Personal Investments • Concentrated equity (LTCG and some other questions))

Hello,

I find myself in a situation where equity that I had held long term (received from my employer as compensation and ESPP) has over the years done exceptionally well - and I was perhaps too lazy to sell and diversify (partially also believing in the company to do well in tech over the years). At the moment, this has become a concentrated stock portfolio of around ~=9.2m (very low cost basis). I and DW have other investments (both 401k, Roth, 529, post tax brokerage accounts) around ~2m. There is a current home mortgage (750k remaining at 2.35% for the next 4 years - 7year ARM). Ages (42 and 41). I plan to work for another 5-6 years atleast - spouse may or may not retire right away. Other goals are of course to send kids to college (ages 9 and 6) and take care of aging parents (back in our home country). But at this point I guess these are my questions:

1. I guess the right thing would be to start selling and just take the hit on the LTCG taxes? (live in California - so don't have a choice but to pay the taxes). Our combined W-2 incomes themselves will cross > 1.2m which means that highest tax bracket. One part of me wants to evaluate all the options i can find to minimize taxes, on the other hand, the simpler me wants to just keep this straightforward, pay the highest tax bracket both at Fed and state and be done with it. Would it help to distributed the sales over multiple years in anyway? or it doesn't matter once you have hit the highest tax bracket?

2. Our current dwelling (1700 sq ft) is now not keeping pace with our 2 growing kids and we feel we can make a jump to a bigger place given the increased stock valuation. Given the high cost of living in CA where we live - we approximate our next home will cost us 2.5m - 3m. What portion of this should i take out as a mortgage vs making a large downpayment. Ofcourse there will be property taxes to be paid over the years and maintenance cost. We can also decide to sell our current home - (value $2m - bought at $1.2m)

3. What are average college savings that should be aimed for? I have not saved enough yet =~ 70k in 529 accounts for both kids.

Many thanks.
Learner_forever

Statistics: Posted by Stinky — Sun Jul 07, 2024 9:33 am — Replies 1 — Views 60