IRS raises 2027 capital gains tax limits: Could selling stocks become tax-free for more Americans as the 0% threshold jumps to $51,050?

Investors may be able to sell more stocks at a profit in 2027 without paying federal capital gains tax. The IRS has raised the income limits for the 0% long-term capital gains tax rate, giving eligible taxpayers more room before their profits move into the 15% bracket.

For single filers, the limit rises to $51,050 from $49,450 in 2026. For married couples filing jointly, it increases to $102,100 from $98,900. The change could reduce tax bills for some investors, but the benefit depends on their total taxable income and how long they have held their investments.

2027 capital gains tax limit rises by $1,600 for single filers

The new IRS threshold allows a single taxpayer to pay 0% federal tax on long-term capital gains as long as their total taxable income does not exceed $51,050 in 2027. That is $1,600 higher than the 2026 limit of $49,450.


For married couples filing jointly, the 0% threshold rises by $3,200, from $98,900 in 2026 to $102,100 in 2027. Both increases are around 3.2%, reflecting the annual inflation adjustment to federal tax brackets.

The change may look small, but it can make a difference for investors whose income is close to the threshold. A single filer who would otherwise have had $1,600 of long-term gains taxed at 15% could save up to $240 under the higher 2027 limit. For a married couple, the additional $3,200 could mean savings of up to $480.

These are potential maximum savings from the higher threshold. Investors who already fall comfortably within the 0% bracket may see no additional benefit. Those with income well above the limit may also see little change.

How taxable income affects the 0% capital gains tax rate

The $51,050 and $102,100 limits do not refer to salary or total annual earnings. They apply to taxable income after eligible deductions, including the standard deduction.

Long-term capital gains are added to taxable income when determining which capital gains tax bracket applies. This means an investor's wages and other taxable income can use up part of the 0% threshold before investment profits are considered.

For example, imagine a single filer has $40,000 in taxable income from a job in 2027. They then sell shares and make a long-term capital gain of $11,050. Their combined taxable income reaches $51,050, exactly the 0% threshold. The entire $11,050 gain would fall within the 0% capital gains bracket.

But a larger gain could push part of the profit into the 15% bracket. The tax rate does not necessarily apply to the entire gain at once. Different portions of a person's capital gains can fall under different tax rates.

2027 capital gains tax brackets for single and married filers

The 0% rate is not the only bracket investors need to watch. For single filers, the 15% long-term capital gains rate applies to taxable income from $51,051 to $563,200 in 2027. The 20% rate begins at $563,201.

For married couples filing jointly, the 15% bracket runs from $102,101 to $633,600. Taxable income of $633,601 or more enters the 20% bracket.

Head-of-household filers have a separate set of limits. Their 0% capital gains bracket extends up to $68,350. The 15% rate applies from $68,351 to $598,400, while the 20% rate starts above $598,400.

One point worth noting is that the joint-filer threshold for the 20% rate is $633,601, which is $70,400 higher than the single-filer threshold of $563,201. The 0% limit for married couples filing jointly, meanwhile, is exactly twice the single-filer limit.

The holding period determines whether an investment profit qualifies as a long-term or short-term capital gain. Stocks and other assets held for more than one year generally qualify for long-term capital gains tax rates. Profits from assets held for one year or less are usually treated as short-term gains and taxed at ordinary income tax rates.

The sale date also determines which year's tax thresholds apply. Investments sold during 2027 will use the 2027 capital gains limits. A sale made during 2026 will still follow the 2026 thresholds, even if the investor files the tax return in 2027.

The IRS is also raising ordinary income tax brackets for 2027, but those are separate from the long-term capital gains limits. Investors need to consider both their holding period and the calendar year of the sale before estimating their federal tax bill.