Ask Terry Questions Taxes on sale of stocks

Taxes on sale of stocks

By Terry Savage on May 04, 2022 | Taxes & Economy

Terry:
I have a brokerage account with Fidelity that I opened with investments (individual stocks and money market funds) that I inherited from my late parents’ estate. This was in 2008-09 when the market tanked so I was able to reinvest everything in index funds without incurring any capital gains taxes. The account is currently worth around $135K and has appreciated over 400% since I first opened it. I am 73 and would like to use this money for retirement but it is a “tax bomb.” Is there anything I can do to either lessen or avoid having to pay capital gains taxes on this money?

Terry Says

Nope. Nothing you can do but spread out the sales. The capital gains rates are incredibly low now:
2022 long-term capital gains tax brackets
For single filers with taxable income of… For married joint filers with taxable income of… …this is the long-term capital gains rate
$0 to $41,675 $0 to $83,350 0%
$41,676 to $459,750 $83,351 to $517,200 15%
Over $459,750 Over $517,200 20%

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