TheBailey
soapy mop
No bio...
User ID: 3254
TheBailey
soapy mop
7mo ago
No, because the exchange probably didn't produce any on-chain transaction to handle my purchase orders; and even if they had, my purchase was probably batched in with thousands of others and didn't have any on-chain data indicating how much of the raw acquisition was attributable to me.
I bought some ethereum and bitcoin on Coinbase back when I was a teen (before either they or I kept good records), and still have it on the exchange now. I believe there is absolutely no shot of nailing down an estimate to even the year's granularity of the purchase date, so I can't just retroactively fudge the basis, either.
Is just donating it as-is to charity the cleanest way to wash my hands of this ambiguously-basis'd balance, or is that likely to somehow be even worse than just biting the bullet of a "$0.00 basis" plea?
Considering the possibility that no custodial exchange will keep my crypto unbreached all the way up through my death, just leaving it in there and banking on the free death basis step-up is a bad option, I'd think.
In which case, why not have the money somewhere where it can both generate wealth and be spent tax-free?
This is such a vague sentence I don't understand it. What, exactly, are you saying? (Both the shoebox strategy and my proposed strategy allow the money to continue growing, and the growth on that money to eventually be spent on medical things without incurring any capital gains or other taxes — but, unlike the shoebox strategy, my proposed strategy doesn't ruin your future self's ability to deduct those expenses when those expenses exceed 7.5% of your gross income, and my strategy additionally allows the gains to still be completely tax-free in the happy-albeit-unlikely event that you don't spend them all on medical expenses before death.)
Are you claiming that the shoebox strategy ever beats my proposed strategy for someone who doesn't anticipate HSA exhaustion before age 60? If so, please explain.
Keep in mind, the shoebox strategy (which is what I'm rebutting) only applies when someone has incurred a medical expense, doesn't particularly need reimbursement at the moment, but has the money already in their HSA such that they could take reimbursement.
TheBailey
soapy mop
8mo ago
Odds are very strong that I'll empty the thing before I die
Even if you expect to exhaust your HSA before you die, my proposed strategy still either beats or ties the “shoebox strategy” as long as you anticipate your HSA lasting through age 60, you're currently under 59, and you're not currently maxing out your Roth contributions.
If your older-than-60 self incurs medical expenses at least 7.5% of your gross income and itemizes, those expenses can be deducted—unless you used them as an excuse to make a tax-free HSA withdrawal. So if your future self is going to need the growth on today's existing HSA dollars to pay for medical expenses, you will still be better off burning any at-hand receipts to make HSA withdrawals today and coincidentally making Roth contributions of an equal amount. (And during years your future self is spending less than 7.5% of gross income on medical expenses, or fails to itemize, my proposed strategy does no worse than the “shoebox strategy”—you're still making 100% tax-free withdrawals from growth on money your past self had put into an HSA.)
would things change if receipt storage were completely trivial
Not much. Receipt storage is nearly trivial anyway. There's still a financial advantage to my strategy for anyone who doesn't fully exhaust their HSA by the time they die (as well as anyone who doesn't expect to fully exhaust their HSA by age 60, and isn't currently saturating every Roth contribution channel), I claim.
I submit receipts to the conpany that manages the HSA, and then those credits for withdrawal and ready for me whenever I want to use them
You're liable to show your receipts to the IRS in case of an audit, which could be up to 7 years after you get reimbursed / make the withdrawal. Are you sure you'll be using this HSA provider for that long? If you're burning your paper copies, you're vendor-locking yourself.
And, if you are delaying your withdrawals (so-called shoebox strategy, the topic at hand), are you sure your HSA provider keeps receipts for 7 years after the withdrawal date, not just 7 years after you submitted the receipt?
Roth IRA [income] limits are not that high. ~250K currently…
Dude, they're twice the median income for couples (119k vs 236k), and 2.5x the median income for singles (61k vs 150k).
unlike Roth you can get this money untaxed on the way in and on the way out.
I think you might be misunderstanding or misreading my question.
I'm not comparing making new Roth contributions to making new HSA contributions. I'm discussing the so-called “shoebox strategy” for how someone who has existing money in an HSA should treat existing HSA-eligible receipts that they don't have a burning need for reimbursement on—whether to hold on to the receipts without cashing them out to allow the money to grow in the HSA, vs other possible courses of action.
I've proposed a strategy that I think strictly beats the “shoebox strategy” in most cases, listed 2 edge cases where my proposed strategy doesn't beat it [namely: (a) someone who is not maxing out their Roth contributions and anticipates HSA exhaustion before age 60, and (b) someone who is already maxing out their Roth contributions and anticipates HSA exhaustion before death], and asked whether there are any other cases where my proposed strategy doesn't beat it.
After 60…significant amount of medical bills
In your example case, if those medical bills are so "significant" as to exceed 7.5% of your gross income, and your future self itemizes, my proposed strategy still beats the shoebox strategy, since while you still take the growth (on money your younger self did put into an HSA) out completely tax-free to pay the medical expenses, your future self doesn't thereby sacrifice the ability to get a that-year deduction for the medical expenses.
And even if they don't rise to that 7.5% threshold, or your future self doesn't bother to itemize, my proposed strategy leaves you no worse off than the shoebox strategy, since either way you're taking out completely tax-free growth (on money your younger self did put into an HSA) to pay for medical expenses.
I assume some of the people discussing this…
That's the thing, though—I have never once (before today) seen Roth accounts mentioned in the context of this.
Of the first page of Google results for shoebox hsa strategy, every article, including a YouTube video and the Reddit thread, fails to mention either my Roth-sweep strategy or the growth-death strategies as alternatives to the shoebox strategy; only the Bogleheads Forum thread even makes mention of my Roth-sweep strategy. (HowToMoney gets half credit for at least suggesting the idea of maxing out your Roth contributions before you put anything in your HSA; but they still don't even touch on my claim about how you could do a lot better than the shoebox strategy with existing HSA-eligible receipts.)
TheBailey
soapy mop
8mo ago
but not the Roth
That's only true before age 60. After age 60, you can pay any expenses tax-free out of the Roth—and do so without sacrificing the ability to deduct those expenses if you're above the 7.5% threshold!
Besides the case of “someone who anticipates HSA exhaustion before age 60”, how does the shoebox strategy help? At best, it seems to put the shoebox strategy on equal footing with the Roth-sweep strategy.
The so-called “Shoebox Strategy” for an HSA seems to me to be strictly wrong for most people:
- If you execute the shoebox strategy, your money will remain in the HSA to grow “probably, hopefully, mostly tax-free” and you will be responsible for storing the receipts for more years than you would otherwise.
- If you instead cash out the amount right away and then coincidentally make a Roth contribution of an equal amount, then your money will be growing “surely tax-free”, which is generally better, and you get to immediately start the 7-year timer to be allowed to throw away your receipts.
- If you are already maxing out every tax-advantaged channel, and so cannot implement strategy (2), you should at least consider just withdrawing it and making a straight-up investment in some tax-efficient growth asset, since you're probably in a position to take advantage of the “surely tax-free” growth of the death basis step-up.
The only case I can see where the “shoebox strategy” wins over (2) is if you anticipate HSA exhaustion before age 60, and the only case I can see where it wins over (3) is if you anticipate HSA exhaustion before death.
Am I missing anything else here?
⸻
EDIT: just to be clear, by “strictly wrong” I mean “strictly beat by another strategy”, not “strictly beat by the default 'stupid' strategy of making the withdrawal immediately and keeping the proceeds in a 0% interest checking account or taxable savings account”.
TheBailey
soapy mop
9mo ago
why people have emergency funds[?] Why not just spend your regular savings[?]
I don't understand your confusion. What's the difference between those categories, in your mind?
Why not just…use a line of credit and slowly pay it off, spreading the cost out over a longer period of time? Or if you need a new car, why not finance it?
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Any car with a market value high enough that a bank would consider financing it is going to be depreciating at a rate I'm not comfortable being liable for.
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There will be interest, at rates likely higher than Ultrashort Treasury yields.
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If I want said interest payments to be less than ~11%, the financer will force me to purchase Collision coverage (and I remind you, avoiding purchasing this was the entire point of opening this thread in the first place.)
TheBailey
soapy mop
9mo ago
Losing your car to an uninsured hooligan sucks a lot, disrupts your whole life, and happens once in a blue moon. It's happened once so far to me, and has happened multiple times to almost every responsible adult I know. Even if there must always be some "house edge", I'm wanting UMPD coverage just to take the edge off the impact to my life.
What I resent is paying the additional premiums for full Collision coverage which also "insures" me against my own irresponsibility, at a premium based on the responsibility of my demographic peers. Even if there were 0 house edge, that's still a bad bet for me because of the massive behavioral component.
He's being forced to insure the value of his own car
No! That is not the case. Per my original post, I'm only being forced to buy Collision coverage if I buy UMPD coverage in Alabama:
I've contacted 5+ insurers trying to purchase an auto insurance package that includes UMPD without Collision, and they all alleged that Alabama bans the sale of UMPD-without-Collision.
Every insurance company is happy to sell me a plan that only includes Liability and (at my option) UM/UIM and Medical; and several reps commented they'd be happy to sell me UMPD-without-Collision if I were to move out of Alabama.
(presumably) he is prepared to replace it out of pocket in the event of an accident
That's exactly it. I'm happy to eat rice and beans for 6 months to rebuild the emergency fund if I break my car due to my own stupidity (which is the risk that Collision coverage defrays), but I'll be damned to do it again because local deadbeat Micahal Rayshone Taylor was driving effectively uninsured because his worthless mother lied to the insurance company about who regularly drives the car (which is the risk that UMPD coverage defrays).
In the latter case, I'm not a squillionare yet so reducing the variance is still worth the middleman's fee; but every insurer claims that Alabama law forces them to bundle these coverages together. But I couldn't find such a law (and obviously the insurance reps don't know shit), so I'm trying to figure out what exactly I need to ask my Alabama State Legislature rep to do.
As a responsible, frugal, young, male driver witnessing the Decline of America, I would be utterly fucked without UMPD coverage, which is extremely valuable and necessary so I don't have to empty my emergency fund every time someone's juvenile delinquent runs a red light; but Collision and Comprehensive are just plain negative-value since their premiums have to be high enough to include the amortized cost of said delinquent replacing his own car also. (Before you ask: Liability is its own thing; I don't mind paying for that.)
I've contacted 5+ insurers trying to purchase an auto insurance package that includes UMPD without Collision, and they all alleged that Alabama bans the sale of UMPD-without-Collision. Most also claimed that Alabama is nearly unique in this.
However, I couldn't find any such law on the books, or any historic arguments/rationale behind the (alleged) Alabama status quo.
What the fuck am I missing? And what due diligence should I do before I start trying to get my state rep to fix this shit?
EDIT: to be clear, my vehicle is not financed; I am the unencumbered owner. Insurers are happy to sell me an Auto insurance plan that has neither UMPD nor Collision ("Liability-only", or Liability+UMBI if I want my hospital OOP covered), which would be significantly cheaper. But having such a plan screwed me over last time.
And if it were just 1 insurance company that said "uhh it's state law or whatever", I'd easily write it off as just a lazy, poorly-trained T1 rep lying to get the customer looking for something they don't sell off the phone (and blaming "the government" has a nicer ring than blaming "company policy" or "our underwriters" anyway.)
In fact, that's what I did assume, for the first few companies I called... but by the time I got to the sixth, and they all gave the same answer in perfectly clear terms (*sans the actual citation), and several of the reps elaborated that Alabama was somehow special (USAA rep said there's only "one or two states where that has been the case"), I had to concede that they might not just be bullshitting me.
UPDATE: just got this nonsensical reply from the Alabama Department of Insurance Consumer Affairs division:
> Is there any law or regulation in Alabama that forbids insurers from offering UMPD coverage outside of a Collision policy? If so, what is the citation?
>
> I ask because I have tried to buy UMPD coverage from 6 different insurers so far (USAA, Progressive, GEICO, State Farm, Liberty Mutual, and AAA), and every one has claimed that Alabama law forbids them from offering UMPD outside of a full Collision policy. Most of them additionally claimed that Alabama was an extremely strange case, and that they are allowed to sell UMPD without full Collision just about everywhere else in the country.Alabama law does not explicitly forbid insurers from offering Uninsured Motorist Property Damage (UMPD) coverage outside of a Collision policy. However, the law does require insurers to offer [UMBI] coverage as part of any auto liability policy, which includes Collision coverage. This means that while insurers can offer UMPD coverage separately, it must be part of the Collision policy, which is a type of liability coverage that covers damages to your own vehicle.
Current draft of a response:
Thank you for the reply!
I don't quite understand your reply, though; it seems to contradict itself:
> "Alabama law does not explicitly forbid insurers from offering Uninsured Motorist Property Damage (UMPD) coverage outside of a Collision policy."
> "while insurers can offer UMPD coverage separately, it must be part of the Collision policy, which is a type of liability coverage that covers damages to your own vehicle."Could you confirm what specific law or regulation is behind the second point there?
Why, exactly, is it illegal for Alabama auto insurers to sell me UMPD (which I want) if I don't also buy a Collision policy (which I do not want)?
TheBailey
soapy mop
9mo ago
I want to give the same "quiz" to close friends and see their response/reaction.
Be sure to be clear, not handwavey, about whether you're posing the question in terms of still-mainly-fictional "gene editing", or here-and-now "embryo selection".
- "Improving your bloodline" (in the abstract) is one thing.
- Improving your bloodline by siring a bunch of children and killing the "unfit" ones is another thing.
- Some would say improving your bloodline by producing a bunch of embryos and gestating only the "best" ones is a third thing still.
The "shiri's scissors" around prenatal infanticide could distort your inquiry on eugenics unless you take measures to address those distortions.
Why is so-called "Open Banking" a good thing for payments?
Almost all discussions of [Open Banking] center on “data”, but it’s actually a fight about payments, and whether banks have a right to monopolize and charge for all economic activity their users engage in, irrespective of whether the bank operates the payment method.
Under the (non-Open Banking) status quo: If the merchant and I trust each other, I pay with check and we cut out the middleman; otherwise, I break out a bankcard, the merchant gives me a 3% discount, and I pay my bank between a third and negative two-thirds of that amount as an escrow fee. This seems like a perfectly cromulent setup, and it's not at all clear how "Open Banking" provides any compelling advantages on either side of that fork.
Plaid was asked [by Chase] for $300 million [in exchange for API-based direct debit access to Chase's customers]...
For customer-to-merchant transactions, "Open Banking" just seems to combine
- All the downsides of plastic (potentially unlimited interchange fees, as Chase has reminded us)
- All the downsides of Check/eCheck (no consumer protections for fraudulent transactions; permanent direct debit account numbers are revealed to a party that is not the customer, the customer's bank, or the customer's bank's contractors)
- Further additional downsides (no precedent for competitive "rewards programs" to renegotiate the effective interchange fee back down; normalization of the use of sketchy as hell 3rd-party intermediaries like Plaid and Stripe, which all actually just screen-scrape most banks anyway.)
For customer-to-customer transactions, if the banks license out access to a mostly-standardized set of APIs to select partners like Venmo, Zelle, and Plaid, that doesn't seem compellingly different from the banks licensing out access to a proprietary set of APIs to select partners like Venmo, Zelle, and Plaid.
For customer-to-self-at-a-different-bank transactions, supposedly Gen Z is so mentally fried that a 3-day ACH transfer time will meaningfully impact conversion rates for new brokerage account sign-ups as they get bored/distracted and wander off; getting around that is the only remotely compelling payment use-case I can see in McKenzie's article.
What am I missing here?
I have a friend who believes in the power of astrological interpretation, and does so because of extensive personal experience as a practitioner and (at least allegedly) from alternate history / alternate cosmology reasons. This person is, obviously, not part of the Rationalist / Neo-Enlightenment movement; but does at least seem to me to be perfectly intelligent (this person, along with their spouse (who I suspect is humoring them as I've never heard a word positive or negative on the spouse) have homeschooled their children to great effect, including the eldest well on track to get into college early by good test scores).
The astrologer was not offended at my suggestion that the Barnum Effect could be clouding their mind more than they realize, and actually asked what it would take to resolve my skepticism. We are now mildly adversarial co-experimentors, but unfortunately neither of us is credentialed in statistics or sociology. (I have an undergraduate math minor including 200-level Statistics, but that's about it.)
Our current experiment design is: I'll round up around 50-100 people not known to the astrologer; then the astrologer will do a “reading” (directed to look for any amount of high-confidence information on any topic about the subject's life between birth and up to 1 year in the future) on the “birth chart” of each (anonymized) subject; then the astrologer will work another experimenter to break each of these “readings” up into a set of atomic, itemized claims; finally, I'll give each subject a shuffled list of their own claims mixed in with the claims from 2 random strangers' “readings” (1 of which is constrained to be from a stranger who is within 15% of the subject's own age, 1 of which is constrained to be from a stranger who is not to be within 15% of the subject's own age) and ask them to rank each on a Likert scale.
If there's no clear separations between any of the rating groups, I'll offer my condolences. If there's a clear separation between the “own” ratings and “control non-cohort” ratings but not “own” and “control cohort”, I'll offer an "I told you so". And if there's a clear separation between the “own” ratings and “control cohort” ratings, I'll start entering counterfactual universes.
Is there anything else we should consider before doing this? We can get help from a statistician after the hard part's done, but if our statistician says "goddamnit, you should go back in time and make this adjustment to the way you ran the experiment" I'm trying to receive that message now.
EDIT: my friend believes that astrology predicts much, much more than the lives of individuals, so I'd considered just suggesting they open a Polymarket account (pre-registering the specific account ID to avoid selection cheese) and start killing it on there for 2 years. But, obviously, even if that might raise eyebrows, it could never rule out the possibility that my friend is a perfectly mundane “Superforecaster” simply laundering their abilities through astrological charts, because this astrologer claims there is a large skill-based component to astrological interpretation.
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