What is liquidating stock
Do I have stock with a basis that is equal to the market value of the stock that I can liquidate with little or no tax consequences? Should I exercise and hold options to take advantage of long-term capital gain rates in the future?As you can likely assume, there is no completely “right” answer to these questions.
It can use the distribution channels it has always used to sell its products, with prices slashed so low that customers can't resist them.Tax, as it pertains to the liquidation of various types of employer stock holdings, can be wildly different.For that reason, it makes sense to not only understand your investment goals and objectives, but also to understand the potential tax implications of each type of stock ownership before deciding which of your shares to liquidate.Furthermore, what is the best strategy to diversify* a large allocation of company stock into other holdings?Should I recognize ordinary income now or defer it until later?
10-15% allows an employee or shareholder to participate in the upside of the company should the stock appreciate and, perhaps more importantly, be somewhat insulated from the risk of total wealth destruction should the company underperform and lose its value precipitously (yes, it is possible and this can definitely happen).