In a year when your income is low enough, you can realize long-term capital gains at 0% federal tax. This page covers when to do it, how to calculate your window, and why it is especially valuable for early retirees and career-transition years.
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If your taxable income including gains stays under $49,450 (single 2026) or $98,900 (MFJ), you pay 0% on long-term capital gains. In a low-income year, early retirement, a career gap, a business loss, intentionally realizing gains at 0% resets your cost basis higher with no tax cost. Unlike losses, there is no wash-sale rule on gain harvesting: sell and immediately rebuy.
2026 long-term capital gains 0% bracket 🔍 verify×DON'T TRUST, VERIFYClaim: 2026 LTCG 0% bracket tops approximately $49,450 single, $98,900 MFJ (inflation-indexed projection).Verify at: IRS Topic 409 ↗Indexed annually. Exact figures in annual Rev. Proc.:
"Taxable income" here means after standard deduction. A single person with $64,450 in ordinary income, minus the $15,000 2026 standard deduction, has $49,450 taxable, right at the 0% LTCG threshold. They could realize some long-term capital gains and pay 0% federal tax on them.
Before Social Security claim. Income is low. Roth conversions and gain harvesting compete for the same low-bracket space. Coordinate carefully.
Lower income = lower brackets. Intentionally sell appreciated positions and rebuy. Higher cost basis for future years at no tax cost.
Net operating loss reduces AGI significantly. Window for 0% gains may open even if normal income is higher.
Extended time off. Income drops. Strategic window opens.
No wash-sale rule on capital gains. Wash sale only applies to losses 🔍 verify×DON'T TRUST, VERIFYClaim: The wash-sale rule under IRC 1091 applies to losses, not gains. Selling at a gain and rebuying immediately has no tax penalty.Verify at: IRS Publication 550 ↗Section 1091 covers wash sales. Applies to disallow loss deductions.. You can sell and immediately rebuy the exact same fund when harvesting gains.
Result: same investment position, new higher cost basis, $0 tax if within the 0% bracket, reduced future capital-gains liability when you eventually do sell.
Long-term Bitcoin gains in a low-income year: sell some, immediately rebuy, new cost basis at current price, no tax if within the 0% bracket.
This is one reason timing matters enormously. The same gain that costs 20% in a high-income year costs 0% in a low-income early-retirement year. See Bitcoin Taxes and Social Security Strategy for the interaction with delaying SS to age 70.
Last updated 2026-04-22. Not financial or tax advice.