Quote:
Originally Posted by CRCRFT78
Got it. I knew it would be a simple formula for some reason I just kept making it more complicated than necessary over thinking it.
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In that case Jose -- you're trying to be a broker or analyst.... they always try to make it complicated. Keeping you confused or in the dark is how they make YOU think THEY are smart or something. They're not.
Whether or not you average "IN" or "OUT" it always usually (note that caveat) pays to do the math to see what you're really doing and how it will affect your portfolio. Most of the time you'll see that buying in as a stock RISES - doesn't really raise your cost basis all that much.
Schwab allow you to check a choice when you SELL -- You must check these options BEFORE you sell -- and I went over this before in the thread -- that allows you to SELL the most expensive shares FIRST -- or in other words the best tax managed sales - in order to keep your capital gains as low as possible. Many people don't know this little fact....
So let's say you did that McDonalds trade -- you have the 60 total shares - but the last 10 cost you $100 a share -- and now they're trading at $120.... and you want to balance your account out.... you want to sell the $100 shares FIRST and only have a $20 per share taxable event --- you don't want to sell the $80 shares and have a $40 per share taxable event. Particularly if you plan to hold "some" shares in the name.
We're not trading -- and I'm assuming that magic ONE YEAR AND A DAY holding period for Long Term Capital Gains... but it pays to manage your GAINS and reduce your taxes. What the heck -- why pay 15% on 40 when you can pay 15% on 20!
We are - after all -- TRYING to manage our money!! Right?
