Perhaps you made a great investment. Or you spent years helping a company succeed and accumulated a substantial stock position along the way. That success can leave you with two connected challenges: too much wealth tied to one company, and a tax bill that makes selling difficult.
If you cannot sleep at night—or find yourself checking your stock price four or five times a day—it may be time for a plan. I help you work through the concentration and tax problem so your financial future is less dependent on a single ticker.
01
Diversify at a deliberate pace
Build a sequence of stock sales around your cash needs, available tax lots, and an annual capital-gains tax budget. Evaluate the risk of waiting alongside the cost of selling.
ILLUSTRATIVE TAX EXAMPLE
Make room in your tax budget.
$5,000
Less federal capital-gains tax in this example.
One-year sale$20,000
Phased sales$15,000
Hypothetical outcomes, not client results.Assumptions & trade-offs
Assumes the same $100,000 total long-term gain is taxed at 20% if realized in one higher-income year, versus 15% across lower-income years. Both are assumed effective rates on this gain—not a calculation for a specific taxpayer. Excludes state tax, net investment income tax, transaction costs, and time value of money. Prices and tax rules can change while you wait; phased selling can increase risk and may not reduce taxes.
02
Seek usable tax losses
Where appropriate, use systematic, active tax-loss harvesting in a diversified taxable portfolio to look for realized losses that may offset gains. Losses depend on market opportunities; they cannot be manufactured or promised.
ILLUSTRATIVE TAX EXAMPLE
Put eligible losses to work.
$12,000
Lower current-year tax in this example.
Without loss offset$20,000
With eligible losses$8,000
Hypothetical outcomes, not client results.Assumptions & trade-offs
Assumes a $100,000 long-term gain, $60,000 of eligible realized capital losses from other investments, and a flat 20% tax rate on the remaining gain: ($100,000 − $60,000) × 20% = $8,000. Excludes other gains, losses, taxes, and costs; assumes no wash-sale disallowance. Losses are not guaranteed. Harvesting may defer rather than eliminate tax and reduce the cost basis of replacement holdings.
03
Define the downside trade-off
Evaluate protective puts, stock collars, and other suitable hedges. Protection has a cost, expiration, and limitations; a collar can cap upside and lead to shares being called away. Employer rules may prohibit hedging.
ILLUSTRATIVE PROTECTION EXAMPLE
Set a boundary on a decline.
$18,000
Smaller decline in this hypothetical collar example.
Unhedged decline$30,000
Collared decline$12,000
Hypothetical outcomes, not client results.Assumptions & trade-offs
Assumes a $100,000 stock position falls 30% by option expiration. A collar with a put strike 10% below the initial stock price and a $2,000 net premium limits this modeled decline to $12,000. The short call caps upside; assignment can trigger a sale. Excludes taxes, dividends, trading costs, and early exercise. Protection ends at expiration. This illustrates risk management, not a tax deduction or tax savings.
Your tax budget. Your risk boundaries.
We begin with your cost basis, account statements, vesting schedule, trading restrictions, and financial goals. Then we compare staged sales and appropriate hedges, examine tax-loss opportunities elsewhere in the portfolio, and coordinate implementation with your CPA. No one technique replaces a diversified financial plan.
There is no single percentage that fits every household. We consider how a major decline would affect your goals, whether your salary also depends on the company, your cash needs, and the rest of your assets.
Do I have to sell all of my company stock immediately?
Not necessarily. A staged selling plan may balance concentration risk with taxes and personal preferences. If the position threatens essential goals, waiting only to minimize taxes may be the larger risk.
Can I diversify without paying any capital-gains tax?
That cannot be promised. Eligible realized losses may offset gains, but availability, holding periods, other income, and tax rules matter. Some approaches defer tax instead of eliminating it.
What is the difference between a protective put and a collar?
A protective put adds a purchased downside hedge to stock you own. A collar also sells a call to help fund that hedge, accepting a ceiling on upside and possible assignment. Both require attention to expiration, costs, suitability, and tax consequences.
Can you help with RSUs, options, or shares I cannot trade freely?
We can build a plan around vesting dates, exercise choices, liquidity needs, and employer restrictions. Restricted shares, blackout windows, or company anti-hedging policies may rule out certain strategies. Legal and tax specialists may need to be involved.
How do you coordinate stock sales with my CPA?
We review projected gains, available losses, tax lots, and estimated payments before significant transactions. Relevant issues can include wash sales, constructive-sale rules, and the tax character of equity compensation.
I already understand investing. What would an advisor add?
The value is in coordinating the details: concentration exposure, stock-sale timing, tax budgets, hedging trade-offs, and the financial goals those shares are meant to support. We start by identifying the specific decision you need help making.
