The Malcolm On Money Guide to Restricted Stock Units

For tax payers, few things can cause a spike in in your blood pressure faster than receiving a letter from the Internal Revenue Service (IRS). But before you go into a doom spiral imagining all of the worst-case scenarios, it is important to take a step back and understand what an IRS notice actually means.  

Yes, the IRS has the authority to assess taxes, impose penalties, and even in extreme cases, seize assets. More often than not, it is a routine matter that can be resolved without much trouble as long as it is handled properly. 

Every December, Americans scramble to find last-minute ways to lower their tax bills. And one of the most common strategies—particularly among high-income earners—is to make charitable donations often by writing a check to support their favorite cause. 

While cash contributions are simple and straightforward, they are not always the most tax-efficient way to give. For those who own stocks that may have appreciated significantly from when they were purchased, donating shares instead of cash can provide a double tax benefit. In this instance, the donor not only avoids capital gains taxes on the appreciation but also receives a deduction for the stock’s full fair market value. 

For most Americans, your home is likely your most valuable asset. In fact, for centuries, it has been the greatest source of inter-generational wealth transfer by a wide margin. This explains why many parents weigh the idea of designating their adult children as co-owners on the property's title as an estate planning mechanism.  

Unfortunately, most stop short out of fear, and for good reason. Giving up financial control of such an important asset is a scary thought for many seniors. Thus, ensuring a smooth transfer of ownership to heirs while retaining full control during one’s lifetime is a common concern for older homeowners.

Inheriting money or investment assets from a loved one often brings a complex mix of emotions. On one hand, there’s gratitude and an acknowledgment that someone cared enough about you to leave behind a financial legacy. On the other, there is an unspoken pressure to preserve what was left behind. It’s almost as if spending even a penny or making any changes would somehow dishonor the person’s memory.  

This hesitation is especially common with investments such as stocks, mutual funds, and rental real estate. And even when a person inherits an asset that does not make financial sense to hold onto long-term, they feel it would be wrong to sell or adjust what their parent or loved one thoughtfully built over decades. 

For high-income earners who often find themselves phased out of many tax deductions, the rules around saving for retirement are no better. However, there is one complex yet beneficial maneuver available: non-deductible contributions to a traditional IRA. 

While contributions to traditional IRAs are typically appealing because they can be deducted from your taxable income, those with higher earnings may hit income thresholds that disallow this deduction. The opportunity to make non-deductible contributions, though, remains a viable strategy. 

In the past few years, alternative investments have surged in popularity among retail investors looking to diversify beyond the perceived limitations of traditional stocks and bonds. Once reserved exclusively for the ultra-wealthy and institutional investors, alternative investments—including private equity, real estate, private credit, hedge funds, farmland, and even collectibles like art and wine —are now more accessible than ever.  

Today, the appeal of this alternative asset class lies in its potential for outsized returns. However, it was initially intended to provide investors with a hedge against inflation, as well as the promise to reduce a portfolio’s correlation with the stock market, which offers a buffer in times of volatility. Therefore, it is possible that there is a misunderstanding between the banks, brokerages, and other financial institutions offering alternatives to retail investors and the investors who are eagerly embracing them.

A revocable living trust is often seen as the cornerstone of a well-constructed estate plan. It allows individuals to bypass probate, maintain privacy, and when the time comes, it ensures a smoother transfer of assets to beneficiaries. However, many individuals stop short of completing the most critical step: retitling their assets into the name of the trust. 

When you establish a revocable living trust, you essentially create a legal entity to hold your assets during your lifetime and to distribute them after your death. For the trust to function as intended, ownership of your assets—such as real estate, bank accounts, and any investment interests—must be transferred into the trust's name. Failing to do so renders the trust an empty shell, leaving those assets outside its purview. 

After a turbulent few years marked by valuation compressions, rising interest rates, and fading investor enthusiasm, 2025 is shaping up to be a comeback year for the fintech sector. Several factors, including an anticipated slate of high-profile initial public offerings (IPOs), a more favorable regulatory and tax environment, and a resurgence in key fintech stocks, suggest that the industry is entering a new phase of growth and innovation.  

Fintech, long viewed as a disruptive force in the financial world, is again capturing the attention of investors who are now more optimistic about its potential for profitability and long-term value creation. Investors would be wise to consider how the sector's improving fundamentals, coupled with macroeconomic tailwinds like the anticipated decline in short-term interest rates, have likely created an attractive entry point for long-term growth opportunities. 

Out of 252 available trading days in 2024, the S&P 500 Index notched 57 new all-time highs, with the most recent record close at 6,090.27. This record-breaking market performance has left many investors sitting on massive unrealized gains, prompting the question of whether or not now is the time to sell and lock in some of those profits.

While the question itself is obviously straightforward, the answer is not. As markets continue to power higher, it can be challenging to find attractive opportunities to redeploy the cash from a sale. But for investors who have a more moderate to conservative risk tolerance, a possible solution is to pay off their home mortgage using the proceeds from some of those highly appreciated stocks or other investments.