“Wouldn’t there be a situation where I would want to trigger short term capital gains?” The obvious answer would be something like the 740% runup of Tesla stock in 2020. After all, anyone could make a strong argument for cashing in on their $10,000 after it turned to $84,000 in less than a year
Many people who are looking to implement a Roth conversion strategy also have a regular investment account. After all, retirement account contributions are limited each year, and many people are looking to set aside additional money. Over time, these taxable accounts can accumulate quite a bit of growth in themselves, particularly if you have a sensible, long-term, diversified portfolio. In that case, you might have capital gains that are now part of your tax planning picture.
ESPPs can be a great way to build wealth and more quickly achieve your personal financial goals.
An incentive stock option (ISO) is a company benefit that gives you the right to buy shares of stock at a discounted price with a tax break on the profit. On the other hand, non-qualified stock options known as NSOs (the more common type) are not as advantageous tax-wise as incentive stock options.
As a highly compensated employee you may find that company stock is now a part of your overall salary package. For some, managing these different types of stock grants and planning what to do with them can be frustrating and confusing.