Equity/Stock Tax Strategies
Equity/Stock Tax Strategies
Hold Stock for at Least One Year (Long-Term Capital Gains Treatment). Hold equity compensation shares for at least one year before selling to get preferential long-term capital gains tax rates instead of higher short-term rates.
Manage Your Capital Gains Tax Bracket. Strategically timing capital gains realizations and maximizing deductions can optimize long-term capital gains taxation by managing applicable brackets and shifting gains to years with lower marginal tax rates.
Tax Loss Harvesting. Tax loss harvesting can help you reduce your capital gains tax bill.
Accelerated Tax Loss Harvesting (Via a Long-Short Portfolio). A long-short equity portfolio generates more tax loss harvesting opportunities through the use of short positions.
Tax Lot Management. Selecting specific tax lot(s) when selling company stock gives you greater control of your tax bill.
Relocate to a Lower Taxation State. Relocating to a state with no/low income tax rates allows you to avoid high state tax rates on stock sales and stock comp income.
Relocation to a Higher Taxation State. If you're relocating to a state with higher taxes, consider selling/realizing gains on appreciated assets before you move.
Hedge Your Stock. Hedge your stock using derivatives to (quite literally) buy yourself time.
Opportunity Zones (Defer Capital Gains Taxes). Reinvesting realized capital gains into a qualified opportunity zone fund within 180 days has multiple tax benefits.
ING Trusts (Potentially Avoid State Taxes). An Incomplete Non-Grantor Trust is a specialized trust that may allow you to avoid state taxation on Capital Gains.
Exchange Funds (Diversify + Defer Capital Gains Taxes). Exchange funds allow diversifying concentrated stock positions into a portfolio of assets tax-free.
Cross-Listed Tax Strategies
In addition to the above Equity/Stock tax strategies, a number of other tax strategies may also apply in certain situations. We encourage you to review all of the strategies detailed on the 50+ Tax Strategies page to ensure you have the proverbial "full menu" of tax planning strategies to consider for your situation.
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