The life of an equity grant.
Follow a grant from the day it is awarded to the day you sell. Pick the type you hold, then step through each stage to see how the tax treatment changes.
What to exercise, and when.
There is no single right answer - the best move depends on your cash, your tax picture, your read on the company, and your goals. Here are common approaches and the trade-offs behind them. Explore each, then decide alongside your CPA.
These are general approaches for education, not recommendations. Which makes sense - and when - depends on your complete financial and tax picture. Review any exercise or sale with your CPA and advisor before acting.
Strategy around your equity - coordinated with your CPA.
Your CPA leads on the tax return and your attorney handles legal documents. Our role is the strategy around your equity: when exercising and diversifying fit your goals, how a concentrated position sits within your wider plan, and keeping the moving parts aligned with your tax and legal team to help reduce the chance something slips through the cracks.
We implement and align - we don’t replace your CPA. If you’re weighing an exercise, a sale, or how to unwind a concentrated stock position, that’s a good conversation to have together.
You can run the numbers a million ways, like exercising 100 shares vs. 1,000 vs. 10,000. But at the end of the day there are really only a handful of strategies: wait, exercise and hold, sell to cover, or sell and diversify. The hard part isn’t knowing the playbook, it’s picking the right one for your situation, and that’s where we can help.
Five common mistakes.
Side by side.
Turn columns off to compare just two.
Figures reflect 2026 federal rules and may change. Plan and grant terms vary and control; check your grant agreement and plan document. State tax treatment is not reflected here.
Plain-English glossary.
The vocabulary your grant documents assume you already know. Tap any term to expand it.
Equity is a plan, not a windfall.
Bring your grant agreements and last year's return. A half-hour conversation is a good start on what vests when, where the tax exposure sits, and how concentrated you are.
Educational use only. North Bay Wealth Management does not prepare tax returns or provide legal advice; tax-related planning is coordinated with your CPA, who leads on filing, and your attorney leads on legal documents. This guide describes how restricted stock units (RSUs), incentive stock options (ISOs), and non-qualified stock options (NSOs) are generally taxed. The explanations, examples, and figures are simplified illustrations based on 2026 federal tax rules and may not reflect current law, your state’s rules, or your complete situation. They do not account for every factor that affects the result, including payroll and Medicare taxes, supplemental withholding, the alternative minimum tax and AMT credit carryforwards, the net investment income tax, disqualifying dispositions, and state taxes. Your grant agreements, plan documents, and any company trading windows or blackout periods govern. Nothing here is a forecast, an offer, or a recommendation to exercise, hold, or sell any security, and it should not be relied upon to make decisions. Reading this guide does not create an advisory relationship. Actual results will differ. Consult qualified professionals before acting. Investing involves risk, including the possible loss of principal, and a concentrated position in a single stock can carry more risk than a diversified portfolio.