Introduction: Why This Question Matters
If you’re an investor or planning to sell appreciated assets, you might wonder: How big can my income be before I lose the 0% long-term capital gains rate? In 2026, as tax rules, inflation adjustments, and possible reforms shift, knowing the threshold can help you time sales, plan your income, and reduce taxes legally.
In this article, we’ll dig into what’s known (and uncertain) about the 0% capital gains bracket for 2026, how taxable income and capital gains interplay, and strategies you can use to stay within it or minimize taxes.
Basics: What Is the 0% Long-Term Capital Gains Rate?
First, a quick refresher:
Long-term capital gains are gains on assets held more than a year. They benefit from favorable tax rates compared to ordinary income.
In the U.S., capital gains tax brackets for long-term gains are typically 0%, 15%, or 20%, depending on your taxable income and filing status. usbank.com+3Wikipedia+3portebrown.com+3
The 0% rate applies when your taxable income (including the gain) stays under a certain threshold. Once you exceed that, part or all of your gain is taxed at 15%, then 20% as income increases. TurboTax+2usbank.com+2
So, to “make money and still pay 0% capital gains,” your combined income + gain must not push you over the threshold. Let’s see what those thresholds currently look like and what to expect in 2026.
Recent and Current Thresholds (for Context)
While 2026 rules aren’t fully confirmed yet, recent data gives us a guide:
For 2025 (filing in 2026), the 0% long-term capital gains threshold for single filers is up to about $48,350 of taxable income. TurboTax+2investor.vanguard.com+2
For married couples filing jointly, the 0% rate applied to taxable income up to $96,700 in 2025. Wikipedia+3usbank.com+3investor.vanguard.com+3
These thresholds are adjusted yearly for inflation, so the 2026 version will likely be slightly higher.
Note: The thresholds apply to taxable income, not gross income. Taxable income is after deductions and exemptions.
So, if your salary plus other ordinary income plus long-term capital gains keeps your taxable income under that threshold, your long-term capital gains can be taxed at 0%.
What to Expect for 2026
Looking ahead to 2026, there are some important considerations and possible changes to watch:
Inflation Adjustments
Tax brackets, deduction amounts, and capital gains thresholds are typically adjusted upward for inflation each year. So the 0% capital gains ceiling for 2026 will likely be higher than $48,350 (for single) and $96,700 (for married) — though how much higher is uncertain.Policy Changes and Tax Reform
There have been proposals to adjust capital gains tax rates, especially for high-income earners. Some analysts predict that the top long-term capital gains rate may increase to 25% for certain income levels starting in 2026. Aldrich Wealth+1
That doesn’t necessarily change the 0% threshold for lower-income brackets, but it could affect how aggressively tax planners act at higher incomes.Net Investment Income Tax (NIIT)
Even if your capital gain qualifies for the 0% rate, if your modified adjusted gross income (MAGI) exceeds certain thresholds, you might owe the 3.8% NIIT on investment income. MarketWatch+2Bankers Life+2
The NIIT threshold is usually $200,000 for single filers, $250,000 for married filing jointly.
So, for many middle-income earners, the good news is: staying under the taxable-income threshold may allow 0% capital gains without triggering NIIT.
How Much Can You Earn + Gain and Still Get 0% in 2026? (Estimate)
Given the trends, here’s a rough estimate for 2026:
Suppose the 0% threshold rises by inflation — say 3–4% — pushing the single filer threshold from ~$48,350 to maybe $50,000–$52,000 (taxable income).
For married couples, the threshold might move from ~$96,700 to somewhere near $100,000+.
So if your ordinary income (salary, interest, wages) plus taxable long-term gain stays under that ~$50–$55k (single) or ~$100–$110k (married) mark, you may still qualify for 0% on the gain portion.
Example (single filer):
Salary / wages: $35,000
Deductions & exemptions reduce taxable income to $10,000 of remaining “room”
You then sell an asset and realize a long-term capital gain of $10,000
Combined taxable income = $45,000 → still under threshold → 0% tax on the gain.
Of course, actual numbers depend on the official 2026 thresholds set by IRS, inflation adjustments, and any tax law changes.
Caveats & Things to Watch
Taxable vs. Gross Income: Always remember, the threshold is based on taxable income (after deductions), not total income.
Other Income Sources: If you have other income — wages, interest, dividends — they all count toward the threshold.
State Taxes: Many states tax capital gains as ordinary income, so even if you avoid federal capital gains tax, you might owe state-level taxes.
Short-Term vs. Long-Term Gains: Only long-term gains (on assets held > 1 year) get the favorable 0% / 15% / 20% rates. Short-term gains are taxed as ordinary income.
Net Investment Income Tax (NIIT): As mentioned, high-income earners might face the 3.8% surcharge even if 0% rate applies.
Legislative Risk: Tax laws change — thresholds, rates, and exemptions may be adjusted with new tax bills or reforms.
Strategies to Stay in the 0% Zone
If your goal is to maximize capital gains while staying within the 0% bracket, here are some useful strategies:
Harvest gains in low-income years
If you expect a year with lower ordinary income (e.g. starting a business, sabbatical), sell in that year.Use deductions and credits
Max out tax-advantaged accounts (IRAs, 401(k)s), charitable deductions, and other credits to lower taxable income, giving more “headroom” to accommodate a gain.Split gains across years
Instead of selling all assets at once, sell portions in multiple years to avoid a single year that pushes you over threshold.Offset gains with losses (tax-loss harvesting)
If you have losing investments, sell them to offset gains, reducing your net gain subject to tax.Plan with spouse or filing status
Married couples filing jointly have a higher combined 0% threshold — coordinate gains and income between partners.Check state tax rules
If your state taxes capital gains, consider doing sales in years with lower total income to reduce state-level burden.
Conclusion: Aim Smart, Stay Below the Line
While we don’t yet have the official 2026 0% capital gains thresholds, historical trends and inflation adjustments suggest they’ll go up modestly. For many middle-income taxpayers, there’s an opportunity: by managing your ordinary income and timing your asset sales wisely, you may still realize gains and pay no federal long-term capital gains tax.
But this isn’t guaranteed — as tax laws evolve, thresholds change, and factors like NIIT and state taxes complicate the picture.
Final Advice & Recommendations
Monitor the IRS announcements in late 2025 for the official 2026 thresholds.
Use tax software or a CPA to model your income + capital gains scenario early.
In years you expect lower income, consider selling gains then.
Use deductions, tax-loss harvesting, and income timing to keep taxable income under the limit.
Always factor state taxes and NIIT into your planning.
Stay updated on proposed tax reforms — threshold changes could shift things.
