what is a zero capital gains rate 
a zero capital gains rate implies a tax rate of 0 on capital gains this 0 rate may be charged to individuals who sell property within a so called enterprise zone such a zone is a geographic area that has been granted special tax breaks regulatory exemptions or other public assistance in order to encourage private economic development and job creation they are used most often to promote the revitalization of a city neighborhood the zero capital gains rate can be applied by a given level of government in order to prompt investment in a given area understanding a zero capital gains ratein 2004 the u s congress passed and the president approved the working families tax relief act the act contains provisions that extend the 0 capital gains tax to certain properties being sold within certain enterprise zones enterprise zones were introduced in the u s in the 1970s in an effort to reverse the flight of people and businesses from urban centers to the suburbs the programs may be used to encourage a private company to stay in a neighborhood expand in it or relocate to it the logic behind this act is to give an incentive to individuals to invest in this area the rate is not exclusive to any one region state or municipality legislators looking to create jobs and draw investment into a community frequently enact a zero capital gains tax rate or institute other tax related incentives in that area a 2012 tax bill made the 0 capital gains rate permanent for most filers provided that are either single with a taxable income under 37 950 or couples with taxable income under 75 900 even still some of these filers face modest tax rates of 25 to 30 if they earn additional income that s taxed at ordinary rates consequently pushing their long term gains or qualified dividend income from the 0 bracket into the 15 bracket for investment income on the other hand itemized deductions may reduce ordinary income placing individuals beneath the 15 bracket and thus increasing the capital gains or dividends that are taxed at 0 this helps explain why taxpayers can have high adjusted gross incomes but still face 0 taxes on their long term capital gains example the d c enterprise zoneunder this program each enterprise zone has its own particular set of rules which may change as the legislation is extended or amended for example with the d c enterprise zone the following mandates must be satisfied 