I have a married couple client in their 30’s whose taxable income in 2024 will be about $50,000, or about $44,000 below the $94,050 threshold in which long term capital gains are taxed at 0%.

They own $130,000 in a stock with a cost basis of $8,000. They wish to hold the stock long term.

I have suggested they consider selling as many shares of this stock as possible each year where they can remain in the 0% long term capital gain tax bracket, and then buy back the stock in order to “reset” the cost basis to the higher amount.

When a stock is sold at a loss, of course the wash sale rules apply so you must wait at least 30 days before buying back the stock you sold.

In this case, however, the stock is sold at a gain. Do the wash sale rules apply when a stock is sold at a gain?

In other words, does the client need to wait at least 30 days to buy back the stock to avoid the wash sale rules? Are you aware of any negative tax consequences that could occur if the stock was bought back before 30 days from which it was sold?

Thank you for considering these questions.