Trail of capital gains

[F4mandolin]

In our pondering of buying a house in the UK yesterday, we were wondering how much cash we could come up with really quickly if we had to. Since I figured I could sell off a lot of my Vanguard funds and still stay well under the $72,500 limit.....I checked the gains since I got in over a year ago and it was in the low 20K+. But that is just for the last year and a bit. Most of this money came over from an Edward Jones account which had gained money as well. How do you figure out what the capital gains are overall?

 

[meierlde]

In our pondering of buying a house in the UK yesterday, we were wondering how much cash we could come up with really quickly if we had to. Since I figured I could sell off a lot of my Vanguard funds and still stay well under the $72,500 limit.....I checked the gains since I got in over a year ago and it was in the low 20K+. But that is just for the last year and a bit. Most of this money came over from an Edward Jones account which had gained money as well. How do you figure out what the capital gains are overall?

You should have statements from Edward Jones that provide the gains till the transfer. Or else you have to dig back and find where you purchased the securities.

 

[Rustward]

You should keep trade confirmations and statements showing reinvested distributions for taxable accounts for as long as you own the shares, and then some. This allows you to establish your basis.

I was given this advice in 1985 before I bought anything outside a retirement account by one of those <gulp> financial planners. Maybe they are not all so bad.

It won't be absolutely necessary to do this going forward for covered shares, but I do it anyway because I have my set of books and the brokerages have theirs.

I am planning to elevate our 2013 income to the top of the 15% bracket this year by selling some shares that have appreciated in order to use the 0% tax on LTCGs in the 15% bracket. At current share prices, it would be about a $48K sale (proceeds) which will produce a $32K LTCG. Without knowing the basis, 1) I would not know how much to sell to get a $32K gain, and 2) I would not know how to handle it at tax time. I have a little unsophisticated spreadsheet in which I enter the anticipated share price on the sale and the desired LTGC, and the sheet tells me how many shares to sell to get that LTGC (using FIFO). I do not yet know exactly how much LTCG I want to generate because of distributions that have not been announced yet, so I will wait until the last week of the year to do this.

Edit to add: If you don't have the confirmations or statements, try contacting the brokerage (EJ). I think different brokerages have different retention policies regarding what they keep, for how long, and what they charge you for providing past statements and confirmations.

For those who view their documents on the brokerage website, it is better to download the documents to your own storage device and maintain them there. There was a thread some time ago in one of these forums started by someone who was relying on a website for documents (CD's at PenFed CU), and through what was essentially a clerical error, he was no longer able to log on to the web site; this caused him some discomfort and inconvenience until it was straightened out.

It really is not difficult to track your documents if you set up a simple filing system using a folder for each account, and have a good naming standard for your saved documents. I use names that contain account number, name, and date in yyyy-mm form so they sort in date order. Start a new set every year. Works for me. I also have three different backups of this stuff on three different media that are stored in two different locations.

 

[LOL!]

If you transferred in kind from Edward Jones to Vanguard, then EJ should have given Vanguard your historical transaction info if this was a taxable account. So you should be able to click on "Cost basis" and see what you paid for everything and compute your gain from that.

 

[Gatordoc50]

If you've paid taxes over the years on your mutual funds, make sure you add that to your basis.

 

[Gatordoc50]

If you've paid taxes over the years on your mutual funds, make sure you add that to your basis.

IOWs make sure to add in the value of reinvested dividends.

 

[meierlde]

If you transferred in kind from Edward Jones to Vanguard, then EJ should have given Vanguard your historical transaction info if this was a taxable account. So you should be able to click on "Cost basis" and see what you paid for everything and compute your gain from that.

Vanguard may not have gotten the information. I moved some prudential stock from computershare to Vanguard (bought before 2006) and they did not transfer any information. I suspect you only get the info if the assets were purchased after the tax law deadlines.
If you bought the asseds at Edward Jones your last statement from them should have the information.

 

[LOL!]

If you've paid taxes over the years on your mutual funds, make sure you add that to your basis.

I don't think you mean that you add the "paid taxes over the years" "to your basis."

One's basis is what they have paid for their shares. If one used a dividend in a reinvestment transaction to buy more shares, then one paid money for their shares with that dividend. Or simplified, one paid money for their shares. Or more simplified, one's basis is what they have paid for their shares no matter where the money came from.

 

[Gatordoc50]

I don't think you mean that you add the "paid taxes over the years" "to your basis."

One's basis is what they have paid for their shares. If one used a dividend in a reinvestment transaction to buy more shares, then one paid money for their shares with that dividend. Or simplified, one paid money for their shares. Or more simplified, one's basis is what they have paid for their shares no matter where the money came from.

Yes. I meant to say add reinvested distributions that have already been taxed to cost basis. Thanks.

 

[steelyman]

I don't think you mean that you add the "paid taxes over the years" "to your basis." One's basis is what they have paid for their shares. If one used a dividend in a reinvestment transaction to buy more shares, then one paid money for their shares with that dividend. Or simplified, one paid money for their shares. Or more simplified, one's basis is what they have paid for their shares no matter where the money came from.

I think that's right but I think Gatordoc50 clarified it. No escaping the Taxman!

 

[F4mandolin]

OK....I have had a couple of beers (58) so I need to look at this again tomorrow....but.....damn.....I just want the answer without having to "work" at it....crap. At least Texas A+M lost.....and Oregon.....and WSU won...so my day hasn't been for naught. I am really getting tired of wearing this boot on my foot from the toe operation.....may need more beer......

 

[audreyh1]

Vanguard may not have gotten the information. I moved some prudential stock from computershare to Vanguard (bought before 2006) and they did not transfer any information. I suspect you only get the info if the assets were purchased after the tax law deadlines.
If you bought the asseds at Edward Jones your last statement from them should have the information.

Yes - you usually have to make sure the basis is correctly set when you do a transfer in kind.

Had to do that manually in the 90s. My transfers in the 2000s seemed like they did a good job of transferring the original basis info as well, but you should always check.

 

[target2019]

An in-law initiated a transfer of several stocks from Computershares to USAA brokerage for wife's parents. None of the cost basis flowed over. I attempted to get history from Computershares online, but had limited success. Two options: 1) just hold the stocks until death, and 2) pay Computershares to do more research.

I know the in-law meant well, but she had no clue. I was amused when she started handing me the USAA brokerage letters asking about the cost basis.

 

[steelyman]

An in-law initiated a transfer of several stocks from Computershares to USAA brokerage for wife's parents. None of the cost basis flowed over. I attempted to get history from Computershares online, but had limited success. Two options: 1) just hold the stocks until death, and 2) pay Computershares to do more research. I know the in-law meant well, but she had no clue. I was amused when she started handing me the USAA brokerage letters asking about the cost basis.

An accountant I know pointed me to BigCharts.com, which has historical prices.

 

[braumeister]

OK....I have had a couple of beers (58)

Wow!
I had no idea that "a couple" could mean that many.

Thanks, I'll have to remember this.

 

[F4mandolin]

Wow!
I had no idea that "a couple" could mean that many.

Thanks, I'll have to remember this.

Well.....not quite that many, but more than I should have had.

I was hoping there would be an easy answer for me on this.....but I guess I need to dig through my old EJ stuff. Of course the funds I had through them were different......that money went mostly into the Total Stock and International funds. I pulled over a Roth that went into Moderate Growth Strat and I added some Dividend Growth. Just need to figure out the growth of the EJ stuff, then it would be easy enough for the Vanguard funds.

 

[target2019]

An accountant I know pointed me to BigCharts.com, which has historical prices.

That's a good start. But you need to have history of buys and sells too.

When/if the shares are inherited, the cost basis resets. This causes another chuckle, since the daughter-in-law is the executor.