New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Expeditors Intl. of Washington Employees: Strategic Ways to Reduce Capital Gains on Appreciated Stock

Healthcare Provider Update: Healthcare Provider for Expeditors International of Washington Expeditors International of Washington primarily partners with major healthcare providers to offer employee health benefits. Typically, these include national insurers such as UnitedHealthcare, Anthem (Elevance Health), and Kaiser Permanente, among others. Employees are encouraged to choose plans that fit their specific healthcare needs. Potential Healthcare Cost Increases in 2026 As we approach 2026, healthcare costs are expected to surge significantly for employees of Expeditors International of Washington, largely driven by the anticipated expiration of enhanced premiums under the Affordable Care Act. Without these subsidies, many individuals could face premium increases exceeding 75%, impacting affordability and access to care. Coupled with rising medical costs and higher drug spending, these changes may create substantial financial burdens for employees and retirees alike, necessitating proactive budgeting and health planning. Click here to learn more

'Expeditors Intl. of Washington employees can benefit from understanding that strategies like a Section 351 exchange, charitable donations, and tax loss harvesting may work together to help manage appreciated stock efficiently while aligning with broader long-term financial goals.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

'Expeditors Intl. of Washington employees should recognize that thoughtful planning with tools such as Section 351 exchanges, gifting strategies, and tax loss harvesting can help them manage highly appreciated stock while supporting both personal and philanthropic objectives.' – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

How a Section 351 exchange can defer capital gains on highly appreciated stock.
Alternative tax-efficient strategies such as charitable donations, tax loss harvesting, and gifting.
The role of inheritance rules, step-up in basis, and combined approaches in long-term tax planning.

A Tax-Aware Q&A on How to Manage Highly Appreciated Stock

From the Section 351 exchange to other practical approaches, this Q&A addresses key considerations Expeditors Intl. of Washington employees may encounter when dealing with highly appreciated shares.

Section 351 Exchange: The Fundamental Approach

Q: What is an exchange under Section 351?
A: Under certain circumstances, an investor may transfer property, such as highly appreciated shares, to a company in exchange for its stock under a provision of the Internal Revenue Code that allows the deferral of capital gains or losses.

Q: What is the primary advantage of exchanging my appreciated stock through a Section 351 exchange?
A: The main advantage is tax deferral. Gains transferred to corporations may be postponed under Section 351, though this applies only if specific diversification requirements are met, especially when transferring to investment companies like exchange-traded funds (ETFs). ¹

Q: What is meant by the “Control Test”?
A: The investor or group of investors who use their portfolio assets to fund the new entity must own at least 80% of the voting power and 80% of the total number of shares of all other classes of stock in the new company immediately after the exchange. ¹

Q: When seeding an ETF, how is the Control Test usually satisfied?
A: It is typically satisfied by either a single substantial investor making a significant asset contribution or multiple investors pooling assets to create a seeding pool for the ETF’s launch.

Q: What is the ultimate tax payment date for the deferred gain?
A: The deferred gain is recognized when the ETF shares acquired through the exchange are sold; distributions from taxable funds must also be reported in the meantime.

Other Tax-Efficient Techniques

Q: What is a straightforward method, aside from a Section 351 exchange, to sell highly appreciated shares without incurring large taxes?
A: Donating shares directly to a qualified charity is one option that some Expeditors Intl. of Washington employees may benefit from.

Q: What tax advantages come with donating valuable stock to a charity?
A: Subject to holding period and adjusted gross income (AGI) limits, you can bypass capital gains taxes on the appreciation and may receive an income tax deduction for the stock’s full fair market value.

Q: What is a Donor-Advised Fund (DAF)?
A: A DAF allows you to donate appreciated stock, receive an immediate tax deduction, and then recommend grants to charities over time, while the assets in the DAF grow without tax impact. ²

Q: Can I give a family member my appreciated stock as a gift?
A: Yes. In most cases, the cost basis from the donor carries over to the recipient.

Q: Why would I give a family member in a lower tax bracket appreciated stock?
A: If they sell the stock, the lower income could result in a reduced capital gains rate, potentially as low as 0% for long-term gains. ³

Tax Loss Harvesting and Other Approaches

Q: What is harvesting tax losses?
A: Selling investments at a loss to offset gains from other sales is known as tax loss harvesting, a strategy sometimes considered by Expeditors Intl. of Washington employees seeking opportunities to leverage bouts of market volatility.

Q: Can I deduct a certain amount of loss from my regular income?
A: Yes. If your capital losses exceed your gains, you can use up to $3,000 per year ($1,500 if married filing separately) to offset ordinary income, with remaining losses carried forward indefinitely. ⁴

Q: What is a Qualified Opportunity Fund (QOF)?
A: A QOF provides investors with tax incentives for investing in tracts of land designated as 'opportunity zones'. Capital gains reinvested in a QOF within 180 days of being realized can be temporarily tax deferred, while QOF investments helpd for at least 10 years may confer a permanent capital gains exclusion. ⁵ That said, 2025 legislation changes may prompt IRS updates to this rule.

Inheritance and Step-Up in Basis

Q: What is meant by a “step-up in basis”?
A: This adjusts an inherited asset’s cost basis to its fair market value at the time of the owner’s death, eliminating capital gains accumulated during their lifetime. ⁶

Q: If I gift shares while living, will I receive a step-up in basis?
A: No. The original cost basis transfers to the recipient without adjustment.

Determining the Right Strategy

Q: What is the best course of action for me?
A: The most suitable approach will depend on factors such as your gain size, income level, charitable intentions, and liquidity needs.

Q: Do any of these strategies call for professional guidance?
A: Yes. Given the complexity of the tax code, working with a qualified financial advisor and tax professional is strongly recommended before implementing these strategies.

Q: Is it possible to combine these strategies?
A: Yes. For example, you might execute a Section 351 exchange on part of your portfolio for tax-deferred rebalancing while donating another portion to a DAF for an immediate deduction.

Q: Is there a loophole in the Section 351 exchange?
A: No. This is a legitimate tax code provision designed for corporate restructuring and adapted for use in the ETF market. It is intended for tax deferral, not permanent tax elimination.

Featured Video

Articles you may find interesting:

Sources:

1. Kitces. ' Using Section 351 Exchanges to Tax-Efficiently Reallocate Portfolios With Embedded Gains ,' by Ben Henry-Moreland and Brent Sullivan. 12 Mar. 2025.

2. Kiplinger. “ A Donor-Advised Fund Can Give Your Charitable Giving a Boost ,” by Samuel Gaeta. 9 May 2024.

3. Internal Revenue Service. “ Topic No. 409, Capital Gains and Losses .” IRS.gov , 8 July 2025.

4. Wealth Enhancement. ' 6 Essential Tax-Loss Harvesting Tips ,' by Jim Wiley. 6 April 2022.

5. Congressional Research Service. ' Tax Incentives for Opportunity Zones ,' by Donald Marples. 26 Apr. 2022.

6. Investopedia. “ Carryover Basis: What It Is, How It Works, Gift Taxes ,” by Julia Kagan. 16 Jan. 2023.

What type of retirement savings plan does Expeditors Intl. of Washington offer to its employees?

Expeditors Intl. of Washington offers a 401(k) retirement savings plan to help employees save for their future.

How can I enroll in the 401(k) plan at Expeditors Intl. of Washington?

Employees can enroll in the 401(k) plan at Expeditors Intl. of Washington by completing the enrollment form available through the HR portal.

Does Expeditors Intl. of Washington match employee contributions to the 401(k) plan?

Yes, Expeditors Intl. of Washington provides a matching contribution to employee 401(k) contributions, subject to certain limits.

What is the maximum contribution limit for the 401(k) plan at Expeditors Intl. of Washington?

The maximum contribution limit for the 401(k) plan at Expeditors Intl. of Washington follows the IRS guidelines, which are updated annually.

Can I change my contribution percentage to the 401(k) plan at Expeditors Intl. of Washington?

Yes, employees can change their contribution percentage at any time through the HR portal or by contacting HR at Expeditors Intl. of Washington.

When can I start withdrawing from my 401(k) plan at Expeditors Intl. of Washington?

Employees can typically start withdrawing from their 401(k) plan at Expeditors Intl. of Washington after reaching the age of 59½, subject to plan rules.

Are there any penalties for early withdrawal from the 401(k) plan at Expeditors Intl. of Washington?

Yes, early withdrawals from the 401(k) plan at Expeditors Intl. of Washington may incur penalties and taxes, as per IRS regulations.

What investment options are available in the 401(k) plan at Expeditors Intl. of Washington?

The 401(k) plan at Expeditors Intl. of Washington offers a variety of investment options, including mutual funds and target-date funds.

How often can I change my investment options in the 401(k) plan at Expeditors Intl. of Washington?

Employees can change their investment options in the 401(k) plan at Expeditors Intl. of Washington as often as they wish, typically with no restrictions on frequency.

Is there a vesting schedule for the employer match in the 401(k) plan at Expeditors Intl. of Washington?

Yes, Expeditors Intl. of Washington has a vesting schedule for employer matching contributions, which employees should review in the plan documents.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Expeditors International of Washington, Inc. offers a robust 401(k) plan with automatic enrollment and company matching contributions. At the end of 2022, Expeditors' 401(k) plan had total assets of $839,061,386, with 9,224 participants. The average retirement account value per participant in 2022 was $90,965. Employees contributed an average of $6,619 annually, with the company matching approximately $1,947 per employee, amounting to 30.92% of employee contributions (Smart 40K Plus). The plan includes automatic enrollment and default investments for employees who do not actively manage their account allocations. Expeditors does not appear to have a defined benefit pension plan but operates a defined contribution plan, making the 401(k) plan their primary retirement vehicle. The company encourages long-term saving by offering a straightforward employer match, providing employees with additional retirement security. Expeditors' matching contributions totaled $17,965,349 in 2022. The investment growth rate in 2022 was notably affected by market fluctuations, showing a -14.04% growth rate

Restructuring and Layoffs: In 2023, Expeditors International of Washington announced a strategic restructuring plan aimed at streamlining operations and improving efficiency. This plan included a reduction in workforce across several departments. The decision was driven by the need to adapt to shifting market conditions and optimize operational costs. It is crucial to follow this news due to the current economic environment, which is characterized by volatility and uncertainty in global trade and logistics. Understanding these changes can provide insights into broader industry trends and potential impacts on job security and organizational stability.

Expeditors International of Washington offers stock options and RSUs to certain employees. Stock options are granted based on performance and tenure, while RSUs are typically awarded to senior management and key employees. According to the 2023 Proxy Statement (page 45), the company provides these incentives to align employee interests with company performance.

Health Benefits Section: The website should provide detailed information about the health insurance plans, types of coverage, and any recent changes for 2022-2024. Business and Financial News Websites: Recent Articles: Search for any news articles on employee benefits changes, cost adjustments, or healthcare-related updates. Job Review Sites: Employee Feedback: Review employee testimonials and ratings for insights into healthcare benefits and satisfaction. Industry News Websites: Trends and Comparisons: Investigate if there are any reports on how Expeditors' benefits compare with industry standards. Healthcare Benefit Platforms: Benefit Analysis: Look for any detailed reports or reviews on healthcare plans provided by Expeditors International.