Selling company stock held in taxable account

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rxv
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Selling company stock held in taxable account

Post by rxv » Tue Aug 06, 2019 3:36 pm

Greetings all,
We have $150,000 in taxable(Vanguard) split almost evenly between VWIUX, VTSAX and Megacorp stock (ESPP).
Stock is all LTCG of ~$16,000.
Question - I would like to sell the individual stock and split it between VWIUX and VTSAX. Should I do it all at once or split it over multiple years?
All at once means I owe $16,000 * .15 = $2,400 in taxes?
Probably a dumb question but haven't done it before so just want to run it by folks much smarter than me.
We are in the 24% tax bracket.

Thanks.

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mhc
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Re: Selling company stock held in taxable account

Post by mhc » Tue Aug 06, 2019 3:55 pm

I would do it all at once. In the future, I would sell all ESPP shares immediately to avoid this situation.

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Steelersfan
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Re: Selling company stock held in taxable account

Post by Steelersfan » Tue Aug 06, 2019 4:18 pm

If the stock has reinvested dividends don't forget to back those out of your capital gain calculation.

When I sold my company stock I did it all in one transaction. If you can't fit $16,000 in your current federal tax bracket you can split it over two years. It may or may not be worth it even then unless you go way past the top of your current bracket.

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Stinky
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Re: Selling company stock held in taxable account

Post by Stinky » Tue Aug 06, 2019 4:43 pm

mhc wrote:
Tue Aug 06, 2019 3:55 pm
I would do it all at once. In the future, I would sell all ESPP shares immediately to avoid this situation.
+1

Bad news - you will owe $2,400 in taxes.

Good news - you have $13,600 of gain left after paying taxes.
It's a GREAT day to be alive - Travis Tritt

megabad
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Re: Selling company stock held in taxable account

Post by megabad » Tue Aug 06, 2019 5:58 pm

mhc wrote:
Tue Aug 06, 2019 3:55 pm
I would do it all at once. In the future, I would sell all ESPP shares immediately to avoid this situation.
Well "immediately" for many is maybe 1-2 years later...depends on the plan type. Speaking as someone who has had some hideously complex ESPP and RSU situations sometimes you just have to pay some taxes. In fact, I have had some that are basically impossible to exit without a tax bomb. I had one that forced me into a wash sale that I couldn't get rid of for years due to their idiotic buy/sell timing. The basis on new shares just kept going up. It sucked. In OP's case no big deal to pay the taxes all at once in the 15% bracket.

riverguy
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Re: Selling company stock held in taxable account

Post by riverguy » Tue Aug 06, 2019 6:33 pm

mhc wrote:
Tue Aug 06, 2019 3:55 pm
I would do it all at once. In the future, I would sell all ESPP shares immediately to avoid this situation.
So you would not hold an appreciating stock just to avoid cap gains? Crazy

Goal33
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Re: Selling company stock held in taxable account

Post by Goal33 » Tue Aug 06, 2019 7:33 pm

riverguy wrote:
Tue Aug 06, 2019 6:33 pm
mhc wrote:
Tue Aug 06, 2019 3:55 pm
I would do it all at once. In the future, I would sell all ESPP shares immediately to avoid this situation.
So you would not hold an appreciating stock just to avoid cap gains? Crazy
How do you know if it’s going to keep appreciating or not?
A man with one watch always knows what time it is; a man with two watches is never sure.

HawkeyePierce
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Re: Selling company stock held in taxable account

Post by HawkeyePierce » Tue Aug 06, 2019 7:40 pm

riverguy wrote:
Tue Aug 06, 2019 6:33 pm
mhc wrote:
Tue Aug 06, 2019 3:55 pm
I would do it all at once. In the future, I would sell all ESPP shares immediately to avoid this situation.
So you would not hold an appreciating stock just to avoid cap gains? Crazy
I would sell immediately to avoid concentrating too much risk into one asset, taxes or no. My understanding is that the discount is going to be taxable income immediately anyways (I could be wrong on this) so holding the shares doesn't change that treatment.

Topic Author
rxv
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Re: Selling company stock held in taxable account

Post by rxv » Wed Aug 07, 2019 8:40 am

Thanks everyone. Appreciate the responses.

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mhc
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Re: Selling company stock held in taxable account

Post by mhc » Wed Aug 07, 2019 8:51 am

riverguy wrote:
Tue Aug 06, 2019 6:33 pm
mhc wrote:
Tue Aug 06, 2019 3:55 pm
I would do it all at once. In the future, I would sell all ESPP shares immediately to avoid this situation.
So you would not hold an appreciating stock just to avoid cap gains? Crazy
I am not a fan of holding individual stocks. It is uncompensated risk. Holding stock in one's company is concentrated risk.

If I knew a stock was going to outperform the market, I would put all my money into it. Since I don't know, I won't do it.

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