US Capital Gains Tax Calculator

How Capital Gains Tax Works

When you sell an investment — stocks, bonds, real estate, cryptocurrency, or other assets — for more than you originally paid, the profit is called a capital gain and is subject to federal tax. How much tax you owe depends on two key factors: how long you held the asset and your total taxable income.

Short-Term vs. Long-Term Capital Gains

The IRS distinguishes between short-term and long-term capital gains based on your holding period. Assets held for one year or less before selling generate short-term capital gains, which are taxed at ordinary income tax rates — the same progressive brackets that apply to wages and salaries. Assets held for more than one year qualify for preferential long-term capital gains rates of 0%, 15%, or 20%, depending on your taxable income and filing status.

2026 Long-Term Capital Gains Rates

• 0% rate: Single filers up to $48,350; Married Filing Jointly up to $96,700; Head of Household up to $64,750.
• 15% rate: Single filers $48,350 – $533,400; Married Filing Jointly $96,700 – $600,050; Head of Household $64,750 – $566,700.
• 20% rate: Income above the 15% threshold for each filing status.

Net Investment Income Tax (NIIT)

High-income taxpayers may also owe the 3.8% Net Investment Income Tax, sometimes called the Medicare surtax on investment income. The NIIT applies to the lesser of your net investment income or the amount by which your modified adjusted gross income (MAGI) exceeds the threshold: $200,000 for single filers, $250,000 for married filing jointly, $125,000 for married filing separately, and $200,000 for head of household. This means the maximum combined long-term capital gains rate for high earners is effectively 23.8% (20% + 3.8% NIIT).

Cost Basis and How It Affects Your Gain

Your cost basis is generally the original purchase price of the asset plus any associated costs such as commissions, fees, or improvements (for real estate). A higher cost basis means a smaller capital gain and lower taxes. Methods for determining cost basis include specific identification, FIFO (first in, first out), and average cost (for mutual fund shares). Inherited assets typically receive a stepped-up basis to fair market value at the date of death, potentially eliminating unrealized gains.

Capital Losses

If you sell an asset for less than your cost basis, you have a capital loss. Capital losses first offset capital gains of the same type (short-term losses offset short-term gains, long-term losses offset long-term gains), then offset gains of the other type. If your total capital losses exceed your total capital gains, you can deduct up to $3,000 per year ($1,500 if married filing separately) against ordinary income. Any remaining losses carry forward to future tax years indefinitely.