Capital Gains Tax Calculator

Short-term vs. long-term: the holding period decides

The tax code rewards patience. Sell an investment you held for one year or less and the profit is a short-term gain, taxed exactly like wages at your ordinary marginal rate. Hold it more than one year and the profit is a long-term gain, taxed at the preferential rates of 0%, 15%, or 20%. The one-year line is a cliff, not a slope: selling on day 364 versus day 366 can change the tax on the same profit dramatically.

How stacking works

Long-term gains do not get their own separate brackets; they pile on top of your ordinary taxable income and fill the preferential thresholds upward. Your wages and short-term gains fill the 0% and 15% buckets first, so high earners push their gains into the 15% or 20% zone while modest earners may pay 0% on part of their gains. This is why the same $20,000 gain can be tax-free for one person and cost $3,000 for another: the rate depends on what sits underneath it.

Approximate 2026 long-term gain thresholds

For 2026, the 0% long-term rate applies to taxable income up to roughly $48,350 for single filers and $96,700 for married filing jointly. The 15% rate then runs up to roughly $533,400 single / $600,050 joint, with 20% on gains above that. These are approximate, inflation-adjusted figures: the IRS finalizes them late in the year, so confirm against official publications before you file or make a large sale. Note that the thresholds measure taxable income (after the standard deduction), not gross income.

Worked example

A single filer has $40,000 of ordinary taxable income and $20,000 of long-term gains. The 0% threshold is about $48,350, and $40,000 of ordinary income already sits under it, leaving $8,350 of room. So $8,350 of the gains is taxed at 0% and the remaining $11,650 is taxed at 15% = $1,747.50. The ordinary $40,000 is taxed separately with the regular brackets. If this filer had $60,000 of ordinary income instead, the 0% room would be gone and the full $20,000 gain would face 15%.

Timing strategies that actually work

Hold past the one-year mark whenever the gain is large enough to matter; it is the single biggest lever. Harvest losses to offset gains: selling losers in the same year cancels winners dollar for dollar, and up to $3,000 of net loss can shelter ordinary income. Mind the threshold: if you are near the 0% line, realizing gains across two tax years can keep more of them at 0%. And remember the home-sale exclusion: up to $250,000 of gain ($500,000 joint) on a primary residence you have owned and lived in for two of the last five years is excluded entirely.

Edge cases worth knowing

The one-year clock starts the day after you buy, and the gain is long-term only if you sell after the one-year anniversary, so mark the calendar rather than eyeballing it. Mutual fund capital gain distributions in December are taxable to you even if you just bought the fund, which surprises new investors every year. Collectibles such as art and coins face a special 28% maximum rate instead of the 20% cap. And the wash-sale rule disallows a loss if you buy the same security 30 days before or after the sale, so harvested losses need genuinely different replacement holdings. None of these change the stacking math above, but each can change the number on your return.