2025 long-term brackets
0% up to $48,350 single / $96,700 MFJ. 15% up to $533,400 single / $600,050 MFJ. 20% above that. The brackets apply to taxable income including the gains themselves, so a large sale can straddle brackets, with slices of the gain taxed at different rates.
The holding period line
More than one year means long-term treatment; a year or less means ordinary rates. The difference on the same gain can be double-digit percentage points, which makes sale timing near the anniversary worth checking against the calendar. When selling part of a position bought in lots, specific identification of which shares you're selling, communicated to the broker at the time of sale, controls both the holding period and the size of the gain.
Netting, the $3,000 rule, and carryforwards
Short-term losses net against short-term gains, long against long, then the two net against each other. A net loss offsets up to $3,000 of ordinary income per year, with the rest carrying forward indefinitely. Harvesting losses in taxable accounts to absorb gains elsewhere is standard year-end work; the wash-sale rule (repurchasing the same security within 30 days) is what disqualifies the sloppy version of it.
Special rates
Collectibles (art, coins, antiques): maximum 28%. Unrecaptured Section 1250 gain (real estate depreciation): maximum 25%. Net Investment Income Tax adds 3.8% above $200K single / $250K MFJ. The NIIT thresholds aren't inflation-indexed, so each year more ordinary investors cross them; a one-time event like a business or property sale routinely triggers NIIT in that single year.
Using the 0% bracket on purpose
Taxpayers with taxable income under the 0% threshold pay nothing federal on long-term gains up to the bracket line. Retirees before RMD age and anyone in a low-income year can harvest gains free: sell appreciated positions, recognize the gain at 0%, and repurchase immediately (no wash-sale rule for gains). The stepped-up basis resets the clock at no cost. Florida's lack of a state income tax makes the 0% federal rate a true zero here.
Common questions
- Can I hit the 0% bracket?
- Yes. Retirees with low taxable income often have space to realize meaningful long-term gains at 0% federal. We plan around it.
- How does the $3,000 loss deduction work?
- After losses absorb your gains, up to $3,000 of what's left reduces ordinary income each year, and the remainder carries forward with no expiration. Big loss years pay out over time.
- Do trades inside my IRA or 401(k) trigger capital gains?
- No. Gains and losses inside tax-advantaged accounts don't hit your return; those accounts are taxed on contributions or distributions instead. Harvesting only matters in taxable accounts.
- Does Florida tax capital gains?
- No. Florida has no personal income tax, so residents pay only the federal rates on investment gains.
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