BobS
Capital gains tax will likely go up from current 15% federal to 25%+ under a Democrat; may even go up under McCain, but perhaps only to 18 – 20%.
Paying it now under current tax rate has its advantages:
Lower rate now, plus you are not compelled to rush into a perhaps misguided upleg purchase with their strict deadlines, pressure to buy, etc.
Don’t forget that CA has one of the harshest treatments of cap gains in the nation. I just sold a commercial property I held for 25 years. Sheltered some of the proceeds with a 1031 for some of the gains. Still paid plenty to the feds and about 2/3 that amount to the state.
Your decision should rest upon your view of the market in the time frame you would hold the upleg, your view of today’s and tomorrow’s interest rates, etc. This is a big decision, and worth a session with your accountant.