There are at least 4 ways I know of to eliminate capital gains tax upon the sale of an asset:
1. Before sale, donate the asset to a charitable remainder trust and have the trust sell it and then provide the income to you.
2. Donate the asset to a personal foundation and have the foundation employ you or your family members. Ex-president Bush had his personal foundation pay him $400,000 for writing his memoirs. This was money from the sale of assets that he previously contributed to the foundation and got a nice charitable deduction and also avoided capital gains tax.
3. In the case of stock, you can exchange shares of stock for an interest in a specialized small business investment company (SSBIC)--essentially a mutual fund of small company stocks. Thus, you can diversify what may be too much money in one stock for an interest in several and thereby reduce your risk. If these new shares are held until death, no capital gains tax is paid. (1)
4. In the case of real estate, an old apartment building you may not want can be exchanged for a chain location (e.g. McDonalds). You eliminate all management headaches as the chain has full responsibility for the property. You get a nice rental income check each month and if the property is held until death, there is no capital gains tax.
You can get more information on these topics by calling the office for an analysis of an asset that you have recently sold or would like to sell. Call 925-935-5488 extension 203.
(1) See limitations, IRS publication 550, chapter 4