Estimate your federal capital gains tax using 2026 rates. See short-term vs long-term treatment, NIIT surtax, bracket breakdown, and net proceeds after taxes.
2 In-Depth Guides
Understand 2026 short-term and long-term capital gains tax rates. Learn tax-loss harvesting, the NIIT surtax, primary residence exclusion, and other strategies to reduce capital gains tax.
Read Full GuideProven strategies to minimize capital gains tax including tax-loss harvesting, the primary residence exclusion, 1031 exchanges, Opportunity Zones, and charitable giving.
Read Full GuideCapital gains tax applies when you sell an asset for more than you paid for it. The tax rate depends on two key factors: how long you held the asset and your total taxable income. Understanding these rules can save you thousands — or even eliminate your tax liability entirely.
Assets held for 12 months or less are taxed at ordinary income rates (10–37%). Assets held for more than 12 months qualify for preferential long-term rates: 0%, 15%, or 20%. For most taxpayers, this means long-term gains are taxed at 15% — a significant savings over the 22% or 24% ordinary rate many people face.
High earners face an additional 3.8% Net Investment Income Tax on investment income above $200,000 (single) or $250,000 (married filing jointly). This brings the maximum long-term capital gains rate to 23.8%. Our calculator automatically applies this when your income exceeds the threshold.
You can offset capital gains by selling investments that have lost value. Up to $3,000 of net capital losses can be deducted against ordinary income each year, with excess losses carried forward. Strategic tax-loss harvesting throughout the year can significantly reduce your tax bill.
The primary residence exclusion shelters up to $250,000 ($500,000 for couples) of home sale gains from taxes. For investment properties, consider a 1031 exchange to defer gains by reinvesting into a like-kind property. Cost basis for real estate includes the purchase price, closing costs, and capital improvements — all of which reduce your taxable gain.
Short-term capital gains apply to assets held for 12 months or less and are taxed at your ordinary income tax rate (10–37% in 2026). Long-term capital gains apply to assets held for more than 12 months and receive preferential rates of 0%, 15%, or 20% depending on your income. This difference can mean paying 0% instead of 37% — making holding period one of the most important factors in tax planning.
For 2026, long-term capital gains rates are: 0% for singles with taxable income up to $48,350 ($96,700 married filing jointly), 15% up to $533,400 ($600,050 MFJ), and 20% above those thresholds. Additionally, high earners may owe the 3.8% Net Investment Income Tax (NIIT) on top of these rates, bringing the maximum effective rate to 23.8%.
The NIIT is a 3.8% surtax on investment income (including capital gains, dividends, and interest) for taxpayers with modified adjusted gross income above $200,000 (single) or $250,000 (married filing jointly). It applies to the lesser of your net investment income or the amount by which your MAGI exceeds the threshold. Our calculator automatically includes this when applicable.
Key strategies include: (1) Hold assets for more than 12 months to qualify for lower long-term rates. (2) Tax-loss harvesting — sell losing investments to offset gains. (3) Use tax-advantaged accounts (401(k), IRA, HSA) where gains are tax-deferred or tax-free. (4) Time your sales in lower-income years. (5) Consider Qualified Opportunity Zone investments for deferral. (6) Gift appreciated assets to charity for a double benefit.
You may be eligible for the primary residence exclusion: $250,000 for singles or $500,000 for married couples filing jointly. To qualify, you must have owned and used the home as your primary residence for at least 2 of the last 5 years. Any gain above the exclusion amount is taxed at capital gains rates. Our calculator can help you estimate the tax on the non-excluded portion.
Your cost basis is typically the purchase price plus any commissions or fees paid. For inherited assets, the basis is usually "stepped up" to the fair market value at the date of death. For gifted assets, the basis carries over from the donor. If you reinvested dividends, each reinvestment increases your basis. Most brokerages now track cost basis automatically and report it on your 1099-B.
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