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The IRS has released the capital gains tax brackets for 2027, which include a six-figure earnings limit for the 0% rate for married couples.
If you’re eager to sell profitable brokerage account investments, higher income thresholds for the 0% rate could help reduce your tax bill, experts say.
“The 0% capital gains bracket is easily one of the most overlooked strategies for tax-free income,” said Stephen Maggard, a certified financial planner with Abacus Planning Group in Columbia, South Carolina.
But it’s important to know how the tax brackets work and the possible trade-offs before selling investments.
Despite recent stock market volatility, many investors have portfolio gains after years of market growth. As of market close Nov. 9, the S&P 500 was up about 10% year-to-date. The index also returned more than 16% in 2025, and over 23% in 2024.
If you’re planning to leverage the 0% capital gains bracket in 2027 to sell or rebalance brokerage account assets, here are some key things to know.
How the 0% capital gains brackets work
The capital gains brackets — with rates of 0%, 15% or 20% — apply to assets owned for more than one year, known as long-term capital gains. By contrast, investments held for one year or less are short-term gains, subject to regular income tax rates.
Your rate depends on taxable income, which you calculate by subtracting the greater of the standard or itemized deductions from your adjusted gross income, or AGI. Taxable income also includes any gains from investments that year.
The standard deduction will rise to $16,600 for single taxpayers and $33,200 for married couples in 2027.
For example, let’s say a married couple’s AGI is $130,000 for 2027, including capital gains. After subtracting the $33,200 standard deduction, their taxable income would be $96,800, which falls below the 0% threshold.
However, taxable income should include mutual fund distributions, which can “dramatically alter year-end planning projections” and increase taxable income, according to CFP Jim Guarino, managing director at Baker Newman Noyes in Woburn, Massachusetts. He is also a certified public accountant.
If your federal taxable income is above the 0% threshold, you’ll pay 15% on the portion of investment gains that exceed the 0% limit, up to that bracket’s cap. Gains above that may be taxed at 20%.
Also, the 0% capital gains bracket applies to federal taxes, but your profits could still be subject to state-level taxes, experts say.
Tax planning for the 0% bracket
As income limits rise for the 0% capital gains bracket due to IRS inflation adjustments, more investors could have tax savings opportunities, experts say.
“There is tons of planning to be done here,” especially for early retirees with lower income, according to CFP Dinon Hughes, a partner with Nvest Financial in Portsmouth, New Hampshire.
One strategy, known as “tax gain harvesting,” is selling profitable brokerage account assets during lower-income years to leverage the 0% bracket, he said. Keep in mind, these sales stack on top of your other earnings, which could bump taxable income above the 0% threshold.
You can also sell the asset and immediately rebuy it to “reset the cost basis,” or original purchase price, said CFP Charles Sachs, chief investment officer of Imperio Wealth Advisors in Coral Gables, Florida.
By resetting the cost basis to current market value, you can reduce future capital gains to trim your tax bill.
When selling assets at a loss, the “wash sale rule” blocks tax-loss harvesting when you rebuy a “substantially identical” asset within 30 days before or after the sale. But the same rule doesn’t apply when harvesting gains.
Weigh other tax benefits
Managing capital gains is only one part of yearly tax planning, according to Guarino with Baker Newman Noyes.
Before selling investments, you should know how boosting AGI could impact your broader financial plan, including income phase-outs for various tax breaks, he said.
For example, modified adjusted gross income can impact a range of tax benefits, such as Affordable Care Act health insurance premium subsidies, which can disappear once earnings exceed the federal limits by even a single dollar.
Another example is President Donald Trump‘s temporary $6,000 senior “bonus” deduction, which is worth up to $12,000 for married couples per year through 2028.
