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I own stock in a previous employer that has just been acquired. I expect to receive a one-time lump sum payment of about one month’s salary, which I expect will be taxed as capital gains.

Every year I also make contributions to 501(c)(3) nonprofits which are tax deductible. I also occasionally make personal investments in LLCs.

Are there any measures you would recommend for me to explore for directing my lump sum capital gains directly into another vehicle that will reduce my tax burden for the actions I was already going to take? E.g., by moving it directly to a 501(c)(3) rather than cashing it in as income first.

This could help my donations to and investments in causes I care about can go further because of reduced tax burden.

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I'm assuming you and your company are both U.S. based, and your company is privately-held and not publicly-traded.

It's unlikely you'd be able to donate the stock to charity before the acquisition closes - mainly because private companies generally don't allow stock transfers without board approval. Is receiving the proceeds in cash the only option you have? If your company is getting acquired by a public company and depending on how the acquisition is structured, receiving shares of the acquiring company is often not a taxable event. Then you'd be able to donate the public stock to the charity without realizing gains.

If you have embedded capital losses in other positions, tax loss harvesting those positions might be an appropriate strategy to offset your capital gains - capturing the loss while reinvesting in similar (but not substantially identical to avoid a wash sale) positions.

At this stage, there aren't many other options that provide a tax break or deferral, certainly not any without risks.

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