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Anh Le, CPA, CGMA, EA, MBA
12400 Olive Blvd, Suite 320
Creve Coeur, MO 63141
Phone: 314-624-0350
Fax: 314-624-0351
Email: anh@anhlecpa.com
Website: www.lecpafirm.com
2026 Tax Planning Guide
Capital Gains Tax
You report capital gains for tax purposes when you sell a capital asset, such as securities or real estate, and realize a profit. Gains on assets held for less than a year are taxed at your ordinary income tax rate. For long-term investments, those held for longer than one year, you pay capital gains tax at 0%, 15%, or 20%, depending on the sum of your other taxable income (after deductions) plus your qualified dividends and long-term capital gains.
EXAMPLE:
In 2026, a married couple filing jointly has $80,000 in taxable ordinary income (after deductions) and $30,000 in qualified dividends and long-term capital gains, totaling $ 110,000. The 0% capital gains rate cutoff is $98,900. $18,900 ($98,900-$80,000) of the gain is taxed at 0%. The remaining $11,100 in gains is taxed at a rate of 15%.
In 2026, a married couple filing jointly has $80,000 in taxable ordinary income (after deductions) and $30,000 in qualified dividends and long-term capital gains, totaling $ 110,000. The 0% capital gains rate cutoff is $98,900. $18,900 ($98,900-$80,000) of the gain is taxed at 0%. The remaining $11,100 in gains is taxed at a rate of 15%.
If your investments have a net capital loss, you can deduct up to $3,000 of the loss against your income annually if filing jointly ($1,500 married filing separately). If your losses exceed the annual limit, you may carry losses forward to future years, deducting up to $3,000 per year against your income until your capital losses are exhausted.
But keep the wash sale rules in mind. These rules prevent you from taking a loss on a security if you buy a substantially identical security within 30 days before or after the sale. You can avoid triggering the wash sale rules while maintaining the same portfolio allocations by selling the security and waiting at least 31 days before repurchasing it or selling the security and buying shares in a mutual fund that holds similar securities.
SMART MOVE: Consider gifting appreciated stock or mutual funds to relatives in lower tax brackets. They'll pay less or no tax on the long-term gain when the shares are later sold, potentially reducing overall family taxes.
Qualified dividends are eligible for more favorable capital gains tax rates, while unqualified dividends are taxed as ordinary income. Generally, dividends from real estate investment trusts (REITs) are unqualified, as are those from credit unions and mutual savings banks.
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