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bythesea53: "There must be a way to avoid the capital gains tax on an investment property other than a 1031 exchange. I want to get out of the rental property business and do not want to continue to invest in real estate. Isn't there an annuity or trust that these monies can be put into to avoid this?"

I think not, except for the sardonic answer to reduce your sales price so that you do not have any capital gains (; >); then you will not need to pay the capital gains tax. BWDIK

" If not, would it be worth taking a big hit now in order to invest the remainder in some stocks or mutual funds (we're talking about approximately $110,000 after deducting an estimated 40% capital gains tax)?"

Not enough info. to even hazard a guess as to the answer for your question. My question to you is where do you pay 40% capital gains tax, unless it is short-term CG? In USA, I believe that the maximum LTCG rate is 20%.

Just my $0.02. Regards, JAFO

PS - Sorry about sounding so smart-alecky, but I am still feeling cranky.

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