Currently discussing with my financial planner how to reduce my exposure in tech heavy QQQ while also keeping the tax bill in mind. Looking at direct indexing and keeping gains around $100,000 annually so I stay in a lower effective tax bracket. I’m worried about taking a slow approach, which could take as long as 10 years. The market could take a shit, and then where would I be? Part of me wants to just sell it all, pay the huge tax bill, and be done with it, but that’s probably dumb. Anyone have any insights here? I have analysis paralysis. Oh, my cost basis is $193,622.
$1.26M unrealized gain in QQQ. What would you do?
byu/carpe_diem_yolo instocks
Posted by carpe_diem_yolo
32 Comments
You can donate some
What are your goals with the $ if you decide to sell it all at once? Are you selling to buy property or something else?
I would not ask Reddit and if taxes are a big influence in your decision, you should ask an accountant.
If you need the money or think it’ll crash, sell it and pay the taxes. If you don’t, let it ride or transfer the lowest cost basis shares to your heirs within the maximum amount per year allowable by the IRS
Yes, the market could take a shit, but it can also rise another 100% before any significant drawdown. We have no idea. Sell it all now, pay a huge tax bill, and potentially kick yourself watching it continue to rise without you.
Or you could sell a little bit at a time.
Or you can sell covered calls to generate some income while unloading a few shares at a time if the calls get exercised.
Or you could buy puts to protect your capital (effectively buying insurance on your position).
Are you married and trying to stay in the 0% long term capital gains bucket? If not, then just accept the 15% bracket and take it out.
anytime you make money paying your taxes is part of the game. Just pay your taxes and move on.
You can borrow a loan on the shares to pay your taxes. That’s how rich people do it. The interest rate is much lower than a collateral, and you can pay it off over time. Talk to your broker.
Do nothing until you think something has broken for all your winners
tech isnt going anywhere this isnt 1999
Sell and buy 300k of QQQI after taxes for $3500/month of passive income
If your total portfolio worth is around $10 million, keeping the QQQ can help offset some gains with losses given you’re invested in a non-registered account. Definitely don’t sell it all in one go; it’s pointless, if anything sell in chunks to offset gains/losses that you may or may not have had. As well, the stock market is literally driven by all things AI so there’s no escaping, of course yes you can go into O&G and banking sectors for dividends and all that…
I am your lost cousin. Please donate some. 😉
Yea it’s called reserving and paying your taxes
Sell 150k and use 10k of that to buy 12 month out puts. Sell another 150k in 2027 and repeat.
If you trust Reddit more than your financial planner you might want to think about finding a new planner.
Sell 🙂
Sell it and buy 100% $O
I will mow your lawn for pay!
You buy puts for protection and take a loan out against it for tax free access to the gains.
Talk to a tax expert, dude. Lol. Is all of it in brokerage (non tax advantaged) accounts? Do you have a cash position to counter balance heavy tech exposure? Why wouldn’t you just leave it in there for another 10-15 years?
Sell the shares with the highest basis that you’ve held for at least a year. Your tax burden might be less in reality than you think it will be. Selling it off over 10 years is ridiculous if you’re selling to diversify and to try and avoid the AI bubble bursting
I’m in a similar position but looking to sell it and use as downpayment for a property. Will be talking to my accountant this week.
If you are planning to retire early, you can take advantage of 0% LTCG bracket to sell your most profitable lots – around $96k/year.
If you are married with one spouse not working and no income, you can MFS your taxes and have that person use 0% LTCG on $48k/year.
Of course it takes time to execute on this plan.
If you are so worried, you can just buy put protection. Also if you have such a return in QQQ you have rode the index through some very big dips. What’s the concern now – are you approaching retirement?
Your financial planner…will tell you what to do. Why are you asking us here when you are discussing with them? They’ll show you all the harvesting strategies are around to minimize taxes. This is their job.
Your cost basis is what? You lucky motherfucker. But if you try to imagine the future, do you see a world where tech is not the future?
Just do what your financial planner says tbh
Go mark to market and just sell.
I’d liquidate your entire portfolio and buy my second yacht
Short QQQ futures and buy something else with the proceeds
Your financial planner is the right person to talk to about this. Ideally you get to your risk capacity before you retire. Your two options are either you guarantee paying a large tax bill or you risk a large drop. You’re retired early at 53 so I am guessing this isn’t all of your money and what you have on the side really influences the decision. The question is how screwed would you be if the market drops 50% tomorrow, could you live off your other safe investments for years into the future until the market recovers or would you still need to sell to cover living expenses? If it’s the former I would hold off on selling to minimize taxes, but if it’s the latter the risk of not selling outweighs the taxes you will need to pay. You have the advantage of an early retirement that you will have a long retirement for your investments to continue to grow if you set yourself up right.
Your financial planner is giving you the right advice and you’re letting anxiety override it. The slow approach works exactly because it hedges the scenario you’re worried about — if the market tanks mid-transition, your unrealized gains shrink and so does your tax bill, so you accelerate the selling. If it keeps climbing, you keep harvesting at favorable brackets. It’s self-correcting.
Selling everything at once to “be done with it” means writing a check to the IRS for roughly $250-300k right now for the psychological comfort of not thinking about it anymore. That’s an incredibly expensive form of therapy