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Dentsply Sirona Employees: Smarter Ways to Manage Taxes on Appreciated Stock

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'Dentsply Sirona employees with concentrated stock positions may benefit from thoughtful tax planning that allows for tax deferral while balancing liquidity, compliance, and long-term compounding,' Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'Dentsply Sirona employees who hold highly-appreciated stock may want to consider tax-efficient strategies that help mitigate their liabilities while aligning with their overall retirement goals,' Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How taxes can affect investment returns, particularly on concentrated stock positions.
Exchange funds and options-based strategies as methods for tax deferral and diversification.
Alternative planning techniques outside ETFs, including charitable trusts and gifting strategies.

By Carlos Hernandez, Wealth Enhancement advisor

When it comes to driving portfolio returns, many investors aim to keep management fees low by investing in low-cost index funds and exchange-traded funds (ETFs). While fees matter, however, the real culprit for lower-than-anticipated performance is taxes. ¹

Wealth Enhancement advisor Carlos Hernandez explains: 'By losing less to taxes each year, investors have access to more capital that can continue to compound over time. This makes tax deferral an important part of an effective financial plan.' Dentsply Sirona employees looking for long-term growth strategies could benefit by understanding how to better manage their investment tax burdens.

Trade Money

One area where taxes can take a toll is on the sale of company stock or other concentrated investment positions. Dentsply Sirona professionals looking to diversify could face significant capital gains taxes on an outright sale. One way to diversify without triggering immediate capital gains is through exchange funds. By contributing their highy-appreciated stock to a pooled fund, investors can trade their concentrated holdings for shares in a diverse basket of securities. This method can be used by Dentsply Sirona employees who want to diversify while postponing taxable events.

Although this method allows for tax deferral, it also requires investors to hold the exchange fund for a period of time, typically seven years. ² This could create a challenge for investors who require liquidity. Additionally, these funds are often exclusively accessible to wealthy, accredited investors—something Dentsply Sirona executives should carefully evaluate.

Funds Based on Options

Another way to mitigate taxes on the sale of highly-appreciated stock is by using options contracts. The idea is to hedge risk with put options while covering the cost of those puts by selling call options—a strategy called 'collaring'. From there, the strategy reverses, with investors selling put options and using the proceeds to buy call option on an equity or bond index. ³ If managed effectively, this helps to diversify a concentrated portfolio while still maintaining liquidity.

Given the complexity of this strategy, meticulous planning is necessary. It's generally recommended that investors work with an experienced financial advisor before pursuing this approach.

Things to Be Aware of

Although these strategies can be beneficial for Dentsply Sirona employees who hold highly-appreciated stock, caution is recommended. There are costs associated with these approaches, and potential liquidity risks. Additionally, the IRS may eventually contest such arrangements because their tax status has not been thoroughly examined—something Dentsply Sirona retirees should keep top of mind.

'Tax drag reduction strategies can be effective, but they must be assessed through the lens of risk, liquidity, cost, and compliance,' warns Carlos Hernandez. What is appealing in theory must hold up to inspection in the real world.

Alternative Strategies

Although they show promise, investors with highly-appreciated stock or those looking to postpone gains have other alternatives besides exchange funds or options. Other tactics could include:

- Prepaid variable forwards (subject to IRS regulations, contracts to sell at predetermined terms in the future).
- Charitable remainder trusts (CRTs), which allow investors to donate appreciated stock to a charitable trust and receive a stream of regular income in return.
- Donor-advised funds (DAFs), which provide investors with a tax deduction for the fair market value of the appreciated stock they donate.
- Other gifting techniques, such as direct donations to charity or family.
Each has its own set of guidelines, advantages, and disadvantages. To limit unnecessary taxes or violating the constructive sale regulations, careful planning is necessary for Dentsply Sirona professionals managing complex portfolios.

The Bottom Line

Although the movement to mitigate the tax burden on investments is not new, the instruments are changing. Both exchange funds and options-based structures offer investors a way to manage tax liabilities, especially for Dentsply Sirona employees who hold highly-appreciated stock.

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In the end, taxes are unavoidable. However, with the correct set of instruments, they can be controlled and postponed. 'The real value comes from aligning tax strategy with investment strategy,' summarizes Carlos Hernandez.

Sources:

1. BlackRock Advisor Center. ' Investing for After-Tax Returns ,' 2025.

2. Kiplinger. ' Four Clever and Tax-Efficient Ways to Ditch Concentrated Stock Holdings ,' by Robert Waskiewicz. Sep. 11, 2025.

3. Financial Planning Association. ' Tax-Efficient Ways to Diversify Concentrated Stock Positions ,' by Peter Lazaroff. Oct. 2024.

What is the Dentsply Sirona 401(k) plan?

The Dentsply Sirona 401(k) plan is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out, helping them prepare for retirement.

How can Dentsply Sirona employees enroll in the 401(k) plan?

Dentsply Sirona employees can enroll in the 401(k) plan by completing the enrollment process through the company’s benefits portal or by contacting the HR department for assistance.

What is the company match for the Dentsply Sirona 401(k) plan?

Dentsply Sirona offers a company match for contributions made to the 401(k) plan, typically matching a percentage of employee contributions up to a certain limit.

When can Dentsply Sirona employees start contributing to the 401(k) plan?

Dentsply Sirona employees can start contributing to the 401(k) plan after completing their eligibility period, which is usually outlined in the employee handbook.

What investment options are available in the Dentsply Sirona 401(k) plan?

The Dentsply Sirona 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to help employees grow their savings.

Are there any fees associated with the Dentsply Sirona 401(k) plan?

Yes, there may be administrative fees and fund management fees associated with the Dentsply Sirona 401(k) plan, which are typically disclosed in the plan documents.

Can Dentsply Sirona employees take loans against their 401(k) savings?

Yes, Dentsply Sirona employees may have the option to take loans against their 401(k) savings, subject to the plan's terms and conditions.

What happens to my Dentsply Sirona 401(k) if I leave the company?

If you leave Dentsply Sirona, you can choose to roll over your 401(k) balance to another retirement account, cash out your balance, or leave it in the Dentsply Sirona plan if allowed.

How often can Dentsply Sirona employees change their contribution amount?

Dentsply Sirona employees can typically change their contribution amount at any time, subject to the plan’s guidelines.

Is there a vesting schedule for the Dentsply Sirona 401(k) company match?

Yes, Dentsply Sirona has a vesting schedule for the company match, which means employees must work for a certain period before they fully own the matched funds.

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For more information you can reach the plan administrator for Dentsply Sirona at 13320 Ballantyne Corporate Pl Charlotte, NC 28277; or by calling them at (844) 848-0137.