Best way to sell annual stock grants?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
mojorisin
Posts: 134
Joined: Sun Nov 27, 2011 9:19 pm

Best way to sell annual stock grants?

Post by mojorisin » Tue Oct 03, 2017 9:59 pm

I receive quarterly and annual stock grants. The stock has done well over the past couple of years. I want to sell off some shares to diversify, and roll into other investments.

So the oldest shares are long and about 50% gains.
The recent shares have no gain or loss, and are short.

While I was about to sell some of the long shares, why wouldn't I sell the short shares that have no taxable gains?

livesoft
Posts: 57211
Joined: Thu Mar 01, 2007 8:00 pm

Re: Best way to sell annual stock grants?

Post by livesoft » Tue Oct 03, 2017 10:03 pm

I'd sell the shares with no taxable gains, too.

I might give the shares with the highest LT gains to my donor-advised fund, too.
This signature message sponsored by sscritic: Learn to fish.

mojorisin
Posts: 134
Joined: Sun Nov 27, 2011 9:19 pm

Re: Best way to sell annual stock grants?

Post by mojorisin » Tue Oct 03, 2017 10:15 pm

livesoft wrote:
Tue Oct 03, 2017 10:03 pm
I'd sell the shares with no taxable gains, too.

I might give the shares with the highest LT gains to my donor-advised fund, too.
Thanks livesoft for validating.

Question - what do you mean by donor-advised fund?

random_walker_77
Posts: 467
Joined: Tue May 21, 2013 8:49 pm

Re: Best way to sell annual stock grants?

Post by random_walker_77 » Tue Oct 03, 2017 10:23 pm

I too would sell whatever stock put the most after-tax dollars in my wallet. In this case, short term stock w/ a high basis is better than LT stock with a low basis. Given that I'm going to sell 100 shares of xyz corp, choose whichever option pays the least amount of tax. Paying 35% of 1K is better than 20% of 50K.

see wiki: https://www.bogleheads.org/wiki/Donor_advised_fund
For tax deduction purposes, with itemized taxes, it's often advantageous to lump deductions all into one tax year right? If you want to lump your charitable donations all into one tax year, but don't know which charity yet, or just want to send the money to charities over time, a donor advised fund is helpful.

Ron Scott
Posts: 389
Joined: Tue Apr 05, 2016 5:38 am

Re: Best way to sell annual stock grants?

Post by Ron Scott » Tue Oct 03, 2017 11:18 pm

It’s almost always best when taking down a stock concentration to first sell shares with the highest basis. I can envision circumstances where this may not be optimal, especially when you have control or knowledge of significant changes from year to year in your tax brackets.

Quick call to your tax accountant should help.

User avatar
badbreath
Posts: 643
Joined: Mon Jul 18, 2016 7:50 pm

Re: Best way to sell annual stock grants?

Post by badbreath » Wed Oct 04, 2017 12:02 am

Quick call to your tax accountant should help.
I have this issue coming up soon also, so the above is what I am going to do.
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

bloom2708
Posts: 2926
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Best way to sell annual stock grants?

Post by bloom2708 » Wed Oct 04, 2017 9:24 am

I sell the day they hit my account. That way I have a very small short term gain/loss to deal with.

Sell some this year and some early next year. Pay the tax. Tax isn't the worst thing. If the stock value plummets, you save the tax, but now the value is gone.
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead

Jack FFR1846
Posts: 5864
Joined: Tue Dec 31, 2013 7:05 am

Re: Best way to sell annual stock grants?

Post by Jack FFR1846 » Wed Oct 04, 2017 9:31 am

I do exactly what bloom2708 does and go even a step further and have my company eTrade account set up a year in advance to sell anything that hits the account the milisecond it's vested and can be sold.
Bogle: Smart Beta is stupid

RetireBy55
Posts: 20
Joined: Wed Nov 30, 2016 6:20 pm

Re: Best way to sell annual stock grants?

Post by RetireBy55 » Wed Oct 04, 2017 9:46 am

I've always held vested RSU shares if I expect the stock has a reasonable chance of appreciation, to maximize the amount I'm receiving from the grant..

This has generally worked out, but we decided this year to hold shares of wife's company until the 2018 tax year as we're already in a high bracket with both of us working and not only would have incurred the extra Medicare tax and higher marginal tax rates, but would have also further reduced our already income-limited deductions.

Big mistake. The stock has dropped 20+% since then as the company got hit with some unexpected shareholder lawsuits. Plus, they missed their Q2 numbers which further cratered the stock.

Now, we're just waiting for it to get back to the range it was in before all the recent developments and are going to sell the bajeebus out of it soon as we get back within sniffing range of where it was - taxes or no taxes..

FWIW.

Post Reply