3 ms·

Just for a little context, that 40k would be tax free, since the first 40k of cap gains are untaxed. So you'd actually be netting out more than the median Ameri

Just for a little context, that 40k would be tax free, since the first 40k of cap gains are untaxed. So you'd actually be netting out more than the median American. So, move anywhere where median Americans live, buy a reasonably sized house, and you'll be cruising. I have family that recently bought a huge house bordering on mansion sized in Salt Lake City for under 500k. So if you have $2.5M in the bank and you buy that kind of house with cash, you have a very livable nest egg that should allow you to cruise through the rest of your life not just in acceptable conditions, but in abundance.

SilasX 8y ago
>Just for a little context, that 40k would be tax free, since the first 40k of cap gains are untaxed. Wait, what? How do you figure? First, the $40k referred to is interest on the $2 million, not capital gains. Second, all interest over a trivial amount is taxed as ordinary income. (If it comes from a mutual fund with stock ownership, it could have qualified dividends taxed at a lower rate, but it's still taxed.) Anyway, I agree it can get you a comfortable life, but you're definitely paying taxes on it.
- asdfasgasdgasdg 8y ago
  Generally you'd source some of your "income" from capital gains, and some from dividends. You wouldn't use interest at all. The first 24k of dividends would fall under the standard deduction, assuming you're married. Assuming your "income" is coming half from cap gains and half from dividends, that yields a 0% tax rate (20k dividends @0% and 20k cap gains @0%). And this is of course assuming nothing comes from retirement accounts. In that case, the situation is even more advantageous.
  - sys_64738 8y ago
    The 2019 Standard Deduction for married filing jointly is $24.4k.
    - asdfasgasdgasdg 8y ago
      I'm aware ("the first 24k of dividends would fall under the standard deduction" -- from my post). I think you're trying to correct something in my comment, but since I already mentioned the fact you posted, I think you must have misunderstood something, or I must have been unclear. Could you make it more obvious what your objection is?
      - sys_64738 8y ago
        I'm not objecting to anything. Simply mentioning that the std deduction is 400$ more for 2019. Peace.

SilasX 8y ago

>Just for a little context, that 40k would be tax free, since the first 40k of cap gains are untaxed. Wait, what? How do you figure? First, the $40k referred to is interest on the $2 million, not capital gains. Second, all interest over a trivial amount is taxed as ordinary income. (If it comes from a mutual fund with stock ownership, it could have qualified dividends taxed at a lower rate, but it's still taxed.) Anyway, I agree it can get you a comfortable life, but you're definitely paying taxes on it.

asdfasgasdgasdg 8y ago
Generally you'd source some of your "income" from capital gains, and some from dividends. You wouldn't use interest at all. The first 24k of dividends would fall under the standard deduction, assuming you're married. Assuming your "income" is coming half from cap gains and half from dividends, that yields a 0% tax rate (20k dividends @0% and 20k cap gains @0%). And this is of course assuming nothing comes from retirement accounts. In that case, the situation is even more advantageous.
- sys_64738 8y ago
  The 2019 Standard Deduction for married filing jointly is $24.4k.
  - asdfasgasdgasdg 8y ago
    I'm aware ("the first 24k of dividends would fall under the standard deduction" -- from my post). I think you're trying to correct something in my comment, but since I already mentioned the fact you posted, I think you must have misunderstood something, or I must have been unclear. Could you make it more obvious what your objection is?
    - sys_64738 8y ago
      I'm not objecting to anything. Simply mentioning that the std deduction is 400$ more for 2019. Peace.