The strategy provides great flexibility and numerous benefits. You are opening up the possibilities to create bigger capital losses if you also do some tax loss harvesting. You are increasing your cost basis to reduce your capital gain tax when you do sell at a profit eventually.
Let's assume you have $1M in value today in an after-tax brokerage account with a cost basis of $750,000. If you can harvest gains of $40K/year for 3 years (2014-2016) while the market is up 7%/year you'll have increased your FMV by $225K while increasing your cost basis by $120K, so you now have a FMV/cost of $1,225,000/$870,000. In this specific scenario your cost basis started at 75% of FMV. If you harvest $40K/year your cost basis is now 71% of FMV. If you fail to harvest $40K/year your costs basis is now 61% of FMV. That's a big difference.
Now in 2017 when the market tanks 12% and you harvest your losses, you can specifically identify the shares you want to sell and create a capital loss. Specifically, you just bought $120K of this investment over the last 3 years, and you can now sell it for a $14K loss. If it drops low enough I'm sure you could create a lot bigger loss. This loss can be used to reduce your current year capital gains if any, or it can be carried forward for many years and you can use $3K/year against ordinary income, meaning it can reduce your wife's salary or your rental property income.
You can also use this loss in the future when you sell your rental property, which will almost certainly create a capital gain much bigger than the $40K we're talking about here that you can do tax free each year.
Here's a link to a post describing the strategy and some of the benefits:
http://www.madfientist.com/tax-gain-harvesting/I think I understand your question - if I'm always going to be in the 15% tax bracket why would I ever need a higher cost basis? These tax laws could change any day. I don't expect them to, and I've said as much on this forum recently, but it could happen. You will also eventually sell your rental property. You will eventually sell these stocks, or pass them on to a beneficiary. Your cost basis will eventually matter, even if it doesn't seem to now.