How to take advantage of long-term capital gains rates

Did you know that you or your heirs might be eligible for a 0% rate on long-term capital gains and dividends? The Tax Cuts and Jobs Act (TCJA) signed into law late last year kept the three federal income tax rates on long-term gains (0%, 15%, and 20%). But unlike the old rules, these rates are no longer tied to the ordinary income rate brackets. What’s more, many individual taxpayers may still qualify for the 0% federal income tax rate on long-term capital gains and dividends. Before you object that your income is too high to benefit, remember that you may have children, grandchildren, or other loved ones who may still be able to take advantage. Here’s what you need to know. Help loved ones to cash in on the 0% rate While your income may be too high to benefit from the 0% rate, you may have relatives who qualify. If so, consider giving them some appreciated stock or mutual fund shares that they can then sell and then pay 0% federal income tax on the resulting long-term capital gains. Gains will be long-term as long as your ownership period plus your gift recipient’s ownership period (before the recipient