In the world of tax law, truly “free” lunches are rare. Usually, a tax break in one area requires a sacrifice in another. However, if you know where to look, the tax code contains several freebies—legal provisions that allow you to increase wealth, generate income, and gift money without the IRS taking a single penny.

Here are five of the most powerful financial freebies available to investors today.

Most investors assume that selling a winning stock always triggers a tax bill. However, for those in the lower income brackets (up to $50,400 for individuals or $100,800 for married couples in 2026), the long-term capital gains tax rate is exactly 0%.

The Strategy: If you have a low-income year—perhaps due to early retirement before Social Security or required minimum distributions kick in—you can strategically sell appreciated securities without paying any federal tax. The proceeds can fund living expenses or replace the shares you just sold to capture a free stepped-up basis without having to die first.

Named after the homeowners in Georgia who rent out their houses during the Masters golf tournament, Section 280A(g) of the tax code allows you to rent out your primary residence for up to 14 days per year without having to report a single dollar of that income to the IRS.

The Strategy: Whether you live near a major sporting event, a film set, or a popular festival, you can pocket the rental income entirely tax-free. There are no income limits on this rule, and you don’t even need to report the income on your Form 1040. For high-income earners in high-tax states like California, this is a significant freebie that bypasses both federal and state taxes.

The newly enacted One Big Beautiful Bill Act has introduced a literal cash freebie for the next generation. For every child born between Jan. 1, 2025, and Dec. 31, 2028, the federal government will provide a $1,000 seed deposit into a Trump Savings Account.

The Strategy: While these accounts have  long-term tax flaws, you should never turn down a  government grant. Capture the $1,000 as soon as the portal opens in 2026. Let that government money compound, but pivot your own family contributions to a 529 plan for superior tax treatment.

The most valuable freebie for retirees often occurs in the window between the end of a professional salary and the start of required minimum distributions, or RMDs, and Social Security. During these gap years, your taxable income may drop to its lowest level in decades.

The Strategy: Use this low-income window to perform Roth conversions at a 0% or 10% effective tax rate. By filling up these lower tax brackets now, you are effectively prepaying your future tax bill at a massive discount. You eliminate future RMD pressure and ensure that every dollar of future growth in that Roth account is shielded from the IRS forever. It is one of the few times the tax code allows you to move money into a tax-free bucket at little or no cost. In most cases, this is a better deal than recognizing capital gains at 0%.

Is a  qualified charitable distribution, or QCD, truly free? If you are charitably inclined and over age 70½, the answer is a resounding yes. Normally, taking money out of a traditional IRA is a taxable event. However, a QCD allows you to send up to $111,000 each year directly to a charity (in 2026).

The Strategy: The money goes from your IRA to the charity without ever touching your bank account, meaning it is never counted as taxable income. This is a freebie because a lower adjusted gross income can help you avoid higher Medicare premiums, and it reduces the amount of your Social Security that is subject to tax. You are effectively spending your IRA money on your philanthropic goals while keeping the IRS entirely out of the transaction.

The IRS rarely hands out gifts, but these five provisions are as close as it gets. Whether it is capturing $1,000 for a newborn or leveraging your gap years for a low-cost Roth conversion, the key is proactive timing.

This article was provided to The Associated Press by Morningstar. For more personal finance content, go to https://www.morningstar.com/personal-finance.

Sheryl Rowling, CPA, is an editorial director, financial advisor for Morningstar.

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