Tax loss harvesting GE stock options?

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loklav
Posts: 104
Joined: Fri Nov 10, 2017 11:39 pm

Tax loss harvesting GE stock options?

Post by loklav » Wed Feb 07, 2018 4:32 pm

Hi all,

I have some GE stock options (200). I got them at 30$, and so I was not able to sell them before they were vested. I still have these stocks, and since I don't need the money I just kept them... Now GE stock is worth 15$.
What do you recommend doing? I can not really believe that GE will be back over 30$ some time soon... I'm not really familiar with tax loss harvesting. Is it something I can/should do? And then just invest what I can get in a mutual fund?

Thanks

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Tax loss harvesting GE stock options?

Post by dbr » Wed Feb 07, 2018 5:05 pm

If you have options with a strike price of $30 and the stock is now at $15, then what you have is nothing. You also do not have a loss because a stock option is not an asset that you sell. If you are talking about incentive stock options, the options vested, and you exercised the options to buy the stock at $30 and it is now at $15, you can sell the shares and take the tax loss. You wound not want to tax loss harvest because that means purchasing the same investment back again after taking the loss. More likely you would invest the money in something more diversified.

Please explain if this is not the situation it sounds like.

livesoft
Posts: 62776
Joined: Thu Mar 01, 2007 8:00 pm

Re: Tax loss harvesting GE stock options?

Post by livesoft » Wed Feb 07, 2018 5:07 pm

I surmise this is not about stock options at all, but only about GE stock. I almost didn't look at this thread because of the title.

So you own the stock? You have a cost basis in the stock? Is the basis really $30 a share or $6000 total? Does your broker state what the basis is?

If you have a basis and can sell, then you can tax loss harvest. I recommend you do that and invest the money in your portfolio according to your asset allocation. That way you get other people to help pay for your loss.
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PinotGris
Posts: 548
Joined: Tue Feb 14, 2012 9:38 pm

Re: Tax loss harvesting GE stock options?

Post by PinotGris » Thu Nov 08, 2018 1:48 pm

Ugh. Just got rid of all our holding in GE stock. The last remaining shares. At $9.13 this morning. Had I waited I could have gotten $9.20. I now have a cost basis I can record as loss. As soon as the funds are available I will move it into VTSAX but wondering if I should split it between Index 500 and Extended market.

retiringwhen
Posts: 532
Joined: Sat Jul 08, 2017 10:09 am
Location: New Jersey, USA

Re: Tax loss harvesting GE stock options?

Post by retiringwhen » Fri Nov 09, 2018 7:59 am

PinotGris wrote:
Thu Nov 08, 2018 1:48 pm
Ugh. Just got rid of all our holding in GE stock. The last remaining shares. At $9.13 this morning. Had I waited I could have gotten $9.20. I now have a cost basis I can record as loss. As soon as the funds are available I will move it into VTSAX but wondering if I should split it between Index 500 and Extended market.
All things equal buy VTSAX. I would only buy them split if you already own one and have unrealized gains or a retirement plan only gives you them as an option (my situation).

PinotGris
Posts: 548
Joined: Tue Feb 14, 2012 9:38 pm

Re: Tax loss harvesting GE stock options?

Post by PinotGris » Fri Nov 09, 2018 12:27 pm

retiringwhen wrote:
Fri Nov 09, 2018 7:59 am
PinotGris wrote:
Thu Nov 08, 2018 1:48 pm
Ugh. Just got rid of all our holding in GE stock. The last remaining shares. At $9.13 this morning. Had I waited I could have gotten $9.20. I now have a cost basis I can record as loss. As soon as the funds are available I will move it into VTSAX but wondering if I should split it between Index 500 and Extended market.
All things equal buy VTSAX. I would only buy them split if you already own one and have unrealized gains or a retirement plan only gives you them as an option (my situation).
Can you explain the relevance for unrealized gains in my Index 500 holding? I do have that fund and the Extended Mkt also, AND unrealized gains.
My VTSAX has some TLH opportunity so I want to hold off any transactions in that for 30 days. But I'd rather not hold the money from the sale in cash for that long.
All this in taxable account, of course.
Thanks

retiringwhen
Posts: 532
Joined: Sat Jul 08, 2017 10:09 am
Location: New Jersey, USA

Re: Tax loss harvesting GE stock options?

Post by retiringwhen » Fri Nov 09, 2018 12:38 pm

PinotGris wrote:
Fri Nov 09, 2018 12:27 pm
retiringwhen wrote:
Fri Nov 09, 2018 7:59 am
PinotGris wrote:
Thu Nov 08, 2018 1:48 pm
Ugh. Just got rid of all our holding in GE stock. The last remaining shares. At $9.13 this morning. Had I waited I could have gotten $9.20. I now have a cost basis I can record as loss. As soon as the funds are available I will move it into VTSAX but wondering if I should split it between Index 500 and Extended market.
All things equal buy VTSAX. I would only buy them split if you already own one and have unrealized gains or a retirement plan only gives you them as an option (my situation).
Can you explain the relevance for unrealized gains in my Index 500 holding? I do have that fund and the Extended Mkt also, AND unrealized gains.
My VTSAX has some TLH opportunity so I want to hold off any transactions in that for 30 days. But I'd rather not hold the money from the sale in cash for that long.
All this in taxable account, of course.
Thanks
It was a short-hand for not selling with gains just to simplify Don't cause tax costs unless necessary (this applies only if in taxable account, I should have been clearer).

If you are in taxable and you have both VTSAX and 500/extended market, i would just swap back and forth as necessary to TLH and put new money in whatever fund does not cause a wash-sale or blocks a TLH opportunity. They are functionally equivalent. you just have to hold two funds for one half of the pair to cover the market.

I personally have been using VTSAX and the VLCAX/VSMAX (LargeCap/SmallCap Index funds) pair as my TLH partners in my taxable account. Unless i time the back and forth perfectly I'll end up with all three funds in the account when the market starts going up again.

I don't use VFIAX/VEXAX (500/Extended Mkt) in taxable as those are the funds my 401(K) provides for a total market solution. Just makes life simpler.

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