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  • Avatar jacoavlu 
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    Status: Physician, Small Business Owner
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    Joined: 03/01/2018

    ^^^ free at E*TRADE

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    in reply to: UTMA investment #239509 Reply
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    Avatar jacoavlu 
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    So is someone retiring and you’re buying out their 20% ownership? Or you are being added to existing 4 owners?

    You characterize the buy in as approx $1M goodwill but are you sure you are using the term correctly? Does the $1M buy in not get you any ownership of physical assets? Building, equipment etc?

    How was the buy in amount determined? Have you had anyone look at the deal and determine if it’s fair? Have current owners shared practice numbers, “opened the books” to you?

    “Buy out is similarly structured” but what are the terms? How is buy out number determined? What if there is no new partner when you want out?

    $1M is a lot of money. You could certainly start your own practice for less than that. You really should get a professional to assess the deal and go over all the paperwork.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    in reply to: Buying in with pretax salary differential #239505 Reply
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    Avatar jacoavlu 
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    you realize you would then owe tax on the rental income right?

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    in reply to: Purchase home, use 529 to pay for it? #239494 Reply
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    Avatar jacoavlu 
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    What does $1M get you? What percent ownership in the practice? What level of control of future? What about buyout? Is someone else going to pay you $1M+ in the future, for your share?

    somewhat worrisome that such a large number is in goodwill

    if your buy in is not post tax then I would imagine your basis in the Corp or Partnership shares remains zero. In other words your buy out at the time of sale will be fully taxed.

    If your buy in were post tax then you would establish basis and would only be taxed at buy out on capital gains above basis

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    in reply to: Buying in with pretax salary differential #239482 Reply
    Avatar jacoavlu 
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    agreed, should be confirmed by OP

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    in reply to: Advice about 401a account. #239465 Reply
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    Avatar jacoavlu 
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    So if you move the money you lose $4k in employer contributions. That’s less than ideal. I would assume this is the case whether you rollover to a qualified plan elsewhere, or Roth convert

    So how can you not lose that $4k? If you leave funds in the 401a what happens? Is this an option?

    i definitely would not cash out for 50 cents on the dollar.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    in reply to: Advice about 401a account. #239462 Reply
    Avatar jacoavlu 
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    This has not been challenged and is a peripheral point to the discussion, but do you really believe that making a $25k basement renovation will add $125k to the value of your home? I don’t.

    https://www.investopedia.com/articles/mortgages-real-estate/08/add-value-to-real-estate.asp

     

    Click to expand…

    Further, the more appreciation, the worse the deal gets. That’s a proposed 5x ROI. Why would one want to give up a share of that return? You’re far better off just taking a HELOC or better yet cash flowing the improvement.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    Avatar jacoavlu 
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    To think of this as something other than a loan doesn’t make sense. They give you money, you pay a 4% fee. You pay them back a lump sum later. In the form of less money in your pocket when you sell your home. You could calculate an interest rate and everything.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    in reply to: Unison investment offer ~ "Shared Appreciation Mortgage" #239407 Reply
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    Avatar jacoavlu 
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    Like many questions here it’s just a math problem. Why not put some rough numbers to it and figure out the results?

    Need your homes value now. Percent of shared equity planned. Amount spent on renovation. Amount invested in market. Estimations of future home value at sale, how many years from now that is, and expected market return over that time.

    Click to expand…

    Yep, working through it later tonight. No changes, HELOC, equity share or using cashs are the four use cases.

    Mostly curious about non-financial aspects that are negatives. Encumbering the property, limitations on transfers, partnership liability, stuff like that.

    Click to expand…

    Please share numbers when you do.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    Avatar jacoavlu 
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    Like many questions here it’s just a math problem. Why not put some rough numbers to it and figure out the results?

    Need your homes value now. Percent of shared equity planned. Amount spent on renovation. Amount invested in market. Estimations of future home value at sale, how many years from now that is, and expected market return over that time.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    Avatar jacoavlu 
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    frustrating thing is, texting of non-emergent exam results is so convenient for the doc on both ends, and benefits patient care, but there is not a widely adopted HIPAA compliant means for that communication.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    in reply to: HIPAA Nonsense #239315 Reply
    Avatar jacoavlu 
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    the thing is, if the employee is a highly compensated employee (HCE, compensation over $120000 in 2018) the employer actually may not have to provide any employer contributions to that participant. Because the non discrimination rules are in regards to non HCEs. A plan can discriminate against HCEs. Not many plans I’ve seen are written to exclude HCEs from a match, but they could.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    Avatar jacoavlu 
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    agree “what does your contract say?” is a fair question

    though, if some hours specifically excluded in contract, I would question the legality of this, assuming employer bills for those services and it is an assigned or expected duty of the employee

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    Avatar jacoavlu 
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    Spouse is an employed pediatrician working about 16 office hours weekly. It is a foundation model and she is paid on a production basis per wRVU. Employer says she is not eligible for 401(k) due to <1,000 hours. They count only “patient contact hours” towards eligibility

    Click to expand…

    so she signed a contract knowing the hours worked, the eligibility, and that you wouldnt qualify for the 401k and now you want to qualify for the 401k?

     

    either work more qualified hours, renegotiate your contract, or leave.

    Click to expand…

    this would only be the case if patient contact hours is defined in the contract and  work hours outside of clinic are specifically excluded. OP should clarify if this is the case.

    Or are you arguing that nursery round and call hours are clearly not patient contact hours?

    I assume the employer bills professional fees for OP spouse nursery rounds work. To then exclude this work from patient contact hours seems unfair

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    Avatar jacoavlu 
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    Joined: 03/01/2018

    Remember what happens with your total bond fund in this setting. The fund already holds bonds which have a rate and maturity years in the future. Falling yields means rising prices means share price of bond fund goes up. The yield is not the only contributor to the total return.

    In other words, allocating fixed income to a total bond fund remains an excellent option for most long term investors.

    BND was below $78 in the fall, now above $84.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    in reply to: Negative bond yield? #239105 Reply
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