Sell stock to pay off credit cards?

[weluvthecastle]

I'm looking for some good advice regarding selling stock to pay off my credit cards for good!! I feel bad thinking of getting rid of the investments but I think it would be the best way to clean my slate. I do have separate 401k accounts which would not be touched. Any good advice from investment pros or those who have done this themselves? Thanks!!

 

[jlima]

Really, ask your tax adviser. If you sell an investment with a gain, you will owe tax on that gain. How much will depend on how long you owned the position. If you sell at a loss, you may be able to deduct the loss. Look at what you paid, how long you've owned it, what it's selling at now; and decide if you are better off or not. For instance, if you paid $10K for an investment several years ago that's worth $25K now, you may owe as much as 20% in capital gains on the $15K gain when you sell - which would be $3,000. However, if you're paying hundreds in interest charges every month on credit cards that you're paying off, you may be better off in the long run. Ask your financial adviser.

 

[Golf4food]

Really, ask your tax adviser. If you sell an investment with a gain, you will owe tax on that gain. How much will depend on how long you owned the position. If you sell at a loss, you may be able to deduct the loss. Look at what you paid, how long you've owned it, what it's selling at now; and decide if you are better off or not. For instance, if you paid $10K for an investment several year ago that's worth $25K now, you may owe as much as 20% in capital gains on the $15K gain when you sell - which would be $3,000. However, if you're paying hundreds in interest charges every month on credit cards that you're paying off, you may be better off in the long run. Ask your financial adviser.

Ditto.

It is never as simple as sell stock get free money. Uncle Sam wants a chunk.

 

[BrightScouter]

And I would only consider paying the credit cards off with the stock sale proceeds if you intend to cut up the credit cards and never use them again. Otherwise, in a couple of year, you could be back in debt again with no stock to sell.