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