I inherited a decent number of TSLA shares a bit over 6 years ago. In the last 3 years I have sold about 70% of them. The remaining amount still equal a fairly large percentage of my assets. (Roughly 15%)
I've been selling it slowly to try to limit the tax consequences (cost basis of under $35 for most of it - today it is about $377.)
My DH and I are just in the income bracket where we have no long term capital gains tax.
So ... I have been reading about what it means when a company goes private. From what I am understanding, whichever company buys it out to make it private, usually pays double the stock price. Musk is saying $420 is where he'd like to be at to go private. That means $840 per stock potentially.
It appears that you also have the option to NOT sell, but stay invested in a company once it's private.
I'm wondering what kind of tax consequences this would have for us? At $820 per stock, it would put us up at least one, if not two tax levels. (I do know that it would be taxed on a graduated basis, so some would still be at 0%, some at the next level, and possibly some at the next level.)
If we kept it invested - how would that work tax wise? How would we get our money out later?
I'm also wondering if it might be better to just get completely out while it's going up in case this whole thing with Musk musing about going private backfires - even if it means a large tax bill this year. *
*Could we get penalties for owing a lot more in taxes than we paid in due to capital gains tax?