The 0% Capital Gains Rate: Who Pays No Tax on Investment Gains (2026)

Many people don't know that long-term capital gains can be taxed at 0%. If your income is modest, you might be able to sell investments you've held more than a year and owe no federal tax on the gain at all. Here's who qualifies in 2026, with examples.

The 2026 long-term capital gains rates

Because of the standard deduction ($16,100 single, $32,200 married), a single person can have up to about $65,550 of total income, and a married couple about $131,100, with long-term gains still inside the 0% band.

Examples

Gains stack on top of your other income. Only the part that fits under the 0% line is tax-free; the rest is taxed at 15%. So in the second example, part of the gain is free and part is taxed.

Short-term gains don't get this

Sell within a year and the gain is "short-term", taxed like wages at your normal bracket. The same $20,000 gain on top of $60,000 of wages, held less than a year, costs about $3,750. Holding a little longer can make a real difference.

Ways people use the 0% rate

• Low-income years: a gap year, early retirement before Social Security, or a year between jobs can be a good time to sell winners.
• "Gain harvesting": sell and immediately rebuy to reset your cost basis higher, paying 0% now and less tax later. (The wash-sale rule applies to losses, not gains.)
• Watch the side effects: higher income can affect the premium tax credit for Marketplace health insurance, how much of your Social Security is taxed, and other benefits.

At high incomes, a 3.8% Net Investment Income Tax can also apply when your modified AGI is over $200,000 ($250,000 married), on the smaller of your investment income or the amount you're over that line.