What This Calculator Actually Answers

This tool models two distinct strategies. Tax-loss harvesting: selling positions at a loss to offset realized gains elsewhere, plus up to $3,000 of ordinary income per year (with the rest carrying forward indefinitely). Tax-gain harvesting: deliberately selling positions at a gain in years where your taxable income is low enough to fall into the 0% federal long-term capital gains bracket, effectively resetting cost basis tax-free.

The output shows the cumulative tax savings across multiple years and the resulting cost-basis reset on positions you continue to hold. For most retirees with taxable brokerage accounts, this is one of the highest-leverage moves available in years where income is intentionally compressed (between retirement and Social Security claiming, for example).

How to Read the Result

The savings figure assumes you harvest deliberately and replace sold positions with similar-but-not-identical funds to avoid wash-sale violations. If you intend to repurchase the exact same fund within 30 days, the wash-sale rule disallows the loss, and the calculator's loss-harvesting estimate becomes irrelevant.

For gain harvesting, the 0% LTCG bracket is income-dependent. As of 2026, married-filing-jointly with taxable income below approximately $96,700 falls into the 0% bracket. Once you cross the threshold, every additional dollar of long-term gain is taxed at 15% federally, so the strategy is most powerful in years where total income is well below the threshold.

Common Mistakes

• Violating the wash-sale rule by repurchasing the same security (or a substantially identical one) within 30 days before or after the sale. The disallowed loss adds to the cost basis of the replacement security but cannot be used immediately.
• Harvesting losses without coordinating with realized gains: the value of loss harvesting is highest when offset gains exist, not when losses pile up as carryforwards.
• Forgetting state tax consequences. Arizona's 2.5% flat rate applies to capital gains as ordinary income: modest, but worth modeling.
• Gain harvesting in years where Social Security or RMD income pushes you out of the 0% LTCG bracket. The strategy depends on intentional income compression.
• Ignoring the AMT implications of large harvested gains for households still affected by AMT thresholds.

When This Calculator Is Not the Right Tool

This is a tactical tax-management tool, not a holistic retirement plan. If your priority is multi-year Roth conversion sizing, RMD trajectory planning, or withdrawal sequencing, those decisions sit upstream of capital-gain harvesting and are better modeled with the tax-efficient withdrawal calculator first. Use this tool after the bigger-picture strategy is set.

Frequently Asked Questions