Not financial advice, but the RSU and ESPP stock sales strategy should be based on how stable you think the company’s stock is.
When I worked at Intuit, there was no point in being in a hurry to sell RSU and ESPP shares because back them the stock didn’t move much….And even now, they are pretty much recession proof.
When I worked at a new fledging startup that IPOed, you wante to sell as much stock options, stock, and ESPP as possible because in smaller companies, there are “lockup windows”, and you don’t want to get stuck holding onto a newly issued stock that tanks after the initial hype. A lot of people hold onto ESPP shares for the “tax advantage” benefit, but the big assumption here is you sell at a gain. In a lot of cases, especially at small tech companies, holding onto ESPP shares ends up paying ordinary income on vested shares, and then carrying over a lot of capital gain losses in successive years. Back to the the startup company that I worked at that IPOed. ESPP shares were granted at $125/share a few times. Those that held for the “taxable advantage” of holding long term ended up carrying over capital losses when the stock tanked $10/share 6months later.
A wise friend once told me it’s much wiser to pay more taxes on gains from stock sale then to incur capital loss carryovers trying to hold on to something too long just to save a few thousand extra on taxes.
That’s why I tend to sell my ESPP and RSU shares when they vest. Because you never know if it will be better years from now, of if the tech company goes under.
This reply was modified 2 years, 2 months ago by Coronita.
