Albertsons Employees: Handling Single-Stock Concentration with a Section 351 Strategy

Healthcare Provider Update: Healthcare Provider for Albertsons Albertsons currently maintains its healthcare benefits through various insurance providers, including major players in the marketplace such as UnitedHealthcare and Anthem Blue Cross Blue Shield. These partnerships allow Albertsons to offer healthcare options to its employees, catering to a diverse range of medical needs and preferences. Potential Healthcare Cost Increases in 2026 In 2026, employees of Albertsons may face significant healthcare cost increases due to a combination of rising medical expenses and changes in insurance benefits. Many employers, including Albertsons, are anticipated to pass on greater costs to their employees by adjusting deductibles, coinsurance, and out-of-pocket maximums, reflecting a broader trend observed across the healthcare industry. This shift is compounded by steep premium hikes in the Affordable Care Act (ACA) marketplace, with projections indicating that out-of-pocket costs could surge by over 75% for many individuals if federal subsidies expire. As a result, workers should be proactive in reviewing their benefits and strategizing their healthcare options to mitigate the financial impacts anticipated in the coming year. Click here to learn more

'Albertsons employees with concentrated stock positions should understand that strategies like a Section 351 exchange can offer flexibility in managing large unrealized gains while preserving long-term planning options.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

'Albertsons employees facing concentrated stock exposure may find that a Section 351 exchange provides an effective way to mitigate risk and maintain control over the timing of potential tax liabilities.' – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

1. When a Section 351 exchange can help diversify concentrated stock positions without an immediate tax bill.

2. The core eligibility rules (80% control test) and basis/step-up mechanics that drive tax deferral.

3. Sample case studies (James & Sarah) illustrating the numbers and outcomes.

The Strategic Potential of Section 351: An Analysis of a Multi-Stock Case in Tax-Deferred Reorganization

A sizable amount of the wealth of many high-earning professionals at Albertsons may be invested in a small number of highly valued equities, including company shares accumulated through restricted stock units (RSUs), the employee stock purchase plan (ESPP), or equity awards earned due to long tenure. While rebalancing may seem out of reach due to the tax ramifications of selling these positions, investors can make tax-deferred contributions of appreciated assets to a new business entity through a Section 351 exchange. When an investor wants to manage several sizable, embedded gains at once, this tactic may be especially useful.

Think about James, a client with a $10 million portfolio. The value of one stock investment, which he purchased for $50,000, has increased to $1 million, or 10% of his total portfolio. At a long-term capital gains rate that can reach 23.8% for certain high-income taxpayers (20% maximum long-term capital gains rate plus the 3.8% Net Investment Income Tax), selling this position would result in a $950,000 capital gain and an estimated $226,100 tax bill. The amount available for reinvestment would be reduced by this tax.

Section 351(a) of the Internal Revenue Code provides: “If property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control (as defined in section 368(c)) of the corporation, no gain or loss shall be recognized.” Under Section 368(c), “control” generally means ownership of at least 80% of the voting power and 80% of each class of non-voting shares.

The transferor or transferors must own at least 80% of the new corporation’s stock right after the exchange to qualify for this treatment. This can be done for investors with sizable portfolios by joining a larger seeding group or acting as the principal seeder of a new entity.

In a Section 351 transaction, any built-in gains are preserved because the shareholder’s basis in the received stock typically carries over from the contributed property. If the shares are held until death, a step-up in basis under Section 1014 may eliminate the deferred gain.

Another client example involves Sarah, who has a $13 million portfolio. She owns two appreciated stocks:

• Stock A: Originally $300,000, now worth $3 million.

• Stock B: Initial cost basis $500,000, now worth $3 million.

At a long-term capital gains rate that can reach 23.8% for certain high-income taxpayers, the aggregate unrealized gain of $5.2 million would translate into an estimated tax of roughly $1,237,600 if sold today, which can constrain portfolio adjustments.

For employees of Albertsons holding concentrated positions, taking part in a Section 351 exchange can reduce concentration risk and defer recognition of these gains without an immediate tax bill. If assets receive a step-up in basis at death, the deferred gain may be fully eliminated under current law, and deferral can provide flexibility in managing future tax obligations.

Featured Video

Articles you may find interesting:

Sources:

1.  Internal Revenue Service.  Revenue Ruling 2003-51 . Internal Revenue Bulletin 2003-21, 2003. PDF.

2.  Friedel, David B., and Yaw O. Awuah. “ Sec. 351 Control Requirement: Opportunities and Pitfalls .”  The Tax Adviser , 1 July 2014. Web.

3.  Internal Revenue Service. “ Net Investment Income Tax (NIIT) .”  IRS.gov , last reviewed 1 July 2025. Web.

4.  Internal Revenue Service.  Publication 551: Basis of Assets . December 2024 revision, posted 18 February 2025. PDF.

5.  FINRA Investor Education Foundation (FINRA). “ Concentrate on Concentration Risk .”  FINRA.org , 15 June 2022. Web.