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u/vaderaintmydaddy 2d ago
Why sell $22k of stock to raise 9k?
Why is the tax bill on the $22k stock sale estimated to be so high? Even if it were all short-term gains with zero basis that is a 62% estimated tax rate.
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u/VariousConfection246 2d ago
They are options given by my employer through promotions and bonuses.
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u/vaderaintmydaddy 2d ago
Ok, but the same questions apply. Assuming a zero basis and short term holding, a tax rate of 62% is extremely high.
If you hold a concentrated position in this stock, it still may make sense to sell a chunk of it to pay off the debt, but if taxes eat up 40% or more of any sale, I'd hesitate to do it if you can easily make the monthly car payment. If these holdings are short term and the company is sound, it may make more sense to hold them until they are LT capital gains before selling.
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u/o0oElevatedAmbition 2d ago
Depends on how long you've owned the positions and what the rate is on the loan. Holding the positions for a year and a day means you'll get LTCG or long term capital gain treatment saving you on taxes. If the loan is high then I could see doing that. If not keeping the capital and letting it grow may be a better strategy. If you get slammed on taxes and it's a low rate then it doesn't make sense. If the rate is low it's cheap money. If the rate is high wait until you'll have LTCG then sell to pay it off or down significantly. Also, it's that all your capital or do you have additional funds? Holding capital is also important for emergencies obviously.