--- title: Qualifications for Reducing Capital Gains Tax description: Learn more about qualifications for reducing capital gains tax. image: https://www.realized1031.com/hubfs/iStock-2155573195-modified-d5a05457-bed3-4af5-b77d-dc360ab3dab9.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - [Wealth Management Gap](https://www.realized1031.com/the-wealth-management-gap) - [Our Process](https://www.realized1031.com/how-realized-works) - [Financial Advisors](https://www.realized1031.com/advisor) - [Resources](https://www.realized1031.com/resources) - [The Company](https://www.realized1031.com/about-us) - [Articles](https://www.realized1031.com/blog) [Register](https://www.realized1031.com/marketplace) [Log In](https://www.realized1031.com/login) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # Qualifications for Reducing Capital Gains Tax Posted Mar 31, 2025 ![iS-2155573195](https://www.realized1031.com/hs-fs/hubfs/iStock-2155573195-modified-d5a05457-bed3-4af5-b77d-dc360ab3dab9.jpg?width=1244&height=699&name=iStock-2155573195-modified-d5a05457-bed3-4af5-b77d-dc360ab3dab9.jpg) Capital gains taxes are an expense that can increase the cost of selling real estate assets. If you sell your assets for a profit, you’ll owe a certain amount–0%, 15%, or 20% of the proceeds--to the IRS. Additionally, depreciation recapture (taxed up to 25%) and the 3.8% Net Investment Income Tax (NIIT) may apply, depending on income level and prior deductions. It’s possible to take steps to lower[ capital gains t](https://www.realized1031.com/blog/what-is-the-capital-gains-tax-rate-on-collectibles)axes. Doing so requires understanding the tools to reduce those liabilities while remaining compliant with the IRS.  ### How the Tax is Calculated [Capital gains](https://www.realized1031.com/blog/capital-gains-tax-on-primary-residence-how-much-is-it-and-can-it-be-avoided) tax is assessed on capital assets held for one year or longer before they’re sold. The profits from the sale are classified as long-term capital gains, which are taxed at the above-mentioned 0%, 15%, or 20%. How much capital gains tax you owe depends on the profit you receive from an asset sale and your income tax bracket. The chart below outlines the 2025 tax brackets and their corresponding capital gains taxes. | Tax Rate | Single Filer Income | Married, Filing Jointly Income | | --- | --- | --- | | 0% | $0 to $48,350 | $0 to $96,700 | | 15% | $48,351 to $533,400 | $96,701 to $600,050 | | 20% | $533,401 and higher | $600,051 and higher |   ### Tips to Help Reduce Capital Gains Taxes Advanced planning and strategizing could help reduce taxes on your [capital gains.](https://www.realized1031.com/blog/the-basics-of-capital-gains) Tools to use for this purpose can include the following. *Using deductions*. Many deductions are available that can help reduce your taxable income. These include (but aren’t limited to) mortgage interest rates, property depreciation, home business expenses, student loan interest deductions, or medical expenses.  *Investing pre-tax dollars*. Contributions to 401(k) retirement plans, Individual Retirement Plans (IRAs), or Health Savings Accounts (HSA) are made with pre-tax dollars. This allows you to reduce your current overall income and may reduce your tax bracket. But keep in mind that you will be taxed on withdrawals. *Considering a 1031 exchange*. If you’re selling investment or business real estate, exchanging that asset for a like-kind one of equal or greater value allows you to potentially defer capital gains taxes. While this doesn’t eliminate or reduce taxes, it could be a strategy that helps you keep more income for additional investments. *Utilizing tax-loss harvesting*. It’s possible to reduce your taxable income by applying capital losses from selling other assets. But remember that long-term capital losses can only be used for long-term capital gains. *Employing the primary residence exclusion*. If the property you sold was used as your primary residence for at least two of the preceding five years, you could be eligible to take the section 121 exclusion. This allows you to exclude the following in capital gains: - $250,000 if you’re a single filer - $500,000 if you’re married and filing jointly ### Lower What You Owe While you can mostly count on tax liabilities if you sell an asset, there may be ways to reduce the burden. Reducing your taxable income could put you into a lower tax bracket, which might lower what you owe to the IRS. Your best bet is to work with a tax professional or financial advisor who can help you develop a compliant strategy to reduce tax liabilities while maximizing your investments.    *The tax and estate planning information offered by the advisor is general in nature. It is provided for informational purposes only and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.*   Download The Capital Gains Tax Calculator [![Cap Gains Calculator For Investors](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/laptop-capital-gains-calculator-spreadsheet.jpg?width=500&height=290&name=laptop-capital-gains-calculator-spreadsheet.jpg "Estimate the cap gains tax owed ...") ](https://www.realized1031.com/blog/qualifications-for-reducing-capital-gains-tax#blogform) Download Calculator ---   --- ### Cap Gains Calculator For Investors ![Download The Capital Gains Tax Calculator](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/laptop-capital-gains-calculator-spreadsheet.jpg?width=500&height=290&name=laptop-capital-gains-calculator-spreadsheet.jpg) Estimate the cap gains tax owed after selling an asset or property By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received. Search ### [Why Realized](https://www.realized1031.com/why-realized) - [Wealth Management](https://www.realized1031.com/the-wealth-management-gap) - [Why Realized](https://www.realized1031.com/why-realized) - [Our Process](https://www.realized1031.com/how-realized-works) - [Scenarios](https://www.realized1031.com/scenarios) - [Private Client Program](https://www.realized1031.com/private-client) - [Realized Exchange Services](https://www.realized1031.com/realized-exchange-services) ### [The Company](https://www.realized1031.com/about-us) - [The Team](https://www.realized1031.com/about-us) - [FAQ](https://www.realized1031.com/frequently-asked-questions) - [Testimonials](https://www.realized1031.com/testimonials) - [Press](https://www.realized1031.com/press) - [Careers](https://www.realized1031.com/careers) ### [Partners](https://www.realized1031.com/partners) - [Financial Advisors](https://www.realized1031.com/advisor) - [Broker Dealers](https://www.realized1031.com/partners/broker-dealers) - [Real Estate Agents](https://www.realized1031.com/partners/real-estate-agents) - [Certified Public Accountants](https://www.realized1031.com/partners/certified-public-accountants) ### [Resources](https://www.realized1031.com/resources) - #### Learn - [Articles](https://www.realized1031.com/blog) - [Glossary of Terms](https://www.realized1031.com/glossary) - [Capital Gains Tax Rates](https://www.realized1031.com/capital-gains-tax-rate) - #### Watch - [Video Library](https://www.realized1031.com/videos) - [Webinar Archive](https://www.realized1031.com/webinars) - #### Read - [Delaware Statutory Trust](https://www.realized1031.com/delaware-statutory-trust) - [Tenants-In-Common](https://www.realized1031.com/tenants-in-common-tic) - [1031 Exchange](https://www.realized1031.com/1031-exchange) - [Qualified Intermediary](https://www.realized1031.com/qualified-intermediary) - [Qualified Opportunity Zones](https://www.realized1031.com/opportunity-zones) #### Realized - 500 W 13th Street Austin, TX 78701 - (877) 797-1031 ##### [Contact Us](https://www.realized1031.com/contact-us) - [![Realized on Facebook](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-facebook-whiterev.png?width=60&height=60&name=social-facebook-whiterev.png)](https://www.facebook.com/Realized/) - [![Realized on LinkedIn](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-linkedin-whiterev.png?width=60&height=60&name=social-linkedin-whiterev.png)](https://www.linkedin.com/company/realized/) - [![Realized on YouTube](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-youtube-whiterev.png?width=60&height=60&name=social-youtube-whiterev.png)](https://www.youtube.com/c/Realized1031?sub_confirmation=1) - [![Realized Holdings, Inc. BBB Business Review](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/bbb/RZH2-bbb-seal.png?width=40&height=65&name=RZH2-bbb-seal.png)](http://www.bbb.org/central-texas/business-reviews/real-estate-investors/realized-holdings-llc-in-austin-tx-1000112948/#bbbonlineclick) - [![FEA Logo](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/fea/RZH2-fea-logo.png?width=82&height=65&name=RZH2-fea-logo.png "FEA Logo")](https://www.1031.org) SECURITIES DISCLOSURE Realized1031.com is a website operated by Realized Technologies, LLC, a wholly owned subsidiary of Realized Holdings, Inc. (“Realized Holdings”). Securities and/or Investment Advisory Services may be offered through Registered Representatives or Investment Advisor Representatives of Realized Financial, Inc. ("Realized"), a broker/dealer, member [FINRA](https://www.finra.org)/[SIPC](https://www.sipc.org/), and registered investment adviser. Realized is a subsidiary of Realized Holdings, Inc. ("Realized Holdings"). Check the background of this firm on [FINRA's BrokerCheck](https://brokercheck.finra.org/firm/summary/22333). Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment. Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested. This site is published for residents of the United States who are accredited investors only. Registered Representatives and Investment Advisor Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every representative listed. For additional information, please contact the Realized Compliance department at 512-472-7171 or info@realized1031.com. - [Terms & Conditions](https://www.realized1031.com/terms-and-conditions) - [Privacy Policy](https://www.realized1031.com/privacy-policy) - [Form CRS](https://www.realized1031.com/hubfs/common-files/disclosures/FormCRS.pdf) - [ADV 2A](https://www.realized1031.com/hubfs/common-files/disclosures/ADV2A.pdf) - [Reg BI Disclosures](https://www.realized1031.com/hubfs/common-files/disclosures/RegBI.pdf) -   © 2026 Realized Holdings, Inc. ```json { "@context" : "http://schema.org/", "@type" : "BlogPosting", "articleBody" : "Capital gains taxes are an expense that can increase the cost of selling real estate assets. If you sell your assets for a profit, you’ll owe a certain amount–0%, 15%, or 20% of the proceeds--to the IRS. Additionally, depreciation recapture (taxed up to 25%) and the 3.8% Net Investment Income Tax (NIIT) may apply, depending on income level and prior deductions. It’s possible to take steps to lower capital gains taxes. Doing so requires understanding the tools to reduce those liabilities while remaining compliant with the IRS. How the Tax is Calculated Capital gains tax is assessed on capital assets held for one year or longer before they’re sold. The profits from the sale are classified as long-term capital gains, which are taxed at the above-mentioned 0%, 15%, or 20%. How much capital gains tax you owe depends on the profit you receive from an asset sale and your income tax bracket. The chart below outlines the 2025 tax brackets and their corresponding capital gains taxes. Tax Rate Single Filer Income Married, Filing Jointly Income 0% $0 to $48,350 $0 to $96,700 15% $48,351 to $533,400 $96,701 to $600,050 20% $533,401 and higher $600,051 and higher Tips to Help Reduce Capital Gains Taxes Advanced planning and strategizing could help reduce taxes on your capital gains. Tools to use for this purpose can include the following. Using deductions. Many deductions are available that can help reduce your taxable income. These include (but aren’t limited to) mortgage interest rates, property depreciation, home business expenses, student loan interest deductions, or medical expenses. Investing pre-tax dollars. Contributions to 401(k) retirement plans, Individual Retirement Plans (IRAs), or Health Savings Accounts (HSA) are made with pre-tax dollars. This allows you to reduce your current overall income and may reduce your tax bracket. But keep in mind that you will be taxed on withdrawals. Considering a 1031 exchange. If you’re selling investment or business real estate, exchanging that asset for a like-kind one of equal or greater value allows you to potentially defer capital gains taxes. While this doesn’t eliminate or reduce taxes, it could be a strategy that helps you keep more income for additional investments. Utilizing tax-loss harvesting. It’s possible to reduce your taxable income by applying capital losses from selling other assets. But remember that long-term capital losses can only be used for long-term capital gains. Employing the primary residence exclusion. If the property you sold was used as your primary residence for at least two of the preceding five years, you could be eligible to take the section 121 exclusion. This allows you to exclude the following in capital gains: $250,000 if you’re a single filer $500,000 if you’re married and filing jointly Lower What You Owe While you can mostly count on tax liabilities if you sell an asset, there may be ways to reduce the burden. Reducing your taxable income could put you into a lower tax bracket, which might lower what you owe to the IRS. Your best bet is to work with a tax professional or financial advisor who can help you develop a compliant strategy to reduce tax liabilities while maximizing your investments. The tax and estate planning information offered by the advisor is general in nature. It is provided for informational purposes only and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.", "articleSection" : [ "Capital Gains" ], "author" : { "@type" : "Person", "email" : "marketing@realized1031.com", "image" : "", "name" : "The Realized Team", "url" : "https://www.realized1031.com/blog/author/the-realized-team" }, "dateModified" : "2025-03-31T14:00:01+0000", "datePublished" : "2025-03-31T14:00:01+0000", "description" : "Learn more about qualifications for reducing capital gains tax.\n", "headline" : "Qualifications for Reducing Capital Gains Tax", "image" : { "@type" : "ImageObject", "height" : 699, "url" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/iStock-2155573195-modified-d5a05457-bed3-4af5-b77d-dc360ab3dab9.jpg", "width" : 1244 }, "mainEntityOfPage" : "https://www.realized1031.com/blog/qualifications-for-reducing-capital-gains-tax", "name" : "Qualifications for Reducing Capital Gains Tax", "publisher" : { "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "USA", "addressLocality" : "Austin", "addressRegion" : "TX", "postalCode" : "78701", "streetAddress" : "500 W 13th Street " }, "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "http://www.realized1031.com/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black-No-Margin-296x60-AMP.png", "width" : 296 }, "name" : "Realized" }, "thumbnailUrl" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/iStock-2155573195-modified-d5a05457-bed3-4af5-b77d-dc360ab3dab9.jpg" } ```