Author Topic: Transfer vs sell company stock  (Read 678 times)

jhrobbin

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Transfer vs sell company stock
« on: November 10, 2018, 03:41:35 PM »
I want to sell my company stock and use the money to buy index funds.  I am aware there may be tax consequences from selling the company stock.

While viewing my options I became confused with selling vs transferring of stock.  According to the company stock plan FAQ you can "transfer your shares to a private brokerage account".  With regard to fees, "There are no transaction costs when transferring shares. There are fees when selling your shares", including wire fees.

What is the purpose of transferring my company stock shares to my private brokerage account instead of just selling the stock?  I can see there is a difference in fees but I lack context of why I would choose one vs the other.  I guess if I transfer the stock then I would still need to eventually sell it in order to invest the money in index funds.

COEE

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Re: Transfer vs sell company stock
« Reply #1 on: November 10, 2018, 07:42:58 PM »
jhrobbin

Transferring stock "in-kind" is simply moving the stock you own from your current provider to another provider.  You still own the stock. 

Selling the stock is all together different.  That is, when you sell your stock you are selling your ownership of that company.  When you sell the stock there can be tax implications.  The taxes you will need to pay due to the sale of the stock is dependent on when and how you acquired the stock, what your tax basis is, how long you've held the stock, what investment vehicle you hold the stock in, etc.

You should work with your tax-professional to understand the implications of selling your stock.  You can give us more details and we can help navigate the waters, but it's highly encouraged to seek professional advise.

Selling the stock will enable you to buy more index funds.

MustacheAndaHalf

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Re: Transfer vs sell company stock
« Reply #2 on: November 11, 2018, 12:20:45 AM »
This might be more of a tax situation than an investing situation.

You'll want to look up your "cost basis" or purchase history, so that you know how much each purchase has gone up in value.  When you sell, that increase in value gets taxed.

If you wait 366 days after the purchase, the increase in value is taxed at a lower rate.  The typical tax rates are 22% for short-term gains, and 15% for long-term gains.  But your tax rate may differ from that.

Even if you seek advice, you will need data.  So take a look at your cost basis or purchase history, so you get an idea how much the stock has gone up in value.

appleshampooid

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Re: Transfer vs sell company stock
« Reply #3 on: November 12, 2018, 08:39:30 AM »
If your intent is to sell the stock, transferring it out doesn't make any sense unless you have a private brokerage account with free trades available. In that case, you could transfer the shares in-kind (no fee as per your plan), and then sell them with no fee via your brokerage. This isn't the norm for brokerage accounts, but some offer X number of free trades if you have a certain balance or account level.

If not, just sell them where they sit and transfer the cash out to your brokerage account, wherever that may be. May take a couple of steps to do this...ACH to your checking account, then up to Vanguard (or whoever).

My employer's stock plan is administered through Merrill Lynch, which doesn't fucking offer ACH transfers from this type of account. Which is total bullshit. They offer wire transfers (at a cost of $7.50). I opted for a check. Vanguard offers mobile check deposit, which is how I'll be getting the cash to them.