All Forum Posts by: Tom Server

Depends on whether you're talking about conventional or nonQM financing. Sometimes lenders can do what's called a "float down", where they can adjust your rate if rates have dropped enough (enough being the key here). Usually you need a decrease of .25%+ for that to work. Or if the person you're working with is a broker, and the original lender doesn't offer that option, they can take your file to another investor. Not something I generally like to do because it can hurt the relationship there, but at the end of the day, gotta do right by your borrower. 

Anything you see online can give you an idea, but it can never be 100% accurate. Too many factors go into determining someone's rate, and what you find online will likely just tell you what direction people THINK rates are headed, and national averages. 

Well, that opens Pandora's box when it comes to tax consequences/strategy.  I'll double down on talking to a CPA because this is absolutely a situation where if you're strategic it'll make a world of difference.  I'll try to be helpful and concise here without being too long-winded...

ESPP - Typically you buy this at a discount (Usually 15%) typically you get beneficial tax treatment on the discount and won't have to pay income tax on it as long as you hold it for their required holding period. (Usually 2 years from the offering date and 1 year from the purchase date).  If you meet the holding period you will only pay LTCG (long-term capital gains) on any growth.

RSUs - A bit simpler, when your RSU shares vest they will move into your brokerage account and that will trigger income tax on the value of the shares.  Essentially at that moment you own them outright and could sell them without additional tax.  Now that you've been holding them what you have to think about is how long you've owned them.  If it has been over a year you would only need to pay LTCG (15% for most) ONLY on the gains since your shares vested.

Stock in 401k - Believe it or not, this may be the most complicated holding you have.  Shares in a 401k are not usually shares, typically they are what's called a Unitized Stock Fund.  If you no longer work for the company you can take advantage of a concept called NUA (Net Unrealized Appreciation).  This involves rolling your shares from your 401k into a brokerage account (Taxable event and potentially a 10% penalty if you're under 59.5 y/o).  Here is where the strategy comes in:

When you move 401k stocks to a brokerage account via an NUA transaction, you pay income tax on the cost basis (And maybe a 10% penalty) but NOT on the gains until you sell.  When you do sell you'll pay LTCG on the growth EVEN IF you haven't held it in that brokerage for a year.  This type of strategy works really well for people who worked at a company for a long time and whose stock did incredibly well.

These are concepts even financial advisors get tripped up on so feel free to clarify anything that doesn't make sense or if you want to give more specifics I can give examples and math.

If you have enough stock that you don't need to sell all of it you could try to find a brokerage(you would have to transfer the stock to the brokerage)/bank willing to loan you money on the portfolio.  Of course with today's interest rates that may make your deal less appealing.

 Hey Tom, glad you asked because there are a few ways to offset capital gains from selling company stock.  Ultimately I'm not a CPA or EA and it would be best to consult someone who is.  With that being said, a few clarifying questions that'll make a difference at tax time.

- It seems like you already sold the shares, is this the case?  If so, how long did you own them? (More than or less than 1 year)
- Were/are the shares from a stock purchase program like ESPP, RSU, ESOP, or something of the like, or were the shares just in a brokerage account at Computershare?

These 2 points will help me give more pointed suggestions for what you're up against because the tax rules all can be slightly different.  Here are a few high-level possibilities to consider.

- Capital losses can offset gains (Short term offsets short-term and long-term offsets long-term)
- Tax loss harvesting - If you have other investments (At a loss) sometimes you're able to sell them and offset your gain
- Charitable giving
- Paper losses from your investment property

With some more information, we can hone in on which options would be applicable for you.

Hope this helps!