Selling Stock

"Doree" wrote

Is that 67 thousand dollars or just 67 dollars?

Do you plan on doing anymore stock sales or purchases?

Do you have a brokerage or IRA account with anyone? If so, who?

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You should find a local office for one of the discount brokers. The cost is anywhere from $5-$15 per trade. I use Schwab and pay $8.95 per trade. More important - what do you plan to do with the money? If you don't need it to spend, you should consider your next steps. Joe

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Among other things, you need to figure out your basis in the stock so that you know what your (presumably) capital gain will be, so you'll know how much of that $67,000 is actually yours (vs. Uncle Sugar's).

-- Rich Carreiro snipped-for-privacy@rlcarr.com

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You should find a local office for one of the discount brokers. The cost is anywhere from $5-$15 per trade. I use Schwab and pay $8.95 per trade. More important - what do you plan to do with the money? If you don't need it to spend, you should consider your next steps. Joe

Doree:

I told you I am dumb, what do you mean "per trade"? I have 3 certificates. 1 for 109 shares. 1 for 245 and another for 708 shares. If I sell them all is it 1,3 or 1062 trades?

No, I don't need the money. At 73, and health not so good, am trying to get my affairs in order. Was planning to put it into more CD's along with the rest of my retirement funds.

Thanks Doree

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find a local office of eTrade, Schwab, Fidelity, or Scott trade, and ask them how much they'll charge you for selling your stocks.

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It's one trade. You would deposit all three certificates for 1062 shares with a broker, and then tell the broker to sell all 1062 shares. That's one trade.

At Fidelity (which I use as an example because I have accounts there and are familiar with the commissions structure), if you place the order online, the commission on the trade will be just about $21. If you place the order with a human being, the commission will be about $190.

So at most, it'll cost you, say, $200 to sell your shares.

So again, the procedure would be to open a brokerage account, deposit the certificates with the broker (they'll tell you how to do that), then when the certificates have posted to your account, place an order with the broker to sell them all. Once the order executes and settles, you can tell the broker to send you a check for the proceeds. At that point you can close the account if you wish. Alternatively, you might want to leave the account open and invest some of the money in CDs purchased through the broker. These CDs are issued by US banks and are FDIC insured (though make sure to check the FDIC status of any particular CD). There is usually no commission to purchase them. An advantage of this approach is that you might find CDs with better rates than at your own bank, and you won't have to go through the paperwork of opening a CD account at each bank you're interested in. One IMPORTANT DISADVANTAGE is that brokerage CDs are generally NOT redeemable at all before maturity.

You might as well start the process of opening an account with a broker of your choice and getting the certificates deposited. Then when you are ready, you can sell. Before selling, figure out what your basis is in the stock so you'll know what your taxable gain on sale is. You'll need that number when you file your tax return.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

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In that case, I'd recommend you do nothing with them. Your heirs would get a step-up in cost basis and would owe no capital gains tax on the stocks. You would if you sold them yourself.

If you come to a situation where you do need the money, then the advice of a discount broker is the way to go. ScottTrade has local offices in many cities, for instance.

Brian

Not only that, but also at age 73 it might not be a bad idea to hold on to something in equities. I wouldn't want everything in CDs.

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It would be 3 trades.

If you used a discount broker like Schwab, you could reinvest in a large variety of CD's that Schwab trades, money market funds, etc. Keep in mind that CD's and MM are not paying much interest these days.

I think that brokers usually charge a small fee to handle stock certificates too.

HTH

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Agreed, but if she in fact has just one company (three certificates, right? But did she say they are all the same company?) then wouldn't she be better off selling and buying a broad index?

I don't know her tax bracket either, but her cap gain rate may be zero this year.

Joe

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It would be one trade (I'm assuming that all three certificates are for the same company). She'd just deposit all the certificates into an account and then place a sell order to sell all 1062 shares.

If the certificates are in fact in three different compaies, then yeah, it would be three trades.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

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Not to deposit them. The fee is when you want to take physical delivery of a certificate instead of leaving it in your account.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

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Yes, true, better an index fund than 3 companies. But if there were significant costs in selling and capital gains taxes, I would be inclined to just stay with the 3 stocks, especially if they were in solid companies and paid dividends. You would have to know more details and factor in the risk.

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Doree, as Richard implied, you want to evaluate carefully whether to sell this stock all at once. Two things to start evaluating before you sell any of this stock:

1. Depending on your income level and the stock's basis, you may be able to pay no tax at all on your sale. A special low tax rate for long term capital gains kicks in starting this year, but only up to a certain income.

1. Selling the stock all at once is very likely to result in your throwing away a lot of money on capital gains taxes. You have certificates instead of the shares on file electronically, so I am betting you have held the shares for some time, and the capital gain is quite large. But your confirming this would help people to advise you, should you need tax advise. The group misc.taxes.moderated is also a good resource for this.

You may also want to strongly consider rolling over your

401(k) to a Traditional IRA. You will pay no taxes on this rollover. You will have more control over the money in the account. E.g. you could invest all of the 401(k) in CDs if you want.

No one's query is stupid around here. Good luck.

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Doree - you may have some zero bracket cap gains rate available to you if your taxable income is under $32,550. You have a Standard deduction of $5450 plus $1350 due to your age, as well as a $3500 exemption. (this all totals $10,300).

For example, if all your income adds (after subtracting that $10,300) to $20,000, you can take $12,550 worth of gains and pay no taxes. This zero rate is available for three years 2008-2010, so depending how much you have in gains, spreading over three years may save you some money.

Joe

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doree if you don't need the money why sell the stocks? You'll have to pay taxes.

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The original poster is 73. That means she has to worry about SS benefits taxation. That's something a many "use the zero CG bracket" people forget about. Even though the LTCG will be taxed at 0% (to a point), it still counts as AGI and so still counts towards how much SS gets taxed. Because of this, the so-called untaxed LTCG may face a marginal rate as high as 12.75% ($100 of LTCG causing $85 of SS to be taxed at 15% leads to $12.75 in tax). So depending on the totality of the original poster's tax situation, it might still make sense to sell it all in a single year so that her SS benefits only face potentially increased taxation once instead of three years.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

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Shame on me, I forgot. After all I've written about the topic. Still, we are back to the need for a lot more information from the OP. Joe

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