I have various taxable investments that I plan to pull a bit from for housing down payment. The investments span many years, 10 or so funds, so I have a lot to choose from in selling. My brokerage will let me do whatever I want; FIFO, LIFO, specific lots.
I am assuming that the optimal approach is to minimize taxes, because I keep the most $$ growing? So FIFO is basically the worst option?
My approach would be:
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Sell any position I wanted to get out of anyway
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Sell anything at a loss
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Start selecting long term gain lots with the least gain in them
Am I missing anything?
Taxable investments withdrawals for house
byu/FinePilsner01 inpersonalfinance
Posted by FinePilsner01
1 Comment
> Am I missing anything?
Once you hit #3, it really depends.
A lot with a STCG of $1 will (likely) have a higher tax *rate* than lot with LTCG of $50.
But depending on the math, the *numerical quantity* of tax paid may be less on that STCG lot.
So it really depends on you actually identifying your applicable tax *rates* for STCG/LTCG *in addition* to the gain size.