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Diversity without tax impact

Folks, I have highly appreciated stock that is nearly 40% of my portfolio. Is there any way to exchange that stock with index funds without tax hit?

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The Home Depot Rowsdower Jan 19, 2018

Not unless you’ve got some other capital loss you can take to offset. (Eg one of your alt coins is down 40%. You can sell and re-buy, Resetting your basis and then you can offset your gains on the stock with the loss in alt-coins.

The Home Depot Rowsdower Jan 19, 2018

Yeah, wait 30 days or buy a different coin or love to eth for 30 days

CareerBuilder hdTI13 Jan 19, 2018

Has the IRS established precedent that buying a different coin would avoid wash sale? Rules are fuzzy even with traditional assets. I suppose you could just do it and claim ignorance if you get audited.

Apple IyaJ67 Jan 19, 2018

As soon as you sell to exchange it will be a capital gain (or loss). No way around that. If you want to avoid the tax hit, you can donate appreciated stock and claim the market value as a tax deductible donation.

Gen!x XPbr65 Jan 20, 2018

This has always been weird to me. When you do this you still come off worse than if you just paid the tax. Charitable donation is a deduction and not a credit. Am I missing something?

Apple IyaJ67 Jan 22, 2018

It totally depends on your tax situation. As an example if you're going to be bumped up into the next tax bracket or will get into AMT territory, you can reduce your taxable income by donating appreciated assets and thereby get under that threshold. This of course assumes you've exhausted all other taxable deductions (e.g. 401k, HSA, etc).