The Motley Fool Discussion Boards
Investing/Strategies / Retirement Investing
|Subject: Re: Tax-free retirement investing||Date: 6/12/1998 11:00 PM|
|Author: JoeSchmoe||Number: 3769 of 82858|
<<I would caution, however, that you are severly overweighting in your company stock, and would urge you to keep its weighting well below 20% of your holdings, trimming it back to 10% or less as you have opportunities to sell in the future and the rest of your portfolio grows.>>
This brings up a good point; we too have been concerned about our dependence on our company's stock.. The reason for putting 10% into this (the maximum allowed) is because we are able to buy the stock at 85% of market value and thus guarantee a return of 20% if we sell immediately. Our company (INTC) has historically provided good returns, but the recent travails in its price have worried us.
So, ideally I would like to hold this stock for 18 months before selling to decrease the capital gains tax that we pay. The question is, at taxtime how is it determined which shares of stock you are selling? We buy through the Employee Participation Program every 6 months, so is the capital gains tax calculated assuming you're selling the oldest shares or the newest?
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