is it feasible to sell most of my individual stocks in my taxable brokerage account to vanguard vans?

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sylvia
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is it feasible to sell most of my individual stocks in my taxable brokerage account to vanguard vans?

Post by sylvia »

Greetings;
I am a late comer to the Bogleheads' way of investing.
I am in my early 70s and want to sell most of my individual stocks (approx $500,000) in my taxable brokerage account and buy VTSAX and VWIUX.
Is it feasible to pay the capital gains taxes on selling the stocks at this late stage of my life in order to covert to the two Vanguard funds because I am a true believer in the Bogelheads way of investing and want peace of mind and not worry about the performance of individual stocks.
What do you suggest?
Thank you
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arcticpineapplecorp.
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Re: is it feasible to sell most of my individual stocks in my taxable brokerage account to vanguard vans?

Post by arcticpineapplecorp. »

Feasible? As long as you understand the tax implications you can do as you wish.
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Brianmcg321
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Re: is it feasible to sell most of my individual stocks in my taxable brokerage account to vanguard vans?

Post by Brianmcg321 »

I would probably space it out over a few years. I would hate to have that tax bill all at once. I would check with an accountant first.
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psteinx
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Re: is it feasible to sell most of my individual stocks in my taxable brokerage account to vanguard vans?

Post by psteinx »

Sure it's feasible. But lots of things that are feasible are not good ideas.

What is the approximate total basis* of all those stocks, with a value of ~$500K?

*Basis means "what did you pay for them". Most brokers will show this information to you on paper statements, but may not show this (or may have partial/incomplete information) if the positions date to 2010 or before (2011 or before for funds).
Topic Author
sylvia
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Re: is it feasible to sell most of my individual stocks in my taxable brokerage account to vanguard vans?

Post by sylvia »

total cost basis is about $200,000 of the stocks with a current value of $500,000.
I can rephrase my question: at my late stage in life, with limited time to recoup the large bite from the capital gains tax, it may make sense to just keep the status quo instead of selling the stocks and buying the vanguard funds?
psteinx
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Re: is it feasible to sell most of my individual stocks in my taxable brokerage account to vanguard vans?

Post by psteinx »

Yes.

Taxes on $300K in cap gains would likely be significant. Note though, that at the federal level, unless you have a high income otherwise, you could likely realize some capital gains each year at a 0% rate. State and/or local may be different.
backpacker61
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Re: is it feasible to sell most of my individual stocks in my taxable brokerage account to vanguard vans?

Post by backpacker61 »

you could consider selling just enough to avoid creeping up into the next capital gains tax bracket (from 15% to 20%, etc), or avoiding the next IRMAA surcharge.

there are certainly risks to keeping the concentrated positions that you currently hold.

at 70, you could also live another 20-25 years.
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arcticpineapplecorp.
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Re: is it feasible to sell most of my individual stocks in my taxable brokerage account to vanguard vans?

Post by arcticpineapplecorp. »

do you plan to donate any assets now or after death? If so, could you use any of these appreciated shares for donation so as to not incur tax bite?

you could look at a donor advised fund for instance with Vanguard, Schwab or Fidelity.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
TropikThunder
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Re: is it feasible to sell most of my individual stocks in my taxable brokerage account to vanguard vans?

Post by TropikThunder »

sylvia wrote: Wed Oct 27, 2021 7:31 pm want to sell most of my individual stocks (approx $500,000)
How many stocks are we talking about? 5 or 50? There is significant undiversified risk when holding individual stocks (as I'm sure you know now) but that risk is less when you own at least 20-30 different stocks in different industries. If the stocks you own are diversified, you could switch them over in batches over the next couple years as others have suggested, to spread out the tax hit. If we're talking about $500,000 worth of TSLA or APPL, maybe do it faster.
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