Author Topic: Advice on selling mutual funds and stock for large purchase  (Read 1676 times)

ohana

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Advice on selling mutual funds and stock for large purchase
« on: August 20, 2015, 08:47:30 AM »
Hello fellow mustachians:

We are about to make a large purchase for which I've been saving for several years.  The purchase price is $65,000, and I currently have a brokerage account to cover this purchase that totals $96,000.  Some of this money is in cash; as the purchase grew closer I just put money into the account and didn't invest it, so I have $16,000 in cash for the purchase.  I need to sell ~50K to cover the rest of the purchase.  I would like advice on the best strategy for this.

Question one:  Should I sell stocks that have been losers first?  Does that balance with my winners to minimize my tax burden?
Question two:  I have a large amount of money in an index fund.  I bought shares in this at several different times.  When I sell this,  are the taxes based on each "bunch" that I bought, or on something else?  Is it worth it to talk to the folks at Fidelity (where the account lives) about a strategy?
Question three, and excuse my naivety :  I know I need to pay taxes on this, but I am wondering if I can figure that out in Turbo Tax and pay it on the next quarter, or if it's worth getting an accountant to do this. 

This is the first time I've ever sold stock -- it's odd to think about using money and not just saving it.  Any advice for a newbie on selling stocks would be appreciated!

Financial.Velociraptor

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Re: Advice on selling mutual funds and stock for large purchase
« Reply #1 on: August 20, 2015, 11:54:19 AM »
Is this money in a taxable account? 

If so, would your capital gain/losses be long term, short term, or a mix?  Have there been any non-dividend distributions to complicate taxes?  Will you have the cash to pay any tax liability or do you need to sell a little more to satisfy "uncle?"

forummm

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Re: Advice on selling mutual funds and stock for large purchase
« Reply #2 on: August 20, 2015, 12:03:06 PM »
What is your income? What kind of capital gains do the brokerage account holdings have?

I'm assuming the brokerage account is all taxable (i.e. not an IRA).

ohana

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Re: Advice on selling mutual funds and stock for large purchase
« Reply #3 on: August 21, 2015, 08:48:37 AM »
Yes, this is all in a taxable account.  Most of the shares are long term, like 80%.  I don't think I have any non-dividend distributions from any of these MFs or stocks.  I think I will have to sell more stocks to pay the IRS, so need to  figure that in. 

Income ~145K.

Any advice is appreciated!

ohana

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Re: Advice on selling mutual funds and stock for large purchase
« Reply #4 on: August 21, 2015, 08:55:57 AM »
Hmmm, I seem to have just about enough actual cash from other accounts where I could cover this.  I hadn't considered that.  I wonder if I should use that, although it would clean out my emergency accounts.  Lots to think about!

forummm

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Re: Advice on selling mutual funds and stock for large purchase
« Reply #5 on: August 21, 2015, 09:43:37 AM »
Hmmm, I seem to have just about enough actual cash from other accounts where I could cover this.  I hadn't considered that.  I wonder if I should use that, although it would clean out my emergency accounts.  Lots to think about!

If you have $100k in a brokerage account you probably don't need much cash on hand. I keep about $3k in checking. But we have 2 reliable incomes, lots of empty credit cards, and stocks in the brokerage that could be liquidated an in my checking account in 2 days.