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Jack - You have gotten good advice from the posters, but thought of another aspect to your question. IRS rules allow for specific identification of shares to establish your cost basis in the shares. Since your objective is to readjust from 51% - 40%, you are obviously not selling all your equity holdings. My advice is to look at the various purchases that you have bought over the years in detail. Some of the blocks of purchases may have more favorable cost basis than others, of the same stock. For instance, you may have bought XYZ Corp at $10 in July of 2008, and then bought XYZ at $14 two months later. By identifying your sale as coming from the $14 purchase block, you have a better tax outcome. Of course, the sales need to be identifiable to a specific purchase, and you must so identify at the time of sale.

By applying more attention to detail, you may be able to reduce the tax impact of making this portfolio adjustment.

Tax Preparer Learning Systems, LLC
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