Long term capital gains tax: 2026 rates, brackets and examples

Long-term capital gains tax rates for 2026: 0%, 15% and 20%

Long-term capital gains, from assets held for more than one year, are taxed at 0%, 15% or 20% federally, depending on your taxable income and filing status. Capital gains tax is charged only when you sell, on the difference between the sale price and your cost basis. According to Rev. Proc. 2025-32, for 2026 the 0% rate applies to taxable income up to $49,450 for single filers and $98,900 for married couples filing jointly, and the 20% rate starts above $545,500 and $613,700.

The thresholds are for taxable income, meaning income after the standard deduction ($16,100 single, $32,200 joint and $24,150 head of household for 2026), and they include the gain itself. Qualified dividends use the same three rates: according to IRS Publication 550, they are subject to the same 0%, 15% or 20% maximum rate that applies to net capital gain.

To see which rate applies to your own sale, work out the tax on your gain with the US capital gains tax calculator. Enter your income before the gain, your filing status, the sale price and what you paid.

Long-term capital gains brackets for 2025

For the 2025 tax year, filed in 2026, the 0% rate covers taxable income up to $48,350 for single filers and $96,700 for joint filers, according to Rev. Proc. 2024-40 and IRS Topic 409. The One, Big, Beautiful Bill Act of July 2025 kept the three rates and their inflation-indexed thresholds.

Between 2025 and 2026 the 0% ceiling rose by $1,100 for single filers and $2,200 for joint filers, so a gain that just crossed into 15% in 2025 may fall wholly in the 0% band in 2026.

Long-term against short-term: the one-year rule

A gain is long-term if you held the asset for more than one year and short-term if you held it for one year or less. According to IRS Topic 409, you count from the day after you acquired the asset up to and including the day you sold it. Shares bought on 15 March 2025 become long-term if sold on or after 16 March 2026; a sale on 15 March 2026 is still short-term.

Short-term gains get no special rate. The IRS says net short-term capital gains are taxed as ordinary income at the graduated rates, which run from 10% to 37% in 2026. The federal tax brackets guide lists the 2026 ordinary income brackets that short-term gains fall into.

Losses are netted in the same groups first: short-term losses against short-term gains and long-term losses against long-term gains, and then the two totals against each other. The lower rates apply to your net capital gain, which the IRS defines as net long-term gain minus any net short-term loss.

How long-term gains stack on top of your ordinary income

Long-term gains are taxed as the top slice of your taxable income: your wages and other ordinary income fill the brackets first, and the gain sits on top. The part of the gain that lands below the 0% ceiling is tax-free, the part between the 0% and 20% thresholds pays 15%, and anything above pays 20%. The site's calculator works out the tax in the same order.

Stacking answers two common questions. A long-term gain does not push your wages into a higher ordinary bracket or change your marginal tax rate on them, because the ordinary income is taxed as if the gain were not there. But the gain does count in your adjusted gross income (AGI) and taxable income, so it can move part of itself from 0% to 15%, and it counts towards income tests such as the 3.8% net investment income tax and the child tax credit phase-out.

Worked example. A single filer has $60,000 of wages and sells shares held for 3 years for a $20,000 long-term gain in 2026. The site's engine, run with those inputs, gives:

1. Taxable income without the gain: $60,000 less the $16,100 standard deduction = $43,900.
2. Room left in the 0% band: $49,450 less $43,900 = $5,550, taxed at 0%.
3. The other $14,450 of the gain is taxed at 15%: $2,167.50.
4. Total federal tax on the $20,000 gain: $2,167.50, an effective rate of 10.84%.

The same seller with $40,000 of wages would pay $0: taxable income including the gain would be $43,900, all within the 0% band. You can reproduce both in the US capital gains tax calculator with country US, filing status single and the term set to long-term.

Worked examples: long-term and short-term tax on the same gains

Holding for more than a year cuts the federal tax on a $20,000 gain from $3,750 to $2,167.50 for a single filer on $60,000, and on a $50,000 gain from $18,730.25 to $9,400 for a single filer on $250,000. These figures come from the site's capital gains engine (capitalGainsTax.ts) for the 2026 tax year, with the standard deduction and no other gains, losses or credits. Income means AGI before the gain.

The married couple's case shows the stacking rule at work. Their ordinary taxable income is $117,800 ($150,000 less $32,200), already above the $98,900 0% ceiling, so none of the gain is tax-free, and the total taxable income of $217,800 is far below $613,700, so none reaches 20%. Their MAGI of exactly $250,000 is not over the $250,000 joint NIIT threshold, so no NIIT is due; $1 more of income would start it.

In the short-term single case on $60,000, the $20,000 gain is added to $43,900 of ordinary taxable income. The first $6,500 fills the 12% bracket to $50,400 ($780) and the other $13,500 is taxed at 22% ($2,970), giving $3,750.

The 3.8% net investment income tax on higher incomes

The net investment income tax (NIIT) adds 3.8% to capital gains once your modified adjusted gross income (MAGI) is above $200,000 single or head of household, $250,000 married filing jointly, or $125,000 married filing separately. According to IRS Topic 559, the tax is charged on the lesser of your net investment income and the amount by which MAGI exceeds the threshold.

The IRS says these thresholds are not indexed for inflation, so they have been the same since the tax took effect on 1 January 2013 and catch more people each year. For most people MAGI is simply AGI.

In the single filer example above, MAGI is $300,000 ($250,000 of wages plus the $50,000 gain), which is $100,000 over the threshold. Net investment income is the $50,000 gain, the smaller figure, so NIIT is 3.8% of $50,000, or $1,900. That lifts the top federal rate on long-term gains to 23.8% (20% plus 3.8%).

NIIT covers gains on stocks, bonds, mutual funds and real estate, plus interest, dividends and rents. It does not apply to wages or to the part of a home sale gain that is excluded from income, according to the IRS questions and answers on the NIIT. Wages already carry Social Security and Medicare payroll taxes; a capital gain is not wages, so no OASDI tax or Medicare payroll tax is charged on it, according to IRS Topic 751, which applies those taxes to wages.

Collectibles at 28% and depreciation on property at 25%

Two kinds of long-term gain can be taxed above 20%. According to IRS Topic 409, net gains from selling collectibles, such as coins or art, are taxed at a maximum of 28%, as is the taxable part of a gain on section 1202 qualified small business stock. The part of a real estate gain that is unrecaptured section 1250 gain, broadly the depreciation you claimed on a rental property, is taxed at a maximum of 25%.

These are maximum rates: if your ordinary rate is lower, the lower rate applies to that slice. The site's calculator does not model the 28% and 25% rates, so treat its result as a floor for collectibles and rental property.

Selling your home: the $250,000 and $500,000 exclusion

You can exclude up to $250,000 of gain on selling your main home, or up to $500,000 on a joint return, if you pass the ownership and use tests. According to IRS Topic 701, you must have owned the home and lived in it as your main home for at least 24 months of the 5 years before the sale; the two periods need not be the same. On a joint return either spouse can meet the ownership test, but both must meet the use test.

You generally cannot use the exclusion if you excluded the gain on another home in the 2 years before the sale. Only the gain above the exclusion is taxed, at long-term rates if you owned the home for more than a year, and the excluded part is also free of NIIT. You must still report the sale if you receive Form 1099-S. A loss on your own home is not deductible, according to Topic 409, because it is personal-use property.

Capital losses: $3,000 a year against income, the rest carried forward

Capital losses first cancel out capital gains in full, and up to $3,000 a year of any net loss left over ($1,500 if married filing separately) comes off your other income. According to IRS Topic 409, any net loss above that limit carries forward to later years. IRS Publication 550 says you can keep carrying it over until it is completely used up; there is no time limit while you are alive, but a loss left at death can be used only on the final return.

Worked example. A single filer on $60,000 sells shares at an $8,000 long-term loss in 2026 and has no gains. The site's engine deducts $3,000 from income, which saves $360 of federal tax at the 12% rate, and carries $5,000 forward to 2027. If the same person makes a $5,000 gain in 2027, the carried-over loss wipes it out.

A carried-over loss keeps its character, so a long-term loss carried forward reduces long-term gains first. Use the Capital Loss Carryover Worksheet in the Schedule D instructions or Publication 550 to work out the figure each year.

Tax-loss harvesting and the 30-day wash sale rule

Tax-loss harvesting means selling investments at a loss to offset gains realised in the same year. In the $60,000 single filer example, the engine shows each $1,000 of losses would save about $108 on the long-term gain, and about $188 if the gain were short-term, because the loss removes income that would otherwise be taxed at the top of the stack.

The wash sale rule blocks the loss if you buy back too soon. According to IRS Publication 550, a wash sale happens when you sell stock or securities at a loss and, within 30 days before or after the sale, you buy substantially identical stock or securities, acquire them in a fully taxable trade, buy a contract or option to acquire them, or buy them in your IRA or Roth IRA. A purchase by your spouse, or by a corporation you control, also counts.

A disallowed loss is not lost for good. It is added to the cost basis of the new shares, and your holding period for the new shares includes the time you held the old ones. Publication 550 gives the example of 100 shares bought for $1,000 and sold for $750, then bought back within 30 days for $800: the $250 loss is disallowed and the new basis is $1,050. The exception is a repurchase inside an IRA, where the basis adjustment does not apply.

Inherited assets get a stepped-up basis and count as long-term

When you inherit an asset, your basis is generally its fair market value on the date the owner died, not what they paid. According to IRS Publication 551, the basis of inherited property is usually the value at the date of death, or on the alternate valuation date if the executor chooses it for estate tax. This is known as a stepped-up basis when the asset had risen in value.

Publication 550 adds that a gain or loss on inherited property is always long-term, however long you held it. So if your parent bought shares for $20,000 that were worth $150,000 when they died, and you sell them 3 months later for $155,000, your gain is $5,000, taxed at long-term rates.

Gifts are different. A gift during the giver's lifetime usually keeps the giver's basis, so the whole rise in value since they bought it stays taxable when you sell. Publication 551 also has a special rule for appreciated property you gave to the person within 1 year before their death: you get back their adjusted basis, not a step-up.

Reporting, estimated tax and state taxes on capital gains

You report each sale on Form 8949 and total them on Schedule D of Form 1040, according to IRS Topic 409. Form 8949 Part I is for short-term sales and Part II for long-term sales, according to the Schedule D instructions. Your broker's Form 1099-B gives the figures for most share sales.

A large gain can mean paying tax before April. The IRS says you may need to make estimated tax payments on a taxable capital gain. According to IRS Topic 306, most people avoid the underpayment penalty if they owe less than $1,000 after withholding and refundable credits, or if withholding and estimated payments cover the smaller of 90% of this year's tax or 100% of last year's. Raising your withholding on Form W-4 for the rest of the year also counts.

Many states also tax capital gains, on top of the federal tax, and the rules differ by state. Check your state's figures on the state paycheck and income tax pages before you sell.

Your next step: put your own sale price, cost, income and filing status into the US capital gains tax calculator, then try the sale date one day after the one-year mark and a split across two tax years to see which saves the most.