How do you avoid paying capital gains taxes on an investment (rental, flip, etc)

[torojd]

i do know that you have to hold on to your primary residence for at least 2 years (not one year as other people have said, righ?) 

If I buy an investment property what's the deal on that?  How long must I hold it before I sell it and not have to pay capital gains taxes???

[yrush2000]

Its an investment so you will have taxes and no exemptions.  However a very smart and creative account will help you lower your tax penalties each yr.

[Dave T]

If I buy an investment property what's the deal on that?  How long must I hold it before I sell it and not have to pay capital gains taxes???

There are a few ways to sell an investment property and not pay capital gains taxes.  Here are a few that come to mind.

• Sell at your adjusted cost basis, or at a loss
• Use a 1031 exchange
• Donate the property to a charitable remainder trust and have the trust sell the property

[Mr Investor]

You can also use a self directed IRA account.

[BLL]

Capital gains only apply to rental property. Home flips are inventory and the income is subject to income and employment taxes. Assuming the home is rental property, the only way to avoid capital gains taxes is to sell at/less than your basis or inherit the property. You can exchange to a TIC and hold until you pass, which will allow your heirs to inherit at stepped up basis with no capital gains taxes due. You receive income without the hassles of rental income. Another option is to use different kinds of trusts.

[mcwagner]

How long must I hold it before I sell it and not have to pay capital gains taxes???

what kind of taxes would you prefer to pay?  If you sell for more than you bought it for, that's called "income" and it's subject to "income tax."  Given that, capital gains tax rates are generally better than other income taxes, so I would think that you would want capital treatment.

You get to avoid tax on your residence because the central planning committee (congress) wants to encourage home ownership, not because there's something magical about living there for two years.  It's still income, they just let you off the hook if it's your residence.

If it's not your residence, you don't get to avoid the tax.

How it will be taxed is determined by what it is and how you use it, as BLL outlined earlier.

[However, to clarify:  capital gains apply to investments.  While rentals are investments, not all investments are rentals.  For example: you could just buy vacant land and hold for appreciation.]