Capitalizing on Capital Gains Tax Breaks

Send us Fan MailJeff and Scott discuss how to legally reduce or avoid paying capital gains taxes. We use Satya Nadella's recent sale of half his stake in Microsoft as an example. To reduce the capital gains tax burden, one can:Change the timing of capital gain incomesell before a new tax is imposed, or after an old tax is retiredwait to sell until capital gain becomes "long term," currently after 1 yearwait to sell to take advantage of the power of deferralExampleshttps://www.journals.uchicago.edu/doi/abs/10.17310/ntj.2015.3.02 https://tax.unc.edu/index.php/news-media/should-you-sell-stock-before-president-biden-raises-the-capital-gains-tax-rate/ Change jurisdictionsMove to Texas, Florida, Wyoming, etc.Hold until death to take advantage of the "step-up" in basis. Inheritance, Estates and the Step-Up in Basis Rule - WSJDonate appreciated assets to charityCharity gets assets at their fair market valueDonor does not pay capital gains taxDonor gets charitable contribution deduction for full market value if itemizes on personal tax returnTax loss harvesting Sell assets that have losses to offset assets that have gains.Invest in Opportunity zones