How to sell appreciated assets without a big tax bill now and later - USA Today

What the report says

USA Today reported on a tax strategy known as tax gain harvesting, which can let some investors sell appreciated assets during lower-income years while owing no federal tax on the long-term capital gain. The July 22 report by Medora Lee describes the approach as the counterpart to tax loss harvesting: instead of selling losing investments to offset gains, investors intentionally realize profits when their taxable income is low enough to qualify for the 0% federal long-term capital gains bracket.

According to the report, the strategy may be especially useful for people between jobs, retirees before Social Security and required minimum distributions begin, or others with temporarily reduced taxable income. USA Today cited 2026 thresholds showing the 0% federal long-term capital gains rate applies up to $49,450 in taxable income for individuals and $98,900 for married couples filing jointly. Because wash-sale restrictions apply to loss harvesting but not gain harvesting, investors may be able to sell and repurchase the same asset, raising their cost basis and potentially reducing future taxable gains.

The article also noted that custodial accounts for children can be a use case because children may have little or no income, though experts warned about the “kiddie tax,” which can tax some unearned income at a parent’s rate. Wealthfront, cited in the report, has introduced custodial accounts that automate limited gain harvesting while seeking to avoid federal tax and filing triggers.

USA Today emphasized that the strategy is not universally tax-free. State taxes, Medicare surcharge thresholds, senior deduction phaseouts and individual circumstances can change the outcome, so tax professionals quoted in the article advised careful planning before using it.