Tax-free Capital Gains Are Here
Some taxpayers will pay no capital gains taxes on their 2008 returns.

Talk about the ultimate irony: The long-awaited era of tax-free capital gains has arrived just as the stock market has suffered one of its worst routs since the Great Depression.
Still, some investors -- perhaps those who bought stocks years ago through a discounted employee stock plan -- may still be able to sell their shares at a profit. And if they are in one of the two lowest income-tax brackets, they will pay no taxes on their capital gains if they sell before the end of the year.
The 0% capital-gains rate for those in the 10% and 15% income-tax brackets is scheduled to apply in 2009 and 2010 as well. But some skeptics worry that Congress may rescind the measure in future years as lawmakers search for revenue to offset other tax changes. So if you’re likely to benefit from this strategy -- perhaps if you are self-employed or retired and can control the timing of your income -- grab this tax break before it disappears.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
To qualify for preferential long-term capital-gains treatment, you must hold shares for more than a year before selling. (This applies to assets in taxable accounts, not those in retirement accounts, which are taxed at your ordinary rates upon withdrawal.)
And to take advantage of the 0% capital- gains rate this year, your taxable income can’t exceed $32,550 if you are single, $43,650 if you are a single head of household or $65,100 if you are married filing jointly. Note that this is taxable income. That’s what’s left after you subtract personal exemptions -- worth $3,500 each this year for you, your spouse and your dependents -- and your itemized deductions or standard deduction from your adjusted gross income. Any gains that lift your income above that threshold would be taxed at the maximum 15% capital-gains rate.
One group of taxpayers won’t benefit from the 0% rate -- children affected by the newly expanded "kiddie tax." Starting this year, dependent children under 19 and full-time students under 24 will be affected by the special rule that applies their parents’ higher tax rate to their investment income in excess of $1,800.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

-
Stocks at New Highs as Shutdown Drags On: Stock Market Today
The Nasdaq Composite, S&P 500 and Dow Jones Industrial Average all notched new record closes Thursday as tech stocks gained.
-
Government Shutdown Puts IPO Resurgence at Risk
The IPO market has been sizzling in recent months, but the government shutdown threatens to put a short-term halt to public offerings. Here's why.
-
New Tax Rules: Income the IRS Won’t Touch in 2025
Income Taxes From financial gifts to Roth withdrawal rules, here’s what income stays tax-free under the new Trump 2025 tax bill, and some information on what’s changed.
-
Three Popular Tax Breaks Are Gone for Good in 2026
Tax Breaks Here's a list of federal tax deductions and credits that you can't claim in the 2026 tax year. Plus, high-income earners could get hit by a 'surprise' tax bill.
-
Tax Brackets 2025 Quiz: How Much Do You Know?
Quiz Test your knowledge of IRS rules that impact how much money you keep in your wallet.
-
Retirees Face a Growing Capital Gains Tax Trap: What's Next?
Home Sales A changing housing market and unchanged IRS exclusion amounts can add up to a headache for many homeowners. Will Congress offer a fix?
-
New York Inflation Refund Checks Are Coming Soon: What to Know Now
Tax Relief Inflation relief checks are on the way for over 8 million New York taxpayers. Here's a full breakdown of who gets a payment and when you may expect yours.
-
IRS Phasing Out Paper Checks: What Happens After September 30?
Tax Changes Avoid delays when IRS tax refunds and Social Security paper checks are cut off. Here’s what to know.
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)
State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.
-
The Final Countdown for Retirees with Investment Income
Retirement Tax Don’t assume Social Security withholding is enough. Some retirement income may require a quarterly estimated tax payment by the September 15 deadline.