LKQ - club_cafe - bivio Investment Clubs

wiltse on

There is no right answer. People in the club have different tax situations and different needs. If the club has realized losses or wants to get rid of a losing stock I would go with selling the earliest shares so the gain offsets the loss. If that doesn't apply then there is no right or wrong answer for all partners.

If you don't sell the earliest shares make sure Bivio knows which shares were sold.

Linda

Sent via the Samsung GALAXY S(R)4, an AT&T 4G LTE smartphone

-------- Original message --------
From: Lucy Baldi
To: club_cafe@bivio.com
Subject: [club_cafe] LKQ

Hi,

My club purchased 100 shares of LKQ back in Nov 2008 at
$9.42. In addition we purchased 50 shares in 2009 and again
in 2011. The stock has done very well and split in Aug of
2008 giving us 400 shares. We want to sell 200 shares but
need some advice on which lots to sell the $9.42 will give
us a large capital gains or should we sell the later shares
that will give us less capital gains. My club can't decide.
I was hoping to get some advice from you.

Thanks,

Paul Madison on

I agree with Linda's comments but have a couple more.

Just as important as bivio is making sure that you have told the broker which lot you are going to sell. Your broker will have a default setting that is almost certainly FIFO (first in first out). This means the oldest lot will be sold first. This is usually the lowest cost lot and thus the highest taxable gain. It is best to make sure ahead of selling that you know how to override this default setting by selecting specific shares to sell. Some brokers will let you change the lot sold for a short time after the trade (2-3 days at most) but it is better to not wait until after and make sure you do it at the time of the trade. If you call your brokerage house they can tell you how to select specific lots to sell.

If you only make the selection in bivio then your records between bivio and the broker will most likely not agree at tax time if you have chosen something other than FIFO in only bivio.

I agree there is no one right answer as to whether it is best to minimize or maximize the gain. Rather it is something that should be put to a vote by the club to see what the majority of the members would prefer to do based on their own personal tax situation.

Paul

On Tue, Jun 3, 2014 at 10:56 PM, wiltse <wiltse@optonline.net> wrote:

There is no right answer. People in the club have different tax situations and different needs. If the club has realized losses or wants to get rid of a losing stock I would go with selling the earliest shares so the gain offsets the loss. If that doesn't apply then there is no right or wrong answer for all partners.

If you don't sell the earliest shares make sure Bivio knows which shares were sold.
Linda

Sent via the Samsung GALAXY S(R)4, an AT&T 4G LTE smartphone

-------- Original message --------
From: Lucy Baldi
Date:06/03/2014 9:39 PM (GMT-05:00)
To: club_cafe@bivio.com
Subject: [club_cafe] LKQ

Hi,

My club purchased 100 shares of LKQ back in Nov 2008 at
$9.42. In addition we purchased 50 shares in 2009 and again
in 2011. The stock has done very well and split in Aug of
2008 giving us 400 shares. We want to sell 200 shares but
need some advice on which lots to sell the $9.42 will give
us a large capital gains or should we sell the later shares
that will give us less capital gains. My club can't decide.
I was hoping to get some advice from you.

Thanks,

Lucy Baldi on

Thanks very helpful.

Lucy

From: Paul Madison

Sent: Wednesday, June 04, 2014 7:27 AM

To: club_cafe@bivio.com

Subject: Re: [club_cafe] LKQ

I agree with Linda's comments but have a couple more.

Just as important as bivio is making sure that you have told the broker which lot you are going to sell. Your broker will have a default setting that is almost certainly FIFO (first in first out). This means the oldest lot will be sold first. This is usually the lowest cost lot and thus the highest taxable gain. It is best to make sure ahead of selling that you know how to override this default setting by selecting specific shares to sell. Some brokers will let you change the lot sold for a short time after the trade (2-3 days at most) but it is better to not wait until after and make sure you do it at the time of the trade. If you call your brokerage house they can tell you how to select specific lots to sell.

If you only make the selection in bivio then your records between bivio and the broker will most likely not agree at tax time if you have chosen something other than FIFO in only bivio.

I agree there is no one right answer as to whether it is best to minimize or maximize the gain. Rather it is something that should be put to a vote by the club to see what the majority of the members would prefer to do based on their own personal tax situation.

Paul

On Tue, Jun 3, 2014 at 10:56 PM, wiltse <wiltse@optonline.net> wrote:

There is no right answer. People in the club have different tax situations and different needs. If the club has realized losses or wants to get rid of a losing stock I would go with selling the earliest shares so the gain offsets the loss. If that doesn't apply then there is no right or wrong answer for all partners.

If you don't sell the earliest shares make sure Bivio knows which shares were sold.

Linda

Sent via the Samsung GALAXY S(R)4, an AT&T 4G LTE smartphone

-------- Original message --------
From: Lucy Baldi
Date:06/03/2014 9:39 PM (GMT-05:00)
To: club_cafe@bivio.com
Subject: [club_cafe] LKQ

Hi,

My club purchased 100 shares of LKQ back in Nov 2008 at
$9.42. In addition we purchased 50 shares in 2009 and again
in 2011. The stock has done very well and split in Aug of
2008 giving us 400 shares. We want to sell 200 shares but
need some advice on which lots to sell the $9.42 will give
us a large capital gains or should we sell the later shares
that will give us less capital gains. My club can't decide.
I was hoping to get some advice from you.

Thanks,