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Many investors don’t know about the 0% capital gains bracket, which allows you to “harvest gains,” or sell profitable assets, without triggering taxes.
With new deductions added for 2025, more investors could qualify for the 0% bracket under President Donald Trump’s “big beautiful bill.″
That could offer a “golden opportunity” to sell investments at 0% capital gains, along with other tax strategies, said Tommy Lucas, a certified financial planner at Moisand Fitzgerald Tamayo in Orlando, Florida.
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Here are some key things investors need to know, according to financial experts.
How the 0% capital gains bracket works
Assets owned for more than one year qualify for long-term capital gains, levied at 0%, 15% or 20%, based on taxable income. There’s also a 3.8% surcharge for higher earners, which brings the total to 23.8% for some investors.
For 2025, you qualify for the 0% long-term capital gains rate if your taxable income is $48,350 or less for single filers, or $96,700 or less for married couples filing jointly.
You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income. However, if you sell investments, those gains count toward taxable income for the bracket.
Still, with a higher standard deduction, a temporary $6,000 deduction for older Americans, and other tax breaks added via Trump’s legislation, more investors could fall into the 0% bracket for 2025, experts say.
Use the 0% bracket for ‘tax-gain harvesting’
One benefit of the 0% long-term capital gains bracket is a strategy known as “tax-gain harvesting,” or strategically selling profitable brokerage account assets during lower-income years.
It’s the “perfect window to trim concentrated positions or rebalance portfolios tax-free,” said Jared Gagne, a CFP and private wealth manager at Claro Advisors in Boston.
Others use the 0% capital gains bracket to sell investments and quickly rebuy to “reset their cost basis,” or the asset’s original purchase price, according to CFP Andrew Herzog, associate wealth manager at The Watchman Group in Plano, Texas.
Increasing your cost basis decreases your profit, which could lead to future tax savings, he said.
Of course, you need to consider how these strategies fit into your broader financial plan, including legacy goals, experts say.
For example, if you’re planning for adult children to inherit profitable assets from your brokerage account, they would already receive a “stepped-up basis,” based on the market value on your date of death.
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