US tax strategies: Reminder to Harvest Capital Gains

[innerscorecard]

For US nationals, just a reminder that next week is the last chance this year not only to harvest capital losses for the year, but also to lock in capital gains, if you're one of the weirdos like me for whom this situation actually makes sense.

 

So I'm going to sell stocks I have that have appreciated a lot, and then buy them back literally immediately, eternally stepping up my cost basis and incurring no tax to do so. There's no wash sale rule (which only applies to capital losses) for realizing capital gains. It's like dying without the pain!

 

I'm sure everyone here already knows about this...but hey, we've gotten a lot of new inexperienced posters (like myself of course) recently.

[merkhet]

Why do you not incur any tax to step up your basis?

[hillfronter83]

Why do you not incur any tax to step up your basis?

 

I have the same question. Do you need to be in certain tax bracket?

[bookie71]

Unless you have no income or large loss carryovers this does not make sense.

[Kraven]

This only works in a low income tax bracket.  At very low levels (below poverty line I think) there is no income tax anyway regardless of whether it comes from capital gains or not.  At a bit higher levels long term capital gains would not be taxed.  If he's doing something else, I have no idea what it is.

[innerscorecard]

I have the standard deduction and personal exemption which apply to my US taxable income. They weren't "used up" for my earned income because that income was excluded under the foreign earned income exclusion.