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With the stock market hovering near record highs, you may have large profits sitting in a taxable brokerage account.
Upon selling, you could owe capital gains taxes, levied at 0%, 15% or 20%, based on taxable income, if you own the assets for more than one year. There’s also a 3.8% surcharge for higher earners, which could bring the total rate to 23.8%.
But many investors don’t realize they qualify for 0% capital gains, which is a chance to take some profits without triggering a tax bill.
“I’d say probably half of our clients are aware of it and understand the concept,” said certified financial planner Andrew Herzog, associate wealth manager at The Watchman Group in Plano, Texas.
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President Donald Trump’s “big beautiful bill” didn’t change the capital gains rates. But new deductions could reduce taxable income for 2025, which could expand eligibility for the 0% bracket, experts say.
Here’s what investors need to know about the 0% long-term capital gains brackets for 2025.
Who is in the 0% capital gains bracket in 2025
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.
But many investors don’t realize there’s a big difference between gross earnings and taxable income. That gap could be even wider under Trump’s new spending package, said Tommy Lucas, a CFP at Moisand Fitzgerald Tamayo in Orlando, Florida.
You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
Trump’s legislation increased the standard deduction from $15,000 to $15,750 for single filers and $30,000 to $31,500 for 2025.
For example, if a married couple filing jointly earns $120,000, and you subtract the $31,500 standard deduction, their taxable income is $88,500. That leaves room to harvest gains at 0% before hitting the $96,700 limit.
A ‘game-changer’ for older investors
Trump’s law also added a temporary $6,000 tax break ($12,000 for married couples) for older Americans ages 65 and over. The benefit falls once modified adjusted gross income exceeds $75,000 for single filers or $150,000 for married filing jointly.
The new tax break is on top of the regular standard deduction, plus the extra deductions for Americans who are ages 65 and over or blind.
“That’s going to be a game-changer” for married couples who qualify for the $12,000 deduction because it further reduces taxable income, Lucas said.
It’s a “golden opportunity” to sell some assets at 0% capital gains, or other tax strategies, he said.
Investors can also use the 0% capital gains bracket to “reset their cost basis,” or the asset’s original purchase price, which can reduce future taxes, Herzog said.
You can sell an asset tax-free, “and then just buy it right back,” to set the new basis, he said.
