How do I convert a $70. stock with a $2. cost basis into mutual fund shares without creating a taxable event?

Answer 1

Unless it's in an IRA, a Roth IRA, or a 401K plan, there's no way to do so. You have to sell the shares in order to generate the money to buy mutual fund shares, and that will create capital gain. If you've held the stock for more than 1 year your gain will be long-term and taxed at maximum of 15% (5% if you are in either the 10% or 15% tax brackets). If you've held the shares less than 1 year the gain would be short term and would be taxed at your regular tax bracket rate.

Answer 2

Unless the stock is already in a tax-deferred account such as a 401k or IRA, you can't.

By converting the stock into another investment, you must sell the stock and pay capital gains tax on the $68 per share gain. If you have owned the stock for more than one year, the tax is going to be about $10 per share.

Answer 3

You can't.

Even if you only hold cash for a split second, the $68 per share is taxable.

If you want to sell the stock, sell the stock. Don't let the tax effects control too much of your decision. Having to pay taxes because a stock you own went way up is not a bad problem to have.

Answer 4

Stock and Mutal Funds are two different animals... To purchase Mutual Funds ya need cash... To buy stock you need cash... Sell the stock get cash and buy the mutual fund...Taxes are paid at the end of the year if there is a capital gain...

Answer 5

You don't. The sale will be a taxable event, where you will owe capital gains taxes on the gain.

Answer 6

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