I've been thinking about moving my Sharebuilder account over the Zecco for quite some time now. I stopped my automatic investments with Sharebuilder awhile back, and any new money I wanted to direct into stocks has been through Zecco because of the zero commissions aspect. When I fist signed up for Zecco I considered doing a brokerage account transfer from S->Z , but at the time there was no incentive. It would have required mailing in paperwork and waiting for more than a month for the brokerages to sort things out. Now though, with Zecco's change in policy such that only accounts > $2500 get free trades, I have a better incentive. On Friday I did a little research into making the switch. I was halfway into filling out the forms for the transfer when I had a few questions(The instructions where non-existent). Turning to the internet for help, I discovered fellow finance bloggers who had made this transition before. Particularly The Sun's Financial Diary was useful since he detailed each step of the process, and brought to my attention the fact that Sharebuilder charges a $50 fee for account transfers. Since I had no free cash in my account, shares of my stock would have to be sold to cover the fee along with the partial share that I own since Zecco only transacts with whole shares. On the other hand, sharebuilder does charge to close an account.
So my plan of action now is this: sell all my shares at sharebuilder for a $10 fee on real time orders, take the money from the sale and transfer it to Zecco( through my checking account), where I can buy the same stock or any other one I please. The downsides of this plan are the trade fee (which is less than an account transfer fee since I only have 1 stock), and any tax consequences I might incur. Since I first bough this stock a little over a year ago, some of my sale would be taxed at the long term capitol gains rate, and some at the short term(< 1 year) rate. However, because or recent down turns in the stock market, my sale of this stock should result in a net loss, which may be favorable to me on my tax return next April 15(Probably not by much). Since I've never sold any of my investments before this will be an interesting exercise. I'll have to figure out my cost basis, and how the sale will actually affect my taxes next year. My loss will probably be about $300 dollars, so not to big an effect either way. Slogging through IRS publications is not my idea of a good time, but it looks like I'll become acquainted with publication 550.
Comments