How to decide which assets to sell?

"LurfysMa" wrote

There isn't an income tax hit with a loan. It's possible that the loan, if secured by the house, would allow the interest to be deductible on Schedule A, so keep that factor in mind.

The stock sales would carry a potential tax hit. More so if you sell all gainers. If you held some stocks that are currently in a losing position, consider selling some of those to lower your overall gains.

The only way to know for sure which is going to be best, is to compile some potential numbers, and see what the tax and financial impact is going to be.

I'd consider the loan, unless that additional monthly mortgage payment isn't in the budget (or at least is shaky). If you do sell the stocks, plan on making a "mortgage" payment back to yourself to build back the investments.

Unfortunately, I only have winners ;-) Most of the stocks have been held for quite some time.

I guess I phrased the question poorly. Here's what I really need to know:

1. How is the tax calculated for stock sales? Is it still capital gains and is that a fixed rate regardless of income tax bracket?
2. If the stock was a gift (I paid zero for it), is the basis for me zero? Does it matter what kind of a gift it was? I believe my parents paid some gift tax.

Thanks

"LurfysMa" wrote

Fixed, at 5% or 15% depending on your tax brackets.

Gifts carry the giver's basis, so ask your parents what they paid for it (what was their basis).