The Internal Revenue Service announced higher capital gains tax brackets for 2027 on Thursday, raising the taxable income limits for long-term capital gains rates that apply to assets held for more than one year, CNBC reported on Friday.
Single filers with taxable income of $51,050 or less will qualify for the 0% long-term capital gains rate in 2027, whilst married couples filing jointly with $102,100 or less will also pay nothing. The capital gains rate paid, whether 0%, 15% or 20%, depends on which bracket a taxpayer falls into based on taxable income, calculated by subtracting the greater of the standard or itemised deductions from adjusted gross income.
The standard deduction will rise to $16,600 for single filers in 2027, up from $16,100, and to $33,200 for married couples filing jointly, up from $32,200. The agency also increased figures for dozens of other provisions, including federal income tax brackets, the estate and gift tax exemption and eligibility for the earned income tax credit.
The adjustments come as many long-term investors hold profitable assets after years of market growth, despite post-election stock market volatility. The new brackets could affect investors' 2027 plans for sales or rebalancing, which can trigger taxes for brokerage account investments. The latest round of IRS inflation adjustments arrives as many Americans wrestle with affordability amid the rising cost of housing, groceries, petrol and other living expenses.
Taxable income determines which capital gains bracket applies to an investor's asset sales. Taxpayers calculate this figure by subtracting the greater of the standard or itemised deductions from their adjusted gross income. The higher standard deduction for 2027 means some taxpayers may find themselves in a lower capital gains bracket than in previous years, potentially reducing their tax liability on investment gains.
Why it matters for wealth
US-exposed investors and those managing cross-border wealth now have the planning data needed to structure asset sales and rebalancing decisions for 2027. The higher thresholds may allow some taxpayers to realise gains at 0% or 15% rather than the top 20% rate.
Source: CNBC
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