For public company executives, founders, early employees, equity compensation recipients, and long-term investors holding large unrealized gains: a disciplined framework for deciding what to sell, when, and at what tax cost.
This is the problem Wealthstone was built around, and it is where the firm's expertise runs deepest. Zak Gardezy wrote the book on diversifying concentrated stock tax efficiently, and the methodology in it is what the firm runs: planning, investment strategy, and tax strategy treated as one problem, with a working command of the tax code behind it and your CPA and attorney at the table.
A boutique advisor-to-client ratio is what makes that level of detail possible on a single position, and the institutional relationships Wealthstone has built across the financial industry are what give clients access to the strategies the work calls for. The aim is to reduce single-stock risk efficiently and deliberately, rather than waiting for a better year that may not come.
Concentration created the wealth. Left unplanned, it also concentrates every threat to it. Six issues show up in nearly every position we review.
A low basis turns every share into a tax decision. Selling without a lot-level plan can convert decades of compounding into a single, avoidable tax event.
One company's earnings, one regulator's ruling, one product cycle. A diversified portfolio absorbs those shocks. A concentrated one takes them at full force.
When your paycheck, your equity grants, and your net worth all track one ticker, your exposure is larger than your brokerage statement shows. Blackout windows compress your options further.
The tax bill becomes the reason to do nothing, so the position keeps growing and the bill keeps growing with it. Lock-in is a planning problem, not a permanent condition.
The stock that built your wealth earns loyalty, and loyalty distorts judgment. A written framework separates your conviction in the company from the sizing of your exposure to it.
All at once feels reckless, waiting feels safer, and neither is a strategy. The honest answer is a schedule: how much, over what horizon, governed by rules you set in advance.
The Wealthstone Methodology combines four interconnected strategies, sequenced to your situation. Some engagements use all four, others only the stages your position requires.
Contribute appreciated shares to a partnership pooled with other investors' stock and receive units of a diversified portfolio, generally without triggering a taxable sale. Single-stock risk is replaced from day one while the gain is deferred. Funds typically require qualifying investors and a lock-up of roughly seven years, with at least 20% held in illiquid assets, often real estate.
Reinvest realized gains into a Qualified Opportunity Fund within 180 days to defer federal tax on the original gain, with potentially tax-free appreciation on the fund investment itself if held ten years or more. Only the gain portion qualifies, many funds are highly illiquid, and the rules remain subject to legislative change.
Hold long positions and short others while keeping net exposure close to the index. The extra trading produces losses a long-only account cannot, building a bank that carries forward against gains from the other stages. In our research, overlay alpha has historically offset most or all of the management fee, and those fees are sometimes deductible. Shorting and leverage add risk.
Protect whatever remains concentrated while the plan unfolds. Collars pair a protective put with a covered call to bound the stock's range, often at no net cost. A variable prepaid forward can deliver a large portion of the position's value in upfront cash without an immediate taxable sale. Employer policies may restrict hedging for current employees.
The complete methodology, including case studies, is documented in Zak's book, Secrets From a Wealth Advisor. Explore the book →
No single technique fits every holder. These are the strategies we evaluate in Stage Two and Stage Three, each with its own tax treatment, liquidity profile, and restrictions.
Pair a protective put with a covered call to bound the position's range, defining downside protection while deferring the sale itself.
Coming in full buildContribute appreciated shares to a pooled vehicle and receive a diversified basket, deferring gain recognition for qualifying investors.
Coming in full buildPre-scheduled sale programs that let insiders and executives diversify through blackout windows under an affirmative defense framework.
Coming in full buildGifts of appreciated stock, donor-advised funds, and charitable remainder trusts can remove gain from the schedule while funding intent you already have.
Coming in full buildReinvest realized gains into qualified funds to defer recognition and, for long holding periods, reduce tax on the new investment's appreciation.
Coming in full buildPair long and short exposures to harvest losses systematically through market cycles, generating offsets that expand each year's gain budget.
Coming in full buildRSUs, ISOs, NSOs, and ESPP shares each carry distinct tax mechanics. We coordinate vesting, exercise, and sale so grants feed the plan instead of complicating it.
Coming in full buildOur Tax Exposure Calculator estimates the federal, surtax, and state cost of selling any portion of your position, then compares an unplanned single-year sale against an illustrative multi-year schedule. Five inputs, live results, assumptions stated in full.
Open the Tax Exposure Calculator →Sample output: $2.0M position, $400K basis, married filing jointly, full sale. Illustrative only. Run your own numbers in the calculator.
Twelve decisions to make before the first sell order, spanning tax, risk, execution, and redeployment. It is the same pre-sale review we run internally, published in full.
Read the Checklist →Four of twelve. The full checklist covers all four disciplines.
Rarely. A single-year sale usually stacks the entire gain into your highest brackets and surrenders every timing lever you have. Most plans stage sales across multiple tax years against a written gain budget, though a severe risk concentration can justify moving faster and accepting the tax cost deliberately.
Taxes are the center of the plan, not an afterthought. Long-term federal rates of 15% or 20%, the 3.8% net investment income surtax, and state tax can combine to a meaningful share of the gain. The work is sequencing realizations, harvesting offsets, and using charitable and deferral tools so the effective rate on the whole program lands well below the unplanned worst case.
Some tranche you sell will probably be followed by a higher price, and some by a lower one. The plan is not a market call. It is a decision that no single company should be able to change your family's outcome. Staged schedules and partial retention bands exist precisely so that continued appreciation still benefits you without your future depending on it.
It changes the execution, not the objective. Insiders and covered employees typically work within open windows or adopt a 10b5-1 plan that executes on a pre-set schedule regardless of blackouts. We build the sale calendar around your company's policy and coordinate with your counsel where required.
Most programs run three to seven years, driven by the size of the embedded gain, your bracket capacity each year, and any restrictions on the shares. The plan itself takes about four weeks to build. Speed is a dial we set together, with the tax cost of each setting made explicit.
Wealthstone is a fee-only registered investment adviser. We charge an advisory fee on managed assets and, for planning-only engagements, a fixed fee quoted in advance. There are no commissions and no product incentives, so the recommendation to sell, hold, hedge, or gift is never connected to our compensation.
A private consultation, your numbers, and a written framework you keep.
