Said It Here

How to rebalance a concentrated stock portfolio without a huge tax bill

Selling appreciated assets to rebalance triggers massive capital gains tax liabilities that eat into investment returns. This prevents people from diversifying concentrated holdings — like years of accumulated company stock — and forces them to choose between high tax bills or staying overly exposed to a single asset.

What people tried

Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.

  1. 1
    Donating the appreciated stocks directly to charity
  2. 2
    Selling losing positions in the same year to offset capital gains
  3. 3
    Stopping dividend reinvestment into those specific stocks
  4. 4
    Selling assets with the least amount of gains first
  5. 5
    Selling stock and reinvesting in index funds
  6. 6
    Keeping the stock as is
  7. 7
    Placing shares into an exchange fund
  8. 8
    Using covered calls or selling calls
  9. 9
    Automatically selling newly vesting shares
  10. 10
    Selling the shares outright and paying the applicable capital gains tax on the gain in value.

In their words

Unedited, most upvoted first, each linked to the thread it came from.

I was wondering if there is any way to rebalance my portfolio without a huge tax bill.source ↗

Is there any way to avoid selling some of these stocks to reinvest in different areas?source ↗

I works love to avoid a huge tax bill just to keep the money in the markets still.source ↗

Asderd224 · r/personalfinance · 9 upvotes

I have been working at Google for many years now so I have a lot of RSU/stocks at Google (never touched it). That makes up ~70% of my investments.source ↗

bestkaranthe · r/personalfinance

Is there a way to sell those shares and move all that money to a more diversified portfolio, without selling them off and paying tax.source ↗

id move the value away from 1 business rather than “praying” the business’ share price never tanks?source ↗

AndYourMammaToo · r/personalfinance

Where this came up

People with this problem also raised