How do I use the Capital Gains Estimator


For a complete capital gains preview of a proposed sale involving multiple securities or mixed lots of a single security, use the Capital Gains Estimator. You can set up as many as three different scenarios in order to compare proposed sales. You can also integrate Capital Gains Estimator scenarios with your tax data and tax rates from the Quicken Tax Planner to determine the overall tax impact before and after the sales you propose. The Capital Gains Estimator will help you calculate your approximate gross and net proceeds from proposed sales. If you chose to use your Tax Planner data and rates, you may also see information about whether proposed sales move you into a higher tax bracket.

1. Choose Investing tab > Tools > Capital Gains Estimator.

  • What happens now?
    The first time you open the Capital Gains Estimator, it displays the Welcome window. After you've used it once, it will open the proposed sales scenario from your previous session.


    After you set up a scenario, it remains until you explicitly change or delete proposed sales.

2. As you work through the Capital Gains Estimator, you may need additional information. Click a topic below to learn more.

  • Choose the taxable investment accounts you want to include
    In the Select Accounts window, choose the taxable investment accounts you want to include when creating sales scenarios. The Capital Gains Estimator will display the holdings only for accounts you select here. However, even for included accounts, any securities that have missing cost basis information will not appear in the Estimator window (see below). The Capital Gains Estimator does not include tax-deferred accounts, such as IRAs or 401(k)-type accounts. If you think an account is missing from this list, be sure to check its tax attributes. Note also that hidden accounts are not visible here.
  • Choose the federal tax rates you want to use
    In the Tax Rates window, choose the short-term and long-term federal tax rates you want the Capital Gains Estimator to use for its calculations. You can also choose short-term and long-term state tax rates.


    For rates that most closely reflect your true tax situation, including changes that may occur over the course of the tax year, use data and rates from the Tax Planner.


    The tax rates shown in parentheses throughout the Capital Gains Estimator refer to the tax rate that would be imposed on the next dollar of income, or marginal tax rate. If you use data and rates from the Tax Planner, the Estimator window will first display the Tax Planner's estimate of your marginal rate. As you explore proposed sales, the federal rates shown may change. This tells you that the proposed sales have pushed you into that new tax bracket. Remember that the information in the Capital Gains Estimator is an estimate and not intended to be exact.
  • Enter loss carryovers
    In the Capital Loss Carryovers window, enter investment losses that you couldn't deduct in prior years, which you want to use now to reduce your capital gains.


    You can use Tax Planner values for your loss carryover (the default) or click Enter different values and enter the amounts of short-term and long-term loss that you want to carry over.


    Remember that you can deduct only up to $3000.00 of any losses from previous years to offset your current-year gain. In addition, losses from selling short-term holdings will first offset current short-term gain, losses from selling long-term holdings will first offset current long-term gain, and so on, and the entire gain of a particular type must be offset before any remaining loss is applied to another type of gain.


    For example, say you have $2500.00 in short-term losses from a previous year to apply to current gains. You want to apply these losses to $2000.00 in short-term gains and $1000.00 in long-term gains. You must offset the $2000.00 of short-term gains with your short-term losses first, leaving $500.00 remaining to offset half the amount of your $1000.00 in long-term gains and resulting in a $500.00 long-term gain remainder.
  • Optimize your sale to meet objectives you specify
    If your goal is to sell holdings of a specific security, proceed to the next step. If the purpose of your proposed sale is to maximize a certain objective (such as after tax returns), use the What Should I Sell component (only in Quicken Premier, Home & Business, and Rental Property) to set your criteria and then have Quicken search for a set of holdings to meet your goal.
  • Select the securities or individual lots you plan to sell
    At the top of the Estimator window, under Step 1, click to place a check mark in the left-side column next to a lot that you're thinking of selling. Repeat for all the lots that you want to include in your scenario. Any securities that have missing cost basis information will not appear in this window.


    In the table under Step 1, Gain/Loss estimates the gain or loss per security lot and per security based on the sale of all shares at the listed price. The security price shown here is the price, as of your most recent update. When you move on to Step 2, you can identify specific shares and adjust the per-share sale price.


    When you enter Buy or Sell transactions, Quicken can keep track of lots for you. This gives you the most detailed capital gains information at tax time. Do not use average cost per share without first considering the tax implications.


    Mixed in a holding period column indicates a mutual fund with average cost tracking.
  • Specify the number of shares you want to sell from each lot
    In the Estimator window, under Step 2, specify the number of shares you'd like to sell from each lot, and the sale price you anticipate for each security. You can adjust the sale price to see what difference a rising or falling security price would have on your sale.


    To remove lots from your proposed scenario, double-click the security name under Step 2.
  • View your proposed sales gains and review the gross total proceeds
    In the table under Step 3, Quicken displays any gain and loss from transactions, grouped by whether the gain or loss is short-term or long-term. In addition, if you're selling shares from an Employee Stock Purchase Program (ESPP) or ESOG (Employee Stock Option Grant) shares, the amount of ordinary income you'll realize is included. (All option sales are considered same-day sales for the purpose of the Capital Gains Estimator. See the Notes section at the bottom of the topic for additional information regarding ESOG and ESPP sales.)


    Below the table, the Estimator window shows the gross proceeds of your sales, an estimate of the taxes you might have to pay on this total, and the net proceeds from your proposed sales, based on the tax rates you've selected. If you selected Tax Planner rates, the Estimated Federal Tax Impact will be based upon the marginal rate shown in the Planner. State Tax is based on the state tax rates you entered in the Tax Rates window, and does not include ESPP or ESOG income. If you see a negative amount, this is an estimate of the possible reduction in your tax because of a capital loss from this sale. Note that Capital Gains rules limit the amount of losses you can take, so this amount may overstate your tax benefit when all of your sales are netted and the limitation rules applied.


    Hidden securities aren't included (unless you clicked Options in the Security List and selected View Hidden Securities). Securities in tax-deferred accounts such as 401(k) accounts and IRAs are not included, but tax-free securities such as tax-free municipal bonds are.


    You can't use the Capital Gains Estimator to propose short sales.
  • View the details of your proposed sale. (Optional)
    • Click Capital Gains Tax Before Proposed Sale to view your year-to-date capital gains or losses and estimated year-to-date federal taxes on any gains without taking into account the sale you're proposing.
    • Click Capital Gains Tax After Proposed Sales to view your year-to-date capital gains or losses, plus the gains and losses from your proposed sales, and estimated year-to-date federal taxes on any gains.  

Notes

Quicken relies on accurate and complete data to derive reliable performance measures. To view certain performance measures, it may be necessary first to replace placeholder entries with complete historical data.

Additional information is available regarding:

  • Capital gains for ESPP sales
    If you're selling ESPP shares, some of the difference between the discounted price of the stock and its market value when you sell is considered a part of your salary and some is considered capital gain, but the amounts of each depend on how long you hold the stock before selling. Consult your tax advisor and the information included on the W2 dialog that you receive for the year you made the sale to determine what is gain and what is salary.
  • Capital gains for ESOG sales
    If you're selling ESOG (Employee Stock Option Grant) shares, some of the difference between the discounted price of the stock and its market value when you sell is considered a part of your salary, and some is considered capital gain. The amounts of each depend on how long you hold the stock before selling, but for the purposes of the Capital Gains Estimator all sales of ESOG shares are considered same-day sales. In other words, you sell the shares the same day you exercise your option. Consult your tax advisor and the information included on the W-2 dialog you receive for the year you made the sale to determine what is gain and what is salary.
 

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