As a young couple, there may come a day when you need to liquidate your stocks to pay for unexpected expenses. Liquidating stocks, a fancy way of saying "selling" stocks, is a straightforward process. Before selling, you should consider the financial consequences of liquidating. For starters, you might face taxation if you sell your stocks at a gain. You also might lose out on your stock's future appreciation, which could prove costly to your long-term investment portfolio.
Step 1
Confirm the number of shares for each stock you hold in your account. Verifying your total number of shares may be necessary to account for additional shares added to your portfolio through a dividend reinvestment program or other type of special dividend.
Step 2
Consider your tax situation. If you are in the position to pick and choose which stocks to liquidate, factor in your overall tax situation, so that you don't trigger a large tax bill. Stock shares sold at a gain could be subject to the capital gains tax. However, the capital gains tax rate only applies if you have held the shares for more than one year. If you sell stocks within one year or less after buying, the tax rate is your ordinary income tax rate, which can often be much higher. If you sell at a loss, on the other hand, you might use the loss to offset capital gains from the sale from other investments.
Step 3
Contact your broker and advise him of the stocks and the number of shares you wish to liquidate from each. If you are selling everything, have your broker sell all the stocks you own. If you trade your own stocks in an online brokerage account, enter your sell order manually, including the number of shares of each stock you wish to sell. You may also enter a specific price at which to sell.
Step 4
Confirm your executions. Financial service firms, whether full-service or online, must confirm all stock trades. Verify the number of shares and the prices at which they were sold by reviewing the sales confirmations provided to you by your broker.
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Writer Bio
After receiving a Bachelor of Arts in English from UCLA, John Csiszar earned a Certified Financial Planner designation and served 18 years as an investment adviser. Csiszar has served as a technical writer for various financial firms and has extensive experience writing for online publications.