23, ~$350k portfolio from a custodial account, 70% in three stocks. How aggressively should I unwind this?
***Disclaimer:*** *I wrote this with AI help. I'm dyslexic and struggle to get information across concisely, so I gave an AI the details and had it organize them. The situation and the questions are mine.*
Some background: my dad invested for me starting when I was a kid, and I got control of the account when I turned 21. It's somewhere in the mid-six-figures. I'm still in school, will earn about $30k this year, and I'm currently being claimed as a dependent. Between the $30k and the standard deduction, my taxable income is low enough that I should have real room in the 0% long-term capital gains bracket, which is the whole reason I'm thinking about this now rather than after I graduate.
Where it stands:
* \~40% Apple
* \~70% in the top 3 positions combined
* Every position is up. There are no losses left to harvest. I sold the few losers a couple years ago
* All of it is long-term
* The only buy I've made myself was some Google around $200
I know 70% in three names is not a portfolio, it's a bet that already paid off. What I don't know is how fast to fix it, because every share I sell is a realized gain.
Questions:
1. **Kiddie tax.** I keep running into this term and I don't actually understand it. I'm 23 and a full-time student, which I gather is the profile it applies to. What is it, how does it work, and what determines whether it hits me? If it does apply, does that wipe out the 0% bracket entirely or just part of it?
2. **Pace.** Sell down to something reasonable over the next 3-4 low-income years while I'm in the 0%/15% bracket, or take the hit now and be done? The counterargument I keep running into is that a 15% tax bill is cheap insurance against a 40% drawdown in a single name.
3. **State tax.** I go to school in MA and my dad lives in CT. For the past few years we've been filing my taxes in CT because that's where my permanent residence is. What does that actually cost me per dollar realized, and does the MA/CT split create any exposure I'm not seeing?
4. **Where the money goes.** Assuming I'm just buying a total market index?
Not looking for stock picks. Looking for how people have actually dealt with this in the past, or would deal with this if you were in my situation.