Capital Gains Tax Calculator
Compute US capital gains tax: short-term (ordinary income) vs long-term (0/15/20%) plus NIIT and state tax. Strategic tax-loss harvest planning. Free.
Capital Gains Tax Calculator
US capital gains tax: short-term (held under 1 year) taxed as ordinary income; long-term (1+ year) at preferential 0/15/20% LTCG rate. Plus NIIT (3.8% for high earners) and state tax. The single biggest tax-savings lever for investors is the 1-year holding rule.
How to Use the Capital Gains Calculator
Use accurate cost basis
Original purchase price + reinvested dividends + commissions paid. Your brokerage 1099-B shows basis but verify against your records — basis errors are common, especially for old purchases or DRIP positions.
Check the holding period
Day AFTER purchase to day of sale. 1 year + 1 day or more qualifies for long-term. The 1-day distinction is huge: short-term might be 24-32% federal; long-term is typically 15%. For positions close to the 1-year mark, waiting can save thousands.
Include other income for proper bracketing
The federal LTCG rate depends on TOTAL income including the gain. NIIT applies when MAGI exceeds USD 200K (single) / USD 250K (joint). Use your trailing-12 income for accurate bracketing.
Consider tax-loss harvesting
If you have losses elsewhere in your portfolio, sell them to offset this gain. Capital losses fully offset capital gains + USD 3K of ordinary income. Wash-sale rule: avoid re-buying the same security within 30 days. Different ETFs tracking same index qualify as not "substantially identical".
Capital Gains Tax — The Holding-Period Rule and Why It Pays
Short-Term vs Long-Term — The Most Important Tax Lever
US capital gains are taxed dramatically differently based on holding period. Short-term (held under 1 year): taxed at ordinary income rate — 10-37% federal depending on your bracket. Long-term (1+ year): preferential rates of 0% / 15% / 20% based on total income. For a middle-income earner in the 24% bracket, the difference is 24% (short) vs 15% (long) = 9 percentage points saved on the gain. For a high earner in the 35% bracket: 35% vs 20% = 15 percentage points. The 1-year holding rule is the single highest-leverage tax-planning move available to ordinary investors.
The day-counting matters precisely. Day after purchase to day of sale. Buy 2024-03-15, sell 2025-03-15: short-term (exactly 1 year, doesn't qualify). Sell 2025-03-16: long-term. The IRS doesn't grant partial credit — one day determines the entire tax treatment. For positions close to the 1-year mark with significant unrealized gain, waiting a few extra days can save thousands.
The 0% LTCG Bracket — Powerful for Retirees + Low-Income Years
LTCG of 0% applies when taxable income is under USD 49,450 (single, 2026) / USD 98,900 (joint). This is taxable income AFTER deductions — many retirees fall here naturally. Strategic gain harvesting: sell appreciated positions until your income hits the bracket ceiling, pay 0% federal on the gain, then immediately rebuy. Resets your cost basis to current price without triggering tax. Useful in: gap years between jobs, early retirement before Social Security, sabbatical years, business losses offsetting income. Combine with traditional IRA Roth conversions in the same low-income year for maximum tax efficiency.
NIIT (Net Investment Income Tax) is the 3.8% surtax on investment income for high earners (MAGI above USD 200K single / USD 250K joint). Applies to the LESSER of net investment income or MAGI above threshold. For high earners, NIIT effectively makes the LTCG rate 18.8% (15% + 3.8%) or 23.8% (20% + 3.8%). State tax stacks on top — California adds up to 13.3% — bringing total marginal tax on LTCG to ~30-37% for high earners in high-tax states.
"The 1-year holding rule is worth far more than people realize. A USD 50K short-term gain at 32% federal = USD 16K tax. The same gain held 1 day longer to qualify long-term = USD 7,500 tax. USD 8,500 saved by waiting one day. For most investors, this is the highest-ROI single tax move available."
Tax-Loss Harvesting and the Wash-Sale Rule
Strategic tax-loss harvesting: sell losing positions to offset gains. Capital losses offset capital gains dollar-for-dollar + USD 3K of ordinary income per year. Excess loss carries forward indefinitely. The wash-sale rule: cannot deduct the loss if you buy "substantially identical" securities within 30 days before or after the sale. Workarounds: buy a different ETF tracking the same index (VOO → SPY, both S&P 500 but legally different), buy after 31 days, or buy related-but-different assets. Wash-sale does NOT apply to crypto as of 2026 — a major tax-loss-harvesting advantage for crypto investors. Annual tax-loss harvesting on a USD 500K portfolio can save USD 1-3K/year of federal tax without changing underlying market exposure.
10 Facts About US Capital Gains Tax
Short-term cap gains (under 1 year): taxed as ordinary income at marginal bracket (10-37%).
Long-term cap gains (1+ year): preferential rates 0% / 15% / 20% based on total income.
0% LTCG bracket: taxable income under USD 49,450 single / USD 98,900 joint (2026, IRS Rev. Proc. 2025-32).
NIIT 3.8% surtax applies above MAGI USD 200K single / USD 250K joint.
Wash-sale rule: cannot deduct loss if you buy "substantially identical" within 30 days. Doesn't apply to crypto (yet).
Capital losses offset gains dollar-for-dollar + USD 3K of ordinary income/year. Excess carries forward.
Specific identification (HIFO): choose which lots to sell to minimize tax. Brokerage must support this.
Step-up at death: heirs receive assets at fair market value basis — deferred gains eliminated.
Collectibles (art, gold, coins): special 28% maximum LTCG rate, not standard 0/15/20.
Crypto specific: same rules but wash-sale doesn't apply as of 2026 — unique tax-loss-harvesting advantage.
Frequently Asked Questions
- 1 year + 1 day. The IRS counts from the day AFTER purchase. Buy 2024-03-15, sell 2025-03-15: still short-term (exactly 1 year). Sell 2025-03-16: long-term. The day matters. Federal rate difference is typically 7-15 percentage points on the gain.
- Long-term capital gains pay 0% federal when total taxable income is under USD 49,450 single / USD 98,900 joint (2026, IRS Rev. Proc. 2025-32). Strategic gain harvesting: low-income years, retirement gap years, sabbatical years let you realize gains tax-free. Combine with Roth conversions in the same year for maximum tax efficiency.
- Net Investment Income Tax: 3.8% surtax on investment income for high earners (MAGI above USD 200K single / 250K joint). Applies to the LESSER of net investment income or MAGI above threshold. For investors with significant gains + high salary income, effectively makes LTCG 18.8% (15% + 3.8%) or 23.8% (20% + 3.8%).
- Most states tax capital gains as ordinary income. Texas, Florida, Washington, Nevada, Tennessee, South Dakota, Alaska, Wyoming, New Hampshire: 0% state cap gains. California up to 13.3%, New York up to 10.9%, Hawaii up to 11%. For high earners in high-tax states, combined federal + state + NIIT can hit 35-40% on LTCG vs 0% for the same investor in TX/FL. Material.
- Strategic sale of losing positions to offset gains. Realizes the loss for tax purposes; you can re-buy similar (NOT identical) holdings to maintain market exposure. Capital losses fully offset capital gains, plus USD 3K of ordinary income per year. Excess carries forward indefinitely. Common annual ritual for taxable-account investors in December. Robo-advisors (Wealthfront, Betterment) automate this for ~0.25% annual fee.
- Cannot deduct a loss if you buy "substantially identical" securities within 30 days before OR after the sale. Goal: prevents "fake" loss harvesting where you sell + immediately rebuy. Workaround: buy a different but similar ETF (VOO → IVV, both S&P 500 trackers). Doesn't apply to crypto as of 2026 — sell BTC at loss + immediately rebuy is fully deductible.
- When you've bought the same security at multiple price points, you can choose WHICH lots to sell. HIFO (highest-cost-first-out) minimizes current tax by selling your most-expensive lots first. Brokerage default is FIFO (first-in-first-out). Specify HIFO with your broker before each sale. Material savings in volatile markets where you have widely-different cost basis lots.
- When an asset passes to heirs at death, the cost basis "steps up" to fair market value on date of death. Accumulated unrealized gains during the deceased's lifetime ARE NOT taxed. The heir can immediately sell with little-or-no tax. Powerful estate-planning tool: holding appreciated assets until death rather than selling during life can eliminate decades of deferred capital gains tax. Combined with 1031 exchange for real estate, can produce zero-tax wealth transfer.
- Yes. Art, antiques, gold + silver coins, gems: maximum 28% LTCG rate (instead of standard 0/15/20). NFTs are still being defined — IRS 2023 guidance suggests "look-through" treatment based on underlying nature. Standard appreciation rate; collectibles surtax for those classified as such. For most retail investors, this distinction only matters for actual collectible holdings.
- Cost basis steps up to fair market value at death. Heir who immediately sells pays little-or-no tax. If heir holds + sells later, only the appreciation FROM date of death is taxed (basis is FMV at death). Major US estate-planning advantage: assets held until death effectively eliminate accumulated lifetime gains tax. Combined with no federal estate tax for estates under USD 13.99M (USD 27.98M joint, 2025) — most US families pass wealth tax-free at death.
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