Harvesting gains is similar in some ways to harvesting losses. The concept is to sell appreciated securities you’ve held at least 12 months to realize the long-term gain for tax purposes. You can immediately repurchase the same asset because there is no wash sale rule for realizing gains. This allows you to pay tax on the gain in 2012, when rates are low, and establish a new cost basis in the asset to minimize increased gains that may be taxed at higher rates if tax increases related to the fiscal cliff occur.
Anyone in the 10 or 15 percent tax bracket this year should seriously consider realizing gains. Long-term capital gains are taxed at 0 percent this year and may be taxed at 8 to 10 percent in 2013.