I made slight errors, apologies, I wasn't thinking quite straight.
With the T-bills, there are no state taxes, but you ARE subject to the NIIT, so the tax burden on T-bill interest = 24% + 3.8% = 27.8%.
With the sale of the stock, you are subject to Federal LTCG of 15%, definitely the NIIT, and the state also stretches its hands for 10% taxes (most states tax capital gains as if ordinary income) = 28.8%.
There is a 1% tax differential between the two marginal rates, but 1% is a small cost to pay to get rid of the single stock risk, IMO.
With the T-bills, there are no state taxes, but you ARE subject to the NIIT, so the tax burden on T-bill interest = 24% + 3.8% = 27.8%.
With the sale of the stock, you are subject to Federal LTCG of 15%, definitely the NIIT, and the state also stretches its hands for 10% taxes (most states tax capital gains as if ordinary income) = 28.8%.
There is a 1% tax differential between the two marginal rates, but 1% is a small cost to pay to get rid of the single stock risk, IMO.
Statistics: Posted by lakpr — Fri Feb 16, 2024 1:57 pm — Replies 7 — Views 298