How to AVOID Taxes (Legally) When you SELL Stocks

STUFF I RECOMMEND!*
Personal Finance

Saving Money & Grabbing Deals

#financialeducation #financialindependence #taxes

Inside This Video:

Introduction to Tax Lot Strategy: Discover the foundational knowledge of managing your investments to optimize for tax efficiency.
Short-Term vs. Long-Term Capital Gains: Understand the significant difference between short-term and long-term capital gains and how they impact your tax rates.

Real-Life Applications: I'll share insights from my own investment journey, focusing on ETFs and individual stocks, and how selecting specific lots for sale can lead to substantial tax savings.

Step-by-Step Guide: Learn the ins and outs of tax lot selection, including a walkthrough of how to analyze and choose which shares to sell to minimize tax liability.

Tools & Resources: Get an exclusive look at the tools and calculators that can assist in making informed decisions about tax lot selling strategies.
Patreon Exclusive: For those interested in going even deeper, check out our Patreon for access to exclusive templates and tools that can help streamline your tax strategy.

Why It Matters:

Tax management is a crucial aspect of investment strategy that can significantly affect your net returns. By employing thoughtful approaches like the tax lot strategy, you can ensure that you're not only growing your investments but also retaining as much of those gains as possible after taxes.

Engage & Share:

Have you used tax strategies to enhance your investment returns? Share your experiences or questions in the comments below. Let's foster a community where we can learn from each other and navigate the complexities of investing together.

Looking to avoid taxes when selling stocks? In this video, we'll discuss legal tax strategies for investors, tax efficiency, and tax planning to help you maximize your investments and minimize your taxes. Don't miss out on this valuable information for all stock traders!

*Disclaimer: Bob is not a financial advisor. Please contact a professional financial advisor prior to making any decisions. Some of the links and other products that appear on this video are from companies in which Bob Sharpe earns an affiliate commission or referral bonus. Bob Sharpe is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.

[vijayaragavan]

Loved it- thanks! I never knew this before!

[lawrance]

One should also be aware of what tax bracket they are in, and make sure you are in the lowest bracket before making that sell.
Long-term capital gains tax rates 2023
Capital gains tax rate Single (taxable income) Married filing jointly (taxable income)
0% Up to $44, 625 Up to $89, 250
15% $44, 626 to $492, 300 $89, 251 to $553, 850

20% Over $492, 300 Over $553, 850

[benjaminguzmanuribe]

Wow! I was wondering about that for a while!

So I guess that the most optimal situation would be to sell long term gains which costs are very close to the actual value.

[rakshere]

Fidelity also allows to select specific tax slot to sell. Robinhood doesnt, it is always FIFO, which is why I dont prefer RH. I am not sure about Webul

[AlexanderWebster_]

Doesn't this just push your tax burden down the road? You'll have more gain on those first stocks the longer you hold them

[zelowatch]

What about index funds? If you sell over years later can you use this strategy ?

[aktham]

Does Vanguard use FIFO or by lot number?

[king-stoney-jay]

I will be taxed even if it is just in my robinhood account? I thought id be taxed once I pulled out?

[igorsto]

Fantastic insights as always! Your tips are not only helpful but also inspire me to explore new strategies. Thank you for sharing your knowledge with us. Can't wait for your next video! I'm really interested in seeing which platform you think is the best for selling stocks on a cost basis, especially for those of us making regular investments. Your knack for breaking down tricky topics is a game changer for us followers!"

[johnt]

I would always sell the LT shares first. This gives the ST shares some extra time to turn into LT shares. Ultimately I think you want to be able to sell you rshares at the lower tax rate.

[pnvst]

Wow, this is eye-opening! I was not aware that we were able to pick what specific lot to sell. We have our taxable brokerage at Schwab also, just checked it and it is there. Thank you so much for showing this!

[RandomJ]

As a 100 percent disabled veteran, nearly all of my income is non-taxable. Does anyone know if this helps tax bracket and taxable amount you are referring to is related to over-all income, or is it just related to any gain you are selling?

[timholder]

Where does social security come in to play?

[KCM]

Do you still pay taxes if you reinvest and not totally withdraw?

[wkeybois]

Listen thank you for making this video I learn a lot from you I'm 15 and have been buying and selling stocks in everyway possible using everything possible the most convenient way I'm doing it is cash app and Fidelity using my mom's help

The only thing I'm afraid about doing is going over 10k invested because it might become too much. How can I manage my taxes if I have any at that I'm not sure.

[ProfessionalDad]

I inherited my dads Vangard account in 2020.I currently pay taxes on dividends as earned income. I understand the cost basis rules somewhat. How can I sell some of these and avoid taxes?

[krakken]

i would probably select LT ones with Higher cost basis per share to sell that way my rate is 15%.

[paulshantz]

ummmm....maybe you should consider the fact that if you only sell shares where you are in the red you are by definition losing money ;). so yeah no tax but you've just thrown money down the toilet, you could have literally just kept it under your mattress instead and be further out ahead ....lol... Assuming that the underlying asset still has intrinsic value you'd be much better off holding losses in order to give them a chance to rebound into gains later.

[LeftBehind]

This is smart, but won't you eventually have to pay the taxes when you sell everything?