Here's one I bet you don't hear all the time

[Mackal Smith]

I don't know if I'm asking for advice or just seeing if anyone is in a similar situation. The good news is this is a first world problem. The bad news is I live this first world life so even though it's not like I'm going hungry or deprived of necessities it still hurts.

The big issue is this: My W2 income is so high that no matter what my properties do, the tax savings are really insignificant. For many years, I invested and was granted stock options, stock grants, and Employee Stock purchase stock from my company. I did the prudent thing and from time to time I sold off the stock when it was high and diversified into mutual funds etc. At the same time, I maxxed out my 401K. After years of doing this and being well on the road to retire early I started investing in Real Estate also. I have been a real estate investor for a little over a year and have acquired 13 units so far. Great!

As my net worth has grown, so has my income from wages/bonus/stock grants. When I started investing in real estate, I basically took about 150K worth of any stock  I had held long enough for it to be a long term gain, moved it to a separate account and as I found a property I either wanted to buy cash or finance, I would sell enough stock to cover the down payment or the entire amount.

After already paying the government more than 50K, my CPA told me that because of dividends, and gains from stock last year I am in the highest tax bracket and I need to write an additional check to the IRS for about 22K. My CPA basically told me to quit selling the stock to fund downpayments on properties. So what a quandary! I actually hit the real estate goal I set for myself for FY16 in March but I still have plenty of stock to go ahead and buy another 10 to 15 units. I find deals all the time in my RE market here that would result in great returns on the investment but if I sell the stock to have the cash to get the deals, I'm really hurting myself from an overall tax perspective.

I do have a single property that I paid cash for, so I can always get a heloc for the equity in that one and use it to continue to invest and I suppose I can always look at trying to get owners to take a second on new properties. The real kicker here is that in my situation bank financing is easy. I have banks stumbling over themselves to finance for me but I'm only hurting myself if I sell the stock to get the down payments. I guess this sort of puts me in the same boat as most other investors it's just doubly frustrating because I have plenty of money tied up in stocks to buy anything that comes along.

I don't know. Any suggestions on whether I should just take the tax hit and buy these good deals when they show up? Of course this situation will correct itself when I do actually retire because I won't have a 250K paycheck coming in every year, but then the banks won't be standing in line to loan to me at that point either. I don't want to stop investing because of taxes. What do you guys think?