Capital gains tax can be deferred or reduced if a seller utilizes the proper sales method and/or deferral technique. There are many sales techniques and methods out there, each of which have their benefits and drawbacks. See some ways to defer and/or reduce capital gains tax below.
Deferred Sales Trust - Allows the seller of property to defer capital gains tax due at the time of sale over a period of time.
1031 exchange - Defer tax by exchanging for "like kind" property. Pay capital gains when it is realized.
Structured sale annuity (aka Ensured Installment Sale) - Defer and reduce capital gains tax while gaining safety and a stream of guaranteed income.
Charitable trust - Defer and reduce capital gains by giving equity to a charity.
Installment Sale - Defer capital gains by taking payments from a buyer over a period of years. No protection from buyer default.
Self Directed Installment Sale (SDIS) - Allows for the deferral of capital gains taxes while removing the risks from buyer default under a traditional installment sale.[2]
(historical) Private annuity trust - No longer a valid tax deferral tool.

In the United States, individuals and corporations pay income tax on the net total of all their capital gains just as they do on other sorts of income, but the tax rate for individuals is lower on "long-term capital gains," which are gains on assets that had been held for over one year before being sold. The tax rate on long-term gains was reduced in 2003 to 15%, or to 5% for individuals in the lowest two income tax brackets. In 2011 these reduced tax rates will "sunset," or revert to the rates in effect before 2003, which were generally 20%. Short-term capital gains are taxed at a higher rate: the ordinary income tax rate.
The reduced 15% tax rate on eligible dividends and capital gains, previously scheduled to expire in 2008, has been extended through 2010 as a result of the Tax Reconciliation Act signed into law by President Bush on May 17, 2006. As a result:
In 2008, 2009, and 2010, the tax rate on eligible dividends and capital gains is 0% for those in the 10% and 15% income tax brackets.