What is 0% capital gains bracket?
In short
Long-term capital gains and qualified dividends are taxed at 0% to the extent they fall within the lowest bracket, taxable income up to $48,350 for single filers and $96,700 for joint filers in 2025.
Key takeaways
- Taxpayers with low income in a year can sell appreciated assets and reset basis at no tax (gain harvesting).
- Gifting appreciated assets to family members in low brackets can use their 0% bracket, subject to the kiddie tax.
- Gains above the threshold are taxed at 15% or 20%.
Where it's tested
TCP: Individual Tax Planning Strategies — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A taxpayer sells stock at a $10,000 loss on December 10 and repurchases the same stock on December 28 of the same year. What is the tax result?