Solar roof vs TSLA stock

Tax credit......
Proof positive that solar still has a 'promising future' - otherwise?

It would be a tax BURDEN.

 

I'm still a working stiff, and only a partial burden to society as a military retiree.

'Per Diem' is what I'm concentrating on......

 

I disagree on the 'burden to society' part. Let any of these flabby sociopath hypocrites naysaying VA bennies, go thru boot camp in any of the services, as that's what they'd have to do (or their sons / daughters) if you or I didn't go in their place. Least they can do is look after our health problems in geezer years -- as that's the only 'burden' I'm declaring

And you as a retiree: this non-retiree envies you the ability to fly MAC anywhere those C5s and C17s go. Bit of a wait sometimes... but free airfare's a pretty good deal for us mils and exes.

When I flew RMS --> DOV on leave one summer... could get a little box lunch for your flight for $10. Bottle of water (remember when you could do that on all flights?) and were set for the 9-hrs atop the tail in a webbing seat, able to see the cargo floor thru a grate, ~20 ft below

 

If you move to Ontario Canada the square footage of your solar system gets added to the square footage of your home for tax assessment purposes. How's that for incentive?

 

That same 65k stock today would be worth well over 105k. Is that accounted for in your analysis? That's about 30k a year......

 

We have $45,000. In a solar T bill returning 4% per annum less 25% tax = $1,350.
But we’re still paying our electric bill

 

I'm having some trouble following that, feel like a step might be missing.

Did you mean you had capital gains of 30% (as in your invested basis was around $217k and you realized $282k at the time of sale)?

In which case, that $65k of cap gain, assuming it was all held more than a year, would have all fallen in the 0% federal cap gains bracket if you filed as married filing jointly. If individual, or married filing separately, the last $16,650 of it would have been in the 15% bracket, incurring $2,497.50 of tax. Filed as head-of-household, just the last $250 of the $65k would have poked into the 15% bracket, incurring $37.50 in tax.

Those are just federal numbers (the 2025 ones), as I'm not well-versed in your state or local income tax rates, if any.

Or were you saying your total tax rate (federal+state+local) on the cap gain came to 30%, and the tax was $65k, meaning the cap gain was $217k?

 

I'm still lost. If $65k was the stock sale income, then the capital gain was ($65k minus what you had spent to buy the stock). And the capital-gains tax would have been a percentage of that.

I assume the "30% capital gains tax" figure was arrived at by adding the federal and state (and/or local) rates, given that the federal cap gains rate never goes above 20% and that bracket starts in the mid-six-figures.

Unless the shares had been held for a year or less, in which case the gains would have been taxed at the normal income rates.

I'm not a tax attorney, but if you ended up paying $19,500 in tax on sale proceeds of $65k, I would be strongly tempted to review that to see if an amended return with corrected math could get you a hefty refund.

I'd want to scrutinize two things:

• If the sale proceeds were $65k, what was the actual capital gain? The answer isn't $65k, unless you got the stock for free.
• Once the actual capital gain is pinned down, what's the effective tax rate on it? The way the brackets work, it's not like crossing by one dollar into the 15% bracket means you suddenly pay 15% on all of it. You pay $0.15 on the one dollar that wasn't in the 0% bracket. So the effective tax in "the 15% bracket" is a lot less than 15% of the whole gain.

 

Worthy or not our retirements and other bennies remain at best, an underfunded liability.
SS used to be funded, although for years the 'usual suspects' lied to our faces and told us it wasn't a 'tax.'

Then? They raided the lockbox and left a bunch of worthless I.O.U.s.

Now?
They're LYING TO US AGAIN, insisting that SS isn't the world's largest Ponzi Scheme......

 

Only if we're saying everyone else whose portfolio includes Treasury bonds is an investor in "worthless I.O.U.s", right?

 

we own some 'worthless' treasury bonds. funding retirement quite nicely thank you.

 

I have no compelling interest in auditing them. You've convinced me there really was $65k cap gain.

Still seems to me the federal cap gains tax on that might have been around $2500. Which, to make the $19,500 figure from your first post, would suggest that Alabama wanted $17k for their cut. Ouch!

Of course I'm basing that on an assumption there weren't other cap gains on your return. There's no need for me to know if I'm right about that or not. (But if there were other cap gains, it kind of muddies the analysis of the TSLA ⟹ solar roof business, given the weirdness of bracket cutoffs.)

 

He does have other taxable income, boosting some or all of that capital gain out of the 0% bracket and up in to the 15% bracket.

When this stock sale first came up in late 2024, the mentioned dates gave me the impression that it was a short term capital gain, thus taxed as regular income.

But the stock split history mentioned here requires it to be a long term capital gain, which is federally taxed at 0% or 15%, or a mixture thereof depending on other household income (or 20% for high flyers north a half-mil$, which other threads indicate don't apply to him.) (There is also a 3.8% Net Investment Income Tax, also starting north of the level here.) Google says Alabama state tax treats it as regular income, taxed at 2, 4, or 5%. AL's top bracket is reached very quickly, so any meaningful pension (except SSA) or other income would push all the capital gain to the 5% bracket.

So I don't believe the stated 30% capital gains tax is directly accurate, unless some indirect effects from tax traps such as phase-outs or multi-income or other special complications arose. E.g. in 2024 I inadvertently got caught in one after getting far behind on planned IRA Roth conversions. When considering catching up at year-end, my tax planning spreadsheet revealed the catch-up would effectively be double-taxed: each new conversion dollar would pay both regular income tax, and boost a prior capital gains dollar from the 0% to 15% bracket. So it was delayed to 2025 where my trap would not be repeated.

I've been paying capital gains taxes every year of my adult working life, starting with remnants of the college fund mother started when I was very young, in my name under that state's Uniform Gifts To Minors Act (a.k.a. UGMA or UTMA). That account held mutual funds that spun off taxable annual distributions, including capital gains. Once drawing my own paychecks, I contributed more to that and a new account, increasing taxable investment income, in parallel with tax-deferred 401(k) and IRA investments. My market trading rate is very low, but most trades produce additional taxable capital gains. So while not being anywhere near expert enough to charge fees for tax advice, I do have some familiarity with this topic.

The narratives earlier in this thread seem a scrambled mess. It should be simpler than that. TurboTax is not a good or clear place to learn how capital gains are taxed. Below is my best guess outline of what should have happened. Adjust as needed with true numbers.

If his true profit (capital gain) was $65,000, then the federal cap gains tax would be (65000 x 0.15 = ) $9750 (or less), Alabama tax (65000 x 0.05 = ) $3250, for a total tax of $13,000 (or less).

If his total stock sale amount was $65k, then the total tax would have been a bit lower. Assuming his rounded purchase and sale and stock split(*) figures were approximately correct, then he started with about 45 shares bought at approximately $80/sh, for a total purchase cost (cost basis) of $3600. After stock splits of effectively 6:1, this gives 270 shares with an adjusted cost basis of ($80/6 = ) $13.33/sh, preserving a total cost basis of $3600.

Selling those 270 shares at $240/sh produces a total sale of $64,800, of which (64,800-3600 = ) $61,200 of taxable capital gains (profit). That produces a federal tax of $9180 (or less) plus Alabama state tax of $3060, or total tax of $12,240.

(*) A stock history source suggests he mis-remembered the split history:



Tesla split 5:1 on 8/31/2020, and again 3:1 on 8/25/2020, for a net result of 15:1.

= = = = = =

I'm not volunteering to audit anyone's return, but would consider looking it over if he decides he might have over-payed and wants another opinion. Though social media is not usually the best route for that. TurboTax's guarantee of accurate results doesn't cover user misunderstanding of the input items. There are still a couple years left to file an amended return and recover any over-payment.

Some people find tax topics boring, but I find them very interesting, at least those that do or potentially might affect my household or extended family. As a retiree living off retirement accounts and other investments, trying to delay Social Security to boost the future monthly benefit, I plan my taxes well in advance. But am not peaked on energy credits, and avoid derivatives (e.g. short sales and plenty of others). Though a small short sale loss should directly offset some gain or other income, after finding the right schedule and line to itemize it.