Capital Gains Harvesting Room: the facts

1. Long-term capital gains are taxed at 0, 15, or 20 percent depending on where they land once stacked on top of ordinary income. For 2026 the 0 percent band runs to $49,450 of taxable income on a single return and $98,900 on a joint return; the 15 percent band to $545,500 and $613,700.
2. Taxable income is adjusted gross income less deductions; the 2026 standard deduction is $16,100 single and $32,200 joint. The room is the band's top minus taxable ordinary income, and a gain that fits inside it is taxed at zero.
3. A single filer with $50,000 of adjusted gross income has $33,900 of taxable income and $15,550 of room at 0 percent; realizing $20,000 of gain costs $668, because the last $4,450 is taxed at 15 percent.
4. The net investment income tax adds 3.8 percent on investment income above $200,000 of modified adjusted gross income single and $250,000 joint; the thresholds have not been indexed since 2013.
5. Harvesting a gain resets cost basis: the same shares can be bought back the same day, since the wash-sale rule applies to losses, not gains. The gain is real income for every other purpose that year: Medicare premiums two years out, the taxable share of Social Security, and the senior deduction's phase-out.
6. Qualified dividends share the same bands, so they are already in the stack before a harvested gain is added.

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