119 - What Should I Do When I Have Large Unrealized Gains in a Concentrated Stock Holding?

Real Personal Finance

Scott and James discuss what you should do when you have large unrealized gains in a concentrated stock holding.

Listener Question

1. My wife and I have been blessed with good fortune through our ESPP and RSU programs across 4 different employers. Having always been a buy-and-hold investor, these companies now have significant unrealized capital gains and represent almost 50% of portfolio value and a strong dividend cash flow that could provide income during a job loss. We live in CA and are in top tax brackets and would like to effectively diversify without loosing over 50% to taxes.

2. I currently have around 4,500 shares of AAPL. This makes up about 54% of my total stocks. I have 2,200 shares in my investment (non-retirement) account which makes up 100% of this total. I want to reallocate some of the AAPL, but it will have serious tax implications especially with my investment account. What do you recommend?

Planning Points Discussed

• Retirement Planning
• Utilizing Time Efficiently
• Capital Appreciation
• Purchasing Power
• Other issues (IRAs, Inflation, Financial Goals, etc.)

Timestamps:

1:30 - Introduction

3:27 - First Listener Question

5:05 - Individual Stock Example

6:58 - Investing v. Gambling

9:05- Taxes

9:43 - Cost Basis

12:15 - Stock Option Tax Planning

14:22 - Peace of Mind & Tax Strategy

17:55 - Lowest Cost Basis v. Highest Cost Basis

19:00 - Charitable Giving Strategy

21:55 - Second Listener Question

23:00 - Retirement Account Tax Benefits

24:53 - Aligning Your Financial Goals

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