Stock/down payment advice desired

At the end of the year I only pay taxes on stocks I've sold, I think that means they're sheltered. How do I find out for sure?

 

I don't see any scenario where you would pay taxes on 100% of the sale price. Some of what you hold HAS to be what you purchased, or your employer purchased. Maybe there is a way, but I don't think that's what you're looking at. You should just look at what you paid for the shares (or your employer paid), then take the difference (the capital appreciation), you'd be taxed on the difference. You'd want to look at what's called "cost basis" on a brokerage account, that is your average per-share price.

An example would be if you bought, little by little over the years, shares of ROST, and the amount you paid is $50k. Your shares are now worth $100k. If you sold ALL of your shares, you're taxed on the $50k of capital gains (either at the long-term or short-term rate, depending on how long you have held the shares).

 

That is really interesting and good information to know. I'm going to have to keep re-reading it to fully grasp it but that's ok, I'll get there eventually.

It sounds like it doesn't matter if it was purchased this year or decades earlier, but the rate is calculated by original cost and how much it's made at the time of the sale. I *think* that's going to help me from getting into a higher tax bracket. I have to sit and think about this a little bit.

 

Hmmm, when my employer gave me the stocks they weren't worth much at all. I think that'll put me closer to that 100% of it is taxed at 10% factor.

 

Your gains (the amount to tax) will be figured based on the difference between your cost basis and the price you sell for. You can look into long-term and short-term tax rates, but I think to get long-term you have to have held for at least a year, so you’re probably good there. It should be a lower rate for you if you sell these shares.

 

I appreciate your replies Boyk and the rest of you other people that have replied. A very positive learning experience for me for sure. Thank you.

 

Short term capital gains are those realized in less than 2 years time and are taxed as ordinary income (likely not applicable here based on OP’s telling). Long term capital gains are taxed at 0%, 15% or 20% depending on the taxable income (which doesn’t include disability) and filing status. So that will most likely be 0% for the OP based on what I read. For 2020 the cutoff for 15% is close to $80K. So Hotboatrod, even if your POTENTIALLY taxable income would be all of that $100K stock sale (which I doubt as Boyk explained) there are still ways to stiff Uncle Sam, and legally so. The year is almost over. Break the stock sales into two transactions, this year and next (new tax year) so that the total tax basis in each year doesn’t launch you from 0% to 15% capital gains. If you are worried about PMI payments please know that those can be shed in various ways (e.g. paying down the loan to below 80% LTV subsequently to closing such as your second stock sale, or via a re-appraisal proving increased equity resulting from market appreciation). Probably overkill for you but could also try to pull off a 10-31 exchange if all else fails but I doubt you’ll need to think about that.

I’m curious, have you really already hammered out all the details of the construction? Your budget sounds really low for San Diego and most banks will want you to buy the land and pledge it as collateral. I’d highly recommend the VA route if possible and put down the least you can on a construction deal to make the bank hold all the risk until construction is finished, and then refinancing with a low rate.

 

Thank you. I am going to need to re-read this one a few times too.

I hired a recently retired construction guy as a construction consultant and he is analyzing every in and out of each property that I ask him too. He has been in the business of manufactured home installs on private land lots for decades. Every single aspect of the lot and its required construction, from permits and fees to what size will fit on the road during transport. He has not finished his job yet as the Padre Dam water district is lagging on their end. Would you believe in the Padre Dam Water District it's $25K for a water meter and another $5K in Padre Dam fees? Crazy. So far the preliminary total cost for fees and permits is $46K (that includes the above mentioned $30K). The land lot I'm considering the most seriously has a lot going for it as far as saving money in construction costs. Septic is in already. Electricity is right on the corner of the lot, maybe 40 feet from where the center of the house will be. The lot suposedly already has a water line in the ground going from where the meter would go to about 80 feet short of where the house would go. And the biggest advantage it might have is that the sellers realtor thinks it already has that $25K water meter. Whether they'll let me use the old meter or not and what they'll want in fees might be another story. We're waiting for confirmation on the water meter and line being already existing, their fees if they are existing already, other than that I'm ready to pull the trigger. The line is a pretty long windy stretch and if it's already there that'll be worth around $15K on this particular land lot.

 

In the end, it didn't matter. I spent more with cash than I planned on because the location and what's already on the land was worth it. The view of the canyon is incredible, the best view in a close proximity to the lot. In the end my mortgage will be less than my goal of $1,000 a month - in San Diego county. I'm so happy my family gets to stay together in our home state.

Thank you all for your advice very much.

 

Congratulations. Where’s the lot?

 

Thank you. 917/905 Kelly Drive, El Cajon, Ca 92019. .54 acre just big enough for me to do something with but not a too big of a lot to take care of.

https://earth.app.goo.gl/xfsnMP

 

Cool, before I got my place in Bonita I looked in Harbison Canyon too.

 

You may be better served on reddit for this sort of question. Check out reddit.com/r/personalfinance or reddit.com/r/investing . I'm sure TW has some solid investors on here but theres a larger crowd on those subreddits.