When it comes to investing, what you keep matters more than what you earn.
In this video, we break down one of the most overlooked tax planning opportunities investors have when selling stocks: cost basis management.
Many investors focus on when to buy and sell investments but fail to consider which shares they’re selling. That decision alone can dramatically impact how much tax you owe and how much money stays in your pocket.
In this episode, you’ll learn:
• What cost basis means
• Why different tax lots create different tax outcomes
• How reinvested dividends affect cost basis tracking
• The difference between FIFO, LIFO, HIFO, and specific lot identification
• Why tax lot selection matters when selling investments
• How tax loss harvesting can offset gains
• How the 0% capital gains tax bracket works
• Common wash sale rule mistakes
• How inherited shares, divorce, and life events impact basis tracking
• Strategies to help reduce unnecessary capital gains taxes
Using a real-world example, we show how two shares of the exact same stock can produce dramatically different tax bills depending on when they were purchased and which lot is selected during a sale.
You’ll also learn why many custodians default to FIFO, how tax lot optimization works, and why proactive planning can help investors keep more of their hard-earned gains.
If you’re considering selling investments, rebalancing a portfolio, or creating a tax-aware withdrawal strategy, understanding cost basis may save you more than you realize.
Before you hit the sell button, make sure you know which shares you’re actually selling.
