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Capital Gains Tax Strategies

A collection of strategies for managing, deferring, reducing, or eliminating taxes on capital gains from the sale of assets, businesses, stocks, and real estate.

Concept Source: generalized Verified: 2026-04-07

Definition

Capital gains taxes apply to the profit from selling assets held for investment or business purposes. Long-term capital gains (assets held over one year) are taxed at preferential rates of 0%, 15%, or 20% depending on income, compared to ordinary income rates of up to 37%. This rate differential is the foundation for multiple strategies within the DEAPR framework.

How It Works

Capital gains strategies span all five DEAPR components:

Defer: Qualified Opportunity Zones, 1031 exchanges, installment sales, and deferred sales trusts postpone gain recognition
Eliminate: QSBS Section 1202 can exclude up to $10 million; gifting appreciated stock to charity eliminates the gain entirely
Arbitrage: The 17-point differential between ordinary (37%) and long-term capital gains (20%) rates creates opportunities through holding period management and income-type conversion
Pay Now-None Later: Roth conversions during low-income years, then investing the Roth in appreciating assets for tax-free gains
Reduce: CRT transfers avoid gain recognition; tax-loss harvesting offsets gains with losses

The 3.8% Net Investment Income Tax (NIIT) adds to the capital gains rate for high-income taxpayers, making the effective top rate 23.8% for long-term gains.

When Entrepreneurs Use This

Business sales: The largest capital gains event most entrepreneurs experience
Stock liquidations: Diversifying concentrated equity positions
Real estate transactions: Selling investment or commercial property
Portfolio rebalancing: Managing gains and losses across the investment portfolio

Dew Wealth Perspective

Capital gains planning should begin years before any anticipated sale. The Linchpin Partner coordinates entity structure (C-Corp for QSBS eligibility), holding period management, charitable vehicle timing, and QOZ eligibility to ensure the entrepreneur pays the minimum legal tax on every gain event.

Frequently Asked Questions

What is the difference between short-term and long-term capital gains?

Assets held one year or less are taxed at ordinary income rates (up to 37%). Assets held longer than one year qualify for preferential long-term rates (0%, 15%, or 20%).

Can I combine multiple strategies?

Yes. For example, a business sale might use QSBS for the first $10 million in gains, QOZ for gains above the exclusion, and an installment sale to spread remaining gains over multiple years.

Disclosure

Certain portions of this publication may contain a discussion of potential benefits and results as of a specific prior date. Due to various factors, including changing market conditions and regulations, such discussion may no longer be reflective of current potential benefits and/or results. Please remember that past performance may not be indicative of future results. Different types of investments and strategies involve varying degrees of risk, and there can be no assurance that any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Dew Wealth or any of its advisory representatives), or any non-investment-related services, will be suitable for your portfolio or individual situation, or prove successful.

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