Q. Is it really true that a portion of your capital gains may be taxed at the 0% rate? M.P.K., Lincoln, Neb.
A. Yes. This tax break is available for long-term gains on assets held longer than one year. The 0% rate applies to gains counted as taxable income up to the threshold for reaching the 25% tax bracket. For instance, a joint filer in 2014 with $50,000 of taxable income can realize a long-term capital gain of up to $23,800 and pay 0% tax on the gain. (The threshold for the 25% bracket is $73,800 for 2013.)
Tip: When possible, manage taxable income in 2014 to take advantage of this break.