How to Avoid and Defer Capital Gains Tax

Capital gains tax is a levy imposed by the government on the profit earned from the sale of an asset.

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What is Capital Gains Tax?

One of the simplest ways to avoid capital gains tax is to hold on to your investments for the long term.

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Hold on to your investments

Invest in retirement accounts such as 401(k)s, IRAs, or Roth IRAs.

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Utilize tax-advantaged account

Offset your capital gains by selling underperforming assets at a loss. This strategy, known as tax-loss harvesting.

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Offset gains with losses

Real estate investors can utilize a 1031 exchange to defer capital gains tax on the sale of investment properties.

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1031 Exchange

Invest in designated Opportunity Zones to defer or reduce capital gains tax on eligible investments.

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Opportunity Zones

invest in Qualified Opportunity Funds, which pool money from multiple investors to invest in Opportunity Zone projects.

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Qualified Opportunity Funds

Consult with a Tax Professional