2027 Capital-Gains Tax Brackets: What Small Business Owners Need to Know

UpTrajectory Review

The IRS has released its inflation-adjusted capital-gains tax brackets for 2027, and Andrew Keshner at MarketWatch has the rundown. For small-business owners, this is not a distant policy story. If you plan to sell your company, your equipment, or a building in the next few years, the 2027 thresholds determine how much of that gain stays with you and how much goes to Washington. The IRS adjusts these brackets annually for inflation, and the new numbers replace the 2026 figures for sales that close next year.

Why does this matter now? Because exit planning takes time. Owners who wait until they sign a letter of intent to think about taxes often leave money on the table. The capital-gains rate you pay depends on your taxable income and how long you held the asset. Knowing the 2027 breakpoints lets you model whether a sale this year or next year produces a lower bill. It also shapes decisions about installment sales, like-kind exchanges, and the timing of equipment write-offs.

Keshner's piece covers the standard three-tier structure: zero percent for lower-income taxpayers, fifteen percent for most filers, and twenty percent for high earners, plus the net investment income tax that can add another 3.8 percent. The genuinely new element is the inflation adjustment itself, which nudges the income cutoffs upward. That shift can matter at the margins. An owner hovering near a bracket edge may find a bit more room before the higher rate kicks in. We agree with Keshner that these annual updates deserve attention, though we remain skeptical that the headline change will alter many exit plans on its own. The bigger drivers remain your basis, your holding period, and your state tax bill.

Second-order effects ripple outward. Owners in high-tax states feel a heavier combined burden than the federal brackets alone suggest. Those with pass-through entities face a different calculation from C-corporation owners, who may contend with double taxation on asset sales. Employees who receive equity compensation also watch these thresholds, since incentive stock options and qualified small-business stock carry their own capital-gains rules. Downstream, a modestly higher bracket threshold can shift the math on whether to accelerate income into 2026 or defer it into 2027, especially for owners weighing retirement or succession.

What should you do next? Pull your most recent tax return and project your 2027 taxable income under both a sale and no-sale scenario. Compare the capital-gains bill under each. If the numbers are close, talk to your accountant about timing strategies, such as structuring an earnout or spreading recognition across multiple years. Watch for any late-year tax legislation that could alter rates or thresholds before 2027 begins. Keshner's article gives you the baseline; your advisor can turn it into a plan.

Takeaway: Model your 2027 taxable income now to see whether selling before or after January 1 changes your capital-gains bill.