Tax Optimization Tool

New regulations allow you to specify to your broker the sales method you wish to use when selling equities. When you sell shares, your broker will automatically use the FIFO method (First In, First Out), meaning that the tax lots you have owned the longest will be the ones that are sold. Tax-wise, this may not be in your best interest!

You have three days from the date that the stock was sold until the settlement date, during which time you can ask your broker to choose a different sales method, including the Specific method, which allows you to select the tax lots to sell. But how would you know which tax lots to choose?

The Netbasis Tax Optimization tool provides a powerful “what if” scenario feature that lets you enter your objectives – gain or loss amount, short term or long term gains, and proceeds – on its easy-to-navigate web page. Based on these parameters, Netbasis will suggest which tax lots could be sold to meet your objectives. The results are provided on a detailed report that is simple to interpret and analyze. You can then change your objectives, enter new parameters and view the outcome, trying out different scenarios as many times as needed to get the results you want.

The Tax Optimization tool lets you ask such questions as: What would happen if I limited my gains to a certain dollar amount? What would happen if I make proceeds the priority over taxes because I need access to immediate cash? What would happen if I wanted to maximize capital gains by selling long term tax lots held for more than one year? What would happen if I just ask Netbasis to maximize my gain or loss? Each time you tweak your scenario, you will have your answers in seconds.

With Netbasis you will be able to make an educated decision about which tax lots to sell and inform your broker. Take control. It’s in your best interest!


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