The seller can use Section 1031 of the tax code, which eliminates any capital gains tax, if the income is used to purchase something similar, such as another home.
The same logic and rule holds true for other types of investments, including stocks and bonds.
While it is probably unlikely that the popular and useful Section 1031 will be eliminated, there is no reason to panic, if it happens.
There are other methods that can be used to reduce or eliminate capital gains taxes that an estate planning attorney can explain.
These methods include things such as grantor retained annuity trusts, charitable remainder trusts and family limited partnerships.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.
