Zero Capital Gain Tax

Dear Client:

Income and estate tax planning must be specific for each of our clients. The following is a tax planning concept to discuss:

Zero Capital Gain Tax.

The maximum federal income tax rate on long-term capital gains from 2020 sales is 15 or 20 percent. Better yet, it is 0 percent to the extent the taxpayer's taxable income (including the gain) falls within the 10 percent or 12 percent regular federal income tax rate brackets. To Take Advantage of 0% Capital-Gains rate for 2020, your taxable income can’t exceed 40,125 if you are single; $53,700 if you are a single head of household with dependents; or $80,250 if you are married filing jointly. Note that this is taxable income.

California does not have a lower rate for capital gains. All capital gains are taxed as ordinary income. If you have any questions, please feel free to call us at your earliest convenience.