disneysteve
Thinks s/he gets paid by the post
- Joined
- Feb 10, 2021
- Messages
- 4,511
When my cousin died in May 2021 I inherited 3 individual stocks from him in a taxable account. What I probably should have done was sold them right away at the stepped up basis and invested the proceeds. That never happened. Now it's 4+ years later and there are gains to deal with if I sell them.
Stock #1: Cost basis $10,600. Current value $21,700.
Stock #2: Cost basis $102,400. Current value $150,500.
Stock #3: Cost basis $43,100. Current value $399,200.
(All numbers are rounded off.)
Selling #1 wouldn't be terrible as far as CG is concerned. #2 would be a bigger hit. But #3 is the real question sitting on a $356,000 gain. On one hand, not selling it upon inheritance turned out quite well. On the other hand, now what?
Do I start liquidating it gradually over the next few years to trim back the holding but not get hammered with taxes in any one year? We have been getting ACA subsidies but that may or may not continue depending on what Congress ends up doing whenever they go back to work. My wife turns 62 in December; I turn 62 next August. So Medicare starts in December 2028 for her and August 2029 for me so there's IRMAA calculations to start thinking about with our 2026 MAGI.
Do I just hang on and hope it continues to do well and worry about it later, or never and let our daughter inherit it?
No, we don't need those specific dollars for anything. However #3 is creeping up on being 10% of our portfolio which I'm not comfortable with.
Stock #1: Cost basis $10,600. Current value $21,700.
Stock #2: Cost basis $102,400. Current value $150,500.
Stock #3: Cost basis $43,100. Current value $399,200.
(All numbers are rounded off.)
Selling #1 wouldn't be terrible as far as CG is concerned. #2 would be a bigger hit. But #3 is the real question sitting on a $356,000 gain. On one hand, not selling it upon inheritance turned out quite well. On the other hand, now what?
Do I start liquidating it gradually over the next few years to trim back the holding but not get hammered with taxes in any one year? We have been getting ACA subsidies but that may or may not continue depending on what Congress ends up doing whenever they go back to work. My wife turns 62 in December; I turn 62 next August. So Medicare starts in December 2028 for her and August 2029 for me so there's IRMAA calculations to start thinking about with our 2026 MAGI.
Do I just hang on and hope it continues to do well and worry about it later, or never and let our daughter inherit it?
No, we don't need those specific dollars for anything. However #3 is creeping up on being 10% of our portfolio which I'm not comfortable with.
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