What option can help a person convert a large amount of company stock into cash flow without selling it?

A charitable remainder trust (CRT) is a strategic option for converting a large amount of company stock into cash flow without an immediate sale, making it the right answer. When an individual transfers their appreciated company stock into a CRT, they can avoid capital gains taxes that would normally be applicable if the stock were sold directly. This tax efficiency enables the trust to sell the stock and reinvest the proceeds into a diversified portfolio, generating income for the individual, often in the form of regular distributions. Additionally, the individual receives a charitable tax deduction based on the present value of the remainder interest that will eventually go to a charity.

This option not only provides cash flow through income distributions but also allows the individual to maintain charitable interests and benefit from tax advantages. Ultimately, it allows for a financially strategic way to manage appreciated assets while meeting both cash flow needs and philanthropic goals.

In contrast, a standard brokerage account would require the direct sale of the stock, incurring capital gains taxes at the time of sale, which is not the goal in this scenario. A home equity loan leverages real estate rather than stock and does not relate to converting stock into cash flow. Lastly, a life insurance policy does not directly convert stock into cash flow; rather, it has its