Sorry I took so long to respond but was out of town.


Want to thank all of you for your advice. Looks like I should just keep
the stock. It's all NSC railroad stock and the basis is about $18,000. I
paid tax on over $4000 of S.S last year so I think I would have to pay
on the whole 85% (10,864) this year.

Thanks again. At least I know how to sell it if I decide to do that.


Doree

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"joetaxpayer" <joetaxpayer[at]nospam.com> wrote
- quote -

TRowePrice, Fidelity and Vanguard brokerages also do not
charge a commission for reinvesting dividends, capital
gains, and returns of capital. Ameritrade says dividend
reinvestment "is available at no cost on some common and
preferred stocks and closed-end mutual funds." No doubt
there are more.

I have not checked precisely but from general reading I
think the number of brokerages offering free dividend
reinvestment has increased rapidly in the last five years. A
2006 article in USA Today says that most brokerages offer
dividend reinvestment, and it "is usually free of charge."

As Joetaxpayer and Ernie propose, it likely does not cost
the brokerages much to offer this service.

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In article <js6r14p6rv661t59hhkt42n3s1afaqsbci[at]4ax.com> ,
"HW \"Skip\" Weldon" <skip5700removethis[at]hotmail.com> wrote:

- quote -

dividends and capital gains can be reinvested at no additional charge.

- quote -

Since the stock is all book entry and reinvestments and/or dividend
payments are handled in mass by computer programs, the cost per investor
is probably next to nothing.

I doubt the cost per investor in any higher to reinvest than it is to
post a cash deposit for the dividend/capital gain payment into the
investors account.

Any broker that would charge an additional fee for reinvestment is a
broker I would quickly run from.

--
-Ernie-

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Mark Freeland wrote:

- quote -

Well, to answer both of you, Skip, I really don't know. I assume their
cost for such a transaction is actually in the pennies, and they can
afford to extend this courtesy. And Mark, you are right, but, by having
stock dividends reinvested, and cash sitting in their 'better' MM fund
also reinvesting, I have no .15% money at Schwab.

I know that in margin accounts, they make money loaning out my shares,
but since IRAs cannot have a margin side, I don't see their revenue
source on a large balance IRA all in ETFs, no major trading.

Joe

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"HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote in message
news:js6r14p6rv661t59hhkt42n3s1afaqsbci[at]4ax.com...
- quote -

They force most customers into low interest transaction accounts. Same way
that banks recover costs for "free" checking. "The Schwab One Interest
feature is automatically included on your account. This feature pays
interest on the uninvested cash in your account. ... Clients with $500,000
or more ... may request a sweep money market fund as an alternative."
https://investing.schwab.com/public/file?cmsid=P-221707

Current interest rate: 0.15%
http://www.schwab.com/public/schwab/...fpid=P-1630062

Or, if you prefer, they lose money on each transaction, but make it up in
volume.

Mark Freeland
nNeEwTs[at]nyc.rr.com

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On Sat, 3 May 2008 21:52:54 -0500, joetaxpayer
<joetaxpayer[at]nospam.com> wrote:


- quote -

How does Schwab cover their costs?

-HW "Skip" Weldon
Columbia, SC

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On 2008-05-03 19:52:54 -0700, joetaxpayer <joetaxpayer[at]nospam.com> said:

- quote -

Joe, somehow we got off the track. I did not mean to recommend DRIPs to
the OP , but was just adding some information to the sales method that
Paul suggested. Actually, I doubt DRIPs would be appropriate for the
OP. I wanted to point out that, just as you can save money in selling
stocks by dealing directly with a company, so also you can save money
in buying stocks by doing the same thing. For the OP I suspect the best
course of action would be to do nothing and keep the stocks (in the
absence of more detailed information).

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Don wrote:

- quote -

I agree about using banks, but don't understand why the avoidance of
brokers. My reinvested dividends (through Schwab) do not have any
commission. Avoiding a $10 commission on the initial purchase hardly
seems worth the effort of having to deal directly with multiple
companies. Paul suggested that the OP Fedex her certificates to the
company to sell them. Well, last I checked Fedex was more than $10.
I'd rather see the OP put the money in a brokerage account and buy CDs
that way (brokered FDIC insured) that to risk having her walk in to a bank.
Joe

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On 2008-05-03 17:26:05 -0700, Douglas Johnson <post[at]classtech.com> said:

- quote -

Be wary of so-called DRIPs run by banks. The banks will promote a plan
as a DRIP and take over the paperwork and deal with the company, but
then pile on fees for this or that which mount up quickly. Some DRIPs
are managed by brokerages, and their fees are not as onerous as the
ones charged by banks, but still they take a commission if and when you
sell. In my view the best way to go is to deal directly with the
company after you acquire your first share. And in some cases you don't
even need a first share to buy directly from the company.

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Don <dwzimm[at]telus.net> wrote:
- quote -

My wife holds some stocks in DRIP plans. They have started charging fees for
reinvestment. Last quarter, she got $6.95 in dividends and they charged her a
$1.50 for the reinvestment.

-- Doug

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On 2008-05-03 11:39:58 -0700, Paul Michael Brown <pmb[at]his.com> said:

- quote -

A good idea. And now that you mention it, that also is a good way to
buy stocks in the first place. I am referring to dividend reinvestment
plans (DRIPs). When I first looked at these some years back, I was
surprised at the large number of good companies from which you can buy
shares directly, in small or large amounts, with no hassle and no
brokerage costs. And you get the added benefit of having all dividends
re-invested automatically without cost.

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Paul Michael Brown wrote:
- quote -

IIRC, it was $60K, not so small. And not knowing much about OP, we don't
know her tax bracket, her other investments, or if their are heirs to
benefit. Is her stock-specific risk outweighed by the cost of the cap
gain if any? Don't know.
Joe

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It might also be possible to sell the stock directly to the company that
issued it. I know General Motors will buy back its own stock in this
manner. You just Fedex the old certificates back to them and they send
you a check. This is a very easy way to avoid the hassle associate with
selling small amounts of stock.

By the way, I concur with those who recommended holding on to the stock
if the original poster doesn't need the money. The heirs would greatly
benefit from the stepped up basis rule.

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Bookie35[at]webtv.net wrote:
- quote -

What are the stocks? If the certificates have sat in a safe deposit box
for 17 years there may be some corporate history to catch up with.

Have you been receiving dividends from any of the stocks?

-Tad

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Rich Carreiro wrote:

- quote -

Shame on me, I forgot. After all I've written about the topic.
Still, we are back to the need for a lot more information from the OP.
Joe

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joetaxpayer <joetaxpayer[at]nospam.com> writes:

- quote -

The original poster is 73. That means she has to worry about
SS benefits taxation. That's something a many "use the zero CG
bracket" people forget about. Even though the LTCG will be taxed
at 0% (to a point), it still counts as AGI and so still counts
towards how much SS gets taxed. Because of this, the so-called
untaxed LTCG may face a marginal rate as high as 12.75% ($100 of
LTCG causing $85 of SS to be taxed at 15% leads to $12.75 in tax).
So depending on the totality of the original poster's tax situation,
it might still make sense to sell it all in a single year so that
her SS benefits only face potentially increased taxation once instead
of three years.

--
Rich Carreiro rlc-news[at]rlcarr.com

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On Apr 26, 1:45*pm, Booki...[at]webtv.net wrote:
- quote -


doree if you don't need the money why sell the stocks? You'll have to
pay taxes.

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Elle wrote:

- quote -

Doree - you may have some zero bracket cap gains rate available to you
if your taxable income is under $32,550. You have a Standard deduction
of $5450 plus $1350 due to your age, as well as a $3500 exemption. (this
all totals $10,300).

For example, if all your income adds (after subtracting that $10,300) to
$20,000, you can take $12,550 worth of gains and pay no taxes.
This zero rate is available for three years 2008-2010, so depending how
much you have in gains, spreading over three years may save you some money.

Joe

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Doree, as Richard implied, you want to evaluate carefully
whether to sell this stock all at once. Two things to start
evaluating before you sell any of this stock:

1.
Depending on your income level and the stock's basis, you
may be able to pay no tax at all on your sale. A special low
tax rate for long term capital gains kicks in starting this
year, but only up to a certain income.

2.
Selling the stock all at once is very likely to result in
your throwing away a lot of money on capital gains taxes.
You have certificates instead of the shares on file
electronically, so I am betting you have held the shares for
some time, and the capital gain is quite large. But your
confirming this would help people to advise you, should you
need tax advise. The group misc.taxes.moderated is also a
good resource for this.

You may also want to strongly consider rolling over your
401(k) to a Traditional IRA. You will pay no taxes on this
rollover. You will have more control over the money in the
account. E.g. you could invest all of the 401(k) in CDs if
you want.

No one's query is stupid around here. Good luck.

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On 2008-04-26 17:14:30 -0700, joetaxpayer <joetaxpayer[at]nospam.com> said:

- quote -

Yes, true, better an index fund than 3 companies. But if there were
significant costs in selling and capital gains taxes, I would be
inclined to just stay with the 3 stocks, especially if they were in
solid companies and paid dividends. You would have to know more details
and factor in the risk.

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