A concentrated stock position, one company making up a large share of what you own, calls for a written plan to bring it down to a target over a set number of years, using the tax rules to keep the bill manageable. The usual tools are sales spread across tax years, gifts of appreciated shares to charity, keeping some shares for heirs, and for large holdings, exchange funds or hedges. In 2026, long-term gains are taxed at 0%, 15% or 20%, plus 3.8% for higher incomes. A one-time plan from a fee-only planner has a median of $2,000.
Few advisors name this as a specialty. Of the fee-only firm websites in our study, 1% listed concentrated stock positions, against 18% for equity compensation.
Where concentration comes from
The source shapes the plan:
- Your employer’s stock, from RSUs, options or an ESPP that kept vesting. Our guide to RSUs and stock options covers the tax on each grant; this guide picks up once the shares are yours.
- Founder or early-employee shares, often with a cost basis near zero. If a sale of the company is coming, see our guide to selling a business.
- Inherited stock. It usually comes with a new basis at the date of death (see step-up in basis), so selling soon after costs little tax. The reason to hold it is usually loyalty, not tax.
- Company stock in a 401(k). Special rules on net unrealized appreciation can turn part of it into capital gain if you take it out the right way.
- A stock you bought long ago that grew to dominate the portfolio.
The tax math in 2026
Gains on shares held more than one year are long-term. Their rate depends on your taxable income:
The 3.8% net investment income tax applies to investment income above modified adjusted gross income of $250,000 for joint filers or $200,000 for single filers, so many people selling large positions pay 18.8% or 23.8%, plus any state tax.
That makes the tax real but limited. At 23.8%, a $1 million position with a $200,000 basis owes at most $190,400 in federal tax if sold at once, based on those rates. The same position falling 40% loses $400,000. A good plan weighs a known tax against an unknown drop.
Ways to bring it down
Sell on a schedule
The simplest plan: sell a fixed amount or share each quarter or year until the stock is at your target. Spreading sales across tax years can keep more of the gain out of the top brackets. Selling losing investments elsewhere in the same year can offset gains; see tax-loss harvesting. Sell the highest-basis lots first, which our cost basis entry explains.
If you’re a company insider, a Rule 10b5-1 plan sets sales in advance so you can sell during periods when you otherwise couldn’t. Since the SEC’s 2022 amendments, directors and officers wait at least 90 days after adopting a plan, or until two business days after the quarter’s results are reported, up to 120 days, before the first sale. Other employees wait 30 days. Anyone other than the company itself can use only one single-trade plan per 12 months.
Give shares instead of cash
If you give to charity, give appreciated shares you’ve held more than a year. You can generally deduct their market value and never pay tax on the gain. The deduction for these gifts to public charities is limited to 30% of adjusted gross income, and any excess carries forward for up to 5 years. A donor-advised fund lets you give a large block in one year and grant it out over time.
Exchange funds
An exchange fund is a partnership that pools shares from many investors. You contribute your stock and receive a share of a diversified portfolio, with no sale. Partnership tax law makes a partner recognize the gain if contributed stock is distributed to another partner within 7 years, which is why these funds generally require a 7-year commitment. You keep your original low basis, so the tax is deferred, not removed. Ask about the minimum, the yearly fee and what you’d receive if you left early.
Hedges
Options strategies such as a collar, or a prepaid variable forward contract, can limit your losses while you hold. Federal tax law treats certain hedges as a sale: a short sale of the same stock, an offsetting swap, or a forward contract to deliver it. A hedge that keeps you outside those rules has to leave you some real risk. These deals need a tax adviser, and insiders should check their company’s trading policy first.
Common mistakes
- Waiting to get back to a past high before selling anything.
- Letting the tax decide everything, and holding a stock that could fall by more than the tax would have cost.
- Selling it all in one year and pushing other income into higher brackets. For people near 65, a large sale also raises Medicare premiums two years later; our retirement guide explains the lookback.
- Giving cash to charity while holding shares with large gains.
- Hedging without checking the constructive sale rules, and owing tax as if you had sold.
- No written target. Without a number and a date, the plan drifts.
Questions to ask an advisor
| Ask | A good answer includes |
|---|---|
| How many clients have you helped reduce a concentrated position? | A number, and positions of a size like yours |
| What share of my net worth should this stock be, and by when? | A target and a dated selling schedule |
| What will each year’s sales cost me in tax? | Dollar estimates by year, including the 3.8% and state tax |
| Would an exchange fund, hedge or charitable gift fit me? | Who sponsors it, the minimum and the total cost, or a reason it doesn’t fit |
| How do you charge on stock you’re not managing? | A clear answer in dollars a year |
On that last question, our RSU guide shows what a percentage fee on stock you’re simply holding adds up to.
When a fee-only advisor is worth it, and what it costs
A planner earns the fee when the stock is a large share of your net worth, the basis is low, you face trading windows or insider rules, or the position has to fund retirement. If the shares were inherited with a stepped-up basis, the plan may be simple enough to carry out on your own.
Fee-only planners who publish prices charge:
- One-time plan: a median of $2,000, middle half $845 to $3,600. It can set the target and the selling schedule for you to follow. See one-time plan costs.
- Ongoing planning: a median of $4,500 a year, middle half $2,400 to $7,200, useful when sales run over several years. See what flat-fee advisors charge.
- Percentage of assets: a median of 1%, usually including investment management.
Exchange funds and hedges carry their own costs on top. Ask for the total in dollars a year.
How to find one
Start with the retirement with concentrated positions specialty, or the equity compensation specialty if the stock came from your job. In the public graph, see equity compensation specialist advisors, advisors for executives, and for very large holdings, ultra-high-net-worth advisors. Audience pages for executives, founders and tech employees gather the advisors and guides for each.