Liquidating Part of Portfolio
I have some questions subsequent to my recent post regarding the liquidation of some assets due to a probable home purchase in the next 6 months.
I will likely sell off the enough equities for at least a 20% downpayment, and furniture/decorating expenses. I'm working with my accountant now to determine whether or not to sell in 2013 or 2014 for tax purposes.
1. Do you recommend selling off proportionate amounts to my overall allocation? If I inherited 30% of my overall portfolio value tomorrow, I'd allocate it according to my current AA, so why wouldn't I do the same when selling?
2. I opted for the "Specific Identification" method when purchasing shares on Vanguard. Should I preference selling any certain batches over others? I believe they all have gains. I suppose by selling off "batches" with smaller gains I will decrease my tax liability. Thoughts?
3. The ETFs I am invested in that distribute dividends do so quarterly. So, I am up for my quarterly dividend by the end of this month. If I want to sell in 2013, but still receive eligible dividends before selling (as if I had not yet liquidated), I can do this and still sell in 2013 for tax purposes, right? I just need to hold onto the shares through the ex-dividend date, and I will still receive the dividend. For example, if the ex-dividend date on share ABC is 12-26, payable 12-31, and I sell 12-27, I will receive the dividend on share ABC on 12-31.
4. Any other suggestions to take into account when liquidating a large chunk of your portfolio? Unfortunately, all of my gains will be short term. Some of them would be long term if I waited until late February/early March to sell, but I will need the money by May at the latest, and don't want to risk a Q1 2014 market drop.