Equity comp · Complex ownership
Vesting schedules, ISO AMT, ESPP qualifying dispositions, 10b5-1 plans, concentrated stock — the tax side and the investment side are the same decision. We run both so the plan holds together across years, not just this April.
The equity landscape
Most equity-comp employees hold two or three of these at once. Each has its own tax treatment, its own timing window, and its own interaction with the rest of the year.
Ordinary income at vest, equal to the fair market value of the shares. Employer typically withholds shares or cash at a flat supplemental rate — which is often below your actual marginal rate. Under-withholding is one of the most common RSU surprises on April 15.
No regular-tax income at exercise, but the spread is an AMT preference item. Long-term capital gains on a qualifying disposition require holding one year post-exercise and two years post-grant. Multi-year planning around the AMT crossover is the whole game.
Ordinary income on the spread at exercise, with the employer withholding payroll taxes. Capital gain or loss runs from the exercise price forward. Less complex than ISOs, but timing and concentration still matter.
The discount is ordinary income; qualifying vs disqualifying dispositions change how much. A §423 plan with a 15% discount and a lookback is one of the best-risk-adjusted returns most employees ever get — if you plan the sale.
§83(b) elections, qualifying small-business stock under §1202 (QSBS), and the coordination of founder shares with a later sale or secondary. The §1202 gain-exclusion rules are powerful and strict — and run on the original acquisition, not the sale date.
When a single position is a meaningful share of net worth, the tax side and the portfolio side have to be run together. Exchange funds, direct-indexed tax loss harvesting, charitable strategies, and staged sales all live in this conversation.
General educational descriptions. The actual treatment of your specific grants depends on the plan documents, grant type, and personal facts. This is not tax or investment advice.
Concentration risk
The tax cost of selling is only half the conversation. The other half is what happens to the financial plan when a single stock represents a third, half, or more of net worth — especially when the same stock is also the employer’s.
The right answer is almost never “sell everything on April 1” or “never sell.” It’s a multi-year program that uses the taxable-gain budget you have each year, pairs it with lot-level harvesting, and coordinates with charitable and estate moves where those fit.
Tools in the concentrated-stock toolkit
California layer
California taxes RSU vests, ISO disqualifying dispositions, and long-term gains at ordinary rates — with no preferential capital-gains rate and a top bracket above 13%. Residency and the timing of the vest both matter. A move across state lines a month too early or too late can change the bill.
California generally sources RSU income based on the portion of the vesting period you worked in-state. Relocation mid-cycle requires an allocation, not a clean break.
California has its own AMT. The federal AMT crossover planning isn't enough on its own — the CA calculation can change the optimal exercise pattern.
California is active on residency and equity-comp sourcing. Documentation of days, domicile ties, and grant-to-vest timing should live alongside the planning.
California does not conform to federal §1202 in the same way. Qualifying for the federal exclusion does not guarantee a California outcome. Plan both returns.
How the engagement works
We catalog every grant — type, vesting schedule, strike, grant date, and running cost basis — so planning decisions run off an accurate picture.
A 3–5 year model of income, vests, exercises, and projected sales — with bracket, AMT, and state overlays — so you see the tradeoff before you make it.
A written annual plan that lines up sales, exercises, and charitable moves with the broader portfolio through Measured Risk Portfolios.
Get started
A 30-minute call to walk through your grant inventory, your timing windows, and where the biggest multi-year tax decisions sit. We’ll tell you what the plan should look like and whether we’re a fit.
Educational information only. Not tax, legal, or investment advice. Tax services through Matt Reese, CPA; investment advisory through Measured Risk Portfolios, a registered investment adviser.