Is there a relative tax advantage to waiting to sell ESPP shares? AFAIK, an ESPP discount counts as earned income in the same year, and LTCG tax advantages would only apply to growth, which would be the case for holding any other stock over that period.
If you sell ESPP without waiting a year, that’s a disqualifying disposition. The difference between purchase price and sale price is taxed as ordinary income. If you hold it for a year after the sale (and 2 years after the grant), that’s a qualifying disposition, and you pay the lower of the discount or the profit from the sale price as ordinary income and the rest of the gains as LTCG.
If the stock is generally not going down and your company does the typical “you pay the lower of the first and last day price of the offering period” thing (a look-back provision), holding the stock is the only way to get preferential tax treatment on that part of the benefit. Of course this isn’t a sure thing; you do risk the stock going down before you finally sell.
It seems your comment is characterizing the OP as a complaint mostly in search of sympathy. That doesn’t strike me to be the purpose of the post at all.
The OP is using him or herself as an example of a real behavior in response to real economic incentives, no matter how unsympathetic you find their circumstance. The fact that this situation discourages moves that most other markets encourage is a worthwhile point to bring up. Among other things, it reduces supply which has a profound effect on new buyers.
Incentives influence actions much more than personal criticism does. The OP’s relatively fortunate outcome does not mean that they don’t have something relevant to share. In contrast, targeting them with pejorative shaming is totally unhelpful.
They bought their house for something like $600k and now it's probably worth $1.3M. They pay 20% capital gains taxes on $200k, so $40k, and they lose 3% if they use a broker. That's another $40k, so $80k total. Let's make it an even $100k. So they have $1.2M to throw around after the sale. Subtract $500k to pay off the existing mortgage, that's $700k free and clear.
$700k is a hell of a down-payment, even in the ritziest areas of Marin. They can buy whatever they want.
That's decidedly untrue. In many markets you can make the case that conservative assumptions result in a cheaper buy option. However, the Bay Area in particular throws that calculus in reverse for many neighborhoods and property types.
Your argument seems to rely on the premise that buying is monteraily cheaper in the long run as long as you're willing to put in nominal sweat equity and risk. And that labor buys you some sort of citizenship that money, for the same amount of tenure, does not. The Bay Area market does not reward that puritanical ethic.
Can you explain how buying in Bay Area can be more expensive than renting? The only reason I can think of is that there's an expectation that the property will appreciate greatly in the near term and can be sold for a profit, but eventually either the rents will raise to be above the buy option (in which case congrats to those who bought, well done) or someone will be left holding the bag.
So yes, I'll concede that in the temporary situation that buy is more expensive than rent, and there's a market correction coming, it's savvy to rent, but those aren't the folks that cry "Gentrification!".
And yes, owning a deed to your place or, even better, owning a business in the neighborhood, counts for more than just "having been there".
I did the same thing to help me get my head around it. For anyone else finding it difficult to imagine the probabilities in Monty Hall intuitively, consider replacing the 3 doors with 100 doors. After you choose the first door, the host opens 98 of the remaining 99 doors. That generalization, at least for me, helps to show that the problem can be reduced to the choice of 1 door vs all unchosen doors.
I think this thought experiment assumes the astronaut is spinning around an axis orthogonal to their belly. From the cartwheeling astronaut's perspective, the other one is also cartwheeling in their own plane.
Yeah, the choice of a non-inertial reference frame for this example is a little confusing to me too. I also haven't been able to find an independent mention of the spinning astronaut experiment.
This is a really nice explanation. I think it's helpful to go a little deeper and clarify that the virus itself isn't performing any electrical activity. Rather, the virus transfects the neural cells with a channel protein [0] that opens up in response to light. By opening the channel protein, the cell allows an influx of ions, which starts the electrical activity of the neuron in a very similar way to how it is 'naturally' stimulated. Furthermore, viral transfection is one of a few methods to expresses this protein in the animal. A population of mice that express it can be bred and maintained, with no need to transfect each one.
20% of appreciation for 10% of assets [0]. Seems like decent leverage on your risk.
From the point of view of a prospective homebuyer, at first this seems attractive as an avenue toward mortgage reduction. However, as you point out, it's hard to identify where this service adds any value to the asset. I fear that it ultimately results in another large pool of money pumping up the demand side at the expense of new buyers.
>It also pains me to see such luxury spent on the elderly. While you may have a personal attachment to them, the rest of society would do much better with that money spent to educate and help the new generations.
I don't think we have any reason to believe that this is an unearned luxury lavished on a lucky elderly couple. It appears more likely that this is their own money, saved and invested over their lifetime, and their's to spend how they wish. Furthermore, advanced age is no reason to cast someone off to a bland waiting room. It's not healthy for a society to consider somebody's value limited to their future contribution potential. I'm happy to contribute economically to present-day's elderly folks, not only for my own attachment to someone, but for the social contract that I, too, will be old, and I doubt I'll suddenly just want to stand in the corner.
