CLEARWATER WEALTH PARTNERS
Client Meeting Transcript
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CLIENT: Chen Household (Sam & Alex Chen)
DATE: June 13, 2018
TIME: 2:00 PM
MEETING: 2018 Q2 Quarterly Review
LOCATION: Conference Room A, Clearwater Wealth Partners
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TRANSCRIPT
[0:00] Sarah Chen: Good to see you. Markets have been choppy in 2018 — the S&P is
roughly flat year-to-date after some volatility from tariff concerns and the Fed
continuing to raise rates. Your portfolio is at $598,000. The NLTK Q1 vest executed
in March and we did the diversification as planned. I want to walk through that, talk
about the TCJA now that it's in effect, and introduce a new planning topic: the home
purchase horizon.
[0:04] Sam Chen: Let's start with the vest — I saw the transaction on the
statement but didn't fully understand all the pieces.
[0:05] Sarah Chen: Sure. 625 shares vested March 15th at $16.50 per share — that's
$10,313 of W-2 income. The company withheld at the supplemental rate, so you net
about 7,500 in after-tax shares. We sold 450 shares for diversification — proceeds of
$7,425 deposited into ACCT-TAXABLE. We held 175 shares in ACCT-TAXABLE. NLTK
concentration is now about 3.8% of total portfolio, comfortably within the IPS cap.
[0:08] Alex Chen: And the shares we sold — is there a capital gain on those?
[0:09] Sarah Chen: Good question. The shares are sold the same day they vest, so the
cost basis is the same as the fair market value at vest — $16.50. No gain on the sale
itself. The entire $10,313 is W-2 income, already captured by withholding. The only
future gain is on the 175 shares you're holding, measured from the $16.50 basis.
[0:11] Sam Chen: That's cleaner than I thought.
[0:12] Sarah Chen: It is. Now — the TCJA. First full year of the new law. Here's what
changed for you: the standard deduction is now $24,000 for married filing jointly,
roughly doubled. Your itemized deductions — mortgage interest, state and local taxes
— totaled about $18,500 last year. So under the new law, you take the standard
deduction. You're not losing anything — you're just using a larger automatic
deduction.
[0:15] Alex Chen: So we don't need to track as many receipts anymore?
[0:16] Sarah Chen: For most things, no. Charitable giving documentation is still
worth keeping if you ever go back to itemizing — say, when you buy a more expensive
home and have more mortgage interest. But for now, the standard deduction is your

friend.
[0:18] Sarah Chen: The other TCJA impact: your W-4 withholding. The IRS issued new
withholding tables, and in some cases people found their paychecks went up — but also
found they owed at year-end because the withholding tables were recalibrated. I want
to review your W-4 and make sure withholding is appropriate given the RSU income. Can
you both pull up your most recent pay stubs and send them to me before the end of the
month?
[0:21] Alex Chen: Sure, I can do that.
[0:22] Sarah Chen: Great. Now — the home purchase. You've mentioned before that
owning a home is a goal. I think the time to start building toward it formally is
now. What's your thinking on timeline?
[0:24] Sam Chen: We'd love to buy something in the next two to three years. We're
not in a rush, but the rental market here is getting expensive and it feels like
we're throwing money away.
[0:25] Sarah Chen: I hear that a lot, but I'd push back gently on the 'throwing money
away' framing — renting gives you flexibility and liquidity. The real case for buying
is building equity and locking in a cost. For your income and goals, I think 2021 is
a realistic target. To get there, we need to start accumulating cash specifically for
the down payment. I'd recommend opening a dedicated cash management account — let's
call it ACCT-CASH — and targeting $110,000 to $120,000 by mid-2021. That would give
you a 20% down payment on a $550,000 home and cover closing costs.
[0:28] Alex Chen: That's a lot to save in three years.
[0:29] Sarah Chen: About $35,000 per year after your investment contributions.
Tight, but achievable at your income trajectory. We'll build it into the cash flow
plan. Action items: send me your pay stubs for W-4 review; I'll set up the ACCT-CASH
account structure and target contribution amounts before our September meeting.
[0:30] Meeting adjourned
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ACTION ITEMS
1. Clients to send current pay stubs for W-4 withholding review — by June 30
2. Advisor to set up ACCT-CASH home purchase savings account and contribution
schedule — by July 31
3. Review NLTK Q3 vest plan; next tranche September 2018
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CONFIDENTIAL — For client use only. Not for distribution.
