Here's How to Pay 0% Capital Gains Taxes With a Six-Figure Income

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Here's How to Pay 0% Capital Gains Taxes With a Six-Figure Income
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You may qualify for the 0% long-term capital gains rate with a six-figure income. Here’s how to calculate your taxable income to harvest tax-free gains.

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For example, let's say a retired couple has $30,000 in tax-exempt interest, $25,000 of regular income and $75,000 in long-term capital gains and dividends. Their gross income is $100,000 since it doesn't include the tax-exempt interest. In this case, their gross income is $125,000 and taxable income is $98,000. Since the $27,000 standard deduction exceeds the $25,000 of regular income, the $98,000 is entirely long-term capital gains and dividends.

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