Question about selling stock grants

[newkidontheblock]

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

[mhc]

Are these options, actual shares, RSU's, or something else?

[newkidontheblock]

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.

[rob]

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.

[mhc]

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.

[newkidontheblock]

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.



Thanks