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Old 04-24-2009, 11:16 AM   #21
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Thanks everyone for their input.

Truthfully I had not even thought about the tax implications of not holding the ESPP for 2 years. I have read the plan and based on the tax advantages of holding I think it is likely we will try and hold each allocation for the the 2 years.

To address some other concerns, even if the entire amount of the RSU's were to vest today, it would not even account for 10% of our portfolio.

I have not fear of an Enron situation. The megacorp involved, is probably one of the more desirable companies to be involved with at this time. There are certain events, which if they were to occur, would likely cause a temporary drop in the stock price, however as said I would expect it to be temporary.

My biggest reason for wanting to have some type of plan in place is with this position DH moved from being a consultant to a permanent employee for the first time in 10 years. We have seen a significant drop in cash flow to the extent that we have to watch every cent. I don't want to make a stupid financial move just to have a bit more money when it could be worth a lot more down the line.
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Old 04-24-2009, 11:25 AM   #22
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I used to hold my ESPP shares for 18 months for the favorable cap gains treatment of the gains, and then sell. But the benefit to doing so can be quiet small (typically on the order of $100 or less in my case), and doing so requires you to hassle with trying to get your broker to sell defined lots rather than FIFO, and doing the defined lot tax bookeeping. If you're not obsessive about squeezing out the last drop of profit, it's easier and less risky to just sell immediately.
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Old 04-24-2009, 11:30 AM   #23
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Actually it is probably to our advantage tax wise to hold for a longer period. Currently we are in horrendous tax brackets - anything we do in California will be 9.3% state and 33% federal, so if we can hold out to sell at a later date when we have left California and can reduce the Federal we should be significantly better off.

Also if we do sell where do we put the money? No good having it in the bank because you make next to nothing in interest and it doesn't seem like any other segment of the market is doing well.
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Old 04-24-2009, 12:32 PM   #24
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I think you treat it like any other investment. If you have a better place to invest, sell. If you think it's a reasonable investment, and aren't overweight in it, hold it. As you get close to the LT cap gains time period and still have gains, you almost certainly want to keep it.

If you are close to the LT gains date but really feel like it will go down, you could short sell an equal amount (but make sure your company allows it) and then sell both sides once you hit the date.

One more thought on the overweighting factor. You already have an investment with the company in your job. If the company tanks, you could face the double whammy of a significant investment taking a hit, plus losing your job. Just a thought.

All that said, most of the time I've held my ESPP stock through the LT holding period.
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