Re gradual selling across the years, here’s my experience.
As stated by others above, no brokerage is very familiar with this as it’s not very common so don’t expect good answers from any generic customer service reps. Also, none of them are going to track the dual cost basis. The responsibility for that falls to you. There are really only three numbers that matter, the NUA cost basis, the distribution date and the distribution date cost basis.
I gave VG the NUA cost basis and the distribution date on the cost basis input form. Things will get complicated if you sell in the first year as there will be a mix of LT and ST capital gains/losses. This would require manual adjustment by you to the VG 1099 numbers. I decided this wasn’t worth the trouble and just decided not to sell in the first year. After that you’re on east street whether you sell all at once or gradually. At that point all the gains/losses are LT and VGs 1099 will be correct for filing taxes.
The only one of the three numbers you haven’t used yet is the distribution date cost basis. That is only needed if circumstances unfold where a partial step up basis can be implemented. I liquidated all before that but, my heirs had the number and documentation needed get the correct step up basis. But again, the responsibility for doing that correctly falls to them so leave detailed instructions. I certainly wouldn’t rely on anyone at a big brokerage knowing the correct process at that point.
As stated by others above, no brokerage is very familiar with this as it’s not very common so don’t expect good answers from any generic customer service reps. Also, none of them are going to track the dual cost basis. The responsibility for that falls to you. There are really only three numbers that matter, the NUA cost basis, the distribution date and the distribution date cost basis.
I gave VG the NUA cost basis and the distribution date on the cost basis input form. Things will get complicated if you sell in the first year as there will be a mix of LT and ST capital gains/losses. This would require manual adjustment by you to the VG 1099 numbers. I decided this wasn’t worth the trouble and just decided not to sell in the first year. After that you’re on east street whether you sell all at once or gradually. At that point all the gains/losses are LT and VGs 1099 will be correct for filing taxes.
The only one of the three numbers you haven’t used yet is the distribution date cost basis. That is only needed if circumstances unfold where a partial step up basis can be implemented. I liquidated all before that but, my heirs had the number and documentation needed get the correct step up basis. But again, the responsibility for doing that correctly falls to them so leave detailed instructions. I certainly wouldn’t rely on anyone at a big brokerage knowing the correct process at that point.
Statistics: Posted by BigJohn — Sat Aug 23, 2025 8:21 am — Replies 14 — Views 988