Sounds too good to be true? Sounds like something you would hear on a TV infomercial at 3 a.m. Right before the host yells at you through the screen, “But wait, there’s more!”
However . . . if you look carefully at the IRS income tax code, you will find at least three ways you can sell stock (or real estate or any other investment you have that has generated a nice profit) for a profit and pay no capital gains taxes at all.
First, you might well be able to do this yourself. Simply sell the stock and pay no tax. How? If you are a married couple and your taxable income is below $78,750 your capital gains tax rate is zero! Sell your stock, report the gain, pay no tax, and send Gene a thank you note.
Second, you may not qualify for a zero percent capital gains tax rate, but there may be someone in your life that does. There may be a loved one who does fall into the appropriate bracket (for single tax payers taxable income under $39,375 qualifies them for a zero capital gains tax rate). You may have a parent or a child that you are helping who find themselves in the correct bracket. You could gift your appreciated stock to your parent or child. They in turn could sell the stock and pay no tax on the profits/proceeds.
Third, there may be a non-profit that you support that you could gift your appreciated stock to and have them sell it. As an eligible non-profit, they would pay no taxes on the proceeds of the sale. You, however, might well receive a tax deduction (if you itemize deductions) for the market value of the stock you gifted.
Be sure to work closely with your professional tax advisor to insure the result you want.