I am selling 3 acres of land for a substantial gain and would like to avoid paying 30 percent of my selling price in capital gain taxes. Are there tax breaks that allows for reinvesting without taking a big hit in taxes?
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Look into a Section 1031 exchange. That won’t avoid the tax bite but will defer it.
If this is a long term gain, the rate is 15% or less, not 30%. If you’re closing in on the one year limit for short term gains, hold off on closing until you are over one year. That way it will be a long term CG at the lower rate.
if not, better to sell now and take the hit before the dems raise cap gains taxes.
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Yes, do a 1031 exchange, in which you replace the land that you sold for new land. All you are doing however is merely postponing the tax, not eliminating it.
I have attached a link regarding 1031 exchanges.
By the way, if it’s long-term gain, the federal tax rate would be maximum of 15%, don’t know about state tax effect as I don’t know the state you live in or the state the land is in.