How to Make the Most of the 0% Capital Gains Rate in 2025

Most taxpayers know that capital gains are taxed at preferential rates — 0%, 15%, and 20% — but fewer realize that many households can take advantage of the 0% rate with the proper planning. In fact, for 2025, married couples filing jointly can have up to $128,200 in adjusted gross income (AGI) before long-term capital gains even become taxable. If your ordinary income is low enough, you may be able to sell appreciated investments and pay no federal tax on the gains.

Case Study: Turning Capital Gains Into a Tax-Free Opportunity

Let’s meet Daniel and Laura Bennett. Daniel was laid off earlier this year, and the couple is living on Laura’s $55,000 salary, a little savings, and careful budgeting. Daniel inherited 800 shares of a tech company’s stock years ago when it was worth $40 per share. Today, each share trades for $110 — a $70 gain per share.

Although they love the company and don’t want to part with the investment, Daniel and Laura are sitting on $56,000 in unrealized gains. With smart planning, they can realize those gains and reset their cost basis — without paying any federal capital gains tax.

The Numbers

Here’s how it works:

• 0% capital gains limit for married filing jointly (2025): $96,700

• Plus standard deduction: $31,500

• Total income before gains become taxable: $128,200

• Minus Laura’s salary: $55,000

• Room for capital gains at 0% rate: $73,200

Since their potential gain is only $56,000, they’re well within the threshold.

The Strategy

1. Sell the 800 shares at $110 each, realizing $56,000 in long-term capital gains.

2. Immediately repurchase the same 800 shares — yes, right away.

3. Avoid the wash sale issue (it applies only to losses, not gains).

4. Keep the same investment but now with a $110 cost basis instead of $40.

Why This Matters

By resetting the basis to $110 per share, any future sale will generate far less taxable gain — potentially saving thousands in future capital gains and net investment income tax. And in this example, there’s no federal tax bill now because they’re under the 0% threshold.

Note: State taxes may still apply, so check your local rules before selling.

Bottom line: If your income is lower than usual — whether because of a job change, retirement, or business slowdown — 2025 could be the perfect year to take advantage of the 0% capital gains rate. By realizing gains strategically, you can lower your future tax liability and keep more of your profits when you eventually sell.