Capital gains tax planning scenarios

Capital gains planning is most effective when you evaluate a few specific levers: timing, income management, relocation, and loss harvesting. The case studies below show how to quantify each lever using the scenario planner and calculators.

Scenario 1: Wait for long-term qualification

Alex bought a $200,000 stock position on June 1, 2024 and wants to sell in May 2025. By waiting until June 2, 2025 the gain switches from short-term to long-term, dropping the federal rate from 32% to 15%. The scenario planner shows a $10,400 federal tax reduction even after accounting for market drift assumptions.

Scenario 2: Loss harvesting to fund a relocation

Priya is selling a rental property in California and moving to Texas. By harvesting $15,000 in stock losses before closing and finalizing the sale after establishing Texas residency, she cuts state taxes to zero and offsets part of the gain federally. Model this by setting Scenario B’s state to TX and entering the planned loss harvest amount.

Scenario 3: Exercising stock options

Quinn holds incentive stock options (ISOs) with significant AMT exposure. Exercising in January triggers AMT but qualifies for long-term treatment by the following year. Use Scenario A to capture an exercise-and-sell-same-year strategy, and Scenario B to model exercising this year and selling next year once the ISO holding period is satisfied.

Applying the playbook

• Benchmark your current plan in Scenario A with actual dates, sale prices, and state.
• Copy the scenario and tweak one lever at a time—timing, income, or loss harvesting—to isolate the savings.
• Record supporting documents (option agreements, improvement receipts, brokerage statements) alongside each scenario for audit readiness.

Share the exported comparison with your CPA or wealth advisor to coordinate estimated payments or withholding changes before year-end.