Don't forget that your daughter will need to file Form 8949 along with Schedule D to report these stock sales. The "Code" column needs to indicate these were gifted shares. For the stock sold at a loss where FMV at time of gift applies, she should use code "B" and attach an explanation.

Remember that the holding period for gifted stock transfers with the gift! So if you held the stock for over a year before gifting it, and your daughter sells it immediately, she still gets long-term capital gains treatment. This is different from inherited stock where the basis gets stepped up but the holding period resets.

You might consider implementing a quarterly dividend strategy alongside a reasonable base salary. This is what I do - I pay myself a consistent reasonable base that covers my actual work (based on market rates for my position), then distribute profits as needed through distributions. Remember that while S-Corp distributions aren't subject to self-employment tax, they ARE subject to income tax. And the IRS is very clear that you can't take distributions without a reasonable salary first.

The uncertainty you're facing is totally understandable - that's a massive potential revenue jump! Here's what I'd recommend based on going through something similar: Start with a conservative approach for Q1. Set your salary based on a blend of last year's performance plus modest growth expectations - maybe bump from $65k to around $75-80k to start. This keeps your fixed commitment manageable while acknowledging some growth. Then implement quarterly reviews. As you hit Q2 and Q3, if the revenue is materializing as projected, you can either: 1. Increase your base salary mid-year (requires payroll adjustments) 2. Pay yourself W-2 bonuses quarterly to catch up 3. Take the excess as distributions (though remember you need that reasonable salary first) The IRS doesn't expect you to predict the future perfectly, but they do expect you to make reasonable adjustments as circumstances change. Document everything - why you set the initial salary, what factors you considered for increases, and how you determined what's "reasonable" for your role and industry. Most importantly, focus on what you'd need to pay someone else to do your job, not on percentages of profit. Your duties might not change much even if revenue quadruples, so your salary shouldn't necessarily scale directly with profits.

If you're stressed about your property taxes, check with your county about installment plans. Most places let you pay quarterly or monthly instead of one big bill. Also look into contesting your assessment if you think your home is overvalued.

Property tax is the oldest form of taxation in America dating back to colonial times. It's actually more equitable than most people think because it's a wealth tax rather than an income tax. Someone sitting on a million-dollar paid-off home should contribute more to local services than someone in a smaller home, even if their current incomes are similar. The problem is that it doesn't account for cash flow. Someone might be house-rich but cash-poor (like many elderly). That's why most states have programs for seniors, disabled folks, and those with lower incomes. The system isn't perfect, but there's logic behind it.

23 Has anyone here used TurboTax to handle the PSO health insurance exclusion? I'm wondering if it has a specific input for this or if I need to somehow manually adjust my income to account for it.

12 Great discussion here! As someone who went through this exact situation a few years ago, I wanted to add that it's also worth keeping detailed records of your health insurance premium payments throughout the year, even though they're being deducted directly from your pension. The IRS could potentially ask for documentation during an audit to verify that the excluded amount was actually used for qualifying health insurance or long-term care premiums. I keep copies of my insurance statements showing the monthly premium amounts, plus documentation from my pension administrator showing how much was deducted each month. Also, don't forget that this exclusion applies to both health insurance AND qualified long-term care insurance premiums, up to the combined $3,000 limit. Some retired officers miss the long-term care piece and could be excluding more if they have both types of coverage.

If you're interested in ETFs, look into tax-managed index funds or ETFs specifically designed for tax efficiency. Vanguard's VIG (dividend appreciation) might be worth checking out - it focuses on companies that grow their dividends rather than just high current yield, which can be more tax-efficient. VWELX (Wellington) is another one that tries to balance income with tax efficiency.

Given your high tax bracket ($275K income), I'd strongly recommend prioritizing tax-efficient growth over income-producing assets in taxable accounts. Here's what's worked for me in a similar situation: 1. **Broad market index ETFs with low dividend yields** - Something like VTI or ITOT focuses on total return rather than dividends, letting you control when you realize gains through strategic selling. 2. **Tax-loss harvesting** - This becomes incredibly valuable at your income level. You can harvest up to $3K in losses annually against ordinary income, plus carry forward any excess. 3. **Asset location strategy** - Keep your bond/REIT investments in tax-advantaged accounts (401k/IRA) and growth investments in taxable accounts. This maximizes the tax benefits of each account type. 4. **Consider Roth conversions** - If you have traditional IRA funds, strategic Roth conversions during lower income years could make sense long-term. For that $180K, I'd personally move most of it into a broad market ETF with minimal distributions (like VTI with ~1.3% dividend yield vs your savings account generating taxable interest). The qualified dividends will be taxed at capital gains rates (likely 15% for you) rather than your marginal rate of 32-35%. Don't completely avoid income - just be strategic about the type and timing.