My parents inherited some stock when my grandmother passed that has been in the family for some time - perhaps since about the 1930s. They reinvest the dividends for now and are planning on getting the dividends paid out when my mother retires.
However, they are under the impression that they "can't ever sell" the stock because they will get killed on the capital gains tax.
I don't have any taxable investments so this is not my area of expertise but my understanding was that the capital gains tax was actually LESS than income tax. They are in the 25% income tax bracket and (I believe) the 15% capital gains tax bracket.
So, that means that as they sell stock annually, they would just pay 15% on the amount each year, correct? Is there anything about a stock being passed down through estates that would affect the taxes on it?
My parents do use a financial planner, who they like, but I'm not super impressed with her. She keeps telling my parents they can't yet afford to have my mother retire but I think she's being overly conservative. (Granted, I don't have the whole picture.)