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  • Home
  • About
  • How to Increase Income
  • Tax Efficiency
  • Running Out of Money
  • Too Much Risk
  • Long Term Capital Gains
  • Long-Term Care
  • Contact Us

taxes on the sale of highly appreCIATED assets

Long Term Capital Gains

Long-term capital gains tax applies when you sell assets that you've held for more than one year and have increased in value. Here are some key points regarding the taxation of highly appreciated assets:

  1. Tax Rate: The long-term capital gains tax rate can vary based on your income level. As of 2024, the rates are typically 0%, 15%, or 20%, depending on your taxable income.
  2. Net Investment Income Tax: Additionally, if your income exceeds certain thresholds ($200,000 for single filers or $250,000 for married couples filing jointly), you may also be subject to the Net Investment Income Tax (NIIT) of 3.8% on the lesser of your net investment income or the amount by which your modified adjusted gross income exceeds the threshold.
  3. Step-Up in Basis: Upon the death of the owner, assets held at that time generally receive a "step-up" in basis to their fair market value, which can reduce or eliminate the capital gains tax liability for heirs who subsequently sell the assets.
  4. Strategies to Manage Taxes: There are various strategies to manage capital gains taxes on highly appreciated assets, such as gifting appreciated assets to family members in lower tax brackets, tax-loss harvesting to offset gains with losses, or using tax-advantaged accounts like IRAs and 401(k)s.
  5. State Taxes: Some states also impose their own capital gains taxes, so it's important to consider state-specific rules if applicable.
  6. Reporting: When you sell a highly appreciated asset, you will report the transaction on Schedule D of your federal tax return, and potentially also on state tax forms if applicable

highly appreCIATED assets

Examples of Highly Appreciated Assets

Highly appreciated assets are those that have significantly increased in value over time. Here are some examples of such assets:

  1. Stocks and Bonds: Shares of publicly traded companies or corporate bonds that have appreciated in value since their purchase.
  2. Real Estate: Properties such as homes, land, or commercial buildings that have increased in market value.
  3. Collectibles: Items such as artwork, antiques, rare coins, or valuable stamps that have appreciated due to their rarity or desirability.
  4. Business Interests: Ownership stakes in businesses or partnerships that have grown in value over time.
  5. Cryptocurrencies: Digital currencies like Bitcoin or Ethereum that have experienced significant price appreciation.
  6. Precious Metals: Gold, silver, platinum, or other precious metals that have increased in value due to market demand or economic factors.
  7. Mutual Funds and ETFs: Investment funds or exchange-traded funds (ETFs) that hold assets like stocks or bonds which have appreciated in value.
  8. Intellectual Property: Patents, copyrights, trademarks, or other intellectual property rights that have gained value over time.


These assets can appreciate for various reasons, including economic conditions, market demand, scarcity, technological advancements, or changes in investor sentiment. When selling highly appreciated assets, understanding the tax implications and seeking professional advice can help manage potential tax liabilities effectively.

$1,000,000+ in long term capital gains?

Deferred Sales Trust

Those of us who own businesses, corporations, and commercial or residential investment real estate assets are often reluctant to sell because of capital gains taxes associated with the sale. But what other choice do we have other than a property exchange directed by a Qualified Intermediary? Is there another way to deal with the capital gains tax deficits that so many investors experience when they sell their real estate assets? The answer may lie in the Deferred Sales Trust™.

This capital gains tax deferral tool could save you thousands of dollars, and at the same time, you would then have the opportunity to potentially make a profit on the money you would have paid to Uncle Sam in the year of the sale. Obviously, this strategy is gaining popularity among those who have highly appreciated assets that are marked for sale. You, too, can potentially take advantage of this program once you understand how it works.


The process starts when a property owner sells their property to a trust owned by a third-party company. The trust sells the property or stock. Next, the trust "pays" you. The payment isn't in cash, but with a payment contract called an "installment contract." The contract promises to make payments to you over an agreed period of time. There are zero taxes to the trust on the sale since the trust "purchased" the property from you for what it sold it for. The payment is made with an installment contract which makes payments to you over an agreed period of time.

The options on when and how payments can be made are flexible. You may have other income and don't need the payments right away. The tax code doesn't require payment of the capital gains until you start receiving installment payments. The capital gains tax is paid to the IRS with an "installment plan" since only that portion of capital gains is due in proportion to the number of years established in the term of the installment agreement.

The Deferred Sales Trust™ has the potential to generate more money over the long run than a direct and taxed sale.

There may be a more suitable or appropriate tax structure depending on your circumstance. We would like to have one of the Estate Planning Team's tax specialists discuss your specific circumstances and goals with you.


For more information and to schedule a complimentary analysis visit  MyDSTPlan.com - Deferred Sales Trust 

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