How much capital gains?

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Topic Author
owenmia
Posts: 208
Joined: Mon Jun 24, 2019 10:19 am

How much capital gains?

Post by owenmia »

I am going to sell 16k on a stock in a non retirement account.

The total value is $214,000 and the unrealized gain is 32k.

How much tax will I incur? Ive owned it more than a year.
sailaway
Posts: 2223
Joined: Fri May 12, 2017 1:11 pm

Re: How much capital gains?

Post by sailaway »

Which accounting method are you using? If anything other than average cost, then more details are needed.
Topic Author
owenmia
Posts: 208
Joined: Mon Jun 24, 2019 10:19 am

Re: How much capital gains?

Post by owenmia »

What other details do you need?
sailaway
Posts: 2223
Joined: Fri May 12, 2017 1:11 pm

Re: How much capital gains?

Post by sailaway »

owenmia wrote: Mon Sep 07, 2020 7:52 pm Whatever Merrill edge uses to calculate unrealized gain.
They use whatever you tell them, assuming that you even have covered shares. You will have to log in and look for this information or call customer service.
Topic Author
owenmia
Posts: 208
Joined: Mon Jun 24, 2019 10:19 am

Re: How much capital gains?

Post by owenmia »

I am sure that I was never asked to specify how they calculate capital gains.

Does anyone else know?
HomeStretch
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Joined: Thu Dec 27, 2018 3:06 pm

Re: How much capital gains?

Post by HomeStretch »

If the cost basis method for your stock is “average cost” then your long-term capital gain would be $2,393 ( = $16,000 / $214,000 x $32,000). The capital gain tax you would pay depends on your income. Capital gain rates are 0%, 15% or 20% (+ 3.8% NIIT depending on income).

If you use another cost basis method (such as Specific Identification, FIFO, etc.), your gain will depend on the cost basis of the tax lot(s) you sell.

Usually the cost basis method is established when you open your Taxable account. You either select one or the brokerage default is used. Check your online account to see what method is used. You may be able to change it online or call your broker to talk with a customer service rep.
Last edited by HomeStretch on Mon Sep 07, 2020 8:08 pm, edited 1 time in total.
Globalviewer58
Posts: 581
Joined: Fri Jul 18, 2008 3:26 pm

Re: How much capital gains?

Post by Globalviewer58 »

Were all shares purchased in one lot or more than one lot?
Topic Author
owenmia
Posts: 208
Joined: Mon Jun 24, 2019 10:19 am

Re: How much capital gains?

Post by owenmia »

I would say three lots.
Topic Author
owenmia
Posts: 208
Joined: Mon Jun 24, 2019 10:19 am

Re: How much capital gains?

Post by owenmia »

HomeStretch wrote: Mon Sep 07, 2020 8:07 pm If the cost basis method for your stock is “average cost” then your long-term capital gain would be $2,393 ( = $16,000 / $214,000 x $32,000). The capital gain tax you would pay depends on your income. Capital gain rates are 0%, 15% or 20% (+ 3.8% NIIT depending on income).

If you use another cost basis method (such as Specific Identification, FIFO, etc.), your gain will depend on the cost basis of the tax lot(s) you sell.

Usually the cost basis method is established when you open your Taxable account. You either select one or the brokerage default is used. Check your online account to see what method is used. You may be able to change it online or call your broker to talk with a customer service rep.
Thank you!
Gill
Posts: 6679
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: How much capital gains?

Post by Gill »

sailaway wrote: Mon Sep 07, 2020 7:47 pm Which accounting method are you using? If anything other than average cost, then more details are needed.
You can’t use average cost with shares of stock.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
RudyS
Posts: 1979
Joined: Tue Oct 27, 2015 10:11 am

Re: How much capital gains?

Post by RudyS »

Gill wrote: Mon Sep 07, 2020 8:18 pm
sailaway wrote: Mon Sep 07, 2020 7:47 pm Which accounting method are you using? If anything other than average cost, then more details are needed.
You can’t use average cost with shares of stock.
Gill
That's true, but if OP is selling everything he purchased, but purchases were at several dates, then the tax return would specify "various" as the date of purchase, and the total cost as the basis, so it would LOOK LIKE an average cost. Any other scenario is more complex.

EDIT: Please ignore. I didn't read properly. OP is NOT selling everything.
Last edited by RudyS on Tue Sep 08, 2020 10:38 am, edited 1 time in total.
kaneohe
Posts: 6687
Joined: Mon Sep 22, 2008 12:38 pm

Re: How much capital gains?

Post by kaneohe »

RudyS wrote: Tue Sep 08, 2020 8:43 am
Gill wrote: Mon Sep 07, 2020 8:18 pm
sailaway wrote: Mon Sep 07, 2020 7:47 pm Which accounting method are you using? If anything other than average cost, then more details are needed.
You can’t use average cost with shares of stock.
Gill
That's true, but if OP is selling everything he purchased, but purchases were at several dates, then the tax return would specify "various" as the date of purchase, and the total cost as the basis, so it would LOOK LIKE an average cost. Any other scenario is more complex.
OP is not selling everything: by owenmia » Mon Sep 07, 2020 8:44 pm

"I am going to sell 16k on a stock in a non retirement account.
The total value is $214,000 and the unrealized gain is 32k."
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WoodSpinner
Posts: 1657
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Re: How much capital gains?

Post by WoodSpinner »

owenmia wrote: Mon Sep 07, 2020 8:04 pm I am sure that I was never asked to specify how they calculate capital gains.

Does anyone else know?
It’s not difficult but we need more info...

Here is a link to the WIKI on how to calculate:
https://www.bogleheads.org/wiki/Capital ... stribution

You need to know info about your Income, Deductions, Cost Basis and Gains on the stock sale etc.

WoodSpinner
Hockey10
Posts: 836
Joined: Wed Aug 24, 2016 12:20 pm
Location: Philadelphia suburbs

Re: How much capital gains?

Post by Hockey10 »

Go to: https://www.mortgagecalculator.org/calc ... ulator.php


Plug in your numbers for 2020 without the stock sale. Then plug in your numbers with the stock sale. The difference is your answer.
rkhusky
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Joined: Thu Aug 18, 2011 8:09 pm

Re: How much capital gains?

Post by rkhusky »

owenmia wrote: Mon Sep 07, 2020 8:10 pm I would say three lots.
What was the price/share of each of the lots?
delamer
Posts: 10517
Joined: Tue Feb 08, 2011 6:13 pm

Re: How much capital gains?

Post by delamer »

If your state has an income tax, then you may pay taxes in addition to the federal amount.
Last edited by delamer on Wed Sep 09, 2020 9:11 am, edited 1 time in total.
DSInvestor
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Joined: Sat Oct 04, 2008 11:42 am

Re: How much capital gains?

Post by DSInvestor »

Did the stock distribute dividends? If yes, did you reinvest those dividends back into the stock. Each dividend reinvestment would be a new tax lot. To minimize capital gains, you'd want to sell the shares with the highest cost basis. Specific share identification will give you the most flexibility with this.

You'd need to figure out the capital gain for each tax lot that you sell.

If some lots have a loss, those offset the gains to give you a net capital gain. Once you have the net gain or loss, you can then apply them to to your tax return on top of the other income that you have already entered and see the tax cost of adding the capital gain. Tax software and/or tax calculator will be helpful.
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