Whoever said that you need to pay capital gains tax was misinformed.

Here’s how we’ve helped our clients avoid paying them (when necessary)

Whoever said that you need to pay capital gains tax was misinformed.

Here’s how we’ve helped our clients avoid paying them (when necessary):

Donate to charity.

When you donate appreciated investments to a 501c3 or some other philanthropically inclined vehicle (DAF, CRAT, etc), you forgo the need of paying capital gains tax on your earnings.

Further you lock in a tax deduction on the contributed amount, and (in some cases) generate income from what you’ve given away.

Borrow money.

You only pay capital gains tax when you sell an investment (with some exceptions) — so if you never sell you never pay.

That said, you might still need money, and if that’s the case you can have someone loan you what you need using your investments as collateral.

Borrowed money isn’t taxable and the interest you’d pay can be tax deductible, so if presented with the option of selling your investment and paying capital gains tax, or not selling your investment borrowing the money and potentially getting a tax deduction, many times our clients will opt for the latter.

Make less than $94,000 ($47K if you’re single).

Most people don’t know that there is a 0% capital gains tax rate.

If you cumulatively (across earned income, investment income, etc) make less than $94,000 (and you’re married) you will not owe capital gains tax on any investments sold.

This is a game changer when coupled with Roth IRA distributions.

Cheers