It depends on the rules of the plan. Some plans require you hold for a certain amount of time, while others may let you sell immediately.
When I had employee stock, my philosophy was to sell ASAP and treat the discount as a cash bonus. Since I did not have an allocation for single company stocks in my investment plan, it made the most sense to sell and reinvest that money into VTSAX.
I think it depends on your overall investment philosophy. If you mentally treat this as a cash bonus, albeit an indirect bonus, then you shouldn’t be concerned about the tax treatment. It’s just the same rate as your normal income.
I’m not going to complain about the tax if my company wants to give me $3000, if all I need to do is remember to click a button to sell every 3 months. It gives me the same vibes as people who don’t want a raise because it would bump them into the next tax bracket.
Yes if you hold it longer you may pay less taxes, and if this stock otherwise fits within your investment philosophy, holding it can be the right choice. As an index investor, it was not for me, because I would otherwise never invest directly in my company (or any company). Getting that money into my desired allocation ASAP was the ideal strategy.
Yeah I think it depends on how it fits into your overall allocation. If it’s small enough I wouldn’t be against holding it a year to get taxed at LTCG rate vs your income rate. But you just have to look at the math and the volitility of the stock and decide for yourself if that makes sense
Alternatively, you can consider the discount to be a guaranteed gain if you sell immediately. For example, my company had a 15% discount. That is better than the market so it made sense to me to want to lock in that kind of gain.
It depends on the rules of the plan. Some plans require you hold for a certain amount of time, while others may let you sell immediately.
When I had employee stock, my philosophy was to sell ASAP and treat the discount as a cash bonus. Since I did not have an allocation for single company stocks in my investment plan, it made the most sense to sell and reinvest that money into VTSAX.
I can sell immediately, but it leaves me subject to the highest taxes with the least risk of price change.
I think it depends on your overall investment philosophy. If you mentally treat this as a cash bonus, albeit an indirect bonus, then you shouldn’t be concerned about the tax treatment. It’s just the same rate as your normal income.
I’m not going to complain about the tax if my company wants to give me $3000, if all I need to do is remember to click a button to sell every 3 months. It gives me the same vibes as people who don’t want a raise because it would bump them into the next tax bracket.
Yes if you hold it longer you may pay less taxes, and if this stock otherwise fits within your investment philosophy, holding it can be the right choice. As an index investor, it was not for me, because I would otherwise never invest directly in my company (or any company). Getting that money into my desired allocation ASAP was the ideal strategy.
Yeah I think it depends on how it fits into your overall allocation. If it’s small enough I wouldn’t be against holding it a year to get taxed at LTCG rate vs your income rate. But you just have to look at the math and the volitility of the stock and decide for yourself if that makes sense
Alternatively, you can consider the discount to be a guaranteed gain if you sell immediately. For example, my company had a 15% discount. That is better than the market so it made sense to me to want to lock in that kind of gain.