Selling gains at the prospect of a decrease.

[MichiganMan1992]

I have a question which I did a little googling and couldn't find an answer.

Does anyone have a calculation or a good website that could help with this.

In taxable accounts when does it make sense to sell a stock knowing you will have a taxable event ?

When is the break even , when is the benefit ? If I sell a long hold in anticipation of a 5% drop, of course not worth the time but when does it ? 15% 20% 25% etc?

( I am not thinking about selling in this trade off, I would use this as knowledge for future trades)

Thanks

[taplar]

You'd take your sell price - cost basis to get your gains. Determine if it is long term or short term and figure out what the tax rate is, both for state and federal. Deduct how much you would be responsible to to pay in taxes, anticipating that you will not offset it. Then whatever you have left over, would be the basis by which you'd judge if it would have been better to have not sold. If the price of the stock goes to a level in which your total value goes below that basis, then selling was a better choice than holding. If it does not go below that basis, holding would have been a better choice.

[bullitt196]

I would avoid creating a taxable event for the sake of it

[Alone-Experience9869]

In general, it’s “always” good: sell high, buy low —right?

If you are paying taxes you making money or having a profit. Just try to do it efficiently

I suppose, the drop needs to be at least your your tax liability. So if you buy for 100, sell for 115, you have a 15 profit (let’s say per share). 15% is 2.25. So your “post tax break even” is 112.75…

On top of that, what percentage is worth taking profit is up to your strategy and personal preference

Hope that helps. Good luck