Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[1101011]

Little help with this financial decision...

As a white hair, I have to take a Required Minimum Distribution from my IRA. It consists 100% TSLA. (My regular account is only 65% Tesla.)
Retired so long, I receive no wages, mostly get by with a paltry social security check. House and Teslas paid for.

Will have to sell TSLA shares to make this transaction, netting cash after Fed withholding, which I would then plunk into my regular account, and add to my Tesla shares there, feeling that the SP will continue this year and beyond.

The question which I put to the more academic accountant types:
1. Sell now, move the cash, buy the shares in the regular account, get the lower basis and then gains there.
2. Wait until the last minute, accumulating the gains in the IRA account, buying in the regular account at a higher basis toward the year end.

Thoughts?

 

[jhm]

This is what Tesla looks for in a new hire.

 

[EVMeister]

Anybody know if they can put a solar roof on this? We’re gonna need a new roof in the next few years. But we’re holding out (I’m patching leaks) for a solar glass roof.
View attachment 624173 View attachment 624172

What is concealed by the heart? Is it because you're standing naked on the roof?

 

[Mokuzai]

Anybody know if they can put a solar roof on this? We’re gonna need a new roof in the next few years. But we’re holding out (I’m patching leaks) for a solar glass roof.
View attachment 624173 View attachment 624172

It looks like it's eligible for a solar roof...unless you have an HOA then it's up to them.

 

[AudubonB]

Little help with this financial decision...

As a white hair, I have to take a Required Minimum Distribution from my IRA. It consists 100% TSLA. (My regular account is only 65% Tesla.)
Retired so long, I receive no wages, mostly get by with a paltry social security check. House and Teslas paid for.

Will have to sell TSLA shares to make this transaction, netting cash after Fed withholding, which I would then plunk into my regular account, and add to my Tesla shares there, feeling that the SP will continue this year and beyond.

The question which I put to the more academic accountant types:
1. Sell now, move the cash, buy the shares in the regular account, get the lower basis and then gains there.
2. Wait until the last minute, accumulating the gains in the IRA account, buying in the regular account at a higher basis toward the year end.

Thoughts?

You can transfer the shares directly into that taxable account without incurring any Sell / Buy trading charges, let alone exposing yourself to fluctuations in the market price. But you get the very much desired HIGHER cost basis in the new account, not lower, as you wrote, unless you hit today's high print of $744.....

***On Edit: I know you can do the above if you have the IRA and a taxable account in the same brokerage house. I do not know about transferring it out of house, as it were.***

You have to transfer the IRS's actuarially-determined absolute $ value number of shares, which it appears you understand. You do have to make your own determination of whether TSLA is more likely to rise or fall over the course of the year, and whether to hit it today, on May 11 or Aug 2 or December 31; whatever # of shares reaches that $ number is, of course, what you'll need to transfer. AS A GENERAL RULE it is better to be exposed to the lower tax rate of LT gains than otherwise; I'll go no further on dispensing tax advice, however.

But another super-important point - and I don't yet know the answer - is whether the IRA Distribution Mandate is once again put in abeyance as it was for 2020. I know I would hold off making any such distribution transfer until that surprise benefit is made clear.

 

[mltv]

OT: is this a hint of Apple iCar Foxconn to make electric SUVs with Byton

 

[mongo]

Little help with this financial decision...

As a white hair, I have to take a Required Minimum Distribution from my IRA. It consists 100% TSLA. (My regular account is only 65% Tesla.)
Retired so long, I receive no wages, mostly get by with a paltry social security check. House and Teslas paid for.

Will have to sell TSLA shares to make this transaction, netting cash after Fed withholding, which I would then plunk into my regular account, and add to my Tesla shares there, feeling that the SP will continue this year and beyond.

The question which I put to the more academic accountant types:
1. Sell now, move the cash, buy the shares in the regular account, get the lower basis and then gains there.
2. Wait until the last minute, accumulating the gains in the IRA account, buying in the regular account at a higher basis toward the year end.

Thoughts?

You may also have the ability to put excess RMD into a Roth IRA to allow it to grow tax free from that point onward. Gains have a 5 year withdrawal penalty period, but the contributed cash does not. Roth IRA Withdrawal Rules

 

[Nocturnal]

OT: is this a hint of Apple iCar Foxconn to make electric SUVs with Byton

If so then I'm even less worried about that competition. 3 Chinese companies plus Apple? How could they possibly generate enough margins on their cars to make it worthwhile?

 

[M|S|M MYP]

How soon before $1T market cap?

 

[StealthP3D]

I would say, don’t look back and think “I could have...”. It’s pointless, you are going to feel bad about your 5x gain because you realize you could have made more. Just think about it as “your decision was correct given how you felt about risk/reward at the time...”

While I am a big believer in an investor not beating themselves up over their incorrect decisions, that does not justify looking back and saying they were the correct decision at the time.

First principles thinking requires the investor to admit that incorrect actions were incorrect actions. Only this way will the investor learn WHY they were incorrect actions. Rationalizing that the decision was "correct" because that is how the investor saw it at the time does not improve the understanding of how to invest more successfully.

It's OK to make mistakes but they shouldn't be called the "correct decision" at the time. I believe in "manning up" to your mistakes and trying not to repeat them. Once you realize you can't time the market with any consistency, you will make far fewer mistakes.

 

[Joe F]

You can transfer the shares directly into that taxable account without incurring any Sell / Buy trading charges, let alone exposing yourself to fluctuations in the market price. But you get the very much desired HIGHER cost basis in the new account, not lower, as you wrote, unless you hit today's high print of $744.....

***On Edit: I know you can do the above if you have the IRA and a taxable account in the same brokerage house. I do not know about transferring it out of house, as it were.***

You have to transfer the IRS's actuarially-determined absolute $ value number of shares, which it appears you understand. You do have to make your own determination of whether TSLA is more likely to rise or fall over the course of the year, and whether to hit it today, on May 11 or Aug 2 or December 31; whatever # of shares reaches that $ number is, of course, what you'll need to transfer. AS A GENERAL RULE it is better to be exposed to the lower tax rate of LT gains than otherwise; I'll go no further on dispensing tax advice, however.

But another super-important point - and I don't yet know the answer - is whether the IRA Distribution Mandate is once again put in abeyance as it was for 2020. I know I would hold off making any such distribution transfer until that surprise benefit is made clear.

Cost basis on transferred shares are retained, at least on a ROTH conversion. Assuming it would be the same to a taxable acct (I have not looked Into it however.

Also, LT gains are not in play given this is an IRA (assuming you mean LT gains on the withdrawn IRA shares.) The shares value is treated as regular income.

This however is from my pouring through the IRA guidelines. I am not an expert, nor have I consulted a tax professional.

EDIT: What @mongo said is a better approach than moving to a taxable account.

 

[Mo City]

How soon before $1T market cap?

View attachment 624199

Using this metric, FB is already in the rear-view mirror with some breathing room.

 

[lafrisbee]

When is Buffet gonna have to show he bought TSLA?

 

[SOULPEDL]

Anybody know if they can put a solar roof on this? We’re gonna need a new roof in the next few years. But we’re holding out (I’m patching leaks) for a solar glass roof.
View attachment 624173 View attachment 624172

Why not? Maybe more edges trimmed for a surcharge, but just guessing. I believe it's only $100 to find out for sure.

Won't it be nice to see house/roof building designs becoming more solar/energy minded soon? Who knows, maybe a curved roof is cool for a more consistent charging rate, and gives a sail look to the southside (up here). Some windows for balanced energy use. That's a different looking home entirely. Excited about the future!!!

 

[Pezpunk]

While I am a big believer in an investor not beating themselves up over their incorrect decisions, that does not justify looking back and saying they were the correct decision at the time.

First principles thinking requires the investor to admit that incorrect actions were incorrect actions. Only this way will the investor learn WHY they were incorrect actions. Rationalizing that the decision was "correct" because that is how the investor saw it at the time does not improve the understanding of how to invest more successfully.

depends on what you mean by "correct" and "incorrect". for example, let's say you are forced to make a bet on a die roll. It's a six sided die, and you have to bet whether it will roll a 1 or not. So you do a bunch of research and math and consult with experts and eventually come to the conclusion that most likely, it will not roll a 1, and you bet accordingly.

The die rolls a one.

Did you make the correct decision? By one measure -- the actual outcome -- you were wrong. But you still made the right choice in the moment given the information available to you.

 

[StealthP3D]

depends on what you mean by "correct" and "incorrect". for example, let's say you are forced to make a bet on a die roll. It's a six sided die, and you have to bet whether it will roll a 1 or not. So you do a bunch of research and math and consult with experts and eventually come to the conclusion that most likely, it will not roll a 1, and you bet accordingly.

The die rolls a one.

Did you make the correct decision? By one measure -- the actual outcome -- you were wrong. But you still made the right choice in the moment given the information available to you.

As an investor, I've never been "forced" to make any bets.

If you read the last part of my post you will notice it says; "Once you realize you can't time the market with any consistency, you will make far fewer mistakes."

 

[generalenthu]

As an investor, I've never been "forced" to make any bets.

If you read the last part of my post you will notice it says; "Once you realize you can't time the market with any consistency, you will make far fewer mistakes."

Not doing anything is a bet on cash. Everything is a bet.

 

[SOULPEDL]

depends on what you mean by "correct" and "incorrect". for example, let's say you are forced to make a bet on a die roll. It's a six sided die, and you have to bet whether it will roll a 1 or not. So you do a bunch of research and math and consult with experts and eventually come to the conclusion that most likely, it will not roll a 1, and you bet accordingly.

The die rolls a one.

Did you make the correct decision? By one measure -- the actual outcome -- you were wrong. But you still made the right choice in the moment given the information available to you.

OK, now I'm totally ready for a dip so I can make my mistake become correct again!

 

[ZeApelido]

After your pessimistic share price estimates in 2020, let's take a stab at 2021.

Peak share price reached in 2021.

What peak share price will TSLA reach in 2021? - Guest on StrawPoll

And why do you think so?

I voted for $1000. I think earnings growth alone will bring it above $900, but FSD improvements will begin a new mode of valuation and put it over $1000 by year's end.

If you look at the results, the change in viewpoint is astounding compared to 6 months ago.

Before share split, most investors thought it would take until mid 2021 for share price to reach $400 ($2000 pre-split).

Now most investors think the stock will reach $1200 or even $1500 ($6000 - $7500 pre-split) this year!!!!

Sentiment on this board for this year has gone 3x higher.

Now of course most of that change is simply due to share price going higher.

But what else has changed so much in your minds that a share price of $1200+ will happen this year?

 

[Big Time]

When is Buffet gonna have to show he bought TSLA?

I also would like to know this
+1!