Sell at vest, or hold?
Selling RSUs on the day they vest costs almost nothing in tax, because you were already taxed on their full value and that value became your cost basis. So the decision is not really about taxes. It is about how much of your financial life should depend on one company that already pays your salary.
The deciding factor is concentration, not conviction. Naming that changes the question from what you think the stock will do to how much you can afford to be wrong about it.
What each choice actually means.
| Sell at vest | Hold | |
|---|---|---|
| Tax triggered by the decision | None beyond the vest itself. You were already taxed on the full value, and your basis equals that value, so selling immediately produces roughly zero gain. | None at the time. You defer a decision, not a tax. |
| What the choice actually is | Converting compensation you already paid tax on into cash. | Using after-tax money to buy your employer's stock at today's price. That is economically identical to receiving cash and choosing to buy the shares. |
| Later tax if the price rises | None. You are out. | Capital gain. Short-term at ordinary rates within a year of vest; long-term after that, topping out at 20% federally plus the 3.8% net investment income tax. California taxes both as ordinary income at rates reaching 13.3%. |
| Later result if the price falls | Unaffected. The tax owed was fixed at vest either way. | You still owe the tax calculated at the vest price, and now hold shares worth less. A capital loss may be available to offset other gains. |
| Concentration | Reduces it on every vest. | Increases it on every vest, alongside a salary that already depends on the same company. |
| What it demands of you | A schedule, decided once. | A view on the company, revisited continuously, formed from inside it. Proximity cuts both ways: you see things outsiders cannot, and you are also the least neutral person available to weigh them. |
Withholding at vest is a flat 22% on supplemental wages, which for most Bay Area households is less than the marginal rate actually owed. That shortfall exists regardless of which choice you make here.
When selling is the better default
- Your employer's stock is already a large share of your net worth, or is heading there on the current vesting schedule.
- You would not use an equivalent amount of cash to buy the shares today at this price.
- You need the money for something specific: a tax bill, a house, a runway to leave.
- You want the decision made by a rule rather than by how the last quarter went.
When holding is defensible
- Your position is small relative to everything else you own, so a total loss would be an annoyance rather than an event.
- You would genuinely buy the shares with cash at today's price, independent of having been granted them.
- You already hold appreciated shares you have decided to sell, and they are close to a year past vest. Waiting the remaining weeks moves that gain from ordinary rates to long-term. This is a reason to delay a sale, not a reason to hold indefinitely.
- You have covered the tax from the vest in cash rather than by selling shares, so holding is a real choice rather than a position you cannot afford to exit. On its own that is a precondition rather than a reason: it still has to sit alongside the first point above.
Figures cited are 2026 amounts. This is educational information, not individualized investment or tax advice, and nothing here is a recommendation about any particular security. Consult your own tax professional.
How we work through this.
We start with a number rather than a view: what share of your total net worth sits in this one company today, and what it becomes over the next two years if you hold everything that vests. People are routinely surprised by the second figure, because vesting compounds quietly while attention is on the current balance.
Then we set a concentration limit while the outcome is still unknown, which produces a more honest number than setting one after a good quarter or a bad one. Everything downstream, how much to sell and when, follows from that limit rather than from a forecast.
We do not offer a view on whether your employer's stock will rise. We are not able to know that, and an advisor who claims otherwise is selling something. What we can do is make the size of that bet a deliberate choice instead of the accidental result of never deciding.
Common questions.
Does selling at vest cost me anything in tax?
Generally no, and this is the most common misconception about RSUs. You were taxed on the full market value at vest, and that same value became your cost basis. Selling that day produces almost no gain or loss. The tax was already paid; selling does not add to it.
Is not selling the same as buying the stock?
Economically, yes. Once shares are yours and taxed, holding them is a choice to keep money in one company rather than move it elsewhere. The useful test is whether you would take the equivalent cash and buy those shares today. If the answer is no, holding is a decision you would not make deliberately.
What about capital gains if I hold for a year?
Appreciation after vest is a capital gain, long-term once you have held more than a year past vest, which caps the federal rate at 20% plus the 3.8% net investment income tax where it applies. California gives no preferential rate. Waiting for that treatment is worthwhile only if you wanted to hold the shares anyway.
Should I hold because I think the company will do well?
That is a legitimate reason to hold, and it is also the reason to size the position deliberately. We cannot tell you whether any company will do well, and neither can anyone else. What we can do is make sure the amount you have riding on that view is an amount you could lose without changing your plans.
What if I sell and the stock goes up?
That will happen sometimes, and it is worth deciding in advance how you want to feel about it. A schedule set ahead of time is easier to hold to than a judgment made each quarter, because it was made when you were not watching the price. Regret is a real cost, but so is concentration.
Is there a middle option?
Usually, and it is what most people land on. Selling a fixed percentage of each vest keeps some exposure while steadily reducing concentration, and it removes the need to make a fresh decision every time shares land. The percentage matters less than actually having one.
Twenty minutes is enough to know if we're a fit.
No pitch, no pressure. A short call where we ask what's actually on your mind right now, and you decide whether you want to go further.