The news these days is dreary, so I will try to distract our readers. Yesterday, unannounced and unexplained, there arrived in our mailbox a nice-looking envelope from the IRS, showing the right colors through the window. Oh, Happy Days, indeed. The check says it's a refund and that there's interest included. Other than that, we know nothing but we are $4.10 to the good. I hear that Schwab is thinking about offering fractional shares...or I could seek some free counsel here. Such a high-class problem!
Comments
Since these will always satisfy first-class postage requirements even if postal rates increase, they may be viewed as an inflation hedge. In fact, the price of first class mail is going up 5-cents in January. So you’re guaranteed to net a quick 10% gain on these babies almost right out of the box.
Alternative Plan: If by chance you intended to say $41 instead of $4.10 (understandable error), than I’d suggest picking up a bottle of Aberfeldy single malt scotch and stashing it away. The new 25% tariff on single malt went into effect yesterday. However, in Michigan the price shouldn’t jump until November 2nd, which is the date the state, which sets spirit prices, normally does an across-the-board reset. Should you be able to afford the latter, your gain would be 25% compared to only 10% on the stamps. As is often the case, those with higher sums to invest stand to earn higher rates of return.
(Not intended to constitute investment advice)
Derf
. Anything plus is better than minus
While I’m fortunate never to have undergone an audit, my state refund was held up last year “pending review”. The several hundred dollars owed me was delayed about 6 months.
What I suspect happened: I use ultra-short TRBUX for non-sheltered routine checking. That results in 2 or 3 “purchases” or “sales” of shares every month. Writing a check, for example, constitutes a share “sale”. In the past I’ve added up my total gains from this fund (erring on the high side) and reported them as “interest earned.” Last year however, I allowed Turbo-Tax to access my account at TRP. It churned out 3-4 pages of “buys” and “sells” (about 40-50) for TRBUX. The fund pegs a $5 NAV, but that fluctuates by 2-3 cents up/down over a year. So instead of reporting the pittance as “interest”, I enclosed the 3-4 pages of “buys” and “sells” with returns. Feds received a check and seem satisfied, but the state held up my refund - likely to “review” each of those buys / sells.
I assure you the total interest earned over the year on that fund wouldn’t buy a decent meal for whomever the state paid to perform the review. Yes - it was somewhat more than Ben’s $4.10 refund - but we’re not talking big money here. I realize that strictly speaking those buys and sells need to be reported as short-term capital gains/losses. On the other hand, as long as the government gets the money they deserve (in my case a bit extra), what difference does it make?