Author Topic: Covered vs Non Covered Shares  (Read 2442 times)

BTDretire

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Covered vs Non Covered Shares
« on: December 16, 2019, 01:39:17 PM »
Hi all,
 First year to use savings for income, newly retired.
 I find a I have non tax advantaged account that is mostly Non Covered shares.
 This could go back 30 years.
 I just now got off the phone with Vanguard and the suggestion is, click on average and be done with it. Has anyone kept good records to know what their cost basis is? I still have boxes of records in the attic, but I'm not about to go through them looking for every deposit I ever made into this account for the last 30 years.

bacchi

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Re: Covered vs Non Covered Shares
« Reply #1 on: December 17, 2019, 01:01:20 PM »
I participated in a DRIP with a regional utility. We're talking multiple small purchases (one every 2 weeks) for many years. In the end, instead of poring over old records, I just used a finance site to get an average stock price and called it good. If the IRS came knocking, I'd do the work.

MDM

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Re: Covered vs Non Covered Shares
« Reply #2 on: December 17, 2019, 02:12:09 PM »
I just now got off the phone with Vanguard and the suggestion is, click on average and be done with it.
The average of what?  In other words, does Vanguard have a cost basis for all the lots?  If Vanguard doesn't, do you?

IF you are going to sell them all then specific lot ID will give the same answer as average lot cost.  But if neither you nor Vanguard know the basis, the IRS is happy to assume $0 for the basis.

BTDretire

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Re: Covered vs Non Covered Shares
« Reply #3 on: December 17, 2019, 07:03:16 PM »
I just now got off the phone with Vanguard and the suggestion is, click on average and be done with it.
The average of what?  In other words, does Vanguard have a cost basis for all the lots?  If Vanguard doesn't, do you?

IF you are going to sell them all then specific lot ID will give the same answer as average lot cost.  But if neither you nor Vanguard know the basis, the IRS is happy to assume $0 for the basis.
Vanguard does know my cost basis, and 58% of the fund is LTCGs. But they don't have any purchases since sometime in 2011 of 2012. I may have used the wrong term with 'Average', I tried to check the site, but I think they are having a problem, I can't log in. Anyway you have the option of (FIFO) or (average cost?) or pick which (lot) you are selling.
« Last Edit: December 18, 2019, 06:00:52 PM by BTDretire »

MDM

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Re: Covered vs Non Covered Shares
« Reply #4 on: December 18, 2019, 07:47:05 PM »
Do you want to sell all of them or only some of them?

BTDretire

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Re: Covered vs Non Covered Shares
« Reply #5 on: December 22, 2019, 08:01:36 AM »
Do you want to sell all of them or only some of them?

Just part of them, maybe 20%.
Preliminary plan, just enough to stay in the 0% LTCGs bracket.
Plan changed from, doing Roth Conversions while staying in the
12% bracket.

MDM

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Re: Covered vs Non Covered Shares
« Reply #6 on: December 22, 2019, 10:49:54 AM »
Do you want to sell all of them or only some of them?

Just part of them, maybe 20%.
Preliminary plan, just enough to stay in the 0% LTCGs bracket.
Plan changed from, doing Roth Conversions while staying in the
12% bracket.
Do you plan to list your lots by descending cost basis and sell from the top of that list until you reach the desired LTCG?

BTDretire

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Re: Covered vs Non Covered Shares
« Reply #7 on: January 02, 2020, 10:53:03 AM »
Do you want to sell all of them or only some of them?

Just part of them, maybe 20%.
Preliminary plan, just enough to stay in the 0% LTCGs bracket.
Plan changed from, doing Roth Conversions while staying in the
12% bracket.
Do you plan to list your lots by descending cost basis and sell from the top of that list until you reach the desired LTCG?

Sorry, a little slow responding. I had no fixed plan, I was searching for my options.
I saw a real headache to get cost of all my lots, so I will/did just go with the average.
 I sold $126,000 worth of non tax deferred VTSAX, $73,080 of which is LTCG.  Added to the $25,000 of other income I have, I'm hoping to pay 0% tax.
 For 2020 I hope to be able to plan a little better and include some Roth conversions even though I'll need to pay some tax.
I have a friend that is stuck in the 24% bracket with his RMDs and has no options. I hope to avoid that when I need to start RMDs.
 So I'm done planning for 2019, But now I have $120,000 in a MM and need to get it invested short term.
 Most/All of that will be spent on living and college expenses in 2020.