disneysteve
Thinks s/he gets paid by the post
- Joined
- Feb 10, 2021
- Messages
- 2,863
When we started investing 3+ decades ago, I was mainly focused on acquisition and growth and gave little to no thought to future tax implications when it came time to sell. Now here we are with a very nice portfolio but some of our holdings have substantial unrealized capital gains and it's time to start tapping those taxable holdings to help support our spending.
How do I best approach starting to sell off some of those holdings? For example, we own one fund that is worth about 198K of which around 90K is gains if we were to sell it all today.
Do I just start selling it off gradually to not take too big a tax hit in any one year? I could sell like 10K worth of shares each year and have about 4.5K in LTCG as a result. That wouldn't be enough extra income to have any significant impact on things overall (ACA subsidy, etc.). I would set aside 15% of the gain for taxes and use the rest for spending. Does that make sense or is there is a better way to go about it? Yes it would all be LTCG in this example.
How do I best approach starting to sell off some of those holdings? For example, we own one fund that is worth about 198K of which around 90K is gains if we were to sell it all today.
Do I just start selling it off gradually to not take too big a tax hit in any one year? I could sell like 10K worth of shares each year and have about 4.5K in LTCG as a result. That wouldn't be enough extra income to have any significant impact on things overall (ACA subsidy, etc.). I would set aside 15% of the gain for taxes and use the rest for spending. Does that make sense or is there is a better way to go about it? Yes it would all be LTCG in this example.