A big unrealized gain is one of those financial problems you’re happy to have… until you start thinking about the tax bill attached to it. Maybe you bought an investment years ago that has grown substantially. Selling it could mean a sizable capital gain, so the obvious strategy seems to be: don’t sell.

But what if you could make some of that embedded gain disappear?

There are situations where you can effectively reset your cost basis without just selling an investment, paying the tax, and moving on. You may be able to give appreciated shares to charity or even intentionally realize gains during a low-tax year.

Neither of these is a magic tax trick. They’re examples of what can happen when you stop looking at taxes one transaction at a time and start thinking about where your gains are sitting, when they’ll become taxable, and whether you have an opportunity to do something about them now.

 1. Donate Appreciated Investments Instead of Cash

If charitable giving is already part of your plan, think about what you’re giving—not just how much.

Suppose you want to give $20,000 to charity and own $20,000 of stock that you originally purchased for $8,000. Instead of writing a check, you could donate the appreciated shares directly to a qualified charity or donor-advised fund.

When certain long-term appreciated securities are donated to a qualified organization, you can generally avoid realizing the capital gain and may be able to deduct the fair market value of the investment, subject to applicable rules and limits.

Here’s where the basis planning comes in: You still have the $20,000 in cash you would have donated. If you still want to own that investment, you could use the cash to purchase it again. You may end up with roughly the same investment exposure, but instead of owning shares with an $8,000 basis and $12,000 embedded gain, your newly purchased shares have a basis closer to $20,000.

The charitable gift didn’t just support a cause you care about. It potentially cleaned up part of your taxable portfolio, too.

 2. Harvest Gains When Your Tax Rate Is Low

You’ve probably heard of tax-loss harvesting. Tax-gain harvesting doesn’t get nearly as much attention.

There may be years when your taxable income is temporarily lower, maybe after retirement but before RMDs begin, during a career transition, or in a year when business income falls. That could create an opportunity to deliberately sell appreciated investments while some of your long-term capital gains fall within the 0% federal capital gains bracket.

For 2026, the 0% long-term capital-gains rate applies up to certain taxable-income thresholds, so this strategy has to be coordinated carefully with the rest of your income. If you sell an appreciated investment and still want to own it, you can generally buy it again. Unlike selling an investment at a loss, the wash-sale rule generally doesn’t prevent you from immediately repurchasing an investment sold at a gain.

You’ve now intentionally recognized the gain during a favorable tax year and reset your cost basis to approximately today’s value. That could mean a smaller taxable gain when you eventually sell the investment down the road.

Sometimes Paying Tax Isn’t the Problem

These two strategies have something important in common: tax planning isn’t always about postponing taxes for as long as possible.

Sometimes it’s about recognizing a gain when the tax consequences are favorable. Sometimes it’s about giving the gain away. And sometimes it’s about taking advantage of a tax-free distribution while you have the opportunity.

The bigger question is: What opportunities do you have today to make your future tax situation better?

That’s where looking at your charitable giving, education funding, investment portfolio, and tax picture together can make a difference. At Approach Retirement Advisors, we help clients look beyond individual investments to understand how all the pieces of their financial lives work together. After all, sometimes the smartest opportunity isn’t finding the next great investment; it’s making more strategic decisions with the investments you already own.

CLICK HERE to start the conversation.