Sell Stocks. Defer Taxes.
Sell stocks with large unrealized gains — defer the capital gains taxes.
Diversify a concentrated position. Invest in a diversified portfolio. Collect monthly income.
The DST+: Explore potential tax-deferral strategies before selling highly appreciated stocks, RSUs, founder shares, or concentrated equity positions. This website is a subsidiary of Gold Coast Financial Group.
Many investors today hold substantial unrealized gains in concentrated stock positions, founder shares, Restricted Stock Units (RSUs), stock options, or long-term investment holdings that may create significant tax exposure if sold outright.
Selling appreciated stock positions may trigger substantial federal and state capital gains taxes that can materially reduce the amount available for reinvestment, income planning, estate planning, or long-term wealth preservation.
Some investors explore advanced planning concepts involving irrevocable trust structures, installment-based planning strategies, charitable planning, Opportunity Zone investments, and other tax-aware approaches before liquidation occurs.
What it is
What are advanced stock tax-deferral planning strategies?
Certain investors explore advanced planning concepts designed to potentially defer or spread out recognition of capital gains taxes associated with highly appreciated stock sales.
Depending upon the structure, the investor may transfer assets into a specialized irrevocable trust arrangement, installment-based structure, charitable planning vehicle, or other tax-aware investment structure coordinated alongside specialized tax attorneys, estate planning counsel, trustees, and financial professionals.
These planning concepts are often explored before a liquidity event occurs and may involve long-term investment, estate, and income-planning objectives.
Potential objectives may include:
- Potential capital gains tax deferral
- Diversification planning
- Reduction of concentrated stock exposure
- Installment-based income planning
- Legacy and estate planning coordination
- Long-term wealth preservation
- Tax-aware investment management
- Charitable planning opportunities
Every situation is different, and these strategies are not appropriate for all investors or all asset types.
Who explores it
Common situations where investors explore these strategies
- Highly appreciated stock portfolios
- Founder shares
- Restricted Stock Units (RSUs)
- Non-Qualified Stock Options (NSOs)
- Incentive Stock Options (ISOs)
- Employee Stock Purchase Plans (ESPPs)
- Concentrated technology stock exposure
- Low-cost-basis legacy stock holdings
- Closely held company stock
- Pre-liquidity planning
- Retirement diversification planning
- Estate and legacy planning situations
- Investors seeking to reduce concentration risk while attempting to defer taxes
Not all investors, securities, stock-option structures, or circumstances qualify for these planning strategies.
Why people explore this
Why some investors explore advanced tax-deferral planning
Many investors spend years building concentrated stock positions through employment, entrepreneurship, long-term investing, or inheritance.
Over time, the embedded unrealized gains may become substantial, creating concerns regarding:
- capital gains taxes,
- concentration risk,
- diversification limitations,
- retirement income planning,
- estate planning,
- and long-term family wealth preservation.
Some investors explore advanced planning structures before liquidation in an attempt to spread recognition of gains over time, diversify concentrated positions, reduce exposure to a single stock or sector, coordinate estate and gifting objectives, and potentially improve long-term investment flexibility. These structures generally require advance planning before a sale occurs.
Executive compensation
Executive compensation & concentrated stock planning
Many executives, technology employees, founders, and long-term employees accumulate substantial unrealized gains through employer stock compensation programs.
These positions may include
- Restricted Stock Units (RSUs)
- Non-Qualified Stock Options (NSOs)
- Incentive Stock Options (ISOs)
- Restricted Stock Awards
- Employee Stock Purchase Plans (ESPPs)
- Founder Shares
- Long-term concentrated stock holdings
Common decisions investors face
- when to exercise stock options,
- when to sell appreciated shares,
- how to manage concentrated stock exposure,
- and how to potentially reduce future tax burdens while diversifying holdings.
Because executive compensation and stock-option planning can involve complex tax rules, vesting schedules, exercise considerations, AMT exposure, and liquidity-event timing, investors should coordinate closely with qualified tax and legal professionals before implementing any strategy.
Beyond the DST+
Other tax-aware planning strategies investors may explore
Advanced trust and tax-aware planning concepts are only one category of planning strategies that investors may evaluate before selling highly appreciated stock positions. Depending upon the client’s goals, income needs, tax profile, charitable objectives, estate planning goals, and liquidity requirements, additional planning concepts may also be considered.
Strategies we may assist in coordinating
- Private annuity and irrevocable trust planning concepts coordinated alongside specialized legal and tax professionals
- Concentrated stock diversification and tax-aware portfolio transition planning
- Installment-based planning concepts involving highly appreciated stock positions
- Tax-loss harvesting and portfolio offset strategies
- Oil, natural gas, and energy investments utilizing potential intangible drilling cost (IDC) deductions under IRC Section 263(c)
- Opportunity Zone investments through professionally managed Qualified Opportunity Zone programs under IRC Sections 1400Z-1 and 1400Z-2
- Charitable remainder trusts (CRTs) under IRC Section 664
- Estate, gifting, and multi-generational wealth planning strategies coordinated alongside legal counsel, including Mains Law Office
- Diversified investment management and income planning after liquidity events
- Legacy and beneficiary planning strategies involving highly appreciated assets
Strategies some investors pursue independently
- Continuing to hold appreciated stock positions in pursuit of a potential future step-up in cost basis for beneficiaries under current estate tax laws
- Direct charitable gifting of appreciated securities
- Donor-Advised Funds (DAFs) — charitable giving accounts that may allow investors to donate appreciated securities while potentially receiving charitable tax benefits
- Exchange fund programs designed to help diversify concentrated stock positions by pooling holdings with other investors
- Family gifting and wealth transfer strategies
- Qualified Small Business Stock (QSBS) planning where applicable under IRC Section 1202
- Direct tax-loss harvesting strategies
- Opportunity Zone investments under IRC Sections 1400Z-1 and 1400Z-2
- Installment-sale structures coordinated independently with legal and tax counsel
- Traditional staged diversification planning over time
No single strategy is appropriate for every investor, and many planning techniques involve tradeoffs, restrictions, legal complexities, liquidity considerations, tax risks, suitability standards, and ongoing management requirements.
Clients should consult with their CPA, attorney, and financial professionals before implementing any planning strategy.
After liquidity
What happens after liquidity?
In many situations, once stock positions are liquidated within the applicable structure, proceeds may then be invested based upon the client’s:
- risk profile,
- income objectives,
- liquidity needs,
- time horizon,
- estate planning goals,
- and long-term financial objectives.
Depending upon the client’s goals, portfolios may include diversified investment strategies consisting of equities, fixed income, cash management solutions, and in certain cases, alternative investment strategies.
Many investors utilize these planning concepts as part of a broader transition away from concentrated equity exposure toward a more diversified long-term investment approach.
Every investment strategy involves risk, and there can be no guarantee that any investment or planning objective will be achieved.
How it works
A simple three-step process
Initial consultation — Gold Coast Financial Group and Scott Brooks
We discuss the stock position, estimated unrealized gain, timing considerations, liquidity objectives, and overall planning goals.
Strategy review — estate planning team, trustee, and tax attorney
Potential structures are reviewed in coordination with specialized professionals and the client’s CPA, tax advisor, and/or attorney to determine suitability.
Customized planning
For each client, investment management, income planning, and trust coordination are designed around personal objectives, risk tolerance, estate considerations, and long-term financial goals.
Tradeoffs
Important considerations
Advanced tax-deferral and trust strategies involve tradeoffs and are not suitable for every investor.
In many cases, investors seeking tax deferral may give up certain forms of direct ownership, immediate liquidity, or unrestricted access to proceeds.
These structures can be complex and should only be considered after reviewing all tax, legal, investment, estate planning, liquidity, and risk considerations with qualified professionals.
Nothing is perfect. Every planning strategy involves potential benefits, limitations, costs, risks, and uncertainties.
About us
About Gold Coast Financial Group
Gold Coast Financial Group works with individuals, families, executives, business owners, and investors seeking long-term investment management and planning solutions.
Our process focuses on:
- investment portfolio design and management,
- tax-aware investment coordination,
- retirement and income planning,
- concentrated stock diversification planning,
- risk management,
- and multi-generational wealth planning concepts.
We work alongside clients’ CPAs, attorneys, and other professionals when evaluating complex planning opportunities.
Request a confidential review
Tell us about the position.
Share a little context about your concentrated position and a member of our team will follow up. All inquiries are confidential and no-obligation.
Confidential consultation
Confidential consultation process
Initial consultations and preliminary educational discussions are provided on a confidential, no-obligation basis.
In many cases, clients choose to have multiple phone calls, meetings, or Zoom discussions with their advisors, CPAs, attorneys, and other professionals before determining whether a particular planning strategy may be appropriate.
Costs, legal fees, trustee compensation, tax planning expenses, and ongoing investment management fees vary based upon the structure, complexity, and asset size involved.
All fees and expenses are reviewed in detail prior to implementation, and clients are under no obligation to proceed.
In general, these costs are intended to fall within customary ranges for trust, investment management, and tax-planning strategies.
Every situation is unique, and all strategies should be carefully evaluated with qualified professionals before implementation.
Contact
Contact Gold Coast Financial Group
Scott S. Brooks
Chief Investment Officer, Owner
Gold Coast Financial Group
2753 Camino CapistranoBuilding B, 1st FloorSan Clemente, CA 92672- Office
- 949.545.6500
- Text
- 949.989.4636
- sbrooks@gcfginc.com
Websites
Legal & Regulatory
Disclosures
Investment advisory services offered through NFSG Corporation, an SEC Registered Investment Advisor. Securities offered through Newbridge Securities Corporation, Member FINRA/SIPC. Gold Coast Financial Group is a separate entity and not affiliated with NFSG Corporation or Newbridge Securities Corporation.
This material is provided for informational and educational purposes only and should not be construed as tax, legal, accounting, or investment advice. Gold Coast Financial Group, NFSG Corporation, and Newbridge Securities Corporation do not provide tax or legal advice. Clients should consult with their CPA, attorney, and other professional advisors before implementing any strategy.
Deferred Sales Trusts and installment-sale-based strategies are complex and involve risks, restrictions, fees, limitations, and suitability considerations. These strategies are not appropriate for all investors or all asset types. There can be no guarantee that any tax-deferral strategy will achieve its intended objectives or produce favorable tax results.
Investing involves risk, including possible loss of principal. Past performance is not indicative of future results. Any references to tax strategies, estate planning concepts, or legal structures are general in nature and subject to change based upon current laws, regulations, and individual circumstances.
This material is neither an offer to sell nor a solicitation of an offer to buy any securities. Any such offer may only be made through the applicable offering documents, including a prospectus or private placement memorandum (PPM), which should be read carefully in its entirety before investing. These documents contain important information regarding investment objectives, risks, charges, expenses, and other relevant factors. Some investments may be speculative, illiquid, and involve higher fees and costs.
Information provided is believed to be from reliable sources but is not guaranteed as to accuracy, completeness, or fitness for a particular use.
This communication may include links to third-party websites. When you access these links, you are leaving our website. We make no representation as to the accuracy or completeness of information provided by third-party sites and assume no liability for their content or use.
This website should not be deemed an offer or solicitation in any state where the investment advisor representative is not properly registered. Specific recommendations can only be made after reviewing a client's individual financial situation, investment objectives, and suitability requirements.
Securities in accounts carried by Newbridge Securities Corporation are protected by SIPC up to $500,000, including $250,000 for cash claims. Additional coverage may be provided through excess insurance policies; however, such coverage does not protect against loss due to market fluctuations. For more information, please visit Securities Investor Protection Corporation.
Accredited Investor Definition: An accredited investor is generally defined as an individual with a net worth exceeding $1 million (excluding primary residence), or income exceeding $200,000 individually (or $300,000 jointly with a spouse) for the past two years with the expectation of the same in the current year.