All things STOCKS

[JFreak]

If that's all long term, looking at a $3-4K tax bill there..

Anyway to choose lots to reduce the 20K even more?

Thanks for making me look at this a little better. With some creative lots I think the best I can do is a cost basis of 230k current value 265k. Would be 30k in LTCG and 5k short term.. but I think I may have some STGC loss carryover from 2025 once I do my taxes (options - lol). Decisions, decisions..

Just curious - what are your thoughts on the margin loan?

 

[Jax_Vol]

Requesting advice - Purchasing a house and need 275k for a down payment, but trying to avoid a taxable event while also maximizing my $$ invested. Investment accounts as follows -
1.35 mil in Vanguard
500k in TSP (401k)

I think I have 2 realistic options -
1. Transfer my Vanguard account to Interactive Brokers and take out a margin loan at 4.65%
2. I can take a 100k loan from my TSP at 4.5% (not margin - money comes out of my balance/investments - must pay back in 5 years which isn't a problem). Then sell approximately 175k in Vanguard investments - if I do it right I can only pay LTCG for 20k in gains.

What would you guys do? Slightly higher risk - take the margin loan from Interactive Brokers and prioritize keeping the amount invested high? Or the more conservative option which reduces my amount invested?

And yes I realize this is truly a 1st world problem and one that I certainly never thought I'd be lucky enough to have.

By TSP are you referring to Thrift Savings Plan...you work for the Gov't?

What is your age range..how many more years do you plan to work?

Congrats on your savings!

 

[JFreak]

By TSP are you referring to Thrift Savings Plan...you work for the Gov't?

What is your age range..how many more years do you plan to work?

Congrats on your savings!

That's correct - TSP = Thrift Savings Plan. I'm still active duty - late 30's.. plan to do about 5 more years. May retire for good at that point but most likely I'll find a low stress job.

And thanks! Wish I would have started earlier and not made some dumb early mistakes.

 

[Jax_Vol]

That's correct - TSP = Thrift Savings Plan. I'm still active duty - late 30's.. plan to do about 5 more years. May retire for good at that point but most likely I'll find a low stress job.

And thanks! Wish I would have started earlier and not made some dumb early mistakes.

I would vote for your Option 2. I'm very aggressive with the Vanguard funds. Over the long haul, it smokes the TSP C .... Common Stocks.

Admittedly, the sophomore year of a presidency is historically the worst. So, TSP may win out in 2026.

But throw the bulk into funds like VITAX, VWUAX, VFIAX...and you are all set for life.

I'm not familiar with Interactive Brokage but can't imagine leaving low cost Vanguard.

Sounds like you're putting down 20%..? Assuming you checked for a VA Loan w/10% option?

Thank you for your service!

 

[Thunder Good-Oil]

Liquidity Access Lines are similar to margin loans by using securities as collateral. The interest rate on a LAL should be slightly lower than a margin loan, but they also have payment schedules instead of simply accruing interest and adding it to the loan balance. Margin loans are tax deductible for those that itemize, but only against investment income.

Calls on margin loans result in immediate (a day or two) liquidation of investments while LALs are more flexible and could be restructured.

 

[Thunder Good-Oil]

Margin loans (and most LALs) have variable interest rates. Personally I’d want a fixed rate loan on my primary home loan.

 

[JFreak]

All valid points TGO. Now if I only I could get a reasonable rate on an LAL without switching brokerages from Vanguard..

Running some calculations and taking a $275,000 margin loan on $1.3 million invested, the market would have to drop ~69% to get margin called. That feels reasonably safe to me.