Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, June 3, 2014

Capital Gains Tax Leaves Loopholes

HoleThe burden faced by capital gains tax can effectively trap assets in investments and make them difficult and expensive to move to another planning device like a trust. One option for avoiding capital gains tax is to hold onto the investment until death and let it pass into the estate. However, the capital gains tax leaves at least 14 loopholes to the tax which can be seen here. Below are the top five:

  1. Use losses to offset gains, up to $3,000
  2. Exclude sale of primary residence, up to $250,000
  3. Buy a house that is a fixer upper as the primary residence, do repairs, and flip it
  4. Roll sale proceeds from rental property into another similar investment, but only within 180 days
  5. Doing a like-kind stock exchange

 See David John Marotta, 14 Ways to Avoid Paying Capital Gains Tax, Forbes, June 1, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.



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