I unfortunately have hundreds of thousands of dollars in capital gains in things like crypto and Lyft.
What do I do?
How do I avoid giving the tax man a big scoop of my hard earned dough?
Should I sell and rebalance?
Should I quit my job and chill in a year or two so my income is low and I can cash it out without paying taxes?
Should I move to Texas to avoid the state tax?
I have many questions. Please advise. Thank you.
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This comment was deleted by original commenter.
If you've held stocks for at least a year the capital gains tax is low.
If you're planning to donate money anyway, donating assets "in kind" without selling on your end is a great way to maximize your impact and deduct the gains.
If they fit into your long term investment plan then you can just hold them until you "retire", take a sabbatical, or have a low income year.
But if you're very over concentrated in an investment that's grown a lot and don't have a natural point in the next couple years when you plan to have lower income anyway, don't reduce your after-tax net income just to avoid paying tax. Just pay the tax and rebalance.
How feasible is this idea for normal code wagies like us?
The next level up, charitable foundation/ trust fund that you control. With this, you can pay yourself to manage the foundation if you want to shift to nonprofit focused work (or other family members). But this is a massive jump up in dedicated funds. Beyond most of us now: but could be a target end game once all of those RSU have been vesting for 15 years. Just transfer the whole lot over to a foundation you set up. But it has MUCH higher costs and accounting. This is a lifestyle decision at that point (whereas Fidelity Charitable Trust) is simply a tax decision).