Hey guys, I'm planning on making some pretty drastic changes with a taxable investment account I own and wanted to bounce my plan off y'all to make sure I'm not about to do something stupid.
A little background:
After aging into a trust set up by my grandparents, I gained ownership of an actively managed, taxable investment account at Morgan Stanley. It was invested in almost 100 US stocks, and I was getting hit with management fees of about 1.75% annually. Obviously the fee situation was not ideal, so I wanted to get out of the actively managed account and into index funds or ETFs. The only "problem" (if you can call it that) is that the account has about $110k of unrealized capital gains at this point, so if I simply sold everything and plowed the proceeds into a different investment, I'd be hit with a huge tax bill at the end of the year.
Another little wrinkle: I have about $34k in capital loss carryover from 2012, although the managed account already locked in about $4k of realized gain for the year, so I have about $30k left in carried-over loss.
So far, I have transferred all the shares in-kind to my brokerage account at Charles Schwab. So they are no longer being actively managed (so no management fees), but I still have a big bucket of 100 stocks to work with.
I'm having trouble deciding exactly how much stock I should sell (and how much gain I should lock in) for the year 2013. I know I'll sell at least enough to get $30k of capital gains (which would be cancelled out by the $30k carried over loss). What other practical considerations should I be making when deciding how much more to sell?
Financial stats:
--Married filing jointly, expecting to be in the 25% bracket
--$145k annual household W-2 income
--About $24.5k contributions to traditional 401(k), $10.5k to Roth 401(k) for 2013
--$11k Roth IRA contributions for 2013
Beyond the $30k in gains cancelled out by capital loss carryover, should I sell enough stock to lock in an additional $24.5k in gains, which would offset our before-tax 401(k) contributions and put us pretty close to the AGI barrier for the 28% bracket? I realize I'm not taking the standard deduction into account, but all these variables and what-ifs are making my head spin. Am I at least on the right track?