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Thursday, January 20, 2011

Six Ways to Defer Capital Gains Tax

When a property owner is ready to sell a particular property the one tax they are very concerned about is the capital gains tax. This particular tax is coming from certain sources such as properties and assets and also from stocks and bonds, and the one draw back of this particular tax is that it takes a rather large sum out of your profit of the transaction. Therefore one of your main objectives as a person selling a property is that you should work to cut this tax to as low as you can.

This list consists of six different ways to defer or cut the tax which would be taken from your profit of the sale. The first one is tax lost harvesting which is a place where you go and sell your securities, and the whole idea of this is to create an offset to your capital gains for years to come. The second is charitable trust in which you can give so of your equity funds to a charity in order to cut some of the taxes you would pay. The third option is an installment sale and this way is if you accept installments for over a period of several years.

Fourth is the option of deferred sales trust in which this trust receives the money from your transaction and then the taxes will be deferred for the period of the installment note. There is also the 1031 exchange this process allows you to defer by exchanging a certain property and it can only be done with property. And the sixth on is structured sale this is a system which allows the seller to defer from any gains from the transaction.

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