unearned income

Post Reply New Topic

What forms of unearned income did you used to have or do you currently have?

What forms of side hustles have you done? In what ways was the work hard or bad? What kind of stories do you have?

I have dividends from stocks and some index fund dividends and money from oil wells in my trust fund. One year I bought a oil lease with my dad and we flipped for a nearly 400,000 dollars profit in unearned income in today's dollars. I also get Social Security Disability and SSI.

Social security.

Interest from Treasury Bills. Cashing out of my IRA, which is taxed as ordinary income.
I can avoid paying taxes by carefully adjusting my income to fall in the 12% tax bracket.
I can avoid paying 22% tax on income by taking losses on my investments to offset my income.
Everyone has winners and losers when they invest. If you are smart you will take advantage of the losers to save on taxes.

What about Required Minimum Distributions?
The government requires you to take out a certain amount of money out of your IRAs so they can tax you.
The wealthy can avoid the effect of RMDs by skillfully donating to Charity!

Exactly how to do that is a very complicated game, with rules that constantly change.

Tax advisors tell you to pay taxes now using something called the Roth Conversion.
I've decided to defer paying taxes as long as possible. If my investments continue to do well I'll just move to Hawaii and spend more money and pay more tax when it is due. If my investments tank I can continue to live modestly as I do now off social security payments.