Year-end strategies: planning checklist for stock compensation
Year-end donations of company stock and the tax advantages
Articles on year-end planning for stock compensation and company shares
Year-end continuing education credits for CEPs, CFPs, CPWAs, and CIMAs
Year-end decisions with nonqualified deferred compensation
Save the date for the first myStockOptions conference: Financial Planning for Public Company Executives & Directors, June 18, 2018



Major tax changes are on the horizon (see our FAQ on tax reform for the latest status of the bills in Congress). With that in mind, year-end planning for stock compensation and company stock holdings in 2017 can be tricky. The articles and FAQs in our section Year-End Planning present ideas and strategies that can help you make smarter decisions and better understand the key issues. In the newsletter below, we present a sample of our content on year-end planning.

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This year marked 17 years since we launched Thank you for using our website and for your support and feedback over the years. We continue to enjoy helping stock plan participants and their companies get more value from equity plans.

—Bruce Brumberg (Editor-in-Chief)

For year-end planning with stock compensation, what should be on my checklist of items to review, know, and consider?

While the tax legislation in Congress is getting a lot of attention now and will affect tax rates in the future, don't forget the fundamentals of year-end planning. The checklist below summarizes what you need to consider for year-end planning with stock compensation.




  • your situation, including short-term cash needs that may prompt you to sell company stock and/or exercise options
  • whether your decisions should be entirely tax-driven
  • your outlook for both your company's stock price and your job
  • how comfortable you are with your concentration in company stock and whether you should diversify
  • multi-year projections for your income and taxes


  • Company and brokerage firm statements, whether online or in print

For general financial-planning points to consider with stock compensation, see a related FAQ.

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How do you donate company stock? What are the tax advantages?

Charitable giving at any level is a very worthwhile use of accumulated wealth, such as holdings of company stock. In fact, nonprofits appreciate gifts of shares as much as gifts of cash.

With the likely increase of the standard deduction under the tax legislation now in Congress, donations this year could have more after-tax value for you while you're still itemizing your deductions. At we have an entire section on the topic of gifts and donations involving stock acquired from equity compensation. The commentary below summarizes some of that section's guidance on how to make stock donations at year-end. For details, see our articles and FAQs on the topic.


For year-end donations, be sure the stock transfer is completed by December 31 to make it count for the current tax year. For electronic transfers from your brokerage account, the donation is recorded on the day it is received by the charity/foundation (not when you approve the transfer). With increased year-end activity at brokerage firms, you should plan your year-end stock gifts as early as possible and have ongoing communications with your broker to ensure that the transfer takes place. For donations of a private company's stock, the process can take longer, so you will want to start it earlier.

Tax Rules

For a charitable donation of company stock acquired from equity compensation, the tax treatment is the same as it is for donations of any stock to a qualified charity. The tax treatment of gifting stock to donor-advised funds is similar to that of donating stock to qualified public charities.

After you have held the company stock for more than one year, at the time of the donation you get a tax deduction equal to the fair market value of the stock (not to your cost basis). For stock acquired from an option exercise or an ESPP purchase, the holding period begins on the day after exercise/purchase, while for restricted stock/RSUs it starts on the day after vesting. If the sale of the appreciated shares would have triggered long-term capital gains, your deduction is up to 30% of your adjusted gross income (20% for family foundations), and you can carry forward higher amounts for five years.


With a charitable gift of appreciated shares held long-term, the donation you make and the deduction you get are greater than they would be if you were to instead sell the shares and donate the cash proceeds. This is because when you donate shares, you avoid paying the capital gains tax.

Donation Example

Suppose you can either (1) donate $100,000 in company stock or (2) sell the stock first and donate the proceeds.

Stock: You donate $100,000 in company stock that you have held for at least one year (10,000 shares trading at $10 per share that you received at $1 per share) to a favorite charity. Your $100,000 tax deduction results in tax savings of $40,000 (assuming a 40% combined federal and state tax rate on your income).

Cash: You sell 10,000 shares, worth $100,000, and donate the cash. On your $90,000 gain ($100,000 minus the cost basis of $10,000) you pay $18,450 in taxes (15% federal capital gains tax plus the 5.5% state tax), resulting in $81,550. This amount will be lower if you trigger the 20% tax rate on capital gains and the 3.8% Medicare surtax. You get a tax deduction for the net amount of cash that you have donated. Your tax savings are $32,620 (40% of $81,550), $7,380 less than the tax savings with a donation of stock.

  Donation of stock Donation of cash
Combined federal and state income taxes 40% 40%
Tax rate and amount for selling stock (Not applicable) 20.5% / $18,450 (0.205 x $90,000)
Net amount to donate $100,000 $81,550
Tax savings $40,000 $32,620

Special Issues

If the donated shares were acquired from incentive stock options or an employee stock purchase plan, additional tax consequences occur if you donate the shares before you have met the required holding periods. (See also our FAQs on donating shares from a Section 423 ESPP after meeting the holding period, and gifting/donating ISO shares after triggering AMT.) Executives and directors will also want to review the Section 16 and Rule 144 requirements before gifting or donating company stock.

Much More Where This Came From

For other ideas on year-end planning, see the year-end articles and FAQs at Our section about estate planning also has content related to the theme of gifts and donations.

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Articles on year-end financial and tax planning for stock compensation and company shares

Below we list our articles about year-end financial and tax planning, all of which have been fully updated for year-end 2017. To see our entire array of content on year-end planning, see the year-end section at

Our award-winning content is available with Premium or Pro Membership or through corporate licensing.

Top Ideas For Year-End Tax Planning With Stock Compensation (Parts 1 and 2)
Consider year-end or year-beginning tax planning with your stock compensation and company stock holdings. While investment objectives, not tax considerations, should generally drive your decisions, here are several ideas to review to prevent paying more taxes than necessary. Part 1 is available free to all registered users.

Year-End Strategies For Restricted Stock: Ideas To Consider, by Bruce Brumberg
As part of your year-end and year-beginning tax planning, don't forget to review any grants of restricted stock, RSUs, or performance shares that vested this year, plus other company stock holdings. This article presents strategies many experts suggest.

Year-End Strategies For Employee Stock Purchase Plans: Ideas To Consider, by the myStockOptions Editorial Team
When you think about year-end financial and tax planning, don't forget to review shares acquired through an employee stock purchase plan. This article outlines issues and strategies to contemplate.

Stockbrokers' Secrets: Year-End Planning For NQSOs, Restricted Stock, And RSUs, by John Barringer and Michael Beriss
The time for tax planning is before the year ends; tax season is too late. Learn about several ideas for year-end 2017 that apply to nonqualified stock options (NQSOs) and restricted stock/RSUs.

Stockbrokers' Secrets: Year-End Planning For ISOs, by John Barringer and Michael Beriss
Learn about year-end planning specifically for incentive stock options, including ideas related to the alternative minimum tax.

Leading Advisors Reveal Strategies For Equity Comp And Company Stock At Year-End
Year-end planning can be tricky amid the ongoing impact of tax-rate changes that took effect a few years ago and expected tax reforms in the year ahead. We asked five financial advisors for their ideas on financial and tax planning for the end of 2017 and the start of 2018. This article presents their responses in their own words. Available free to all registered users.

How The Trump Presidency And Tax Reform May Affect Stock Compensation
Tax legislation now in Congress is likely to be adopted and have a meaningful impact on stock compensation and employee ownership after this year. While it is too early to be certain about the changes and their timing, the general prospect of major tax changes next year may influence your thinking about year-end planning in 2017. Available free to all registered users.

Making Gifts And Donations Of Company Stock, by the myStockOptions Editorial Team
In addition to being an effective form of generosity, gifting and/or donating shares can play a role in financial and tax planning for your equity compensation and company stock. This article presents the basics that you need to know when you are contemplating gifts or charitable donations of shares acquired from stock options, restricted stock/RSUs, or employee stock purchase plans.

The ISO Tax Trap And The AMT Credit Myth: What To Do Before Exercise And At Year-End, by Alan Ungar
The tax reductions of the past few years have brought both good and bad news for holders of incentive stock options (ISOs). While you may have lower capital gains rates when you hold the shares long enough after exercise, it's harder to avoid the risks of the alternative minimum tax (AMT) and to fully recoup any AMT credit.

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Pursuing the Equity Compensation Opportunity

Company stock and options granted by employers represent a lucrative and underserved niche market for financial advisors. There are over 10 million recipients of these awards and less than 1% are receiving structured profession guidance.

On average, users report they generate over $200,000 in AUM per client per year and can charge $500–$1,500 annually for separate equity compensation guidance.

Helping clients to make timely, profitable, and informed diversification decisions regarding their employer stock requires a process for analyzing these holdings, identifying decision criteria, and then tracking them going forward. Unlike StockOpter, general financial planning applications and company stock plan sites do not provide detailed information on valuation, leverage, concentration risk, goal attainment, or diversification metrics.

To learn more about pursuing the equity compensation opportunity, sign up for an upcoming free webinar. Click here to view the schedule and register.

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Need CE credits before year-end? Learning Centers at and offer credits for CEPs, CFPs, and other professionals

As the clock ticks toward the close of 2017, many professionals with continuing education requirements to meet before year-end will be relieved to learn that and its sibling website have courses and exams offering continuing-education credits.

At, the Learning Center offers:

  • 30 continuing-education credits for Certified Equity Professionals (CEPs): 100% of the total requirement
  • 15 continuing-education credits for Certified Financial Planners (CFPs): 50% of the total requirement
  • 15 continuing-education credits for Certified Private Wealth Advisors (CPWAs) and Certified Investment Management Analysts (CIMAs): 37.5% of the total requirement

Each course of study features podcasts, articles, and FAQs from They are woven into a dynamic, interactive learning tool that teaches the topics in a memorable way. The answer key for each exam also links to relevant content on the site for further reading and learning.

Built on a similar model, the the Learning Center on nonqualified deferred compensation offers up to 6 continuing education credits for Certified Financial Planners, 6 Professional Achievement in Continuing Education (PACE) credit hours for CLU® and ChFC® certifications, and up to 12 CPE hours for credentialed ASPPA members.

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AdvisorFind Directory
Find a financial, tax, or legal advisor with experience in stock compensation

Stock compensation raises many questions.

  • What year-end financial and tax planning should you do?
  • How much should you contribute to your ESPP?
  • When should you exercise stock options?
  • Should you sell or hold restricted stock at vesting?
  • How can you diversify your company stock holdings?
  • How can you minimize your tax bill?
  • How do you negotiate for stock compensation in your employment agreement?

While is a good place to learn about concepts, issues, and general strategies in equity compensation, at some point you may need an advisor to help with your unique situation. Yet finding a good advisor can be hard when you are busy and don't know where to start. The AdvisorFind Directory from is for you.

  • Identify and contact an expert who can provide specialized professional guidance on equity compensation.
  • Search for advisors by geographical area, type of advisor, years of experience, minimum portfolio size, and other key criteria.
  • Look up resources for performing background checks on advisors.

Searching AdvisorFind is free and does not require registration at

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Year-end deferral decisions with nonqualified deferred compensation

Many executives and highly compensated employees both receive stock grants and participate in their companies' nonqualified deferred compensation (NQDC) plans. These let them defer cash salary and bonuses to a future year and therefore defer taxes (this is separate from an RSU plan with a feature permitting the deferral of share delivery).

Under the tax rules, the election to defer salary through NQDC plans must be made in the year before the income will be received. Consequently, many NQDC participants are now making decisions about salary deferrals for 2018. In fact, the fourth quarter of the year is the most common period for electing salary deferrals in the year ahead.

Issues To Consider At Year-End 2017

Congress is developing tax legislation that would significantly alter the US tax code. These may include the simplification of individual income-tax brackets and rates, though a large reduction in the top income-tax rate of 39.6% now seems unlikely. The final form and effective date of these proposed changes remain too uncertain to affect deferral decisions. However, if you expect your income tax rate to be unchanged or only slightly different in 2018, it makes sense to continue or increase deferrals in 2018.

In-Depth Resource On Year-End Planning For NQDC

For the key issues to consider in year-end deferral decisions with nonqualified plans, see an FAQ at, a separate sibling website of To make projections for current and future tax rates, and to compare returns both through deferrals and through not deferring income, try the calculator at Another FAQ at explains the many benefits that deferral through NQDC plans can offer.

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Save the date (June 18, 2018) for the first myStockOptions conference

Here at, we are planning to hold our first-ever conference. It will be a one-day event: Financial Planning for Public Company Executives & Directors (Monday, June 18, 2018). Taking place in the Boston area, this is a must-attend national conference for financial, tax, and legal advisors working with or wanting to counsel executives, directors, and high-net-worth employees. We have a wonderful group of expert speakers and a very substantive agenda of sessions on various stock-related and financial-planning topics.

The conference will provide essential education from leading experts on:

  • current tax, legal, and SEC developments
  • strategies in financial, tax, and estate planning
  • stock compensation trends of importance to advisors
  • forms of stock compensation and related planning issues with taxes, estate planning, charitable giving, and SEC rules
  • methods for successfully attracting and effectively advising these types of desirable clients

Look for more information about the conference early next year, or contact us for more information (617-734-1979,

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