Long-term capital gains in 2026: the 0% rate up to $49,450, and tax-gain harvesting
Sell a share held more than a year and the gain is taxed at 0%, 15% or 20% — not the ordinary brackets. For a single filer with under $49,450 of taxable income, the rate is zero.
Gains on investments held more than one year are taxed on their own schedule, at three rates. For tax year 2026 the thresholds, set by the IRS on October 9, 2025, are:
| Rate | Single | Married filing jointly | Head of household |
|---|---|---|---|
| 0% | up to $49,450 | up to $98,900 | up to $66,200 |
| 15% | $49,450 – $545,500 | $98,900 – $613,700 | $66,200 – $579,600 |
| 20% | over $545,500 | over $613,700 | over $579,600 |
Gains on assets held one year or less are short-term, and are taxed as ordinary income at the regular brackets. One day makes the difference between 22% and 15%, or between 12% and 0%.
How the 0% band is filled
The thresholds are on total taxable income, with ordinary income counted first. A gain sits on top of wages, and only the part of it that falls below the threshold is taxed at zero.
Wages $40,000 − standard deduction $16,100 = $23,900 of ordinary taxable income. The 0% band runs to $49,450, so $25,550 of long-term gain can be realised in 2026 and taxed at zero. A gain of $30,000 would put $4,450 into the 15% band — $668 of tax on the whole $30,000, an effective 2.2%.
Tax-gain harvesting
That room is the basis of a strategy that is the mirror image of loss harvesting. An investor in a low-income year — between jobs, in early retirement, in graduate school — sells appreciated holdings up to the 0% threshold, pays no tax, and buys them back. The wash-sale rule does not apply to gains, so the repurchase can be immediate. The cost basis is now the higher price, and the gain that would have been taxed at 15% in a later, higher-income year has been taxed at zero.
Basis, and why the record matters
The gain is sale price minus basis — what was paid, plus commissions, plus reinvested dividends that were already taxed. Brokers have been required to track basis on shares bought since 2011 and report it on Form 1099-B; for older holdings, inherited shares (which take the value at death as basis) and shares moved between brokers, the record is the owner's.
Tax is due when an asset is sold, not when it rises. An asset held until death passes to heirs with its basis reset to the value on that date, and the lifetime gain is never taxed. This is the reason long-held positions are often never sold, and the reason the 0% band is valuable to those who do sell.
- Collectibles — art, coins, precious metals and funds that hold them — are taxed at up to 28%, not the rates above.
- A home has its own exclusion: up to $250,000 of gain ($500,000 joint) on a main residence lived in for two of the last five years.
- Losses offset gains without limit, and up to $3,000 of net loss a year offsets ordinary income, with the rest carried forward.
Sources
- Revenue Procedure 2025-32 — tax year 2026 inflation adjustmentsInternal Revenue Service · checked Sep 24, 2026
- Topic no. 409, Capital gains and lossesInternal Revenue Service · checked Sep 24, 2026
- Topic no. 701, Sale of your homeInternal Revenue Service · checked Sep 24, 2026