Who qualifies for 0% capital gains in 2025 under Trump’s “big beautiful bill”

If your portfolio has ballooned and you are staring at a big green number in a taxable account, the smart move is not always to hold forever. For long-term positions, the federal capital gains system has a built-in release valve that many people miss. In 2025 there is a 0% bracket for long-term gains and qualified dividends. If your taxable income sits under that bracket’s ceiling, you can sell and owe nothing to the IRS on those specific gains. The long-term capital gains system still uses three rates, 0%, 15%, and 20%, and high earners may also face the 3.8% Net Investment Income Tax, but the 0% slice is still very real.

The key is knowing the line you cannot cross. For the 2025 tax year, the 0% long-term capital gains threshold is $48,350 of taxable income for single filers and $96,700 for married couples filing jointly. If you land under those numbers after deductions, gains you realize while staying inside the band are taxed at zero at the federal level. State taxes are a separate story, so check your state rules.

That “taxable income” phrase does a lot of work. It is not your salary or your total earnings. It is what remains after subtracting deductions from Adjusted Gross Income. Under the 2025 rules, the standard deduction is $15,750 for single filers and $31,500 for married filing jointly, which lowers the income that counts toward the bracket thresholds. If you are age 65 or older, you also get the usual additional standard deduction for seniors, and on top of that the new law adds a separate $6,000 senior bonus deduction per eligible person that applies from 2025 through 2028, subject to a phaseout. Those two features together reduce taxable income further, which expands room inside the 0% band.

Here is the simple math. Imagine a married couple with $120,000 of income, all ordinary. With the $31,500 standard deduction, their taxable income is $88,500. The 0% ceiling for joint filers is $96,700, so there is $8,200 of headroom where long-term gains can be realized at a zero federal rate. If both spouses are 65 or older and qualify for the new $12,000 combined senior bonus deduction, their taxable income drops again, opening even more space for 0% realization. That is why planners keep calling this a window, not a loophole.

A quick checkpoint helps you decide if it is worth it. First, confirm your holding period. The 0% bracket applies only to long-term capital gains and qualified dividends. Shares held one year or less are short-term and get taxed as ordinary income. Second, remember that realizing gains adds to your taxable income. You can harvest in tranches, check the projected totals, then stop before you push yourself into the 15% zone. Third, if you are near the thresholds for the 3.8% Net Investment Income Tax, watch your Modified Adjusted Gross Income. The NIIT kicks in at $200,000 for single filers and $250,000 for joint filers and is calculated on the lesser of your net investment income or the amount by which MAGI exceeds the threshold. That surtax is separate from capital gains brackets, but it can stack if your income is high enough.

The most overlooked move here is a basis reset. You can sell a long-term position for a gain inside the 0% window, pay zero federal tax on that gain, and buy the same holding right back immediately to lock in a higher cost basis. The wash sale rule does not apply to gains. The wash rule only blocks the deduction of losses when you rebuy a substantially identical security within 30 days. If you are realizing gains, there is no 30-day wait and no penalty for rebuying, which is why basis resets inside the zero bracket are a clean, legal way to reduce future tax drag.

Think of basis resets like upgrading your save point in a game. You keep your asset exposure, but you move the tax trigger higher. Later, if you sell above that new basis when you are in a higher bracket, the taxable portion is smaller. For broad index funds you have held for years, the compounding benefit of a higher basis can be surprisingly large once you add reinvested dividends and multiple resets over time.

If you are in your sixties or seventies, 2025 is unusually favorable. The new $6,000 senior deduction sits alongside the standard deduction and the usual senior add-on, which together push your taxable income down. Married couples who both qualify get a combined $12,000 senior deduction, and the benefit phases out starting at $150,000 of MAGI for joint filers. If Social Security is part of your income mix, note that the new law also changed how benefits are taxed for many households, which can further affect your MAGI math. The result for a lot of retirees is a wider 0% lane for harvesting.

A few guardrails keep the strategy clean. Keep your eye on health insurance cliffs if you buy coverage on an exchange since additional realized income can shrink premium subsidies. Watch college financial aid calculations if a FAFSA is in your near future. Confirm state tax treatment since some states do not mirror federal capital gains rules. If you are near NIIT levels, run the numbers because the surtax can quietly add 3.8% even when your bracket for long-term gains is 0% or 15%. And if you are optimizing Roth conversions this year, remember that conversion income is ordinary and increases MAGI, which can compress your 0% harvesting room. Recent commentary on the 2025 tax bill flags this Roth-conversion interaction as a real planning tradeoff.

You do not need to overcomplicate execution. Start by estimating your year-to-date taxable income, subtract the standard deduction that matches your filing status, and add the senior bonus deduction if you qualify. Compare the result to the 0% ceiling for your status. If you have space, pick one appreciated long-term position and realize gains up to the remaining headroom. Immediately repurchase if you want to maintain exposure and lock in the new basis. Recalculate after the trade to confirm you stayed under the line. Repeat later in the year if your income picture has not changed. The goal is to use the 0% capital gains 2025 rules intentionally, not accidentally.

If you prefer to keep it simple, run one clean example. A single filer with $55,000 of ordinary income would normally expect to pay 15% on long-term gains. Subtract the $15,750 standard deduction to get $39,250 of taxable income. That sits below $48,350, which means there is about $9,100 of room for 0% long-term gains. You can harvest up to that number, pay zero federal tax on those specific gains, and raise your basis at the same time. Direct, boring, effective.

Markets move and rules evolve, but this part of the code still rewards planning. The combination of higher 2025 standard deductions, the newly added senior bonus deduction where eligible, and the unchanged long-term capital gains brackets gives you a clear shot at turning paper gains into realized gains without a tax bill. Treat it like a scheduled maintenance task for your portfolio rather than a once-in-a-lifetime hack. A few hours of math today can save you years of unnecessary taxes later.

Sources worth bookmarking for specifics and thresholds include the IRS page on the 3.8% Net Investment Income Tax, current 2025 long-term capital gains brackets from reputable tax guides, and the IRS summary of the new senior deduction under the One Big Beautiful Bill Act. These will keep you honest about the numbers while you harvest smartly.