A deferred capital gains tax similar to the real estate 1031 Exchange but for securities reinvestment?
Sale of a stock creates a capital gain. It can be offset with losses, up to $3000 more than the gains. It can be deferred when held within a retirement account.  When you gift appreciated stock, the basis follows. So when I gifted my daughter's trust shares, there was still tax due upon sale. The kiddy tax helped reduce but not eliminate it. And there was no quotes around ownership. The money is gone, her account is for college.  No 1031 exchange exists for stock.
GIC perhaps? These would be quite similar to Certificates of Deposit where one is agreeing to lock up their money for a term and be paid a percentage for doing so. There are various kinds as some may be linked to market returns in some cases and others are just simple interest. In the US, dividends have special tax treatment similar to, but not the same as Capital Gains. No easy way to transform one to the other, the very fact that you invested your money in a company that has returned part of your capital as income means it is just that, income. Also in the US, you could invest in Master Limited Partnerships. These are companies that make distributions that are treated as a return of capital, instead of dividends. Throughout the life of the investment you receive tax forms that assign part of the operating expense/loss of the company to you as a tax payer. Then at the end of the investment life you are required to recapture those losses as Capital Gains on sale of the stock. In some ways, these investments do exactly what you are asking about. They transform periodic income into later capital gains, basically deferring tax on the income until the sale of the security. Here is an article I found about MLPs coming to the UK through an ETF: Master Limited Partnerships in the UK "A REIT is a real estate investment trust. It is a company that derives most of its gross income from and holds most of its assets in real estate investments, which, in this case, include either real property, mortgages, or both.  They provide a way for investors to get broad exposure in a real estate market without going to buy a bunch of properties themselves.  It also provides diversification within the real estate segment since REITs will often (but not necessarily) have either way more properties than an individual could get or have very large properties (like a few resorts) that would be too expensive for any one investor.  By law, they must pay at least 90% of their taxable income as dividends to investors, so they typically have a good dividend rate (possibly but not necessarily) at the expense of growth of the stock price.  Some of those dividends may be tax advantaged and some will not. An MLP is a master limited partnership.  These trade on the exchange like corporations, but they are not corporations. (Although often used in common language as synonyms, corporation and company are not the same thing.  Corporation is one way to organize a company under the law.)  They are partnerships, and when you buy a share you become a partner in the company.  This is an alternative form of ownership to being a shareholding.  In this case you are a limited partner, which means that you have limited liability as with stock.  The shares may appreciate or not, just like a stock, and you can generally sell them back to the market for a capital gain or loss under the same rules as a stock.  The main difference here from a practical point of view is taxes:  Partnerships (of any type) do no pay tax - Instead their income and costs are passed to the individual partners, who must then include it on their personal returns (Form 1040, Schedule E).  The partnership will send each shareholder a Schedule K-1 form at tax time.  This means you may have ""phantom income"" that is taxable even though cash never flowed through your hands since you'll have to account for the income of the partnership.  Many partnerships mitigate this by making cash distributions during the year so that the partners do actually see the cash, but this is not required.  On the other hand, if it does happen, it's often characterized as a return of capital, which is not taxable in the year that you receive it.  A return of capital reduces your cost basis in the partnership and will eventually result in a larger capital gain when you sell your shares. As with any investment, there are pros and cons to each investment type.  Of the two, the MLP is probably less like a ""regular"" stock since getting the Schedule K-1 may require some extra work at tax time, especially if you've never seen one before.  On the other hand, that may be worth it to you if you can find one that's appreciating in value and still returning capital at a good rate since this could be a ""best of everything"" situation where you defer tax and - when you eventually do pay, you pay at favorable capital gains rates - but still manage to get your cash back in hand before you sell. (In case not clear, my comments about tax are specific to the US.  No idea how this is treated elsewhere.) By real world example, I guess you meant a few tickers in each category?  You can find whole lists online.  I just did a quick search (""list of MLP"" and ""list of REIT""), found a list, and have provided the top few off of the first list that I found.  The lists were alphabetical by company name, so there's no explicit or implicit endorsement of these particular investments. Examples of REIT: Examples of MLP:" "Appreciation of a Capital Asset is a Capital Gain.   In the United States, Capital Gains get favorable tax treatment after being held for 12 months. From the IRS newsroom: Capital gains and losses are   classified as long-term or short-term,   depending on how long you hold the   property before you sell it. If you   hold it more than one year, your   capital gain or loss is long-term. If   you hold it one year or less, your   capital gain or loss is short-term. The tax rates that apply to net   capital gain are generally lower than   the tax rates that apply to other   income. For 2009, the maximum capital   gains rate for most people is15%. For   lower-income individuals, the rate may   be 0% on some or all of the net   capital gain. Special types of net   capital gain can be taxed at 25% or   28%. The IRS defines a Capital Asset as ""most property you own"" with a list of exclusions found in Schedule D Instructions.  None of the exclusions listed relate to Bond ETFs." No, it's not all long-term capital gain.  Depending on the facts of your situation, it will be either ordinary income or partially short-term capital gain.  You should consider consulting a tax lawyer if you have this issue. This is sort of a weird little corner of the tax law.  IRC §§1221-1223 don't go into it, nor do the attendant Regs.  It also somewhat stumped the people on TaxAlmanac years ago (they mostly punted and just declared it self-employment income, avoiding the holding period issue).  But I did manage to find it in BNA Portfolio 562, buried in there.  That cited to a court case Comm'r v. Williams, 256 F.2d 152 (5th Cir. 1958) and to Revenue Ruling 75-524 (and to another Rev. Rul.).  Rev Rul 75-524 cites Fred Draper, 32 T.C. 545 (1959) for the proposition that assets are acquired progressively as they are built.  Note also that land and improvements on it are treated as separate assets for purposes of depreciation (Pub 946). So between Williams (which says something similar but about the shipbuilding industry) and 75-524, as well as some related rulings and cases, you may be looking at an analysis of how long your property has been built and how built it was.  You may be able to apportion some of the building as long-term and some as short-term.  Whether the apportionment should be as to cost expended before 1 year or value created before 1 year is explicitly left open in Williams.  It may be simpler to account for costs, since you'll have expenditure records with dates. However, if this is properly ordinary income because this is really business inventory and not merely investment property, then you have fully ordinary income and holding period is irrelevant.  Your quick turnaround sale tends to suggest this may have been done as a business, not as an investment. A proper advisor with access to these materials could help you formulate a tax strategy and return position.  This may be complex and law-driven enough that you'd need a tax lawyer rather than a CPA or preparer.  They can sort through the precedent and if you have the money may even provide a formal tax opinion.  Experienced real estate lawyers may be able to help, if you screen them appropriately (i.e. those who help prepare real estate tax returns or otherwise have strong tax crossover knowledge). Where I am you pay annual taxes on a house, pay state and county transfer taxes when you buy/sell, and then have to pay capital gains the year you sell if it appreciated and you don't meet one of the exemptions. So I think your whole premise may be flawed. No, the reinvestment is done as a courtesy. Consider, one can have, say, 100 shares of a $50 stock. A 2% dividend is $100/yr or $25/quarter. It would be a pretty bad deal if brokers charged you even $5 for that trade. When cap gains and dividends are grouped as you suggest, it refers to Mutual Funds. My funds will have a year end dividend and cap gain distribution. In a non-retirement account, one has to pay the tax due, and be sure to add this to your cost basis, as it's money you are effectively adding to your account. It does not mean cap gain the same as when you sell your shares of Apple for a huge gain.  Those check boxes seem to offer you a chance to put all your holding on the same reinvestment plan for div/cap gain. You should also be able to choose one by one what you'd like to do. "They are similar in the sense that they are transferring money from the company to shareholders, but that's about it. There is different tax treatment, yes, but that's because they are fundamentally different. Dividends transfer money equally to all shareholders, but that also reduces the value of each share by the same amount, since it's cash out the door, which drops the value of the company. Shareholders are taxed on dividends at the capital gains tax rate. A buyback returns the cash to shareholders who decide to sell.  Other shareholders get a secondary benefit of now owning a slightly larger portion of the company since there are fewer shares outstanding.  Shareholders only pay tax if they sell shares for a gain. It that means when company buyback their stock, the stock price will definitely go up? Not necessarily. It depends on the price that the company buys back the shares for and what the ""opportunity cost"" of that cash is - meaning what else could the company have done with the cash that would have been better? Buybacks often happen in mature companies with undervalued stock prices and fewer opportunities for further investment.  If a company has an intrinsic value of $10 a share but its stock is trading at $8 a share, then it can instantly get a 25% ""return"" by buying back stock.  I use the term ""return"" loosely since the company does not actually profit from the buyback, but from the shareholder's perspective the company is worth more per share." In the US, it is perfectly legal to execute what you've described. However, since you seem to be bullish on the stock, why sell? How do you KNOW the price will continue downwards? Aside from the philosophical reasoning, there can be significant downside to selling shares when you're expecting to repurchase them in the near future, i.e. you will lose your cost basis date which determines whether or not your trade is short-term (less than 1 year) or long-term. This cost basis term will begin anew once you repurchase the shares. IF you are trying to tax harvest and match against some short-term gains, tax loss harvesting prior to long-term treatment may be suitable. Otherwise, reexamine your reasoning and reconsider the sale at all, since you are bullish. Remember: if you could pick where stock prices are headed in the short term with any degree of certainty you are literally one of a kind on this planet ;-).  In addition, do remember that in a tax deferred account (e.g. IRA) the term of your trade is typically meaningless but your philosophical reasoning for selling should still be examined. As mentioned by Dilip, you need to provide more details. In general for transacting on stocks; Long Term: If you hold the stock for more than one year then its long term and not taxable. There is a STT [Securities Transaction Tax] that is already deducted/paid during buying and selling of a stock. Short Term: If you hold the stock for less than one year, it's short term gain. This can be adjusted against the short term loss for the financial year. The tax rate is 10%. Day Trading: Is same as short term from tax point of view. Unless you are doing it as a full time business. If you have purchased multiple quantities of same stock in different quantities and time, then when you selling you have to arrive at profit or loss on FIFO basis, ie First in First Out Here are three key factors that you do not explicitly state: So while I cannot say exactly why the tax law is the way it is, I can infer that it encourages long-term investments rather than short-term, which would seem to be a good thing for society overall.  The fast that capital gains are taxed at all somewhat discourages cashing out investments (although I suspect it's more of a nuisance factor - the cash received is likely more on an incentive that the tax is a disincentive). A purchase of a stock is not a taxable event. No 1099 to worry about.  Welcome to Money.SE You have a misunderstanding about what it is. Absent differential tax treatment buybacks and dividens are the exact same. period. You're saying it yourself, not buying back stock so they can pay out dividends. What the impetus might be is irrelevant. Dividends are a use of funds competing equally with investments or higher salary. "I held shares in BIND Therapeutics, a small biotechnology company on the NASDAQ that was liquidated on the chapter 11 auction block in 2016. There were sufficient proceeds to pay the debts and return some cash to shareholders, with payments in 2016 and 2017. (Some payments have yet to occur.) The whole process is counter-intuitive and full of landmines, both for tax preparation & planning and receiving payments: Landmine 0: Some shareholders will sell in a panic as soon as the chapter 11 is announced.  This would have been a huge mistake in the case of BIND, because the eventual liquidation payments were worth 3 or so times as much as the share price after chapter 11.  The amount of the liquidation payments wasn't immediately calculable, because the company's intellectual property had to be auctioned. Landmine 1: The large brokerages (Vanguard, Fidelity, TDA, and others) mischaracterized the distributions to shareholders on form 1099, distributed to both shareholders and the IRS. The bankruptcy trustee considered this to be their responsibility. According to the tax code and to the IRS website, the liquidation is taxed like a sale of stock, rather than a dividend. ""On the shareholder level, a complete liquidation can be thought of as a sale of all outstanding corporate stock held by the shareholders in exchange for all of the assets in that corporation. Like any sale of stock, the shareholder receives capital gain treatment on the difference between the amount received by the shareholder in the distribution and the cost or other basis of the stock."" Mischaracterizing the distributions as dividends makes them wrongly ineligible to be wiped out by the enormous capital loss on the stock.  Vanguard's error appeared on my own 1099, and the others were mentioned in an investor discussion on stocktwits.  However, Geoffrey L Berman, the bankruptcy trustee stated on twitter that while the payments are NOT dividends, the 1099s were the brokers' responsibility. Landmine 2: Many shareholders will wrongly attempt to claim the capital loss for tax year 2016, or they may have failed to understand the law in time for proper tax planning for tax year 2016. It does not matter that the company's BINDQ shares were cancelled in 2016.  According to the IRS website ""When a shareholder receives a series of distributions in liquidation, gain is recognized once all of the shareholder's stock basis is recovered. A loss, however, will not be recognized until the final distribution is received."" In particular, shareholders who receive the 2017 payment will not be able to take a capital loss for tax year 2016 because the liquidation wasn't complete.  Late discovery of this timing issue no doubt resulted in an end-of-year underestimation of 2016 overall capital gains for many, causing a failure to preemptively realize available capital losses elsewhere. I'm not going to carefully consider the following issues, which may or may not have some effect on the timing of the capital loss: Landmine 3: Surprisingly, it appears that some shareholders who sold their shares in 2016 still may not claim the capital loss for tax year 2016, because they will receive a liquidation distribution in 2017. Taken at face value, the IRS website's statement ""A loss, however, will not be recognized until the final distribution is received"" appears to apply to shareholders of record of August 30, 2016, who receive the payouts, even if they sold the shares after the record date.  However, to know for sure it might be worth carefully parsing the relevant tax code and treasury regs. Landmine 4: Some shareholders are completely cut out of the bankruptcy distribution. The bankruptcy plan only provides distributions for shareholders of record Aug 30, 2016.  Those who bought shares of BINDQ afterwards are out of luck. Landmine 5: According to the discussion on stocktwits, many shareholders have yet to receive or even learn of the existence of a form [more secure link showing brokers served here] required to accept 2017 payments.  To add to confusion there is apparently ongoing legal wrangling over whether the trustee is able to require this form. Worse, shareholders report difficulty getting brokers' required cooperation in submitting this form. Landmine 6: Hopefully there are no more landmines. Boom. DISCLAIMER: I am not a tax professional. Consult the tax code/treasury regulations/IRS publications when preparing your taxes.  They are more trustworthy than accountants, or at least more trustworthy than good ones." You cannot do a like-kind (Sec. 1031) exchange for personal property, only for business/investment property. Since you said that you traded in your personal car - no like-kind exchange is possible. Also, since the new car doesn't belong to you - you didn't actually perform any exchange. You sold your old car, but you didn't buy a new one. If Turbo-Tax suggests you to fill the exchange form - you must have entered something wrong to make it think there was an exchange. Check your entries again, specifically - check if you entered that you purchased a new car instead of the old one, since you didn't. See an example of where to start looking here.