Capital gains planning

A capital gains event is not a tax problem to be solved afterward. It is a planning problem with a deadline.

The problem

Selling a business, an investment property, a concentrated stock position or a family property can generate a gain far larger than any the seller has previously reported. Federal capital gains tax, potential net investment income tax, state tax and depreciation recapture can combine in ways that surprise people who have only ever seen a headline rate.

The critical constraint is sequencing. Most approaches that change the tax character or timing of a gain must be established before the seller is contractually committed. Attempting to introduce structure after a binding agreement exists generally does not work, and can create a worse result than doing nothing.

Approaches commonly evaluated

Each of these has substantial requirements, costs and disqualifying conditions. They are listed to show the landscape, not to recommend any of them.

Installment sale treatment, spreading recognition across years when the buyer and structure permit it.
Section 1031 like kind exchange, available for qualifying real property held for business or investment use, with strict identification and closing deadlines.
Charitable remainder trusts, where a charitable objective genuinely exists.
Qualified opportunity zone investment, subject to program rules and investment risk.
Deferred sales trust structures, which carry meaningful complexity and require specialized counsel.
Timing and bracket management across tax years, coordinated with the seller's CPA.
Recognizing the gain and planning around it, which is sometimes genuinely the best answer.

The approach

The analysis starts with facts, not products. Asset type, holding period, basis, depreciation history, entity structure, state of residence, the seller's other income and the seller's actual objective for the proceeds all determine which approaches are even eligible.

From there, each candidate approach is modeled by the seller's CPA against simply paying the tax. That comparison is the honest baseline, and it wins more often than promoters of complex structures suggest.

Any structure that survives that comparison then requires the right specialized professionals to implement. We coordinate that process rather than execute it.

Questions to ask about any capital gains strategy

What is my total tax if I simply sell and pay, including state tax and any recapture
What are the all in costs of the proposed structure over its full life
What is the deadline after which this structure is no longer available
What happens if the structure is later challenged, and who bears that risk
How liquid are the proceeds once inside this structure
Will my CPA and attorney put their support for this in writing

Key takeaways

Eligibility is determined before commitment, not after.
Paying the tax is a legitimate option and the correct comparison baseline.
Complexity has ongoing cost, administrative burden and risk.
Implementation belongs to specialized tax and legal counsel.

Important disclosure

This page is general education, not legal, tax or investment advice, and not a recommendation of any specific product. Suitability depends on individual facts, product terms, issuing company strength and current law. Guarantees, where mentioned, are backed solely by the claims paying ability of the issuing insurance company. Consult your own licensed legal and tax professionals before acting.

Last reviewed 2026-08-09 by Tim Parnell.

Capital gains planning

The problem

Approaches commonly evaluated

The approach

Questions to ask about any capital gains strategy

Key takeaways

Business exit planning

Deferred sales trust

Selling a business or asset

When is it too late to plan for capital gains