If I understand correctly, you pay 0% long-term capital gains tax if you are in the 10% or 15% income tax brackets (i.e. if you make $37,450 or less).

If I knew I had to sell my stock that had, say, $1M of capital gains, could I simply not work (or work so little that I made less than $37,450) for the year I sold it, and pay $0 in tax instead of $150,000?

  • 1
    The capital gain itself will be your income that year. You will get taxed based on that income. So, the answer is no. Since 100% of that income will be the subset of long term capital gains, you will pay the associated long term capital gain tax rate.
    – CQM
    Apr 24 '15 at 16:15
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    Why sell. If you have a million dollars worth of stock, any real bank will make you a collateral loan so that you can avoid having a taxable event. You'll get your million dollars today at very low interest rates. My guess is any interest rate you take will be an order of magnitude below the tax rate you'd find selling. Very easy to withdraw large gains under the radar this way. Apr 24 '15 at 20:36
  • @Knuckle-Dragger its not really withdrawing, and not at all under the radar. Trouble starts when the stock tanks and the loan get called. If you have deep enough pockets (and diverse enough investments) to swallow this, then definitely, that's how rich people can afford to not pay taxes.
    – littleadv
    Apr 25 '15 at 1:59


$1M income already puts you in the highest income tax bracket, so your capital gains tax would also be the highest + medicare.

While the capital gains are taxed at special rates, they do affect your AGI. The special rates for capital gains are based on the AGI. It is only if your AGI is less than that amount will you pay 0% capital gains tax.

  • 2
    Thanks, makes sense. So all I have to do sell it over 27 years, without making any other money! ;)
    – Jer
    Apr 24 '15 at 16:47
  • @jer yes. In other words - retire:)
    – littleadv
    Apr 25 '15 at 1:58

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