CLEARWATER WEALTH PARTNERS
Client Meeting Transcript
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CLIENT: Chen Household (Sam & Alex Chen)
DATE: March 15, 2023
TIME: 2:00 PM
MEETING: 2023 Q1 Quarterly Review
LOCATION: Conference Room A, Clearwater Wealth Partners
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TRANSCRIPT
[0:00] Sarah Chen: Markets have recovered significantly from the 2022 lows — the S&P
is up about 7% year-to-date. Portfolio is at $935,000. The donor-advised fund is
open. And we are six to eight weeks away from what may be the most significant
financial event in your relationship with Clearwater. The NLTK vest.
[0:03] Sam Chen: We've been anxious about it. The share count, the timing — what
do we actually know right now?
[0:04] Sarah Chen: Here's what I can confirm from your grant documentation: the vest
is expected in April. The share count is 2,667 shares — substantially larger than the
quarterly tranches. This is the cliff vest on a grant cycle that started before the
smaller quarterly tranches. NLTK's current price is about $42. If it holds near that
level at vest, you're looking at approximately $112,000 of W-2 income. That's a
significant number.
[0:08] Alex Chen: $112,000 just from the vest. On top of salary.
[0:09] Sarah Chen: Correct. Combined with your salary and Sam's income, your 2023
AGI could approach $430,000 to $450,000 before deductions. That puts you firmly in
the 35% federal marginal bracket and creates a Medicare surtax exposure on investment
income. This is why we've been planning since October.
[0:11] Sam Chen: The DAF is open — how does that interact with the vest?
[0:12] Sarah Chen: Here's the plan. At vest, rather than selling all shares into the
market, we donate a portion directly to the Clearwater Giving Fund in-kind — shares,
not cash. You receive a charitable deduction for the full fair market value of those
shares at the day of contribution. You recognize zero capital gain on donated shares,
because donated appreciated property is never subject to capital gains tax. The
deduction reduces your AGI directly.
[0:15] Alex Chen: How many shares are we thinking of donating?
[0:16] Sarah Chen: I'm modeling 550 to 600 shares. At $42, that's $23,100 to $25,200
in donated value and an equivalent charitable deduction. That brings your net AGI
down by that amount. Combined with the $15,500 TLH carryforward offsetting other
gains, we can meaningfully reduce your tax liability on what would otherwise be an

extremely high-income year.
[0:19] Sam Chen: And we can still grant money to the school and arts
organizations from the DAF afterward?
[0:20] Sarah Chen: Exactly — on your own timeline. The deduction is captured in 2023
when you fund the DAF. The grants to charities can happen in 2023, 2024, whenever you
choose. The organizations receive cash grants from the DAF; they never see the
shares.
[0:22] Alex Chen: What happens to the remaining shares after the donation — the
ones we sell?
[0:23] Sarah Chen: We sell 1,800 shares for diversification per our protocol —
proceeds go into the portfolio per your IPS allocation. The remaining shares —
approximately 317 after donation and sale — we'll hold briefly to assess
concentration. NLTK will be at approximately 9 to 10% of AUM at vest, which
temporarily breaches the 5% cap. We have a plan to bring that down over subsequent
quarters.
[0:26] Sam Chen: This is a lot to track. Can you put the plan in writing?
[0:27] Sarah Chen: Absolutely — I'll send you a written summary of the vest execution
plan by March 25th. You'll have it before the event. I'll also be available by phone
the day of vest to walk through any questions. The key thing for you to do before
April: make sure you have nothing unusual in your tax situation — no large deductible
expenses we're missing, no changes to withholding elections. Everything should be as
we've modeled.
[0:29] Alex Chen: We're good. Nothing unusual. We'll read the plan document when
you send it.
[0:30] Sarah Chen: Action items: written vest execution plan to you by March 25th;
DAF open and ready to receive shares; confirm $15,500 carryforward with CPA before
April. I'll be in touch the week of the vest.
[0:30] Meeting adjourned
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ACTION ITEMS
1. Send written NLTK vest execution plan to Chens — by March 25
2. Clearwater Giving Fund (DAF) confirmed open and ready to receive shares
3. Confirm $15,500 TLH carryforward with CPA before April 15
4. Monitor NLTK price heading into April vest; update income projection if price
moves materially
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CONFIDENTIAL — For client use only. Not for distribution.
