Washing Capital Gains

Originally posted by bellenuit ↑

I have researched this for reasons similar to yours and also additional reasons. I am trying to move shares across into a family trust and do not want to have a huge personal tax bill up front if I simply sell all shares that are in my own name in one chunk realising a massive capital gain all in the one year. So my plan is to sell a portion each year at least up to the $37K threshold where tax will still be at just 19% and buying back in the name of the trust.

I also see the same advantages. If I need a substantial amount of money in a hurry, I can liquidate the trust shares first and the capital gains will be less on them as they are starting from a higher cost base. Also, it seems better to create some capital gains now at the lower tax rates than when my estate gets passed on to my survivors (if the shares are not moved to he trust first) who will be taxed at their marginal rates when they eventually sell.

I have researched this issue and as far as I can tell there is no restriction on selling shares to create a capital gain and then buying back those same shares either in your own name or a trust's name. It is not seen as a wash transaction. I am not an accountant so this is just my understanding, but I have not found anything that says otherwise.

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I would suggest a simple of market transfer between your personal account and your trust. This also allows you to select the cost basis on the exchange between the two accounts. The cost basis just needs to be basically a price the stock has traded at in the last month or so meaning you could pick the lowest price in the last month lets say. This will give you the lowest personal CGT.

Nothing illegal about it at all.

I would suggest a simple of market transfer between your...