How to Avoid and Defer Capital Gains Tax

[@ritafong8587]

very informative. Thank you!

[@CunninghamLegal]

You're welcome!

[@chuck_in_socal]

It's ridiculous that you can't sell a house to buy an equivalent one 10 miles away without paying capital gains tax.

[@CunninghamLegal]

If it is your primary residence you can often exempt $250K in capital gain if you are a single filer and $500K if married filing jointly.

[@alamedakwong]

Jim: Thank you so much for all these helpful and informative videos. My question relates to Capital Gains with low income. For example, if I sell $50,000 of stock (assuming $40,000 is the capital gains, $10,000 cost basis). Does this $50,000 count income for this year? In other words, if I have $20,000 of income from interest and dividends for this year, is my income $70,000 ($50k + $20)?

[@CunninghamLegal]

I'm really glad you enjoy the videos! Thanks for leaving a comment. A Gain on a Stock ($40K) plus $20K in income is equal to $60K, not $70K. Generally, we are not taxed on the ($10K) “basis” in stock when sold.

[@0SCJustJohn]

Informative video, thanks. If I wanted to do an installment sale with cryptocurrency do you know if that would be possible (since they are not securities) and how I would do it? If it is, would I be able to sell everything at one point and then take that value in installments each year, or would it have to be sold in chunks each year?

[@CunninghamLegal]

We haven’t seen much use of the installment strategy as the Charitable Trust structure has been modeled out to provide better outcomes. That being the case, we would be happy to work on this strategy to spread out the capital gain over multiple tax years. BEWARE: a MONETIZED installment sale is a listed transaction. www.irs.gov/newsroom/treasury-and-irs-issue-proposed-regulations-identifying-certain-monetized-installment-sales-as-listed-transactions (This is NOT legal advice, or any other kind of advice. It's just information.)

[@patrickrodgers1380]

nm is bad state to live in for taxes. forget how low property taxes are. look at the state taxes and capital gains taxes. i was going to move there until i found out that i was going to have to pay 60 thousand dollars just on a capital gains tax that i have to pay soon when i sell some of my stocks etc... so now im going to move to a state that has no state tax or capital gains tax. these types of things are killing that state and people with money wont move there.

[@CunninghamLegal]

Patrick, you should check out our recent video in retiring in CA!: kzbin.info/www/bejne/jaqueXd_jaZqrac

[@keithmachado-pp6fv]

Good video. FYI anyone with an S&P 500 fund owns Nvidia.

[@CunninghamLegal]

Thank you! You are correct-Nvidia became a component of the S&P 500 on November 28, 2001, (replacing Enron Corporation!), so anyone holding an S&P 500 index fund since that time would indeed have invested indirectly in Nvidia.

[@saralaine6236]

Good video, thank you. Do you get the $250k single filer exemption each year of an installment sale? Assuming just for example a $2 million gain, single filer, and installments of $250K each year for 8 years.

[@CunninghamLegal]

Great question. I don’t think so. IRC 121 exempts up to $250K of gain on a qualifying residence from income. I am not seeing an “annual” exclusion in the Code. (This is information only and NOT advice. If you have a specific situation, we would be happy to review it with you during a consultation: www.cunninghamlegal.com/california-law-offices/contact/)

[@saralaine6236]

@@CunninghamLegal Yes, thank you so much. I found an express limitation in sec. 121 that the exclusion can't exceed $250K for "any sale or exchange." But maybe there's a potential advantage if the installment payments are spread out wisely. Thanks!