You can still make the most of the 0% capital gains bracket for 2025. Here’s what to understand.

Cody Garrett, a certified financial planner based in Houston, mentions that after a sale, you can refresh and buy back the same security right away.

The IRS imposes a wash sale rule that disallows tax deductions for losses if you buy a “substantially identical” asset within a 30-day window before or after the sale. However, Garrett notes this rule doesn’t impact profitable transactions.

Despite this, he warns that realizing gains can complicate things, as increased income may lead to other tax implications.

Here’s a breakdown for investors.

For assets owned longer than a year, gains are categorized under long-term capital gains, which can be taxed at rates of 0%, 15%, or 20%, depending on your taxable income. Some high-income individuals may also face a 3.8% Net Investment Income Tax.

The thresholds for the 0% bracket in 2025 are $48,350 for individuals and $96,700 for those married filing jointly. Taxable income is arrived at by subtracting either the standard or itemized deductions from your gross income.

Notably, the standard deduction for 2025 is $15,750 for single filers and $31,500 for married couples. So, for a couple making $120,000 annually, their taxable income could potentially fall below $96,700 after accounting for the deduction.

Older Americans benefit from additional deductions, including a new $6,000 “senior bonus” as part of a recent legislative package.

That said, selling investments can push your taxable income over the 0% capital gains limit.

Also, year-end payments from mutual funds and dividends from ETFs can raise your overall taxable income. “Many individuals reinvest dividends without realizing it contributes to their taxable amount,” points out CFP Michael DeMassa of Forza Wealth Management in Sarasota, Florida.

If your taxable income stays within the 0% capital gains limit, you might be able to sell your asset without incurring taxes.

However, Garrett emphasizes that an increase in income can yield some unexpected results.

For instance, older individuals might unintentionally trigger higher taxes on their Social Security benefits, or it could impact their family’s financial aid eligibility when applying for student assistance.

Additionally, it may affect your eligibility for health insurance subsidies under the Affordable Care Act, which help lower monthly premiums. By 2025, a significant portion of participants could be receiving such subsidies, as per medical policy group KFF.

DeMassa from Forza Wealth Management remarks that “many moving parts” need to be navigated, and understanding the tax ramifications is crucial before selling any assets.