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PIMCO Total Return Instl Message Board

  • laseradam laseradam Nov 27, 2012 10:34 AM Flag

    year end capital gain

    I have a rollover IRA that is coming due Dec. 8th. If renewed it would earn .4%. I want to roll it over into my 403b PTTRX account. I am tring to decide on the timing. If I roll it over on Dec. 8th would I get the special Capital Gain on it or is that calculated by how long the money has been in PTTRX? Or maybe it would be better to wait till the share price drops after the special Capital gains. What do you think?

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    • The IRA money is in a bank CD. My 403b account allowes rollovers from CDs. I originally thought that the term came due on this CD on Dec. 8th but I now found that it is due on Dec.16th. Originally I mentioned the Ddec. 8th date because Dec. 8th is a Saturday and Dec. 11th (the date of record that money must be in the PTTRX fund to receive the div.) fell on a Tuesday. I figured I need to make a decision by the 8th to have enough time for the money to be posted to PTTRX by the 11th. I was not sure if the money put in on the 11th would receive the Dec. div. Now I realize that it would have. Now that I find that my CD term is not up until the 16th, the point is mute. My new plan it to hope the NAV will be down around the 16th and then either transfer it to PTTRX then or park it into my 403b money market for a while and wait for a drop in the NAV to buy in.

      • 1 Reply to laseradam
      • I would have rather seen you transfer in on the Friday prior to the 11th say the 10th as orders don't always get transacted as fast as you might like especially when changing plans and with the date of record falling close to all of what you want to do. The potential for PTTRX NAV growth is generally ihghest in the few days following the cap gain distribution. But you seem to be tied to the date of expiration of the CD before you can do anything.

        Sentiment: Hold

    • I do think it will be pro-rated. So you will only get a portion of the dividend.
      But if this helps your decision. I have almost all of my 401k funds in PTTRX and have gotten a little over 10% return with div. and appreciation. The sooner you move the money the sooner you start earning.

      Sentiment: Buy

      • 1 Reply to circuit_jock
      • It is definelty not pro rated. The cap gain dividend is made toPTTRX holders of record just on Dec 11, 2011 as if the holder held PTTRX for the entire year. Ther is no way that PIMCO could possibly back date all the various holders of a security through an entire year and pro rate a cap gain distribution. So if you are on the books as a owner of record as of December 11 you pick up all the chips for cap gains for the entire year. Makes quite a diference in planning a buy sell PTTRX strategy this late in the game.

        Sentiment: Hold

    • Not sure why your rollover IRA is "coming due" Dec. 8. Usually you are allowed until April 15 of the following year before you have to make any changes. Either that or you are allowed 60 days from a special event that triggers liquidation of the IRA which is rarely the case. It sounds more as if the "due date" may be self imposed or perhaps you have misunderstood the characterization of rollover limitations? You need to be an owner of PTTRX as of the day of the cap gain distribution. The net gain in shares won't show up until the following day and are bought at the depreciated price reflecting the amount of the cap gain less the NAV on the date of the cap gain distribution. I nearly always hang onto my PTTRX shares through the months of Dec and Jan because PTTRX will have two distributions in December and one again in January all less than 2 months apart. I would ask why you would want to forgo the added amount of December dividends on the extra shares recieved by the cap gain distribution by just holding the equity for 3 additional weeks? That all said you will have to decide if we jump off the fiscal cliff would you rather be in PTTRX or something else? If it is something else please let me know and your rationale behind that decision.

      Sentiment: Hold

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