Although it may not be possible for you to enjoy a 0% tax rate, your adult children could be eligible. If they’re in the 10% or 12% income tax bracket, you might want to consider transferring long-term appreciated investments to them. If they sell the assets, they’ll likely qualify for a 0% capital gains rate — as long as the gains don’t push them into a higher bracket. This strategy may be even more effective if you’re subject to the 3.8% net investment income tax. But be careful: Children under age 24 on Dec. 31, 2026, could be subject to the “kiddie” tax. Gift tax issues might also come into play. Contact us for help navigating these potential obstacles.
