OK, I think we are on the same page now and you are just making different assumptions than I was. I am going to try to go back to a simpler example that I think I posited some time ago here. ASSUME the following is true:
1 Due to RMDs and other taxable investment income, and other self-employment income, I will owe some NII tax even if I sell none of this company stock. 2. It is over one year from when the movement to a taxable account was made and there has been no dividend reinvestment nor purchases or sales of the company stock so any sale of company stock I make is from that original pool. 3. Suppose the cost basis was 100 (and all shares were assigned the same cost basis per share), the value was 600 when moved to a taxable account, meaning 500 NUA would be the LTCG if I sold all the stock and it was still worth $600. However,. now the stock is worth 700 and so I will have another 100 of potential LTCG. Now, let's assume I decide to sell half of the shares, which would result in 700/2 = $350 of proceeds which would have a cost basis of 100/2 = 50. So, I believe I will have a LTCG of 350 - 50 =300. I believe that the portion of that LTCG that is exempt from NII tax is 500/2 = 250 and the remaining portion of that LTCG that is subject to NII tax is 100/2 = 50. Do you agree that this is how the pro ration must be done and I must pay the NII tax on the $50?
If not, please state why not. If so, please tell me what you think the entries need to be in Turbo-tax. Thanks much, Romper.
