Cashing Out Stocks

Cashing Out Stocks
Prepare carefully when cashing out stock.

Pull out copies of your brokerage statements and locate the trade confirmations for the stocks you plan to cash out. If the stocks are held in a taxable account you will owe capital gains taxes on any profit.

Look up the current price of each stock on an online site like Yahoo! Finance or CNN Money. Subtract the original purchase price of the stock from its current selling price and multiply the result by the number of shares you plan to cash out. For instance, if you bought 100 shares of stock at $30 per share and it is now selling for $40, your profit would be $10 per share times 100, or $1,000.

Download a 1040 form and a Schedule D form from the IRS website at irs.gov. Fill out the capital gains information on the stocks you plan to sell and calculate the taxes you will owe. If you have tax preparation software, it can do the calculations for you.

Log on to your brokerage account and go to the trading menu. Type the ticker symbol of the stock you want to sell. Enter the number of shares you want to sell and click the "Confirm" button to review your sales order. Click "Submit" to finalize the trade.

Print out a copy of your trade confirmation and keep it with your tax records. You will receive a 1099 form from your broker detailing the sale of the stock, and the IRS will get a copy of the same form. Report the sale of the stocks and any capital gains that might apply.