etkinlestirme kodunu girme Windows 10 Pro Lisans Key Satin Al bilgisayari tam surum yap insta takipci kazan instagram hesap satin al fotograf begen mailden dosya gondrmek resim upload fotografi yukle minecraft hileler Mini Racing Adventures hileli apk apk hileli nasil indirilir eski facebook hesabi Facebook 5 yildiz Derecelendirme Satin Al kapanan hesabi acma anlik muhabbet Canli Sex Hatti ucuz hatun numaralari seksi sohbet Yetiskin Sohbet Hatti canli kizlarla konus yetiskin videolari xnxx anal izle makine ile su kacagi tespiti kirmadan tamir yapilir
How can I Avoid Capital Gains Tax?
Category: 
How can I Avoid Capital Gains Tax?
Article Details
  • Written By: Adam Hill
  • Edited By: Bronwyn Harris
  • Last Modified Date: 05 April 2012
  • Copyright Protected:
    2003-2012
    Conjecture Corporation
Free Widgets for your Site/Blog
There are about 10,000 varieties of wine grapes.  more...

May 1, 1926: The Ford Motor Company adopted the 40-hour workweek. more...
   

Most monetary transactions are subject to some kind of tax in the United States. This is something that an investor must be especially aware of when it comes to planning how and when to purchase or sell an asset. The tax rates on capital gains vary depending on how long the asset was held for, and where the taxpayer lives. There are some ways to actually avoid capital gains taxes, or at least reduce the tax burden that one has to pay. These include taking advantage of loopholes that are written into the tax laws at the state and federal levels.

There are two main areas of the average person’s finances where avoiding capital gains taxes would be a concern. The first is at the time of the sale of stocks or other securities. There are only a few tax loopholes left that allow a person to partially avoid capital gains taxes incurred by selling stocks that have appreciated, and these loopholes are among the least publicized in the tax code. One of them, which is especially helpful for parents with children in college, is to give appreciated stock to their children to pay for their schooling. While it’s impossible to avoid capital gains altogether, their children pay capital gains tax at the lowest rate, five percent.

Ask a Lawyer Online Now
Investment Bank Bootcamp
Auto Title Loan
Buy Binary Options
Stock Option Strategies

It’s important to keep a few things in mind when using the above tax loophole. First, someone can only give $11,000 U.S. Dollars (USD) per year worth of stock to his children without that transaction itself being taxed. Secondly, once the stock is given to the child, he is the legal owner of it. This means that if he decides to cash out the stock and buy a car, for instance, instead of paying for his education, there isn’t much the parent can do to prevent it. This can be avoided if the parent sets up a brokerage account in the child’s name while retaining full trading authority. Such may be a wise choice for a parent looking to safeguard the child’s educational funds.

The other time when the average person might want to avoid capital gains taxes would be at the sale of a piece of real estate. If a property increases in value from the time it was bought until the time it was sold, that sale is subject to capital gains taxes, but tax loopholes exist in these situations as well. One well known loophole is called a 1031 exchange, or Starker Trust exchange. In this type of exchange, an investor sells a property, then buys another which is worth more, within a certain time frame. If this is done correctly, the investor can avoid capital gains taxes on that transaction for the time being.

Another loophole exists for an investor who lives at an investment property for at least two of the five years preceding the sale of the property. That investor may be able to avoid capital gains tax for up to $250,000 USD worth of appreciation on the property. Loopholes such as these are purposely written into the tax code for the benefit of investors in certain situations, and it is important to stay within the boundaries set by tax laws. Many tax shelters exist which are illegal, and these should be avoided since their use constitutes tax evasion, a serious crime. Legal tax avoidance, however, can be a valuable tool for an investor seeking to lessen his tax burden.

Ask a Lawyer Online Now
Investment Bank Bootcamp
Auto Title Loan
Buy Binary Options

Discuss this Article

Post your comments

Post Anonymously

please enter the following code:

Login

username
password
forgot password?
or connect with facebook
Log In

Register

username
password
confirm
email