00:00Yes, several legal mechanisms let investors reduce or defer capital gains tax, though
00:05loophole overstates it.
00:07These are codified provisions, not exploits.
00:10In the U.S., the most significant is the step-up in basis at death.
00:15Heirs inherit assets at current market value, erasing all prior unrealized gains tax-free.
00:21This alone shields an estimated $40-plus billion annually.
00:25Beyond that, tax-loss harvesting, selling losing positions to offset gains dollar-for-dollar,
00:31capped at $3,000 per year against ordinary income, excess carries forward indefinitely,
00:38requires avoiding the 30-day wash-sale rule.
00:411031 Exchanges
00:42Real estate investors defer gains indefinitely by rolling proceeds into like-kind property,
00:48doesn't apply to stocks since 2017 tax reform.
00:52Opportunity Zone Funds
00:54Reinvesting gains into designated low-income areas defers tax and can eliminate gains on
01:00the new investment if held 10-plus years.
01:03Donating appreciated assets to charity or a donor-advised fund avoids capital gains entirely
01:09while claiming a fair market value deduction.
01:12Long-term holding, 12-plus months, drops the rate from ordinary income rates, up to 37%,
01:19to 0-slash-15-slash-20% brackets.
01:23This changes sharply by context.
01:26Non-U.S. residents face different regimes.
01:28E.g., the U.K. has no step-up at death but offers ISAs.
01:33Several countries have zero capital gains tax on personal investments.
01:37High-net-worth individuals also use buy, borrow, die, borrowing against appreciated stock instead
01:43of selling, avoiding realization entirely, then passing assets at death with stepped-up basis.
01:49My knowledge on current thresholds, 2026 brackets, OZ fund deadlines, may not be fully current.
01:57Verify exact figures with the IRS or a CPA before acting.
02:01Practical Takeaway
02:02If you hold appreciated assets, prioritize tax loss harvesting yearly, hold positions past 12 months
02:10when feasible, and consult a tax professional before using estate-based or exchange strategies,
02:15since misapplication triggers penalties.
02:18Finally, remember that everything we discussed today is for educational purposes only and does
02:23not constitute financial advice.
02:25Good luck to everyone, and see you in the next video.
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