Capital Gains/Loss scenario question


Suppose I purchase 110 shares of StockA in two transactions:

  1. Jan 2017 – 100 shares at $50 a share ($5000 total)
  2. Jan 2022 – 10 shares at $500 a share ($5000 total)

I bought these for long term investment and intend to hold on to them for many years and expect the stock will hit $1000 a share at some point before I sell them.

In April 2022, the stock dropped to $250 a share and has stayed there.

I want to cash out a little and sell 5 shares to cover some household expenses. What formula can I use to determine if it's better for me to:

  1. Sell 5 shares of the 2017 stake and pay long term capital gains on the profit
  2. Sell 5 shares of the 2022 stake, which would normally be subject to short term capital gains, but in this case I would instead be writing off a loss.

?

To simplify matters, lets assume the write-off does not change my income tax bracket.

Thanks!


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