Selling Appreciated Stock

Organize the holding, timing and basis questions your professional team should review before evaluating what comes next.

What is decided, and what is still open?

Before a sale

Identify the holding you are considering selling and the questions you want your professional team to review. If the shares relate to your employment or have restrictions, flag that context.

After a sale

Keep the trade confirmation and available basis records for your tax professional. Note what remains invested and what you want to accomplish with the cash.

Prepare four pieces of context.

1. The transaction: what was sold or may be sold, the owner, and actual or expected dates.
2. The estimate: who is reviewing basis and gain, when the estimate was prepared, and what remains uncertain.
3. The remaining portfolio: holdings you plan to keep and other commitments.
4. Your priorities: cash you need available and questions about risk.

Questions to take to your professional team

• Do the available records reflect the shares involved and any basis adjustments?
• Are there employment, ownership or transaction details that require a specialist?
• What obligations should I plan for before discussing an investment amount?
• How would a new investment fit alongside the holdings I am keeping?

Basis is used in determining gain or loss; sale proceeds alone do not establish the gain. The IRS discusses stock basis in Publication 550.

Review the proposed investment on its own terms.

Ask about potential loss, fees, limits on accessing your money, the manager and the actual offering documents. A tax question is only one part of the decision.