Unlocking a Concentrated Stock Position Without Triggering a Tax Catastrophe

A retiring technology executive held approximately 70% of her total net worth in a single publicly traded stock. The position had been accumulated over 15 years through RSU grants, stock options, and open-market purchases at various price points. Her cost basis ranged from near-zero on the earliest lots to relatively recent purchases near current market value.

She knew the concentration was dangerous. She also knew that selling the full position in a single year would generate a seven-figure federal and state capital gains tax bill.

The executive faced the classic concentrated stock dilemma:

We designed a multi-year, tax-aware diversification strategy — not a single "sell" decision, but a choreographed, multi-year transition from concentrated risk to diversified wealth.

• Mapped every tax lot by acquisition date, cost basis, and holding period
• Identified lots eligible for long-term capital gains treatment versus short-term
• Built a 3-year liquidation schedule that kept annual realized gains within optimal tax brackets
• Harvested losses in other portfolio positions to offset gains in each year
• Gifted the lowest-basis shares to the client's donor advised fund — eliminating gains entirely on those lots
• Deployed proceeds into an individually constructed portfolio reflecting her specific income needs, risk tolerance, and personal preferences

Over three years, the plan delivered:

The executive's portfolio now reflects her actual financial goals — not her former employer's stock price.

Concentrated positions are one of the most common — and most dangerous — features of UHNW wealth. They're also one of the most solvable, when approached with patience, precision, and a multi-year perspective.

The mistake most investors make is treating diversification as a single event. We treat it as a process — one that can be optimized for taxes, timing, and the client's full financial picture simultaneously.