Find cash
If you've set up your data in the Tax Planner, the Capital Gains Estimator can help you figure out how many shares of a security to sell in order to come up with a certain amount of cash, after also estimating the amount of income tax you'll need to pay on your gain. (If you know your tax bracket, an alternate method is to simply tell the Capital Gains Estimator which tax rates to use.)
Find cash by analyzing the results of your proposed sale
- Use the Capital Gains Estimator to create a sales scenario.
- View the impact of your proposed sales. Pay special attention to Net Proceeds from Proposed Sales. This will tell you how much cash you have after you put aside the estimated taxes.
Example
You might want to put a $6,000 down payment on a new car. You open the Capital Gains Estimator and indicate that you want to use the 15 percent/10 percent federal capital gains tax rates and 10 percent for state income tax. Six months ago you purchased 1000 shares of stock in XYZ for $10 a share. It is now valued at $18 per share.
If you sell all the shares, the total proceeds would equal $9,750, but you would have to put aside $2,000 for taxes. You would have $7,750 to spend. That would be $1,750 more than you need. Use the Capital Gains Estimator to change the number of shares you sell. Selling 775 shares would give you $7,556 in total proceeds. You should put aside $1,550 for federal and state income taxes. That would leave you with $6,006 to spend on your new car, and you would still own 225 shares of XYZ stock.
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