Married couples can pay 0% capital gains tax on $102,100 in 2027

The IRS released 2027 capital gains tax brackets that let married couples earn up to $102,100 in taxable income and pay nothing on long-term investment gains, CNBC reported.

Single filers get the same deal up to $51,050. The thresholds are higher than 2026 because the IRS adjusts brackets for inflation, and inflation has been running hot. The standard deduction also rises to $16,600 for singles and $33,200 for married couples in 2027, which means a married couple with adjusted gross income of $135,300 could clear the 0% bracket entirely after subtracting the standard deduction.

The timing matters. The S&P 500 is up about 10 percent year-to-date as of Nov. 9, and it returned more than 16 percent in 2025 and over 23 percent in 2024, according to CNBC market data. After three straight years of gains, many investors are sitting on large unrealized profits in taxable brokerage accounts. The 0% bracket gives them a way to lock in those profits without a federal tax bill, provided their taxable income stays below the threshold.

“The 0% capital gains bracket is easily one of the most overlooked strategies for tax-free income,” Stephen Maggard, a certified financial planner with Abacus Planning Group in Columbia, South Carolina, told CNBC. The strategy is called tax gain harvesting: selling profitable assets during a year when your income is low enough to stay in the 0% bracket, then either keeping the cash or rebuying the same asset to reset the cost basis. Unlike tax-loss harvesting, the wash sale rule does not apply to gains, so you can sell and immediately repurchase the same stock or fund.

The math is straightforward but unforgiving. Taxable income includes your wages, interest, dividends, and the capital gains themselves. A married couple earning $90,000 in salary has $45,100 of room before the 0% bracket runs out. Sell enough stock to push taxable income above $102,100 and the portion of gains that exceeds the threshold is taxed at 15 percent. Go high enough and the top rate is 20 percent. There is no partial benefit: every dollar of gains that crosses the line is taxed at the higher rate.

Jim Guarino, a CFP and certified public accountant at Baker Newman Noyes in Woburn, Massachusetts, warned that mutual fund distributions can complicate the picture. Year-end capital gains distributions from mutual funds are taxable even if you did not sell anything, and they count against the 0% bracket limit. “They can dramatically alter year-end planning projections,” Guarino said. An investor who carefully harvests gains to stay under $102,100 could get pushed over by a December distribution from a fund they still hold.

The 0% rate applies only to federal taxes. State capital gains taxes vary widely. California taxes capital gains as ordinary income at rates up to 13.3 percent. Nine states, including Florida, Texas, and Washington, levy no state income tax at all. An investor in Sacramento pays nothing to the IRS but owes the state on every dollar of gain harvested. An investor in Seattle pays nothing to either.

Dinon Hughes, a CFP and partner at Nvest Financial in Portsmouth, New Hampshire, said the strategy is especially powerful for early retirees. Someone who leaves the workforce at 55 with a portfolio of appreciated stocks can live off harvested gains for several years, paying 0 percent federal tax while keeping their income below the threshold. The window closes when required minimum distributions from retirement accounts begin at age 73, which push taxable income up whether you need the money or not.

The broader tax picture matters. Modified adjusted gross income determines eligibility for Affordable Care Act premium subsidies, which can disappear entirely if income exceeds the limit by a single dollar. Harvesting gains to save on capital gains tax could cost more in lost health insurance subsidies than it saves. President Donald Trump’s temporary $6,000 senior bonus deduction, worth up to $12,000 for married couples through 2028, also phases out based on income. Selling a large position could disqualify a household from a deduction worth more than the tax on the gains.

Charles Sachs, chief investment officer of Imperio Wealth Advisors in Coral Gables, Florida, said the cost-basis reset is the play for investors who do not need the cash. Selling a stock that has doubled and rebuying it at the current price means future gains are calculated from the higher basis. If you eventually sell at a higher price, the taxable gain is smaller. If you sell at a loss, the deduction is larger. The strategy costs nothing in federal tax this year and reduces the tax bill in every future year.

What I think

The 0% bracket is real money for the people who can use it. A married couple retiring this year with $80,000 in pension income and $200,000 in appreciated stock can harvest $55,000 in gains annually and pay zero federal tax on the sale. Over four years, that is $220,000 in profits locked in with no federal bill. The couple is not dodging taxes; they are using a provision Congress wrote into the code specifically to reward long-term holding and to give lower-income taxpayers a break on investment income.

The catch is that most people who have large unrealized gains also have large incomes. The 0% bracket is widest for the households that need it least: retirees with no wage income, sabbatical takers, business owners with a slow year, and young investors just starting out. A two-earner family making $250,000 cannot get within $150,000 of the threshold. The provision is well-designed for its intended beneficiaries and invisible to everyone else.

The cost-basis reset is the move that almost no one talks about and almost everyone should consider. If you are in the 0% bracket and you have a stock that has tripled, selling and rebuying costs you nothing and permanently reduces your future tax exposure. The only risk is that the stock drops between the sale and the repurchase, but in a liquid market that gap is seconds. The wash sale rule does not apply. There is no holding period. It is a free option that expires when your income rises above the threshold.

The danger is in the knock-on effects. Guarino is right that AGI changes ripple through the tax code in ways that are hard to track. A family that harvests $40,000 in gains to stay under the 0% bracket could lose ACA subsidies worth $15,000, disqualify a child from college financial aid, or trigger the net investment income tax. The federal capital gains rate is one line on a tax return; the return is a system, and pulling one lever moves the others. Anyone considering a large harvest should model the full return, not just the gains line.

The 2027 thresholds are higher than ever because inflation was higher than ever. The IRS adjustments are automatic, indexed to chained CPI, and they do not require congressional action. That means the 0% bracket will keep widening as long as inflation runs hot, and it will shrink if inflation falls to zero. The bracket is a lagging indicator of the price level, not a policy choice. For investors, the practical takeaway is simple: if your income is low this year and you have gains, the 2027 brackets give you more room than you have ever had to harvest them tax-free.