How to sell appreciated assets without a big tax bill now and later
USA Today • • business
Key Points:
- Tax gain harvesting involves selling appreciated assets during low-income years to realize capital gains at a 0% federal tax rate, then repurchasing the same assets to reset their cost basis and reduce future taxable gains.
- This strategy is especially beneficial for retirees or individuals in early retirement with lean income years, allowing them to lower future tax liabilities without triggering the wash-sale rule that applies to tax loss harvesting.
- In 2026, individuals with taxable income up to $49,450 and married couples up to $98,900 qualify for the 0% long-term capital gains tax rate, making it an ideal time to implement tax gain harvesting.
- Tax gain harvesting can also be applied to children’s custodial accounts to utilize their typically low or zero tax brackets, though care must be taken to manage the kiddie tax rules and avoid unintended tax consequences.
- State taxes remain a key consideration, as many states tax capital gains differently from federal rules, so consulting a tax professional is advised before employing tax gain harvesting strategies.
