Capital gains taxes can significantly impact the profits from selling highly appreciated assets like cryptocurrency, rental property, inherited property, or a business. However, there are strategies to reduce or delay this tax burden legally. Offsetting capital gains with capital losses is one of the most straightforward approaches. If you have underperforming assets, selling them in the same year as your appreciated assets can balance out gains, with tax loss harvesting allowing up to $3,000 of losses to offset your taxable income.
Another effective strategy is donating appreciated assets to charity before selling them. By doing so, you avoid paying capital gains taxes on the asset while also deducting its fair market value from your income taxes, creating a dual benefit. A Deferred Sales Trust is a powerful option for those seeking to defer taxes. This method lets you delay paying capital gains taxes and spread payments over time, offering flexibility to align with other deductions or favorable tax brackets. Properly leveraging these methods requires careful planning and, often, professional advice to ensure compliance and maximize savings.
source: https://capitalgainstaxsolutions.com/tax-evasion-or-tax-avoidance-youd-better-know-the-difference/
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