To withdraw profit from stocks, sell the shares through your brokerage, wait for the trade to settle, and then transfer the cash to your bank. Start to finish, the sequence usually takes two to four business days. The mechanical part is quick. The decisions around it, which shares to sell, when to sell them, and how to handle the tax bill, are what determine how much of the profit you actually keep.
Placing the Sell Order
Log into your brokerage, pull up the stock by its ticker, and select “Sell” on the trade ticket. Enter the number of shares. You don’t have to unload the whole position; a partial sale works the same way.
You’ll pick between two order types. A market order sells right away at whatever price buyers are offering. A limit order sets a minimum you’ll accept, but the trade won’t execute if the stock never hits that price. For a large or volatile position, a limit order gives you more control over the final number. For a widely traded stock whose price barely moves second to second, a market order is usually fine.
The platform shows an estimated proceeds figure before you confirm. Most major online brokerages charge $0 in commissions for standard stock trades.1Charles Schwab. Pricing During market hours, the order typically fills within seconds, and you’ll get a confirmation showing the exact sale price and total proceeds.
Choosing Which Shares to Sell
If you bought the same stock at different times and prices, which shares you sell changes your taxable gain. Most brokerages default to first-in, first-out: your oldest lot is treated as sold first. Those older shares often have the lowest cost basis, which produces the biggest gain.2Internal Revenue Service. Publication 551 (12/2025), Basis of Assets
Specific identification lets you pick the exact lot. If you bought 100 shares at $50 two years ago and another 100 at $90 last month, selling the $90 lot creates a much smaller taxable gain. You can usually choose the lot in the trade interface before placing the order. The rule is that you have to adequately identify the shares at the time of the sale, not afterward.2Internal Revenue Service. Publication 551 (12/2025), Basis of Assets
The lot you pick also decides whether the gain is short-term or long-term. Shares held more than a year get lower long-term capital gains rates; shares held a year or less are taxed at your ordinary income rate.3Office of the Law Revision Counsel. 26 USC 1222 – Other Terms Relating to Capital Gains and Losses A few seconds spent picking the right lot can save real money at tax time.
Waiting for Settlement
The cash doesn’t land in your account the moment the order fills. Under SEC Rule 15c6-1, stock trades settle T+1, one business day after the trade date.4SEC. Shortening the Securities Transaction Settlement Cycle Sell Monday, the cash is typically available Tuesday. Sell Friday, you’re waiting until Monday.
During that gap, your brokerage will show the proceeds in your total balance, but the “available for withdrawal” number won’t update until settlement completes. Trying to withdraw earlier will either fail or trigger a good-faith violation. Short wait, but worth planning around.
Moving the Cash to Your Bank
Once settlement clears, go to the “Transfers” or “Withdrawal” section. You’ll need a linked bank account already on file. If you haven’t connected one, the verification process itself takes a few days.
Two options do most of the work. ACH transfers are free at virtually every brokerage and usually arrive in one to three business days. Wire transfers typically land the same day but cost $25 to $50 depending on the platform. Unless the money is urgent, ACH is the right choice.
Watch the daily transfer limits. Some brokerages cap ACH withdrawals at $25,000 per day on standard accounts, others allow $50,000 or more. If you’re pulling out a large sum, you may need to spread it across several days or request a wire. Confirm your platform’s specific limit before assuming you can move everything at once.
What You’ll Owe in Taxes
Selling stock at a profit is a taxable event. Your brokerage reports the sale to the IRS on Form 1099-B and sends you a copy early the next year, showing proceeds, cost basis, and the gain or loss. You report the figures on Schedule D.5Internal Revenue Service. Topic No. 409, Capital Gains and Losses
The rate turns on how long you held the shares. Short-term gains on shares held one year or less are taxed at ordinary income rates, which run as high as 37% for 2026.6Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Long-term gains on shares held more than one year get preferential rates of 0%, 15%, or 20%, depending on taxable income.5Internal Revenue Service. Topic No. 409, Capital Gains and Losses
2026 Long-Term Capital Gains Brackets
For tax year 2026, the 0% long-term rate applies up to $49,450 of taxable income for single filers, $98,900 for married filing jointly, and $66,200 for head of household. The 15% rate runs from those ceilings up to $545,500 single, $613,700 married filing jointly, and $579,600 head of household. Above those thresholds, the rate is 20%. A married couple filing jointly with $90,000 in total taxable income would owe 0% federal tax on their long-term stock gains in 2026. The brackets adjust for inflation each year.
The Net Investment Income Tax
Higher earners owe an additional 3.8% surtax on investment income, including capital gains. The Net Investment Income Tax applies when modified adjusted gross income exceeds $200,000 for single filers, $250,000 for married couples filing jointly, or $125,000 for married filing separately.7Internal Revenue Service. Topic No. 559, Net Investment Income Tax The surtax hits the smaller of your net investment income or the amount over the threshold. On a large gain, it pushes the effective top long-term rate to 23.8%.
Trade Date Sets the Tax Year
Sell on December 31 and the trade won’t settle until the next business day in January. The IRS still treats the sale as occurring on the trade date. You report the gain on the return for the year you placed the order.8Internal Revenue Service. Publication 550 (2025), Investment Income and Expenses To push a gain into next year, you have to wait until January to place the sell order.
Trade date also controls the holding period. The clock starts the day after you buy and ends the day you sell.8Internal Revenue Service. Publication 550 (2025), Investment Income and Expenses Shares bought June 15, 2025 have to be sold on June 16, 2026 or later to qualify as long-term. One day early costs you the preferential rate.
Estimated Tax Payments on Large Gains
Stock profits aren’t withheld the way a paycheck is. A large gain can create an underpayment penalty if you don’t send in quarterly estimated payments. The IRS generally requires estimated payments when you expect to owe $1,000 or more after subtracting withholding and credits.9Internal Revenue Service. 2026 Form 1040-ES – Estimated Tax for Individuals
You can dodge the penalty by hitting one of two safe harbors: pay at least 90% of what you’ll owe for 2026, or 100% of what you owed for 2025. If your 2025 adjusted gross income was above $150,000 (or $75,000 for married filing separately), that second figure rises to 110%.9Internal Revenue Service. 2026 Form 1040-ES – Estimated Tax for Individuals
The 2026 estimated tax due dates are April 15, June 16, September 15, and January 15, 2027.10Internal Revenue Service. Publication 509 (2026), Tax Calendars Sell in July and the September payment is your first chance to catch up. Miss the deadlines and interest compounds daily, even if you pay everything you owe when you file.
Watch the Wash Sale Rule if You’re Harvesting Losses
If you sell a losing stock to offset a gain, don’t buy it back too soon. The wash sale rule disallows the loss deduction if you buy substantially identical stock within 30 days before or after the sale.11Office of the Law Revision Counsel. 26 USC 1091 – Loss from Wash Sales of Stock or Securities The window runs in both directions, a 61-day blackout total.
The loss isn’t lost forever. It gets added to the cost basis of the replacement shares and reduces your gain when you eventually sell those. But if you were counting on that loss to offset a profitable sale this year, a wash sale can undo your entire plan. The rule applies even if the repurchase happens in a different account, including buying the same stock in your IRA after selling it in a taxable brokerage account.
Stocks Held in Retirement Accounts Work Differently
Selling stock inside an IRA or 401(k) uses the same mechanics, but the tax picture is completely different. No capital gains tax when you sell within the account. The tax event is the withdrawal.
For traditional IRAs and 401(k)s, withdrawals are taxed as ordinary income regardless of whether the underlying gains were short- or long-term. Under 59½, a 10% early distribution penalty stacks on top of the income tax.12Internal Revenue Service. Topic No. 558, Additional Tax on Early Distributions from Retirement Plans Other Than IRAs Several exceptions can waive the penalty, including disability, a first-time home purchase (up to $10,000 from an IRA), separation from service at 55 or older for 401(k) plans, and unreimbursed medical expenses above 7.5% of adjusted gross income. Those exceptions waive the penalty but not the income tax on a traditional account.13Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions Roth IRA contributions come out tax- and penalty-free at any time; earnings are tax-free only after 59½ and after the account has been open at least five years.
State Taxes on Top of Federal
Federal isn’t the whole bill. Most states tax capital gains too, generally at ordinary income rates. State rates on investment income range from 0% in states with no income tax to over 13% at the top. For a high earner in a high-tax state, the combined federal and state hit on a short-term gain can exceed 50%. A handful of states have no income tax, leaving federal as your only obligation. Check your state’s rules before you sell, since a few treat capital gains differently from wages or offer partial exclusions.