very few people in that income range maintain brokerage accounts with equities in them . you will find most have only their ira's and 401k's with investments in them so zero capital gains brackets do them no good .
if it turns out one is not in the 15% tax bracket and do have equities in their brokerage account then odds are they shot themselves in the foot doing it that way . even a 1% distribution over time wipes out any tax savings in a brokerage account if it turns out with rmd's and ss your are not in the 15% bracket or consumed to much of the 15% bracket with other income .
all other income you get fills up the bucket first and only what can still fit in that bucket after all other income qualifies for special zero capital gain rates .
there are also different rules as far as what is qualified dividends when using funds . it is not based on a 1 year hold . it has to do with how long the fund holds the stocks as well as your holding period . .
last year was our first full year in retirement . we ate up that zero capital gains bracket pretty quickly and i am delaying social security so far .
we had 8k in social security from my wife , 20k in pension , 5k in interest income from some lease rights we sold and 20k from me doing a bit of consulting work in retirement and about 15k in interest from our bond funds in the taxable account . all the rest we spent came from cash so it did not count .
so the bucket started out filled with 68k before our first dividend and fund distribution goes in , less deductions and exemptions of course . .
here is a good explanation of the zero capital gains bracket from michael kitces.
this is his summary with a great tip about not harvesting losses , but harvesting gains . .
EXECUTIVE SUMMARY
For “lower income” individuals whose income falls within the bottom two ordinary income tax brackets, the Internal Revenue Code applies a 0% long-term capital gains rate to the extent their gains also fall within the lower two brackets. However, the 0% rate only applies as long as the income actually does fall within those lower brackets – which means “too much” in capital gains will eventually cross out of the 0% rate and into the higher tax brackets.
Nonetheless, the potential for 0% long-term capital gains rates means that for those who are eligible, the best thing they can do every year is not harvest capital losses – the “typical” capital gains strategy – but instead to harvest gains! By selling investments that are up, and buying them back again immediately (without any wash sale rules to navigate!), the taxpayer can effectively get a step-up in basis on current investments without any (Federal) tax liability!
Of course, the caveat to this strategy is that while long-term capital gains may be eligible for 0% rates for lower income individuals, it is still income itself, potentially impacting certain deductions and tax credits, and the taxation of Social Security. In addition, harvesting capital gains must be coordinated with other strategies, like partial Roth conversions, which can potentially drive up long-term capital gains rates and make capital gains harvesting less effective. Still, though, the potential to claim a free step-up in basis is not one to be missed, for any years where income is low enough to take advantage of the rules, whether due to just having income low enough to qualify, having a “temporarily” low income year due to a job loss or change, or simply looking to harvest capital gains once retired when wage income is gone and required minimum distributions have not yet begun!
https://www.kitces.com/blog/understa...p-up-in-basis/
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