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.