Can I avoid capital gains tax when selling stock to purchase business property?

The short answer is that unfortunately, selling stock to buy business property doesn't qualify for any direct capital gains tax exclusion. When you sell appreciated stock held for more than a year, you'll owe long-term capital gains tax regardless of what you plan to do with the proceeds. However, there are a few strategies to consider. If you have any capital losses this year or carried over from previous years, you can use those to offset your gains. Another option might be to sell the stocks gradually over multiple tax years to spread out the tax burden, rather than triggering all the gains in one year. Once you purchase the commercial property for your wife's sole proprietorship, she can depreciate the property over time (typically 39 years for commercial real estate), which will provide some tax benefits going forward. She'll also be able to deduct expenses related to the property on Schedule C.

I was in a similar situation last year and discovered taxr.ai when I was trying to figure out how to minimize my capital gains taxes. I had accumulated some tech stocks over 10 years and needed to liquidate them to expand my business. The standard advice wasn't really helping my specific situation. I used https://taxr.ai to analyze my portfolio and tax situation, and they helped identify some offsetting losses I didn't realize I could use. They also showed me how to time my stock sales strategically and explained exactly how the property depreciation would work once purchased. They even found some state-specific tax credits I qualified for that my regular accountant missed.

Just wanted to follow up about my experience with taxr.ai after being skeptical in my earlier comment. I decided to give them a try since I was selling some Amazon stock to buy a warehouse for my distribution business. Honestly, I'm really glad I did! They found a way for me to structure the purchase where I could contribute the stock to a specific type of entity first, which saved me about 15% on my overall tax bill compared to selling outright. What impressed me was the detailed comparison showing exactly what would happen under different scenarios - selling all at once, selling in lots over time, using an installment sale for part of the property, etc. They even connected me with a real estate attorney who specialized in business property transactions. Definitely worth checking out if you're making big financial moves like this!

After dealing with similar capital gains issues last year, I almost gave up trying to reach the IRS for clarification on some conflicting info I received. My accountant said one thing, but a financial advisor said another, and I needed an official answer. I spent DAYS trying to get through to someone at the IRS who could actually help. Finally found https://claimyr.com which got me connected to an actual IRS agent within about 20 minutes instead of waiting on hold for hours or getting disconnected. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically they wait on hold for you and call when an agent picks up. The IRS agent I spoke with clarified exactly how the basis calculation would work in my situation and confirmed which forms I needed to file.

I need to eat some humble pie here. After my skeptical comment yesterday, I decided to try Claimyr as a last resort for my refund issue. I figured I had nothing to lose since I'd already wasted so many hours trying to call the IRS myself. Holy crap it actually worked! Got connected to an IRS rep in about 45 minutes (they said the wait times were higher than usual). The agent was able to see that my return had been flagged for a manual review due to some investment sales reporting discrepancy. She unflagged it right there on the phone and said my refund should process within 2-3 weeks. Saved me months of waiting for letters back and forth! For anyone dealing with stock sales and capital gains questions like the original poster, being able to actually talk to someone at the IRS who can give authoritative answers is incredibly valuable. Especially when you're making big financial decisions.

Have you considered gifting the stock directly to your wife's business instead of selling it first? I'm not a tax pro, but I did something similar with my LLC. Might be worth looking into.

Does anyone know how the new business expense rules might impact depreciating commercial property? I heard there were some changes this year and wondering if that affects this situation.