Any tax accountant's on the forum?

double browtine

double browtine

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Got a question. My wife has some bank stock that she bought before we met. That was over 16 years ago. Well now the bank is selling out and they are going to mail out checks in January as part of a stock buyback, because she has less than 10,000 shares.

Question is, do we just claim this as income on next year's taxes? Trying to decide if I need to adjust how much I put in my 401k for next year, so it doesn't kick me into the next tax bracket. Or we may elect to invest it, but either way I think we have to claim it as income.
Any help or advice would be great.
 
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markwondi

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It will not count as income since she's had the stock for well over a year. You will pay capital gains taxes instead.
 
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Jon54

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If the sale is in January, then yes, the income would be reported next year
 
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Jon54

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The general advice is accelerate deductions but defer income when possible. I’m a cpa and feel free to pm me if you have questions.

As someone else stated, this will be capital gains income which generally is at lower rates. If you are not maming out your 401k with holdings, you could reduce your ordinary income which would be replaced with your capital gains income.
 
double browtine

double browtine

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Thanks guys! Did some research after reading your posts and I think I have it figured out. Now hopefully Congress will pass a new tax plan that will save me some money.
 

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