We use a unique data set of capital gains transactions to investigate the behavior of taxpayers with respect to the preferential tax rate for long-term capital gains. Our data allow us to examine the shifting of gains across time periods but eliminate the effect of the large pool of accrued gains that mechanically enlarge previous estimates. We adapt the bunching methodology developed by Kleven and Wasseem for rate changes over incomes to the drop in the capital gains tax when an asset has been held for more than one year. We find strong evidence that taxpayers respond to the preferential rate by reducing the realizations of gains in the weeks leading up to the point when the preferential rate applies. However, the magnitude of the transitory elasticity is small relative to prior estimates: we estimate a short-run gains elasticity of –0.47. We also estimate a quasi-permanent gains elasticity of –0.79.