In short
Long-term gains (held more than a year) are taxed at 0% up to $49,450 of taxable income for single filers ($98,900 joint), 15% to $545,500 ($613,700) and 20% above, stacked on top of your other income; short-term gains are ordinary income at 10–37%. A 3.8% net investment income tax applies above $200,000 / $250,000 of MAGI. A single filer on $85,000 pays $3,000 on a $20,000 long-term gain; losses offset gains without limit, then $3,000 a year of other income.
US capital gains tax depends on how long you held the asset and how much other income you have. After reading this guide you will be able to tell short-term from long-term, stack a long-term gain on your salary to find the 0%, 15% or 20% rate, add the 3.8% net investment income tax where it applies, use the home-sale exclusion, and net losses against gains correctly. All thresholds are the 2026 figures from Rev. Proc. 2025-32.
Open the US capital gains tax calculator →
Short-term vs long-term: the one-year line
A capital gain is proceeds minus cost basis (what you paid, plus commissions and improvements). The holding period decides the rate:
- Short-term — held one year or less. The gain is ordinary income at your 2026 bracket of 10% to 37%.
- Long-term — held more than one year. Taxed at 0%, 15% or 20%, depending on taxable income.
The line is strict: a sale on the one-year anniversary is still short-term. Qualified dividends use the long-term rates. Two categories sit outside the 0/15/20% ladder: collectibles (art, coins, bullion) are capped at 28%, and depreciation recapture on rental property at 25%.
The 2026 long-term rates and how they stack
The thresholds are on taxable income — after the standard deduction ($16,100 single, $32,200 joint) or itemized deductions — and the gain itself is included in that figure.
| Long-term rate | Single | Married filing jointly | Head of household |
|---|---|---|---|
| 0% | up to $49,450 | up to $98,900 | up to $66,200 |
| 15% | $49,450 – $545,500 | $98,900 – $613,700 | $66,200 – $579,600 |
| 20% | over $545,500 | over $613,700 | over $579,600 |
Married filing separately uses $49,450 and $306,850. The rule that trips people up is stacking: ordinary income fills the ladder first and the long-term gain sits on top. If your other taxable income is already above the 0% ceiling, none of the gain is tax-free; if it is below, the part of the gain that fits under the ceiling is taxed at 0% and the rest at 15%. A single filer with $40,000 of wages has $23,900 of taxable income, leaving $25,550 of room under $49,450, so a $20,000 long-term gain is taxed at 0%; on an $85,000 salary the same gain is wholly at 15%. Short-term gains instead push up through the ordinary brackets in the federal tax brackets guide.
Net investment income tax (NIIT)
On top of the capital gains rate, a 3.8% tax applies to the lesser of net investment income (gains, dividends, interest, rents) and the amount by which modified AGI exceeds $200,000 (single or head of household), $250,000 (married filing jointly) or $125,000 (married filing separately). The thresholds are statutory and not indexed. The top federal rate on a long-term gain is therefore 23.8%, and 40.8% on a short-term gain in the 37% bracket.
Worked example 1: single, $85,000 salary, $20,000 long-term gain
Taxable income from wages: $85,000 − $16,100 = $68,900, already above the $49,450 ceiling for the 0% band.
The $20,000 gain stacks on top: $68,900 + $20,000 = $88,900, still under the $545,500 limit for 15%. Tax on the gain = $20,000 × 15% = $3,000.
MAGI of $105,000 is below $200,000, so no NIIT. Tax on wages alone is $9,870; the total federal bill is $12,870.
Held a year or less, the $20,000 would be ordinary income: taxable income rises from $68,900 to $88,900, all inside the 22% bracket ($50,400 – $105,700), so the tax would be $4,400 — $1,400 more.
Worked example 2: married filing jointly, $200,000 salary, $60,000 long-term gain
Taxable income from wages: $200,000 − $32,200 = $167,800, above the $98,900 joint 0% ceiling. The gain stacks to $227,800, under $613,700, so all $60,000 is at 15%: $9,000.
NIIT: MAGI is $200,000 + $60,000 = $260,000, which is $10,000 over the $250,000 joint threshold. The tax is 3.8% of the lesser of the $60,000 gain and the $10,000 excess: 3.8% × $10,000 = $380.
Total federal tax on the gain: $9,000 + $380 = $9,380, an effective 15.6%. As a short-term gain it would cross from the 22% bracket (ending at $211,400) into 24%: ($211,400 − $167,800) × 22% + ($227,800 − $211,400) × 24% = $9,592 + $3,936 = $13,528, plus the same $380 NIIT.
Selling your home: the $250,000 / $500,000 exclusion
Gain on your primary residence is excluded up to $250,000 for a single filer or $500,000 married filing jointly, provided you owned the home and lived in it as your main home for two of the five years before the sale. Only the gain above the exclusion is taxed, always as long-term. A couple who bought for $300,000 and sell for $750,000 exclude the whole $450,000 gain; a single owner with the same numbers has $200,000 of taxable gain. Second homes and rentals get no exclusion.
Crypto is property, not currency
The IRS treats cryptocurrency as property, so the rules above apply unchanged — and every disposal is a taxable event. Selling for dollars, swapping one coin for another, paying for goods and trading an NFT each realize a gain or loss equal to the value received minus the basis of the coins given up. Staking rewards, mining and airdrops are ordinary income at their value when you gain control of them, and that value becomes their basis. Brokers report sales on Form 1099-DA, with cost basis for covered lots from 2026. The crypto tax calculator separates short-term, long-term and staking income.
Losses, netting and the $3,000 rule
Losses are netted in a set order: short-term losses against short-term gains, long-term against long-term, then any remaining loss of one kind against gains of the other. A net loss after that offsets up to $3,000 a year ($1,500 married filing separately) of ordinary income such as wages; the rest carries forward indefinitely.
Tax-loss harvesting
Selling a losing position to realize the loss, then buying a similar (not identical) investment, is tax-loss harvesting. It pays most when short-term losses cancel short-term gains or ordinary income taxed at up to 37%, and least when long-term losses offset 15% gains. It is mostly deferral: the replacement shares have a lower basis, so the gain reappears when you sell — but the tax saved today can be invested meanwhile, and the gain may never be taxed if the shares are held until death or donated. The wash-sale rule disallows the loss if you buy the same or a substantially identical security within 30 days before or after the sale, in any account including an IRA or a spouse’s. It covers securities, so as of 2026 it does not apply to crypto. The tax-loss harvesting calculator runs the netting and shows the saving, carry-forward and wash-sale dates.
What people get wrong
- Thinking the 0% rate is on income under $49,450 before deductions. It is on taxable income, and the gain counts toward it.
- Applying one rate to the whole gain. A gain straddling the 0%/15% line is split.
- Forgetting state tax. Most states tax gains as ordinary income; the calculator accepts a flat state rate.
- Treating crypto-to-crypto swaps as non-events. Each swap is a sale of the coin you give up.
- Harvesting a loss, then rebuying in an IRA. That is a wash sale and the loss is permanently lost.
- Not paying estimated tax on a large gain. $1,000 or more of unpaid tax can trigger a penalty; see the quarterly estimated tax calculator.
Frequently asked questions
What is the capital gains tax rate for 2026?
0%, 15% or 20% on assets held more than a year, with breakpoints at $49,450 and $545,500 of taxable income for single filers ($98,900 and $613,700 joint). Short-term gains are ordinary income at 10% to 37%.
How much tax do I pay on a $20,000 stock gain?
For a single filer on $85,000, $3,000 if held more than a year (15%) or $4,400 if held a year or less (22% bracket). On $40,000 of wages the same long-term gain is taxed at 0%.
Do I pay capital gains tax when I sell my house?
Not on the first $250,000 of gain ($500,000 joint) if you owned and lived in it as your main home for two of the last five years; gain above that is long-term.
How much capital loss can I deduct?
Losses offset capital gains without limit, then up to $3,000 a year ($1,500 married filing separately) against ordinary income. The remainder carries forward indefinitely.
Who pays the 3.8% net investment income tax?
Anyone whose modified AGI exceeds $200,000 (single or head of household), $250,000 (joint) or $125,000 (married filing separately), on the lesser of net investment income and the excess over the threshold. The thresholds are not indexed.
Sources
- Rev. Proc. 2025-32, section 4.03 (maximum zero-rate and 15%-rate amounts under §1(h)) — 2026 long-term capital gains thresholds, NIIT thresholds and collectibles rate, checked 8 October 2026.
- IRS — Tax year 2026 inflation adjustments (IR-2025-103); Rev. Proc. 2025-32 — ordinary brackets and standard deduction used for stacking, checked 8 October 2026.
- IRS Topic 409 — Capital gains and losses and Topic 559 — Net investment income tax — holding periods, loss netting and the $3,000 limit, checked 8 October 2026.
- IRS Publication 550; IRC §1091, §1211, §1212 — wash-sale and loss carry-forward rules, checked 9 October 2026.