Harvest capital gains at 0% in 2026: the $98,900 line

For 2026, long-term capital gains and qualified dividends are taxed at 0% as long as your taxable income, with the gains stacked on top, stays at or below $49,450 (single or married filing separately), $98,900 (married filing jointly) or $66,200 (head of household). Taxable income is what is left after the standard deduction, so a couple with no other income could realize $131,100 of long-term gain in 2026 and owe no federal income tax on it. Selling a winner inside that room and buying it back the same day raises your cost basis free of federal income tax, because the wash-sale rule applies to losses, not gains. A couple with $60,000 of wages can harvest $71,100 of gain this way; left alone and sold in a year when their income is $150,000, that same gain would cost $10,665.

The numbers

Every figure below comes from the MoneyVibe capital gains harvesting calculator, which stacks the gain on top of ordinary income after the 2026 standard deduction ($16,100 single, $32,200 joint, $24,150 head of household), applies the 0%, 15% and 20% bands from Revenue Procedure 2025-32, and adds the 3.8% Net Investment Income Tax where income crosses its threshold. Each household takes the standard deduction, has no other gains or qualified dividends, and is under 65. Income is wages after any pre-tax contributions. The households are example inputs, not forecasts.

The first household shows the whole idea. $60,000 of wages less the $32,200 standard deduction leaves $27,800 of taxable income, and the 0% band runs to $98,900, so $71,100 of long-term gain fits under the line and adds nothing to the federal bill. If the couple instead sells $100,000 of gain, the first $71,100 is still free and the remaining $28,900 is taxed at 15%, the $4,335 in the second row. There is no cliff: one dollar over the line costs 15 cents, not a jump in the rate on the whole gain.

The single filer at $45,000 has $20,550 of room; a $30,000 sale puts $9,450 into the 15% band and costs $1,417.50, shown rounded. The head of household keeps $25,000 of gain inside a $25,350 room; the $5,000 pre-tax 401(k) contribution moved that much out of taxable income and opened the same amount of room for the gain. Above the line the picture changes. At $150,000 of wages, taxable income is already $117,800, so none of a $50,000 gain is free and the sale costs $7,500. At $240,000 of wages the gain is taxed at 15% and also lifts adjusted gross income to $290,000, $40,000 over the $250,000 Net Investment Income Tax threshold; 3.8% of $40,000 is $1,520, for $9,020 in total.

What the harvest is worth is the tax avoided later. If the $60,000 couple does not sell and realizes the same $71,100 of gain in a year when their wages are $150,000, the calculator prices that sale at $10,665, all of it at 15%. Selling and rebuying now resets the basis to today's price, so only growth from here is taxable next time. This is not the step-up in basis an heir receives at death; a gain harvest is a sale you choose and report on Form 8949 and Schedule D.

The standard deduction is why those limits sit above the headline $49,450 / $66,200 / $98,900. Age adds more: a couple both 65 or older with the same $60,000 of wages gets a $35,500 standard deduction plus the $12,000 senior deduction under section 151(d)(5) ($6,000 per person for tax years before 2029, reduced by 6% of modified adjusted gross income above $150,000 on a joint return, which their $146,400 after the harvest does not reach), so their room is $86,400 rather than $71,100. Income you may be forgetting shrinks it: $8,000 of qualified dividends and fund capital-gain distributions already on the couple's return share the band and cut the room to $63,100; $2,000 more in wages cuts it to $69,100.

Why it works this way

Internal Revenue Code section 1(h)(1)(B) taxes at 0% the part of adjusted net capital gain that fits below a threshold measured against taxable income reduced by that gain; in plain words, ordinary income is counted first and the gain is stacked on top. Section 1(j)(5), added for tax years after 2017 and made permanent by Public Law 119-21, replaces the old bracket-based threshold with a "maximum zero rate amount" and a "maximum 15-percent rate amount" that are indexed each year. Revenue Procedure 2025-32, section 3.03, sets the 2026 figures: a zero rate up to $98,900 for joint returns and surviving spouses, $49,450 for married filing separately, $66,200 for heads of household and $49,450 for all other individuals, and 15% up to $613,700, $306,850, $579,600 and $545,500 respectively, with 20% above. IRS Topic 409 describes the same structure (its page still showed the 2025 amounts of $48,350 / $96,700 / $64,750 on October 10, 2026) and lists the exceptions: collectibles and section 1202 stock at up to 28%, unrecaptured section 1250 real-estate gain at up to 25%. Adjusted net capital gain includes qualified dividends under section 1(h)(3)(B), which is why dividends use up room.

The sale-and-rebuy works because section 1091 disallows a loss, not a gain, when substantially identical stock or securities are bought within 30 days before or after the sale. Publication 550 states the rule the same way: "You cannot deduct losses from sales or trades of stock or securities in a wash sale." A sale at a gain is simply a taxable sale: you may buy the same shares back immediately, your new basis is what you paid for them, and the holding period starts over on the new lot. Only gains on assets held more than one year get the 0% rate; Publication 550 counts the holding period from the day after you acquired them, and short-term gains are ordinary income. The loss side, with its 30-day window and $3,000 limit, is covered in tax-loss harvesting in 2026.

The Net Investment Income Tax comes from section 1411: 3.8% of the lesser of net investment income or the excess of modified adjusted gross income over $250,000 for joint returns and surviving spouses, $125,000 for married filing separately and $200,000 for everyone else. Section 1411(b) states those amounts as fixed dollars with no inflation adjustment, and Topic 559 lists the same figures. A harvested gain is net investment income and also raises MAGI, so it feeds both sides of the formula.

What changes the answer

• State income tax. The 0% band is federal. Many states tax a long-term gain as ordinary income, and some have no income tax; check your state's rule. At a flat 5% state rate the $71,100 harvest that is free federally costs $3,555 of state tax, and the next dollar costs 20 cents rather than 15. The calculator accepts a flat state rate; a state with brackets is not modeled. The comparison that matters is state tax now against federal plus state tax later.
• The Net Investment Income Tax at $200,000 and $250,000. A single filer or head of household whose MAGI, gain included, passes $200,000, or a couple passing $250,000, pays 3.8% on the overlap. A household in the 0% band is far below these lines, but a large one-time gain can cross them on its own, as the $240,000 couple's $1,520 shows.
• Marketplace health insurance and other income tests. A realized gain is income for the premium tax credit, which is measured on household MAGI, so a household buying coverage through healthcare.gov can lose part of its 2026 credit on a sale that is free of federal income tax. The ACA subsidy calculator prices that. Income-related Medicare premiums two years later and financial-aid formulas use similar measures.
• The kiddie tax. Giving appreciated shares to a child to sell in their own 0% band runs into section 1(g): for a child under 18, or a child who is 18 (or a full-time student under 24) and whose earned income is not more than half their support, net unearned income above $2,700 in 2026 (twice the $1,350 in Revenue Procedure 2025-32, section 3.02) is taxed at the parents' rates. The engine does not model this.

What to do first

1. Estimate your 2026 taxable income before any sale: wages projected to December from a pay stub, plus interest, dividends and the capital-gain distributions your funds will pay (most publish estimates in November and December), minus pre-tax 401(k), HSA and IRA contributions and the standard or itemized deduction. The tax bracket calculator shows where that lands.
2. Enter it in the capital gains harvesting calculator with the gain you are considering. It reports the room left in the 0% band, the tax on the sale and the cost of the next dollar, with a smaller or split sale beside it.
3. If part of the gain fits, sell only long-term lots and only up to the room, then buy back if you want to stay invested. The gain, not the proceeds, counts against the band: a $200,000 sale with $60,000 of gain uses $60,000 of room. For securities traded on an exchange, Publication 550 reports the gain in the year the trade date falls, so place the trade by the last trading day of 2026. Keep the confirmation: the new purchase price is your new basis.

What this does not model

Married filing separately, the alternative minimum tax, credits, state brackets, capital-loss carryforwards that would offset the gain first, the 28% and 25% rate groups, the kiddie tax, Medicare premiums, financial aid and the premium tax credit. Only the gains count toward the Net Investment Income Tax here, not interest, dividends or rent. Itemized deductions and the age-65 additions can be entered and are counted.

Next steps: price your own sale in the capital gains harvesting calculator, read the library chapter how each type of income is taxed, or see the glossary entries for the wash-sale rule, the Net Investment Income Tax and the standard deduction.

Not tax or legal advice. Federal rules as published by the IRS in Revenue Procedure 2025-32 and the Internal Revenue Code, read on October 10, 2026; confirm with a tax professional before acting.