0% Long-Term Capital Gains Tax

Strategically manage your investments to potentially qualify for zero capital gains tax on long-term investments.

Get startedLearn more

Table of Content

Discover how 0% Long Term Capital Gains Tax works

The 0% long-term capital gains tax rate applies to individuals and couples with taxable income below certain thresholds, offering significant tax savings on profits from investments held for more than one year. 

This rate is designed to encourage long-term investment and can apply to stocks, bonds, real estate, and other qualifying assets.

Required documents

Benefits of 0% Long-Term Capital Gains Tax

  • Tax Savings: Eliminates federal taxes on long-term capital gains for eligible individuals.
  • Investment Encouragement: Motivates taxpayers to hold investments longer, potentially increasing investment returns.
  • Financial Planning: Aids in strategic financial and retirement planning by reducing tax liabilities

Understanding Taxable Income Thresholds for 0% Rate

  • Single Filers: Taxable income up to $40,400.
  • Married Filing Jointly: Taxable income up to $80,800.
  • Head of Household: Taxable income up to $54,100.
  • These thresholds are for the 2021 tax year and may adjust annually for inflation.

Important considerations

It’s vital to plan your investment sales and other income to ensure eligibility for the 0% rate. This may involve managing other income sources and timing the sale of investments to maintain income within the qualifying threshold. 

Regular consultation with a financial advisor is recommended to optimize your tax situation.

For more information, please refer to the IRS guidelines on Capital Gains and Losses.

Tax AI

Stay ahead with our advanced TaxAI

Get tax answers, useful insights, and proactive solutions to keep your tax affairs in perfect order.

 Grow your business

Take the financial stress off your business’ shoulders

Let CFOmate handle your finances so you can enjoy peace of mind while focusing on growing your business.