Ways to protect large sum from selling business interest??? (trading, invest, income)

[loves2read]

My husband got reliable info today that an investment he has a profitable interest in is planning to offer the smaller shareholders a buyback before the end of the year...this is something he has owned long enough to be a capital gains profit...

Is there any way to take the money and shelter it or invest it to mitigate the large tax bill?

[SportyandMisty]

The way you phrase the question implies insider information rather than publicly available information. If that is the case, and we are talking about a publicly traded company, you & your husband should do absolutely nothing until such information is fully public. If your husband meets the legal definition of being an insider and your knowledge is the result of pillow talk, then, with all due respect, I suggest you do absolutely nothing until the information is fully public.

[loves2read]

You are tripping over your legal robes--
there is no insider trading--this is privately held company
not public

[SportyandMisty]

The good news is you're dealing with a private company.

So... you expect a significant cap gain this tax year, and you're wondering if there is something that could be done now?

Yes, many things. For example, you could move & establish residency in a zero-income-tax state such as Nevada right now.

See http://en.wikipedia.org/wiki/State_i...ual_income_tax

There are other things that can be done, most of which are in the context of a much more thorough evaluation of your overall financial position.

[loves2read]

again--
that won't help us
already live in state w/no state income tax

[Sparks69]

Not sure if you will qualify depending on your ownership but you could perform a 1031 tax exchange. It essentially means you have to reinvest the money into another investment within 6 months and then you will not pay capital gains. You can repeat this process in the future. If you ever sell an investment without reinvesting then you will have to pay the capital gains at that point. Go talk to a good tax advisor.