Capital Gains Tax Calculator

What Is Capital Gains Tax?

Capital Gains Tax (CGT) is the federal tax you owe on the profit you realize when you sell a capital asset—stocks, ETFs, mutual funds, real estate, cryptocurrency, or collectibles—for more than you paid for it. You only owe CGT when you *sell* (a "realization event"); simply owning an appreciated asset creates no tax liability.

How gain is calculated: > Capital Gain = Selling Price − Cost Basis − Selling Expenses

Your *cost basis* is what you originally paid, plus any commissions, fees, or improvements (for real estate). Selling expenses include broker commissions and transfer taxes.

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📈 Short-Term vs Long-Term: The Most Important Distinction

The single biggest factor in your CGT bill is how long you held the asset.

Short-Term Capital Gains (held ≤ 365 days) Taxed as ordinary income—the same brackets as your salary. For 2026, federal rates range from 10% to 37%. If you're in the 32% bracket, a short-term gain is taxed at 32%. There is no discount for short-term gains.

Long-Term Capital Gains (held > 365 days) Taxed at preferential federal rates of 0%, 15%, or 20% depending on your taxable income. For most middle-income Americans, the rate is 15%—less than half the typical ordinary income rate.

2026 Long-Term Capital Gains Tax Brackets (Federal)

| Filing Status | 0% Rate | 15% Rate | 20% Rate | |---|---|---|---| | Single | Up to $47,025 | $47,026 – $518,900 | Over $518,900 | | Married Filing Jointly | Up to $94,050 | $94,051 – $583,750 | Over $583,750 | | Head of Household | Up to $63,000 | $63,001 – $551,350 | Over $551,350 |

*Note: These thresholds apply to your total taxable income, not just the gain itself.*

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The Net Investment Income Tax (NIIT): The Hidden 3.8%

High-income taxpayers face an additional 3.8% surtax on top of regular CGT rates. This Net Investment Income Tax applies to the *lesser* of your net investment income or the amount by which your modified AGI exceeds:

• $200,000 for single filers
• $250,000 for married filing jointly

This means a high-income single filer with long-term gains effectively pays 23.8% federal CGT (20% + 3.8%), not 20%.

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Asset-Specific Rules

Stocks & ETFs Standard short/long-term rules apply. Qualified dividends receive long-term rates regardless of holding period. Wash sale rules (see below) prevent you from claiming a loss if you repurchase within 30 days.

Real Estate Your primary residence qualifies for the Section 121 exclusion: up to $250,000 of gain ($500,000 for married couples) is tax-free if you've lived in the home for 2 of the last 5 years. Gains above the exclusion are taxed at long-term rates if held over a year. Depreciation recapture on rental property is taxed at a maximum of 25%.

Collectibles (Art, Coins, Antiques) Long-term gains on collectibles are taxed at a flat 28% maximum federal rate—higher than the standard 20% cap.

Cryptocurrency The IRS classifies crypto as property. Every sale, trade, or spend triggers a gain/loss calculation. See our Crypto Tax Calculator for crypto-specific detail.

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Strategy 1: Tax-Loss Harvesting

If you hold investments at a loss, you can sell them to realize the loss**, then use that loss to offset your gains dollar-for-dollar. After exhausting gains, you can deduct up to **$3,000 of losses against ordinary income per year. Excess losses carry forward indefinitely to future tax years.

The Wash Sale Rule (critical):** You cannot repurchase the *same or substantially identical* security within 30 days before or after the sale for loss. Doing so disallows the loss. This rule applies to stocks and mutual funds—**not currently to cryptocurrency under IRS rules, though this may change legislatively.

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Strategy 2: Hold for Long-Term Status

The simplest, most powerful CGT strategy: hold assets for at least 366 days before selling. For someone in the 24% ordinary income bracket, this transforms a 24% short-term rate into a 15% long-term rate—a 9-percentage-point saving. On a $50,000 gain, that's $4,500 preserved by waiting a few months.

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Strategy 3: Timing Gains Across Tax Years

If you're selling near year-end, consider whether recognizing the gain in the *current* year vs. *next* year affects your bracket. A large gain in December might push you into the 20% long-term bracket; waiting until January could keep you at 15%. Similarly, if you expect lower income next year (job transition, early retirement), deferring a sale may mean 0% CGT on long-term gains.

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How to Report Capital Gains

Capital gains are reported on IRS Form 8949** (each individual transaction) and summarized on **Schedule D** of your Form 1040. Your broker issues a **Form 1099-B each year summarizing all sales, including cost basis for most transactions.

Key deadlines:

• If your gains push your estimated annual tax liability over $1,000, you may need to make quarterly estimated tax payments (Form 1040-ES) to avoid underpayment penalties. Due dates: April 15, June 16, September 15, January 15.

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State Capital Gains Taxes

Federal CGT is only part of the picture. Most states tax capital gains as ordinary income at their regular rates:

| State | Long-Term CGT Rate | |---|---| | California | Up to 13.3% (no preferential rate) | | New York | Up to 10.9% | | Oregon | Up to 9.9% | | Texas, Florida, Nevada | 0% (no state income tax) | | Washington | 7% (on gains over $270,000) |

For high earners in California, combined federal + state + NIIT can reach 37.1% on long-term gains.