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Periodic Contributor

Brokerage sold holdings without even telling me. What are tax implications?

My brokerage sold all my stocks and bonds that I've had with them for over 25 years. I got a notice after they did it, along with a check. I called them about it and they said they sent me an email about this five months prior. I reviewed all correspondence and did find a vaguely worded email with a link to another vaguely worded document about it.

At this point, I'm not going to dispute this. I just need to know what the tax implications for 2019 would be and exactly what I need to bring to a AARP tax prep center.

Gold Conversationalist

To me this sounds like a pretty awful situation. I don't understand how the company can just "vaguely" shut down your account. Myself, I would want to know specifically the rationale as to why this was done to me. There might even have been alternative resolutions that might have had better tax consequences for you but that is water under the bridge now (not necessarily so, but you don't wish to pursue it so that ends it).

 

It sounds like you must have some knowledge of investments, their distributions, and income taxes, based on your long investing experience. So this shouldn't be a totally foreign experience for you.

 

As you likely know already, investments sold from a taxable account (eg: not an IRA, etc) may be subject to capital gains tax (which is generally a favorable rate for long term gains). You will need records of the purchase dates and costs of these investments. The brokerage should send you 1099 forms for the sales, and they may provide forms for the costs. You will need to bring these forms to whoever assists with your income tax; this year's tax filing may become quite complicated and possibly expensive.

 

Now if they have sold off your IRA accounts that is an entirely different situation and may have severe (unnecessary) financial costs to you. In this event, get a lawyer.

 

 

 


@cm5504903 wrote:

My brokerage sold all my stocks and bonds that I've had with them for over 25 years. I got a notice after they did it, along with a check. I called them about it and they said they sent me an email about this five months prior. I reviewed all correspondence and did find a vaguely worded email with a link to another vaguely worded document about it.

At this point, I'm not going to dispute this. I just need to know what the tax implications for 2019 would be and exactly what I need to bring to a AARP tax prep center.


 

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