r2i forum

My situation:

I am currently sitting on ~$250K company granted stocks. (75% stock options, 15% ESPP and 10% RSU). Stock options expire in 2014 or within a month of employment termination. My company is doing very well, so I expect the value of my holding will rise by ~$50K or so every year.

My concerns:

1) Paying too much taxes on the gains in case I have to leave the employer. I am already on 6th year of H1-B (first labor denied, second labor pending, extension for next year approved). In case my second labor gets denied, I probably will have a forced termination next year. (I am planning to r2i anyway in 2014 or so)

2) Having so much money invested in one stock makes me wonder if I am foolish to take so much risk. I am not nervous or anything and my risk tolerance is pretty high, but I still want to make sound financial decisions.

I am looking for smart but legal ways / strategies to unload the holding and minimize tax/costs on the gains. What are my options?

Your advice is very much appreciated. Thanks in advance.

Congrats. I don't know how much of your net worth is tried into your company, but IMHO if it is more than 10%, you should try to diversify.

(1) Don't know much about RSUs but don't they withold taxes on them already when they get vested? If so, then you might have very small capital gain left on them. If so I will sell them last in a year that I have low income (e.g. after R2I)
(2) If you have any long held ESPPs such that they attract long term capital gains rates, you can consider selling them first. If you have any recently issued ESPP that do not get long term tax treatment, I will hold them till they do.
(3) Are your options ISO or NQSO? If they are NQSO, there is not much you can do. The main thing to consider is that if you quit your job and then forced to exercise all of them at once, you will get bumped up in tax bracket because of all that extra income and possibly get hit with AMT which nullifies your state tax deduction. A better idea is to exercise and sell small amounts each year just enough so that you can avoid bumping up a bracket/AMT. This will require planning and time...
(4) If you have ISOs, you can exercise them and hold them for >1 year so that they attract long term rate. Realize that this is risky and you may not get the desired effect because you may get hit with AMT. However also realize that any AMT paid because of ISO can be used as a deduction in later years. Thus you can become very creative with this if you can plan and execute...
(5) Does your company have office in Texas/Washington? Can you move there? Perhaps you can then save the 10% CA state tax ....

P.S. Or you can just forget about all this and pay taxes and enjoy life in the time remaining :)

rdecartus;384394My situation:

I am currently sitting on ~$250K company granted stocks. (75% stock options, 15% ESPP and 10% RSU). Stock options expire in 2014 or within a month of employment termination. My company is doing very well, so I expect the value of my holding will rise by ~$50K or so every year.

My concerns:

1) Paying too much taxes on the gains in case I have to leave the employer. I am already on 6th year of H1-B (first labor denied, second labor pending, extension for next year approved). In case my second labor gets denied, I probably will have a forced termination next year. (I am planning to r2i anyway in 2014 or so)

2) Having so much money invested in one stock makes me wonder if I am foolish to take so much risk. I am not nervous or anything and my risk tolerance is pretty high, but I still want to make sound financial decisions.

I am looking for smart but legal ways / strategies to unload the holding and minimize tax/costs on the gains. What are my options?

Your advice is very much appreciated. Thanks in advance.