1.) Match Losses - Investors can realize losses to offset and cancel their gains for a particular year.
2.) Primary Residence Exclusion - Individuals can exclude up to $250,000 of capital gains from their primary residence ($500,000 for a married couple).
3.) Home Renovation - Sharp real estate agents and home renovators make their under-market investment purchases their primary residence...then flip the houses, selling for a better sales price but avoiding any tax on their gains via the primary residence exclusion.
4.) 1031 Exchange - You can avoid capital gains and depreciation taxes by rolling the proceeds of your sale into a similar type of investment within 180 days.
5.) Stock Exchange - Stock investors with highly appreciated securities can also do a like-kind exchange.
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6.) Exchange-Traded Funds - ETF's use stock exchanges to avoid triggering capital gains taxes when stocks move in or out of the index...
7.) Traditional IRA and 401k - If you are in the higher tax brackets during your working career, you can benefit from contributing to a traditional IRA or 401k.
8.) Roth IRA and 401k - Traditional accounts can postpone taxes to a more favorable year, but Roth accounts can avoid them altogether.
9.) Health Savings Accounts - HSA's are one of the few accounts where you can receive a tax deduction for contributing to them...
10.) Give Stocks to Family Members - If you are facing a high capital gains rate, you can give your highly appreciated securities to family members who are in lower brackets.
11.) Move to a lower tax bracket state - State taxes are added on to federal capital gains tax rates and vary depending on your location.
12.) Gift to Charity - Instead of giving cash to the charities you support, you can give appreciated stock.
13.) Buy and Hold - Many investors buy good index funds that never need to be sold.
14.) Wait Until You Die - Most people die holding highly appreciated investments. When you die, your heirs get a step up in cost basis and therefore pay no capital gains tax on a lifetime of growth.
Today's blog from www.Forbes.com courtesy of DJ Vyzis, Sales Executive, Veristone Capital