Newbie question on selling stock and taxes

[Live Free]

Sorry if this is a really stupid set of questions that don't make sense. I am really still trying to learn about investing - not just the concepts, but the actual "how to" nuts and bolts. I think I've finally gotten our retirement accounts (401Ks) into a good place and have a plan in place that at this point I am comfortable with. But now I want to focus on some of our other assets that aren't in our 401Ks - namely my company stock.

For a variety of reasons (corporate performance and lack of confidence in upper management) I want to sell my company stock which has been down in the crapper for most of the year (30% down since January - but in the last week has rallied a bit) and buy stock in a few other dividend paying companies (maybe energy stocks?). These are vesting stock awards I've received over the years and as I pull out a few of the award statements I see that I've paid taxes (via share withholds) on the awards. Some of the awards are many years old, and some are recent. They are in an account administered by a a firm called Computershare. I get statements, dividend checks, etc. from them. So I'm assuming I sell through them.

I haven't researched yet on how to buy stocks (I use vanguard for my 401K) but I guess I'll have to open some sort of brokerage account somewhere like a Charles Schwab... But I guess my question is more on paying taxes. Do I have to pay taxes on the stock sale? How do I know how much I have to pay? Some of the stock has probably lost value since award (the recent ones) and others have gained value (from years past). I plan on just buying different stock with the money from the sale of the my company stock. Again, I believe I've already paid taxes on these shares when they were awarded and the dividends I pay taxes on when I do my Turbo Tax return each year. I have not kept good records on when I got shares, what taxes were withheld, etc. Also, I intend to max out my Roth contribution for this year from part of the sale of the company stock.

This is not a lot of money. Less than $40K for my company stock (I call it my secret future facelift fund). DH has his own company stock, but he does not want to sell.

 

[davismills]

Since these stocks appear to be taxable (non-qualified) shares, you'd have to pay capital gains taxes to the Feds and also your state. The firm you're currently dealing with, Computershare, should have the prices you paid for the stock within their records. Once you sell through them you'll pay 15-20 percent capital gains tax ( the difference between what you paid and what you sold the stock). Since you have a relationship with Vanguard already, I would open a brokerage account with them.
https://personal.vanguard.com/us/whatweoffer/stocksbondscds/feescommissions

 

[MBAustin]

I believe you will be able to net out the losses from the shares that are worth less than the cost when you got them against the gains from the ones that are worth more.

I suggest you call Computershare and talk with them about two things:
- can they give you a list of all the transactions including the cost basis?
- how do you go about selling the stock.

Good luck!

 

[fh2000]

These are vesting stock awards I've received over the years and as I pull out a few of the award statements I see that I've paid taxes (via share withholds) on the awards. Some of the awards are many years old, and some are recent. They are in an account administered by a a firm called Computershare. I get statements, dividend checks, etc. from them. So I'm assuming I sell through them.

But I guess my question is more on paying taxes. Do I have to pay taxes on the stock sale? How do I know how much I have to pay? Some of the stock has probably lost value since award (the recent ones) and others have gained value (from years past). I plan on just buying different stock with the money from the sale of the my company stock. Again, I believe I've already paid taxes on these shares when they were awarded and the dividends I pay taxes on when I do my Turbo Tax return each year. I have not kept good records on when I got shares, what taxes were withheld, etc. Also, I intend to max out my Roth contribution for this year from part of the sale of the company stock.

Sounds like these are RSU (restricted stock units). If so, you already paid the ordinary income taxes when they vested. The remaining shares are yours to keep, and their cost bases are calculated on the vesting dates. The gains or loss from that date will then be calculated as capital gain/loss (long term or short term).

In my case, I have RSUs from 2 different companies, so do my DW. Some of them are more than 10 years old now. Each time, when certain shares were vested, I would receive a paper from the company. Later years, they only emailed us.

I no longer have all of the records of when they vested, how many shares, or their cost bases. I know my current company will send me a spreadsheet of all of these details since day one, on request. But I can't get anything out of my prior company.

This is a difficult situation for us, so my plan for these shares is to wait until we RE. Start to liquidate small piece at a time when our tax rate is below 15%, then capital gain rate will be 0%. For those shares we no longer have records, we will just use current share price as cost base (since they are higher now).

The other option is to keep them forever, and let kids inherit them, then the cost base will be the price on the date they receive the shares.