You recently received the following e-mail from a client and friend: Hey Friend! I cannot believe it is almost year end! Only a few days before it’s 2020. As you recall, I was lucky enough to win big at the casino back on New Year’s Day earlier this year (thanks for celebrating with me). I took the $3,000 I won and bought 100 shares of stock in that cool new smartphone app company, TriviaAddiction. I just love playing that game. Anyway, the stock has done well, and I am thinking of selling before year end now that the price has reached $240 per share. Since you are my tax adviser, I thought I’d ask a couple of questions: Is there any reason to wait and sell later? If I don’t sell, the price might go down (TriviaMaster seems to be replacing TriviaAddiction as the “hot” new game). I’m thinking the price might be as low as $220 by early next year. My taxable income this year and next year is expected to be $38,500 (not including the stock sale). I think that puts me in the 12% tax bracket? Any suggestions on what I should do?
You recently received the following e-mail from a client and friend:
Hey Friend!
I cannot believe it is almost year end! Only a few days before it’s 2020.
As you recall, I was lucky enough to win big at the casino back on New Year’s Day earlier this year (thanks for celebrating with me). I took the $3,000 I won and bought 100 shares of stock in that cool new smartphone app company, TriviaAddiction. I just love playing that game. Anyway, the stock has done well, and I am thinking of selling before year end now that the price has reached $240 per share. Since you are my tax adviser, I thought I’d ask a couple of questions:
-
Is there any reason to wait and sell later?
-
If I don’t sell, the price might go down (TriviaMaster seems to be replacing TriviaAddiction as the “hot” new game). I’m thinking the price might be as low as $220 by early next year.
My taxable income this year and next year is expected to be $38,500 (not including the stock sale). I think that puts me in the 12% tax bracket? Any suggestions on what I should do?
Thanks!
Sue
Requirement:
Please advise your friend Sue and addressing her questions in your initial post. Be certain to include estimates of the different after-tax outcomes she is suggesting. Sue is a single taxpayer and not a tax expert and so your language should reflect her limited understanding of tax law and avoid technical jargon. Although Sue is your friend, she is also a client, therefore, the information presented in your post should reflect your professionalism and expertise in the matters concerning her.
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