Smart Ways to Avoid Capital Gains Tax When Selling Real Estate Capital gains tax can eat into your real estate profits. But with the right legal strategies, you can reduce or even avoid this tax burden entirely. Let’s explore smart methods that real estate owners and investors can use to retain more of their earnings. 1. Primary Residence Exclusion If you’ve lived in your property for at least two of the past five years, you may qualify for the Primary Residence Exclusion . This allows you to exclude up to $250,000 ($500,000 for married couples) of capital gains. 2. 1031 Exchange A 1031 Exchange allows investors to defer capital gains tax by reinvesting proceeds into a like-kind property. It’s a powerful tool often used in commercial real estate. Learn more in our RealEstate insights. 3. Invest in Opportunity Zones Opportunity Zones offer attractive tax incentives. By reinvesting in designated areas, you may defer and even reduce capital gains tax. Check our Tax secti...