You may be able to minimize the capital gains bite by designating in your sell order which specific shares to sell. If you plan to hedge your bets on the stock market and cash in a portion of your holdings in a particular stock or mutual fund, you may be able to minimize the capital gains tax bite by designating in your sell order which specific shares are to be sold.
Most investors simply tell their broker or fund manager how many shares to sell.
That's sufficient if all your shares were bought at the same time and same price. But if your shares were purchased at different times or different prices, telling your broker or fund manager which specific shares to sell can make a significant difference in your tax bill. That's because some of your shares may have bigger taxable gains than others. And some might be subject to tax at a higher rate than others. When deciding which shares to sell, don't just consider the size of gain.