You have a lot going on but you need to be careful about linking all the questions together since they are not really dependent on each other. They are basically;
1) Do I sell most or all of the Nvidia? To me that is an easy yes, you will always be paying a lot of taxes so saving a small percentage of the taxes is relatively minor compared to how much the stock could drop before you sell it if you delay the sale.
Paying a bit more in taxes is not a life changing amount.
Having the stock drop by 30% or more is a life changing amount.
2) What to do with the money? There is a wiki on managing a windfall and one of the big points is that it a good idea to just put the money into something ultra safe for six months to a year while you get used to having the money and come up with a long term plan. I would suggest just putting it into a something ultra safe for six and worry about what to do with it later.
https://www.bogleheads.org/wiki/Managing_a_windfall
One thing you might look at is taking an unpaid sabbatical from work if you can. You will be in a high tax bracket this year so this would be a good time to take some time off from work if you can.
There is a risk that you could hold on to the stock longer only to have the tax laws change and then sell it and pay more in taxes than if you sold it today.
We cannot discuss politics or proposed legislation here because of the board rules, which is a good thing, but in the past there have been proposals to increase the long term capital gains tax rate or even tax it the same as wage income. Some states already tax long term capital gains the same as wage income. That is about all that can be said but it does not take much imagination to see how that might be possible.
1) Do I sell most or all of the Nvidia? To me that is an easy yes, you will always be paying a lot of taxes so saving a small percentage of the taxes is relatively minor compared to how much the stock could drop before you sell it if you delay the sale.
Paying a bit more in taxes is not a life changing amount.
Having the stock drop by 30% or more is a life changing amount.
2) What to do with the money? There is a wiki on managing a windfall and one of the big points is that it a good idea to just put the money into something ultra safe for six months to a year while you get used to having the money and come up with a long term plan. I would suggest just putting it into a something ultra safe for six and worry about what to do with it later.
https://www.bogleheads.org/wiki/Managing_a_windfall
You could contribute to a donor advised fund but that would of course involve giving the money away.I don't think there's any way to reduce LTCG further but please enlighten me if there are ways I am not looking into.
One thing you might look at is taking an unpaid sabbatical from work if you can. You will be in a high tax bracket this year so this would be a good time to take some time off from work if you can.
There is a risk that you could hold on to the stock longer only to have the tax laws change and then sell it and pay more in taxes than if you sold it today.
We cannot discuss politics or proposed legislation here because of the board rules, which is a good thing, but in the past there have been proposals to increase the long term capital gains tax rate or even tax it the same as wage income. Some states already tax long term capital gains the same as wage income. That is about all that can be said but it does not take much imagination to see how that might be possible.
Statistics: Posted by Watty — Tue Jul 23, 2024 7:34 am — Replies 8 — Views 783