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Ventura Wealth Clients
2 min Read

Capital gains taxes can eat into your hard-earned investment profits. But fear not, savvy investors! This blog dives into some easy-to-implement strategies that can help you minimise your capital gains tax burden and keep more of your returns.

What are capital gains?

Capital gains taxes apply to the profit you earn when you sell an investment asset, such as stocks, bonds, or real estate, for more than you paid for it. The tax rate you pay depends on the type of asset and how long you held it before selling (holding period). Short-term capital gains (held less than one year) are typically taxed at your ordinary income tax rate, while long-term capital gains (held more than one year) benefit from lower tax rates.

Strategy 1: hold your investments for the long haul

The most significant tax advantage lies in holding your investments for more than one year. This qualifies them for the long-term capital gains tax rate, which is typically much lower than your ordinary income tax rate. Consider your investment goals and risk tolerance when deciding your holding period.

Strategy 2: harvest your losses to offset gains 

Selling investments at a loss can be a strategic tax move. If you realise a capital loss, you can use it to offset capital gains and potentially reduce your tax bill. You can even net your capital losses against ordinary income up to a certain limit ($3,000 per year, with any excess carried forward to future tax years). However, be mindful of the wash-sale rule, which prevents claiming a loss if you repurchase a substantially identical investment within 30 days.

Strategy 3: donate appreciated assets

Donating appreciated assets (stocks, bonds, etc.) to qualified charities can be a tax-savvy way to reduce your capital gains tax and support a worthy cause. When you donate appreciated assets, you can generally deduct the full fair market value of the donation from your taxes, while avoiding capital gains taxes on the appreciation.

Strategy 4: be mindful of investment fees

Investment fees can erode your returns and indirectly impact your capital gains tax liability. Choose low-cost index funds or exchange-traded funds (ETFs) with minimal expense ratios. Reducing investment fees allows you to keep more of your profits and potentially lower your taxable gains.

Seek professional advice

These strategies offer a starting point, but tax laws can be complex. For personalised guidance, consider consulting a qualified tax advisor who can assess your specific situation and recommend the most suitable tax-reduction strategies for you.


By implementing these simple yet effective strategies, you can take control of your capital gains tax burden and maximise your investment returns. Remember, even small tax savings can add up significantly over time. So, equip yourself with knowledge, plan strategically, and keep more of your hard-earned profits in your pocket!