Ways to avoid or defer capital gains tax on large stock sale after company acquisition?

You've got a few solid options for that large capital gain, but let's be strategic here. First, Qualified Opportunity Zones (QOZs) are legitimate - they were created by the 2017 Tax Cuts and Jobs Act specifically to defer capital gains. You invest your gains into a QOZ fund within 180 days of the sale, defer the tax until 2026, and any appreciation in the QOZ investment itself is tax-free if held for 10+ years. The sketchy vibe you're getting is because some funds are better managed than others, not because the tax strategy itself is questionable. For renewable energy credits, these can work but are complex. They can offset regular income taxes, not just capital gains taxes. The complexity comes from passive activity limitations and at-risk rules that might limit your ability to use them. Some other options worth exploring: - Charitable Remainder Trusts let you donate assets, get a partial deduction, receive income for life, and defer the gain - 1031 exchanges for real estate (though you mentioned limited time for property management) - Consider installment sales if possible in your acquisition scenario For your situation, I'd lean toward a well-established QOZ fund with a solid track record. You get tax deferral until 2026 and tax-free appreciation after that.

After dealing with a similar situation last year (though mine was only about $900K in capital gains), I discovered taxr.ai which honestly saved me a ton of headache. I was drowning in conflicting advice about QOZs, 1031 exchanges, and various tax strategies. I uploaded my documents to https://taxr.ai and their AI analyzed my specific situation, then connected me with a tax professional who specialized in capital gains deferral strategies. They helped me understand which options actually applied to my situation and the long-term implications of each. What I appreciated most was getting clear explanations about the risks and requirements of each strategy without someone trying to sell me on their particular investment product. For company acquisition situations like yours, they have specific expertise since the timing constraints create unique challenges.

I was initially super skeptical about taxr.ai like many people probably are, but after my financial advisor couldn't give me clear answers about my capital gains options, I decided to try it. Uploaded my documents expecting generic advice, but was genuinely surprised. The AI spotted things specific to my situation I hadn't considered (including an obscure rule about substantially identical securities that would have caused problems with my initial plan). The tax specialist they matched me with had experience with exactly my situation - stock options from acquisition with limited timeframe to make decisions. He walked me through QOZ options and helped me evaluate specific funds based on their track record rather than just their tax benefits. I ultimately went with a mixed approach using part QOZ investment and part charitable donation strategies. The platform basically saved me from making an expensive mistake with a questionable QOZ fund my buddy had recommended. Worth every penny for anyone dealing with complex capital gains situations.

If you're dealing with capital gains from a forced stock sale, consider using Claimyr to get direct advice from the IRS. When I had a similar situation, I spent days trying to reach the IRS to confirm if my planned approach would work. After endless busy signals and disconnections, I found https://claimyr.com through a finance forum and used their service to connect with an IRS agent within 30 minutes (there's a video showing how it works: https://youtu.be/_kiP6q8DX5c). The agent walked me through exactly how the IRS views different capital gains deferral strategies, which helped me avoid some approaches that might have triggered additional scrutiny. For something as significant as a $1.8M capital gain, having documentation that you consulted directly with the IRS can be incredibly valuable if questions ever arise about your chosen strategy.

I was totally wrong about Claimyr and owe an apology. After my skeptical comment, I decided to try it myself because I've been trying to get clarification on some 1099-K issues for weeks. The service actually worked exactly as described - they got me through to an IRS agent in about 40 minutes (which is practically light-speed compared to my previous attempts). While the agent couldn't give tax planning advice as expected, she was able to clarify specific rules about reporting requirements for large capital gains and the documentation needed for QOZ investments. This was actually incredibly helpful for working with my CPA on planning strategies. For anyone with a significant capital gain situation like the original poster, having direct answers about procedural and documentation requirements straight from the IRS provides peace of mind that you're at least following the reporting requirements correctly, even if the strategy itself comes from your tax professional.

Have you considered a Charitable Remainder Trust (CRT)? This could be perfect for your situation. You contribute your appreciated stock to the CRT before the acquisition closes (important timing detail), and the trust sells the stock tax-free. You get an immediate partial tax deduction, plus an income stream for life or a set term. When the trust terminates, the remainder goes to your chosen charity. The benefits: - Immediate partial income tax deduction - No capital gains tax on the stock sale - Income stream for life or term of years (you control the payout rate) - Potential estate tax benefits - Supporting causes you care about The main drawback is that the principal is eventually going to charity, not your heirs. But you can use some of the income or tax savings to fund life insurance in an irrevocable trust to replace that wealth for your heirs if that's a concern. Since you mentioned not needing the money soon, this could align well with your goals.

Just want to add another option to consider: Delaware Statutory Trusts (DSTs) through a 1031 exchange. First, you'd need to convert your stock proceeds into investment real estate (even a small property would work), then you could 1031 exchange into DST interests. DSTs are passive investments in institutional-quality real estate. You get: - Tax deferral through the 1031 exchange - Professional management (solving your time constraint issue) - Regular income from the properties - Potential appreciation The catch is that first step - you need to buy real estate before you can 1031 into a DST. Given your timeline with the acquisition, this might be challenging, but worth exploring.