During a divorce when splitting up an account holding stocks is it better to sell all stocks and split the proceeds or to split the stocks? My husband sold all the stocks in the account which caused a huge tax amount and bought all the same stocks back and then split the stocks between us. Because of the tax we each ended up paying 300,000 to the IRS in taxes.

1 Answer 1


There's no benefit in the situation you're describing unless your husband expects his tax rate to be significantly higher as single. It is unlikely that he did that for your benefit.

If you already cashed out the stocks, then you should probably consider whether you want the exact same stocks, or use the opportunity to rebalance the portfolio. It may be one of the motivations for your ex.

You should probably talk to your attorney about this, your husband unilaterally selling stocks you both own may be a violation of a court order. In most US states, once a divorce is filed certain things are automatically forbidden.

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