 months but given the interest rate given the safety backed by the full faith and credit of the United States government I think it's a great option not for long-term money that would have gone into the stock market where you have a 10 plus year time horizon but if you have a one to five year time horizon and it would have been in more of a cash or cash equivalent well you can't beat it in the iBonds so again when you'd head to treasury direct.gov open an account and then you're going to want to purchase you can only buy up to ten thousand dollars worth of the iBonds per person per calendar year does that make sense? Yes it does but I'm going to have to go into the next month so we're not going to know what the percentage is going to reset. What we're hearing is it's going to be in the mid sixes so still a great rate given that you know you're essentially only locking it up for a year and you know you've got zero risk you're not going to find a guaranteed six percent anywhere so still worth it I think.

Okay great thank you. All right Lynn thanks for calling today 800-525-7000 is the number to call we've got some lines open today we'd love to hear from you let's see Illinois is where we're headed next. Linda thanks for calling go right ahead. Hi Rob thanks for taking my call.

Yes ma'am. My question is I want to retire this year and so far I've spoken with two financial advisors not the CKA that I put a call an email for one to reach out to me but two advisors and I have a mortgage and my mindset is to pay the mortgage off but both of them are against that what what's your opinion on that Rob? Yeah well I love the idea that you would be completely debt-free including your home where would the funds be coming from Linda that you would use to pay off the mortgage? I have a pension and I have a little bit of a 401k. Okay how much is left on the house?

118,000. 118,000 and you are you drawing a monthly amount from the pension or are you going to roll over a lump sum or what do you have? He's gonna he's he set it up as I think it's going to be I would uh first because I'm only 57 so he said the little bit that I have in my 401k will do a monthly on that and then once I'm 59 and a half he can do a monthly on my pension. Okay.

Did I answer the question? Well I think so so you you've got a pension so are you fully retired at this point? No sir I want to retire this year December 31st. Okay 1231 and so what are your expenses going to be per month roughly? If I keep the mortgage my expenses are roughly just under $2,500 a month. Okay with the mortgage all right and where come January 1st where is that $2,500 going to come from? He said that 401k. Okay and what's the balance on that 401k?

I only have 103,000 in there. 103,000 you're going to take 2,500 a month all right and then what do you and then how long are you planning to do that? He said the way he set it up he said that would I would live off that for two years he actually said Rob he would do $4,000 a month for me for two and a half years for two years and then I would have to he would have to tap into the pension where I'd have to pay a little bit of a penalty because I wouldn't be quite 59 and a half. Yeah and how much do you have in the pension?

$552,000. Okay and then at that point the 401k is gone and so then you'd have to start living off of the pension. The challenge is I'd on that pension I would only you know really you try to want to limit the you want to limit that to four percent a year in terms of your withdrawal rate so that'd be 22,000 but you're pulling 30,000 off of that so that's a little bit more aggressive than I would like to be but I guess essentially are you trying to buy time until you start collecting social security? Exactly, exactly what he said. Yeah and are you going to do that early at 62?

Yes sir. Okay all right yeah and the idea behind you know stopping working at 57 is just you're ready to kind of move on to God's next assignment or you know what do you have in mind there? Yes my situation is I'm actually traveling back and forth on the weekend get to my my place of employment. My sister is local in that city and they're kind enough to let me stay their landlord is kind enough to let me stay there through the end of the year because it's just not feasible to continue that pattern. My intentions were to stay there until I was at least 61 but it's just not feasible to do that.

Yeah what about getting another job closer to where you live? I did think about doing that one actually one of the advisors did say Linda I'd like it if you go and get a part-time job you know $15 an hour just part-time and that was his suggestion. Yeah okay yeah I think you really want to try to supplement your income if you can because a couple of things here I mean you've built up a nice nest egg but really ideally we wouldn't start drawing from it at this point you'd continue continue to try to build it up at the very least you wouldn't tap into it and try to live off of you know income that you can bring in to supplement it because I'd also love for you not to have to pull social security early you're going to reduce permanently reduce your benefits by about 30 percent if you take it at 62 versus 66 or 67 for retirement age.

I'm in agreement in this situation I don't think I would pull out and create the taxable event to pay off the house at this age I just keep focused on trying to supplement your income with part-time work or even another full-time job closer to home and let's try to continue to be aggressively paying it down through cash flow not pulling out of these retirement accounts and I try to limit as best you can what you pull out of the 401k and then eventually the pension so you can delay social security. Let's talk a bit more off the air Linda we'll be right back on MoneyWise Live. Great to have you on MoneyWise Live I'm Rob West your host we're taking your calls and questions here in our final segment 800-525-7000. Let's head back to the phones.

Lakeland Florida hey Lori thanks for calling go right ahead. Hey Rob thank you my mother died a few years ago at age 87 and we found some series EE bonds of more than 50 of them that were purchased in 1986 and matured in 2016. The treasury website says that that they're worth from $50 worth $234 each. For tax purposes how do I determine the interest that needs to be claimed? Yeah so once you redeem the bonds the interest that the savings bond earns is the amount that a bond can be redeemed above its face value or original purchase price.

It's taxed at the federal level but not the state or local level as far as income goes. So when you redeem it you would look at the face value or the original purchase price and the amount that's redeemed above that is considered the interest because it's credited at redemption and that would be the amount that's taxable. So okay so it'd be the the 234 minus the 50 I guess correct?

Yeah what they originally purchased it for correct. Okay thank you so much. Okay thanks Laurie we appreciate your call today.

Randy in Indianapolis how can I help you? Yes I'd like to know when is the earliest and what is the latest one can collect from a Roth IRA? Okay well so you've got to keep the money in for at least five years since you first contributed to a Roth in order to pull the money out tax-free.

That applies to anyone. Now if you don't want a penalty you're going to have to wait until you're after 59 and a half but basically you can start funding a Roth as early as you want as long as you have earned income and you can continue funding as long as you want. There is no required minimum. You've just got this five-year rule that says you can't withdraw the earnings and you can't withdraw the earnings tax-free until it's been in at least five years. You can pull your original contributions back at any time just the earnings have to be there five years.

Very good. Does that go true with standard IRAs as well? No no no so with a standard IRA you just it's growing tax deferred so when you pull it out you pay tax on it as income because you got the deduction going in and you just have to be beyond 59 and a half in order to do that or you'll pay a 10% early withdrawal penalty. Okay so there's no penalties for withdrawing later in life then?

No there is no penalties for withdrawing later in life that's right. Okay very good and what about 401ks? Is that goes true with that too?

It is true with that as well yes. All right thank you. All right thank you. Okay Randy we appreciate your call today. God bless you sir.

Let's see to Chicago. Jean how can I help you? Yes I have another question regarding the I bonds.

Yes ma'am. I'm interested in buying the I bond. I went to the site. I filled out of the I guess the form that they have for you and I received an email that says that I needed to verify my signature so I needed to go to the bank and having notarized or some way verified send the form in and then I will be able once it's approved will be able to make the purchase. However they told me it will take more than 10 weeks before that verification takes place before I can buy bonds. Is that right? It probably is yes.

Unfortunately in some cases when you're going to set up this electronic account in many cases it does require what's called signature certification just to verify that you are in fact the individual and you have to follow their process of doing it. You're correct though if that happens and that doesn't happen in every case but if it does it does take some time in fact several weeks as much as 10 weeks and I understand you're probably looking to try to lock in the current rate that's going to not be the case here because it's going to take that long to get it set up and then funded and at that point when you actually purchase the bonds you would be subject to the prevailing rate at the time which is expected to be well experts are saying they expect it to be 6.47 percent in November although that's not official yet. Yeah okay I was hoping to get that nine percent. I imagine you were and I'm so sorry to hear that Jean and yeah unfortunately this is just one of those things in this electronic age the idea is that we can do everything instantaneously but it doesn't always work out that way and it sounds like it certainly didn't in this case given that they're requiring this extra information so I would just kind of follow through on the process it's still going to be a great rate in terms of it being you know only a one-year minimum and complete safety no risk but I realize it would have been more attractive at the nine plus percent rate so I'm sorry to hear that we appreciate your call though today. Let's see well let's head to Fort Lauderdale Florida my hometown Michael how can I help you? Oh first of all thank you so much for taking my call and thank you for all the awesome work you do for so many people and help them out. Well thank you.

You're welcome. I have a couple part question um oh wait I bought a property um the condo it went up I bought it for 200 it went to 300 and I should have sold it but then the bottom fell out and I ended up selling it for 140 which was horrible but that's all I could get for it at the time. So what did you purchase it for? It was a condo I took 20,000 I took 200,000 out of my house on a HELOC loan um and I bought the car so I ended up losing uh 60,000 bucks and my wife just wanted me to just put 140 towards a 200,000 loan but I refused to take that big of a hit so I invested um basically 100,000 into another piece of property in Sebring. I bought uh 16 units eight duplexes pretty much with my brother we bought on the lake in Sebring for 410. The value right now is probably about a million one but my brother is not equally yoked with me and I want to get out from underneath with him because he's I just I just need to get away from because we're not yoked so he's going to give me a value of 900,000 so he's going to give me 300,000 in the next uh couple weeks or so. So how do I what do I pay capital gains on my initial investment I put down basically was 70 um I used the 30 payoffs and fills so I kept 100 of that loan so I paid 70 put put down the 70 he didn't and he paid me back um yeah I'm unfortunately Michael I think there's just too many moving pieces to track all this in a couple of minutes on the radio but I would love for you to get some help here and you know I think the idea here is you've got to establish what is your cost basis for any of these properties so what is the amount you put in for whatever percentage of a property in in the case of the condo is 100 so it's easy you could determine your your cost basis and then your pro your sale and and proceeds or loss and in the case of a shared property what percent did you buy and for what amount and then what did you sell it for at either a loss or a profit you know based on your pro rata share and that gain or loss would determine whether you have a capital gain and the same would be true for a tithe if you're trying to give a tenth you know on this on the proceeds but as to the kind of inner workings of this and the legal side of it um I would connect with the CPA just to there's a lot of moving pieces that you were describing there and so I'd be a little it'd be premature for me to try to weigh in on that unfortunately in just a couple of minutes that we have here with all the moving pieces that you have if you need a CKA there in in Fort Lauderdale Michael I just head to moneywise.org and I think if you get a professional that'd probably be the best option to help you navigate all this all the best to you I'm so sorry to hear about that loss on that condo but glad to hear you are making I think a good choice to get out of a situation where you're unequally yoked especially when family's involved you know money changes the relationship and so I think this is a wise decision to be able to get out uh hopefully take a profit set aside the taxes you mentioned a a gift to the Lord on top of that based on the proceeds I love that so I think this is all you know right um I think you just have to get some tax professional tax advice on exactly what is owed here uh with all these moving pieces so we appreciate your call my friend god bless you quickly to Chicago Jeanette you'll be our last caller today how can I help hi thank you very much for taking my call um I'm calling because my parents made some changes to their liquid accounts uh they removed me as beneficiary on their accounts and made me joint owner and I want to know the pros and cons of that they wanted to help me as joint owner so I could have easy access to their accounts help to manage their finances and pay bills and things like that I'm listed as the third owner of the account but I don't know what that means to me in terms of taxes etc you know there's probably not a whole I mean is this uh this is a checking account is that right checking savings CDs those type of accounts yeah I mean so you would be responsible for your share of the taxes on any of the interests that's paid on any of these CDs savings checking it's probably not going to amount to a whole lot but you'd it'd be worthwhile for you to look into that just to see exactly how much is in each of these accounts how much interest was paid out last year and might be a good barometer for what's coming this year and just recognize that as a one-third owner of this that you know you are going to be responsible for that beyond that I think the next step would be to say should you get a power of attorney instead of actually you know taking you know actually being a joint owner which has tax implications that might be another way for you to be able to control the account on their behalf to make decisions for them but not be financially responsible does that make sense it does thank you very much all right Jeanette thanks for your call today well folks that's going to do it for us today so thankful to have you along with us and as we apply God's wisdom to your financial decisions and choices thankful for my team today Amy Rios engineering today Gabby T producing grateful for our amazing call screening team as well as Mr. Robert Sutherland providing me great research MoneyWise Live is a partnership between Moody Radio and MoneyWise Media again here at the end of the month if you'd consider a gift to MoneyWise you can do that quick and easy at moneywise.org just click give in the meantime have a great rest of your day and weekend we'll see you next week bye-bye