Should You Sell in December or January?

Pull the facts first

Before you debate calendar timing, gather:

• Your projected taxable income for the current and upcoming year.
• The expected sale price and basis for the asset.
• Planned relocation moves or major life events that change filing status.

Build two scenarios

In the scenario planner set Scenario A to your intended December closing date. Scenario B should move the sale forward 30 to 45 days. Keep everything else identical to isolate the timing effect.

Look at three metrics:

1. **Total estimated tax** – which scenario leaves you with more cash after federal and state taxes?

2. **Long-term qualification** – does waiting push the holding period past one year?

3. **Surtaxes** – does either year leave you above the NIIT or Medicare surtax thresholds?

Don’t forget estimated payments

Selling in December may require a larger Q4 estimated payment due January 15. Selling in January pushes the tax bill into the following April, effectively giving you an interest-free loan for an extra fifteen months.

Example snapshot

• Dec sale: $60,000 tax
• Jan sale: $52,000 tax (long-term treatment) but $10,000 more payroll tax due to delayed bonus

Even though January produces a lower capital gains tax, the higher ordinary income next year may offset the savings. Let the planner calculate the blended total so you can decide with the full picture.

Final takeaway

Timing choices rarely hinge on taxes alone, but pairing the calculator with the scenario planner gives you concrete numbers. Share both outputs with your financial planner so you can balance cash flow needs against portfolio strategy.