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re: Stock formula question

Posted on 7/9/10 at 12:21 am to
Posted by Doc Fenton
New York, NY
Member since Feb 2007
52698 posts
Posted on 7/9/10 at 12:21 am to
quote:

My capital gains tax bracket is 25%.


Sounds like a homework problem.

You bought $250 worth of stock, and want a $25 gain free and clear.

1 / (1 - .25) = 4/3

So you need $33.33 (= $25 x 4/3) in taxable CG to end up with a post-tax profit of $25.

Add in the $10 in fees and I think you need to sell at $293.33 = $29.33 per share--so a 17.3% rise in the market price is necessary for you to clear 10%.
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