Los Altos Tax Accountant: Apple Execs, Retired Founders, and Legacy Wealth

Los Altos and Los Altos Hills represent old Silicon Valley money and new Silicon Valley money existing on the same quiet streets. The retired Apple vice president who bought in 1994, the active senior director with a current RSU grant worth $3 million, the venture-backed founder who took her company public and now holds a concentrated position worth far more than her home, the family with three rental properties and a revocable trust written in 2008 that nobody has revisited. Each of these is a tax situation with genuine complexity. Each one carries real cost if the planning is done poorly or not at all.

Silicon Valley Tax has served the Bay Area for over 23 years. Our office is at 2051 Junction Ave, Suite 200, San Jose, about 15 minutes from downtown Los Altos on the 237. We serve Los Altos clients in person at our office, on Zoom, or by phone and portal once the relationship is established. This page covers the tax situations we see most often in Los Altos and Los Altos Hills, and what to expect when you work with us. To book a free consultation, call (408) 383-9870 or use the online booking form.

Who We Serve in Los Altos

Los Altos returns cluster around four distinct profiles. Most of our Los Altos clients are in one of these groups, or a combination as careers and family situations evolve.

1. Active Apple executives and senior staff

Apple's Infinite Loop and Apple Park campuses are minutes away, and a large share of the Apple executive and senior individual contributor population lives in Los Altos and Los Altos Hills. Apple equity compensation is structured as RSUs on a quarterly vesting schedule. For a senior director or above, the annual vest income is often the largest single income item, frequently $500,000 to $1.5 million per year in RSU income alone. The standard supplemental withholding Apple applies is 22% federal, well below the 37% marginal rate these employees actually face. By April the cumulative shortfall across quarterly vests can reach six figures. We catch this shortfall in January, set up estimated tax payments, and optionally coordinate with the equity platform to adjust withholding so the problem does not repeat the following year.

2. Retired tech executives and founders with concentrated positions

Perhaps the most consequential planning challenge in Los Altos is the retired founder or executive who holds a large block of appreciated stock in a single company. They are diversified in every other asset class but cannot stomach selling the stock because the embedded gain is enormous and California taxes it at 13.3% with no preferential long-term rate. The combination of 23.8% federal and 13.3% California means selling $5 million of appreciated stock costs nearly $1.9 million in tax. We design multi-year diversification plans using charitable structures, exchange funds, and staged sales coordinated with estimated tax payments to reduce the per-year tax cost without triggering a single catastrophic event.

3. High-net-worth families with real estate and trust complexity

Longtime Los Altos residents often hold multiple properties acquired at low basis in the 1980s or 1990s, with unrealized gains dwarfing the original purchase price. Add a revocable trust that may need updating, multiple beneficiaries with different income levels, and Proposition 19 considerations for eventual parent-to-child transfers, and the tax picture requires coordination between accountant and estate planning attorney. We prepare personal returns, trust returns, and partnership returns for family entities, and we coordinate the tax analysis with the estate lawyer when transfers or restructuring are on the table.

4. Entrepreneurs selling a business

Los Altos has a significant concentration of entrepreneurs who built a business over 20 to 30 years and are approaching a sale. The difference between an asset sale and a stock sale is measured in percentage points of the purchase price, and the structuring decisions made in the year before closing can reduce the tax cost by hundreds of thousands of dollars. We work on pre-sale planning, coordinate QSBS analysis for qualifying C corporations, model the installment sale option against lump-sum, and prepare the returns for the year of sale and the installment years that follow.

Apple RSU Taxation: The Withholding Gap Problem

The withholding gap is the most common and preventable tax problem for Los Altos Apple employees. Understanding it requires walking through how Apple's supplemental wage withholding actually works.

When your RSUs vest, Apple treats the vest income as supplemental wages and withholds federal tax at the IRS-mandated 22% flat rate for supplemental income under $1 million (37% above $1 million for a single event, but quarterly vest income usually falls below this threshold). For an employee in the 37% marginal bracket, 22% withholding leaves a 15-percentage-point gap on every vest. If $400,000 of RSUs vest across four quarters, that gap totals $60,000 of federal tax the employer did not withhold. Add California at 13.3% versus the 10.23% default supplemental rate, and the state gap adds another $12,000. Total underpayment: approximately $72,000 before considering any other income in the year.

The IRS assesses an underpayment penalty based on the federal funds rate plus 3 percentage points. In a rising rate environment, this penalty is material. The California FTB applies a similar rule. We eliminate this problem by projecting the full-year tax liability in January and setting up quarterly estimated tax payments large enough to cover the gap. We also help clients adjust their equity platform withholding elections where the platform allows it.

Concentrated Stock: The Core Wealth Problem in Los Altos Hills

Concentration in a single stock is not just a tax problem, it is a financial planning problem that tax planning alone cannot solve. But the tax dimension shapes every decision.

The sale scenario

A straightforward sale of $5 million of Apple stock held more than one year generates approximately $1.185 million of federal tax (23.8% long-term capital gains rate including the 3.8% net investment income tax) and $665,000 of California tax (13.3% flat rate on all long-term gains). Total tax cost: approximately $1.85 million, or 37% of the sale proceeds. This is the baseline against which every planning strategy is measured.

Charitable remainder unitrust (CRUT)

A CRUT lets the owner transfer the appreciated stock into an irrevocable charitable trust, which then sells the stock without recognizing capital gain at the trust level. The trust pays an annuity stream to the donor (or named beneficiaries) for a term of years or lifetime, and the remainder passes to a designated charity. The donor gets a partial charitable deduction in the year of transfer, based on the present value of the charitable remainder. A CRUT does not eliminate the tax on the income stream, but it converts a large upfront capital gain event into a stream of ordinary income or capital gain distributed over many years at lower marginal rates. It works best for philanthropically inclined clients who do not need the full liquidity from a sale.

Donor-advised fund

A donor-advised fund (DAF) accepts appreciated stock at full fair market value, generating a charitable deduction in the year of contribution and eliminating the capital gains tax on the donated shares entirely. The deduction is limited to 30% of AGI for appreciated property gifts to a public charity, with a 5-year carryforward for excess. A Los Altos executive contributing $1 million of Apple stock with a $50,000 basis eliminates $950,000 of capital gain and generates a $1 million deduction, subject to the 30% AGI limit. The DAF then invests the proceeds and the donor can grant from the account over time. We model DAF contributions as part of the annual income and gain forecast to optimize the timing and amount of contributions.

Exchange fund

An exchange fund allows holders of different appreciated stocks to contribute their shares to a partnership alongside other investors with different concentrated positions. The IRS treats the contribution as a tax-free partnership formation under Section 721, deferring the gain. After a 7-year holding period, the investor can withdraw a diversified basket of shares representing their pro-rata interest. Exchange funds are offered by major wealth managers and require minimum contributions typically in the $1 million range. They are an option for Los Altos clients who want diversification without a California tax event and are willing to accept the 7-year illiquidity and the counterparty risk of the fund structure.

Estate Planning Intersections: Trusts, Prop 19, and the Step-Up

Many Los Altos and Los Altos Hills families are navigating a cluster of estate-related tax questions simultaneously. The federal estate tax exemption, scheduled to sunset at the end of 2025 under current law, created urgency around trust and gifting strategies. California has no estate tax, but the federal exposure for families with $10 million to $30 million of combined assets is real.

The step-up in basis

Assets included in the gross estate for federal estate tax purposes receive a step-up in income tax basis to the fair market value at the date of death. For a Los Altos Hills home purchased in 1988 for $500,000 and now worth $8 million, the embedded capital gain of $7.5 million disappears entirely at death. Heirs inherit at the $8 million value and can sell without any capital gains tax. This step-up is the single most powerful income tax planning tool available to high-net-worth families with appreciated assets, and every gifting or trust strategy has to be weighed against the cost of transferring appreciated assets out of the estate and forfeiting the step-up. We model this tradeoff explicitly in our planning work.

Proposition 19 and real estate

As described in our FAQ below, Proposition 19 dramatically narrowed the property tax protections available for real property transfers between parents and children. A Los Altos Hills home with a $700,000 assessed value and a $6 million market value will trigger a substantial property tax reassessment if transferred to a child who does not use it as a primary residence. For families with rental properties, the property tax consequence of an eventual transfer must be weighed against the estate tax and income tax picture.

Multi-Year Tax Planning for Los Altos Clients

The most valuable thing we do for Los Altos clients is not preparing the return, it is the planning conversation that happens before the year closes. By October or November, the income picture is clear enough to model the year-end numbers, and there are still planning tools available.

• ISO exercise timing. For Apple or other company ISOs, the AMT exposure from an exercise can be modeled against the expected year-end income. Exercising in a year when ordinary income is lower reduces the AMT impact significantly.
• Capital gain/loss harvesting. Selling underperforming positions before year end to offset gains realized earlier in the year. California does not have a preferential rate on long-term gains, so harvesting losses is equally valuable on the state return.
• Charitable giving timing. Bunching charitable contributions into a single high-income year to exceed the standard deduction threshold and maximize deductibility, then using a donor-advised fund to smooth out the actual grants over subsequent years.
• Retirement account contributions. Maximizing 401(k), profit-sharing, SEP-IRA, or defined benefit plan contributions for self-employed clients or those with side businesses. At 13.3% California rates on top of federal, each pre-tax dollar is worth up to 50 cents in combined federal and state tax savings.
• Roth conversions. For retired clients with low ordinary income but large traditional IRA balances, modeling conversions to fill the brackets below the point where California makes them uneconomic.

Local Office and Engagement Formats

Our office is at 2051 Junction Ave Suite 200, San Jose CA 95131. From Los Altos, that is roughly 15 minutes via the 237 West to 880 South, or 20 minutes via El Camino to the Central Expressway. We offer four formats:

• In-person at our San Jose office. Annual planning meetings run 60 to 90 minutes. We work through the year's situation and set the strategy before you file.
• Virtual via Zoom and secure portal. Document exchange through our SOC 2 compliant portal, meeting by Zoom. Most of our Los Altos clients prefer this after the first in-person meeting.
• Phone and portal for ongoing clients. Once we know your situation, most year-over-year work happens by phone and portal upload without formal meetings.
• Weekend and evening appointments. We are open seven days a week, which accommodates executives with Monday through Friday travel schedules.

Contact Information

Silicon Valley Tax
2051 Junction Ave, Suite 200
San Jose, CA 95131
Phone: (408) 383-9870
Email: admin@siliconvalleytax.co
Hours: Mon-Fri 8am-8pm, Sat-Sun 8am-6pm

Services for Los Altos Residents

• Individual federal and California tax preparation for high-complexity returns with equity, trust K-1s, and multi-state income
• Apple RSU withholding gap analysis and estimated tax planning to prevent underpayment penalties
• ISO exercise modeling and AMT projection for Apple and other company stock option awards
• Concentrated stock diversification planning using CRUTs, DAFs, exchange funds, and staged sales
• Trust income tax returns (Form 1041) for revocable trusts after death and for irrevocable trusts
• Estate and gift tax analysis, including coordination with estate planning attorneys on Proposition 19 transfer planning
• QSBS analysis under IRC Section 1202 for founders and early employees of qualifying C corporations
• Business sale tax planning including asset versus stock sale analysis, installment sale modeling, and earnout treatment
• International tax compliance including FBAR, Form 8938, foreign tax credits, and PFIC reporting
• Real estate tax including depreciation, 1031 exchanges, and passive loss rules for rental property owners

Frequently Asked Questions

How is Apple RSU income taxed for a senior executive living in Los Altos?

Apple RSU income is taxed as ordinary compensation in the year shares vest. For a VP or director at Apple with a large grant, the standard 22% federal supplemental withholding rate is almost always insufficient because the marginal federal rate is 37% and California's top rate is 13.3%. The shortfall accumulates across every quarterly vest and can easily reach six figures by April. We calculate the precise withholding gap each January and set up estimated tax payments to cover the shortfall, preventing underpayment penalties. Apple's equity admin platform (Fidelity) allows adjusting supplemental withholding, and we coordinate that change as part of annual planning.

I retired from a technology company and still hold a large block of appreciated stock. What are my options?

Concentrated appreciated stock is one of the most expensive tax problems in the Bay Area. Selling outright triggers federal long-term capital gains tax (23.8% including the net investment income surtax at your income level) plus California's 13.3% on the full gain. Alternatives worth modeling include charitable remainder unitrusts, donor-advised funds, exchange funds, installment sales, and opportunity zone investments. The right answer depends on your income needs, estate plan, and timeline. We model all the options before recommending a path.

What trust tax filings does a Los Altos family with a revocable trust need?

A revocable living trust is a grantor trust, meaning all income flows to the grantor's personal Form 1040 while the grantor is alive. No separate trust return is needed. Upon the grantor's death the trust becomes irrevocable and must file a Form 1041 annually for trust income. If the trust holds income-producing assets, an annual 1041 is required. Irrevocable trusts used for estate planning, like SLATs and IDGTs, also file their own 1041 each year. We prepare trust returns and coordinate with the estate planning attorney on distributions and K-1 issuance to beneficiaries.

California property tax and Proposition 19: how do they apply to my Los Altos Hills home?

Proposition 19, effective February 2021, narrowed the parent-child exclusion so that only a primary residence qualifies, and only if the child uses it as their primary residence within one year. The exclusion is capped: if fair market value exceeds assessed value by more than $1 million, the excess is reassessed. For a Los Altos Hills home assessed at $800,000 but worth $5 million, a parent-to-child transfer would trigger partial reassessment on $4.2 million. Vacation homes and rental properties no longer transfer without full reassessment. We advise on the income tax side of these transfers and coordinate with the estate planning attorney on the combined analysis.

Do you work with clients who have foreign financial accounts or live part of the year outside the United States?

Yes. Los Altos has a significant population of tech executives and retired founders with international financial ties. U.S. persons with foreign financial accounts exceeding $10,000 at any point during the year must file FinCEN Form 114 (FBAR) annually. Missed FBAR filings carry penalties starting at $10,000 per account per year for non-willful violations. We handle FBAR, Form 8938, foreign tax credits, PFIC reporting on foreign mutual funds, and coordination with foreign advisors for clients who split time between countries.

Why Los Altos Residents Choose Silicon Valley Tax

Los Altos and Los Altos Hills clients have access to every major accounting firm in the Bay Area. The question is not whether a large firm can prepare your return, it is whether you will have a dedicated relationship with a senior practitioner who knows your situation year over year, or whether you will rotate through different staff each spring. We are a focused practice. The senior preparer who handles your return this year will handle it next year. We hold planning conversations before December 31, not after April 15. Our fee is flat and known upfront, not billed by the hour with a surprise invoice in May.

If you are looking at a complicated Los Altos return with concentrated equity, trust K-1s, and real estate, we are happy to take a free consultation call. No commitment to engage, no sales pressure. Call (408) 383-9870 or book online.

Serving Los Altos, Los Altos Hills, Mountain View, Sunnyvale, Cupertino, and Palo Alto. Sibling city pages: Palo Alto tax accountant, Cupertino tax accountant, Mountain View tax accountant, and Saratoga tax accountant.