KΞRL_✂️ (@KRL_defi_)

Caller: “My dad is 84 and his estate is worth just under $5 million. He has about $900K in an IRA and a stock position that turned roughly $22,000 into more than $1 million.” “We discovered he bought 1,000 shares at $22, and now the stock trades above $1,000 a share.” “My brother and I want to make sure his estate is protected. Do we sell some of it and diversify, or leave it alone because of the step-up in basis when he passes?” Dave Ramsey: “You’re weighing two things: taxes versus risk.” “If you sell it today, there’s a substantial capital gains tax bill. If he passes away holding it, there’s no tax because of the step-up in basis.” “But the risk is that you’ve got over a million dollars tied up in a single stock.” “If that company gets into trouble tomorrow, the stock could get cut in half and you lose $500,000.” Caller: “We talked about maybe selling 20% to 25% instead of the entire position.” Dave Ramsey: “That’s probably the direction I’d lean.” “Sell off a portion over time, reduce the concentration risk, and move the money into mutual funds.” “You’re basically balancing the odds of something happening to the company against the odds of your dad passing away first.” “A million-dollar position in one stock is a lot of risk, no matter how great the story has been.”