Legal Question in Investment Law in California

Re: stocks and capital gains

If you are selling appreciated stocks (and if so congratulations!), you will be subject to capital gains tax. While there are a very few exceptions to capital-gains tax liability when investments are cashed in, most of these involve like-property exchanges under IRC section 1031, e.g. one income property (apartment house) for another (strip mall). Other non-taxable transactions include exchanges of securities in the same corporation due to a reorganization, bankruptcy, recpaitalization, and so forth.

I do not know of any way to avoid capital gains taxes when the change of investment is so great as stocks-to-residence will be.

How much you will have to pay is a question that can only be answered by having a tax expert, or great software, run your particular numbers.

If it's any consolation, keep in mind that as long as you have a profit is stocks, Uncle Sam is going to get his cut, sooner or later. On the other hand, home ownership has a lot of tax benefits, e.g. deductibility of interest and a substantial capital-gains exemption when you SELL at a profit (but not when you buy).

Your stock broker may be able to give you some free assistance on this.