Which is best?
Strategy: Opt for the payout in company stock. Thanks to a giant loophole in the tax law, you only have to pay current federal income tax on the plan’s original cost of the stock. In other words, any appreciation in value is 100 percent tax-free until you actually sell the shares!
But that’s not the end of the story. If you sell the stock down the road, you’re required to pay capital gains tax on the difference between the sales price and the original cost. As long as you meet the holding period for long-term capital gain, the maximum federal tax rate is no more than 15 p...(register to read more)