Stocks to Real Estate

[Stephen Lyons]

I have created a substantial amount of capital through the stock market and want to transfer to real estate. I was wondering if anyone knew if there is a way to transfer without paying capital gains tax. Is there an exchange similar to when you do a "1031???" exchange? (I believe that's what its called)

[Thomas Rutkowski]

Originally posted by @Daniel McNulty:

@Stephen Lyons

There are a couple of options. Utilizing Opportunity Zones will allow your to defer the gains and eliminate part. The downside is that it is complicated to qualify and may be more head ache than it’s worth trying to own direct real estate such as a single family home. Most people opt for a syndication or real estate fund that has navigated the legal and tax complexities of an Opportunity Zone. You would just invest passively.

Another option is to use something like a deferred sales trust, which is essentially just a creative way to do an installment sale.

Neither option is cheap or easy to accomplish alone.

Depending on how large the tax bill might be, it may be easier to just pay a little tax to have the flexibility to do what you want. Especially if these fall into LT capital gain rates.

I don't THINK a deferred sales trust will work for this because you can't sell securities on an installment sale. I believe there is an exception for appreciated assets that can be sold on a public exchange.