Pongnathee Kluaythong | Moment | Getty Images
After selling, you can “refresh the page and repurchase the same security right away,” said certified financial planner Cody Garrett, founder of Measure Twice Planners in Houston.
The wash sale rule prevents a tax break on harvested losses when you buy “substantially identical” assets within the 30-day window before or after the sale, according to the IRS.
But that rule doesn’t apply when buying and selling profitable assets, said Garrett, who is also co-author of the new book, “Tax Planning To and Through Early Retirement.”
Still, harvesting gains can be tricky because incurring more income can cause other consequences, he said.
Here is what investors need to know.
How the 0% capital gains bracket works
For assets owned for more than one year, profits typically qualify for long-term capital gains, taxed at 0%, 15% or 20%, depending on taxable income. Some higher earners also pay a 3.8% net investment income tax.
For 2025, the taxable income limit for the 0% bracket is $48,350 for single filers or $96,700 for married couples filing jointly. You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
Keep in mind, the standard deduction is $15,750 for single filers and $31,500 for married filing jointly for 2025. For example, if a married couple makes $120,000, their taxable income could easily fall below $96,700 after subtracting the $31,500 standard deduction.
There are additional standard deductions for older Americans, including the new $6,000 “senior bonus” enacted via President Donald Trump‘s “big beautiful bill.”
However, you could bump taxable income above the 0% capital gains thresholds after selling investments.
Plus, year-end mutual fund payouts or dividends from exchange-traded funds could add to your taxable income total.
“A lot of people have ETF or mutual fund dividends reinvested,” said CFP Michael DeMassa, founder of Forza Wealth Management in Sarasota, Florida. “They’ve never received it, but it shows up on their tax return.”
What to know before harvesting gains
If your taxable income falls within the 0% capital gains bracket, it could be possible to sell assets without triggering a bill.
But boosting your income could have other surprise consequences, according to Garrett from Measure Twice Planners.
For example, older Americans could unknowingly trigger higher taxes on Social Security benefits. Or your family’s college financial aid could be impacted when filing the Free Application for Federal Student Aid.
Another possible issue could be eligibility for Affordable Care Act marketplace health insurance subsidies, which make monthly premiums more affordable. For 2025, more than 22 million people, roughly 92% of enrollees, receive the subsidy, according to KFF, a health-care policy organization.
Before selling assets, “you need to know the tax impact” because “there are a lot of moving parts,” said DeMassa from Forza Wealth Management.
