I can take part of my rollover in "equivalent whole shares" of my previous employer's company stock in which my basis is about 50% of the current price. My understanding, which I'd like a second opinion on, is that I can walk with this stock, put it in a regular brokerage account and:
1) Have to pay taxes on the basis this year as ordinary income. There's no withholding, so I have to either goose up my W4 withholding and/or file some 1040ES payments to avoid penalties next spring.
2) Lock in all of the rest of the gain as unrealized long term capital gain taxable at the investor-preferred rate.
3) Have the purchase date, for purposes of considering any
**future** gains/losses in these shares as short- or long-term, set at the date of the rollover transaction.
4) I'd have to start paying taxes on, presumably, qualified, dividends while I hold the shares and they keep paying the dividend. If I go this route, one year from the rollover, ALL capital gains over the basis can be realized and treated as long-term capital gains. Does this sound right?
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