Advice on how to liquidate stock accounts?

GoldenWest
Sun, 02 Aug 2015 05:12:28 +0000

If you have $10K in capital gains and $5K in capital losses, you will have net taxable capital gains of $5K (long term or short term depending on how long you held the stocks). If you have $10K in capital gains and $15K in capital losses, you will completely offset your current capital gains, and of the remaining $5K in losses, you can take $3K in the current year and carry forward $2K to be used in future years (either against future capital gains, or as a net loss, up to the $3K annual limit). If you withdraw funds from an IRA, it is ordinary income, whether the source of that withdrawal was selling stocks held in the IRA or from other income earned in your IRA.

If you have moved stocks from an IRA to a taxable account, you would have paid tax on the fair market value of the stock when it was withdrawn and transferred to a taxable account. Therefore, your basis in the stock is the now the fair market value that you reported tax on in the year of transfer. The only gain you would then have is any appreciation from the time of transfer to the taxable account to the time of sale.