Making Finances Simple. Changing Lives.
With the stock market at lofty levels, many investors have portfolios with huge gains sitting inside them. This is great, until you have to pay the taxes!
How Capital Gains Work
If you purchase 1,000 shares of a stock for $25/share, you have a cost basis of $25,000. If that stock appreciates to $65/share and you sell all 1,000 shares, you have capital gains in the amount of $40,000 ($65,000 proceeds minus $25,000 basis).
You’ll then pay capital gains tax on this $40,000 income to the IRS and your state taxing authority. This tax could reach 30% for some folks, which is $12,000.
However, there are ways to avoid this tax hit!
Stock Gifting Strategies
There are obviously several considerations when looking at your stock strategy, including whether you need the money for your own purposes, or plan to assist your kids financially.
Contact us with questions about your specific situation…we’re happy to help you strategize!!