Question about selling stock grants

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Question about selling stock grants

Postby newkidontheblock » Thu Dec 27, 2012 1:10 pm

For the past 4 years I have been getting stock grants that get 20%vested each year.
I have never sold them.

My account is in schwab. When I sell them is there a way to sell the stocks that became vested earlier.
I want to make sure I avoid short term capital gains.

Last year I had hefty AMT payment. With fiscal cliff and the risk of higher capital gains versus risk of AMT I am having a hard time deciding if I should sell or not.

I don't need the money at this time I am trying to avoid paying higher taxes.

Let me know if you have any suggestions for me.

Thanks
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Re: Question about selling stock grants

Postby mhc » Thu Dec 27, 2012 5:41 pm

Are these options, actual shares, RSU's, or something else?
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Re: Question about selling stock grants

Postby newkidontheblock » Fri Dec 28, 2012 4:23 pm

These are actual shares. Taxes are deducted when the shares are vested.
I don't pay anything for them so my cost basis is zero.
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Re: Question about selling stock grants

Postby rob » Fri Dec 28, 2012 4:28 pm

Ok... So the question becomes... If you had $x in cold hard cash would you go and invest in your employers stock? If the answer is no then you should sell once they vest. Options are a different animal but RSU's that vest into zero basis stock are exactly that question IMO.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
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Re: Question about selling stock grants

Postby mhc » Fri Dec 28, 2012 9:25 pm

I assume you are paying normal income tax on the shares when they vest. At that point, they are just shares that have a cost basis for the Fair Market Value on the day they vest. If you sell them immediately, there will be essentially no additional taxes. This is what I do. I have no desire to hold individual stocks, especially in my company. I want to maintain a well diversified portfolio. I already have my job and NQDCP in my company. That is enough.

If the stock is a small enough percentage of your portfolio and you are comfortable keeping the stock, then keep them. Otherwise, sell them.

In the future, I would recommend selling any new shares as soon as they vest.
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Re: Question about selling stock grants

Postby newkidontheblock » Sat Dec 29, 2012 11:06 am

I don't own any other individual stocks. I don't believe in holding stock in my employer as I am already invested in them via index funds. I will be selling some of my stocks tomorrow and sell any future vested shares as soon they become vested.



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