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Capital Gains

What will you actually owe on that gain?

A long-term capital gain does not get taxed at "your bracket". It stacks on top of the income you already have, so your salary fills the lower bands first and the gain is taxed in whatever room is left above it. Enter your numbers and see exactly where each dollar of the gain lands.

Try a sample:

Salary and other ordinary income, after your standard or itemized deduction. This is what fills the bands first.

Net realised gains this year

Held more than one year. Net of any losses you have already applied.

Held one year or less. Taxed as ordinary income — and it fills the bands too.

Dividends, interest and passive rents. Counts toward NIIT, not toward the gain bands.

Where the long-term gain lands

Your ordinary income of $120,000 fills the bands first. It already fills the 0% band, so none of the gain is free.

Taxed at 0% · $0$0
Taxed at 15% · $40,000$6,000
Taxed at 20% · $0$0
Total federal tax on these gains$6,000
Effective rate on the gain15.0%
You keep $34,000 of $40,000
The top of your long-term gain is taxed at 15%, and the whole gain works out at 15.0% once every band is counted.
Holding period is worth $3,600 here. Priced as a short-term gain these same dollars cost $9,600; held past the one-year mark they cost $6,000. The holding period starts the day after you bought and has to run MORE than a year.
Walkthrough

Why "what bracket am I in" is the wrong question

A long-term gain is not taxed in the band its own size would suggest. It is taxed in whatever is left of each band after your ordinary income has filled it. Think of the bands as buckets filling from the bottom: salary goes in first, and the gain pours into the space above it.

That produces the two results people are most often surprised by. A gain that crosses a ceiling is split — part of it at the lower rate, the remainder at the higher one — so quoting a single rate for the whole gain is wrong in one direction or the other, usually by thousands. And a raise can move a gain that was free into a taxed band without the gain itself changing at all, because the band is a property of your total taxable income rather than of the sale.

A short-term gain is in the first bucket, not a separate one: it is ordinary income under the statute, so it both takes your marginal rate and raises the floor the long-term gain starts from. That second effect is the one an inline calculation almost always misses.

The 2026 long-term bands

Ceilings are TAXABLE income — after your standard or itemized deduction — with the gain included.

  • Single — 0% up to $49,450, 15% up to $545,500, 20% above
  • Married filing jointly — 0% up to $98,900, 15% up to $613,700, 20% above
  • Head of household — 0% up to $66,200, 15% up to $579,600, 20% above
  • Short-term — no preferential band at all; ordinary rates apply
  • NIIT — a further 3.8% above $200,000 MAGI single, $250,000 married filing jointly
Questions

Frequently asked questions

How much tax will I pay when I sell a stock at a profit?
It depends on how long you held it, and on how much you already earn. Held MORE than one year, the profit is a long-term capital gain and gets its own preferential rates — 0%, 15% or 20% — but which one you land in is decided by your total taxable income, not by the size of the gain. Held ONE YEAR OR LESS, it is a short-term gain and is taxed exactly like salary, at your ordinary marginal rate. That is why the same profit can cost wildly different amounts for two people, and why a sale one day either side of the anniversary can cost different amounts for the same person.
What does it mean that a capital gain 'stacks' on my income?
Your long-term gain sits on TOP of your other taxable income, so your salary fills the lower bands first and the gain is taxed in whatever is left of each band above it. Picture the bands as buckets that fill from the bottom: ordinary income goes in first, and the gain pours into the space that remains. Two things follow. First, a gain that crosses a ceiling is SPLIT — part at the lower rate, the rest at the higher one — rather than all landing in one band. Second, a raise can push a gain into a higher band without the gain changing at all, because the band is a property of your total taxable income.
Who actually qualifies for the 0% long-term rate?
Anyone whose taxable income, gain included, stays under the first ceiling — and it is higher than most people expect. For 2026 the 0% band runs to $49,450 of taxable income for a single filer, $98,900 married filing jointly and $66,200 for head of household. Remember that is TAXABLE income, after your standard or itemized deduction, so the gross salary that fits under it is meaningfully larger. The band matters most in a year when income is temporarily low — a sabbatical, parental leave, a gap between jobs, the first years of retirement — because the room in it does not carry forward. Unused, it simply expires on 31 December.
Where do the 15% and 20% bands start?
Above the first ceiling the long-term rate is 15% until taxable income reaches $545,500 for a single filer, $613,700 married filing jointly or $579,600 for head of household. Past that, the rate on the excess is 20%. Only the dollars above each ceiling take the higher rate — crossing into 20% does not reprice the gain underneath it, the same way a new ordinary bracket does not reprice your whole salary.
What is NIIT, and does it apply to me?
The Net Investment Income Tax is an extra 3.8% federal tax on investment income — capital gains, dividends, interest, passive rents — for higher earners. The thresholds are modified AGI above $200,000 single or $250,000 married filing jointly, and they are set in the statute rather than indexed, so they do not move with inflation the way the bands above do. It is charged on the LESSER of your net investment income and the amount by which your MAGI exceeds the threshold, which means it phases in: a filer a little over the line owes it on that little, not on the whole gain. Below the threshold it does not apply at all.
Is it worth waiting to cross the one-year mark before I sell?
Often, yes, and the calculator above prices it for your own numbers. The gap is the difference between your ordinary marginal rate and your long-term rate, and for a higher earner that is most of the tax. The trade is that you carry the market risk for the extra days — if the position falls by more than the tax you would save, waiting cost you money. Two details worth knowing: the holding period starts the day AFTER you acquired the asset and ends on the day you sell it, and it has to be MORE than a year, so exactly twelve months is still short-term.
What if I also sold something at a loss?
Losses are netted against gains before any of the above applies, and a net loss beyond that can reduce ordinary income with the remainder carrying forward. That netting, and the wash-sale rule that governs when you buy back in, are the subject of the tax-loss harvesting calculator linked below. This page prices gains that have already been netted, so enter your NET gain for the year rather than the gross proceeds of each sale.
Selling at a loss is the other half of this question — netting, the annual ordinary-income offset and the wash-sale rule are all on the tax-loss harvesting calculator.

See your full tax picture

A capital gain is one line of a return. The full optimizer factors retirement contributions, deductions, entity choice and rental property in one place.

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Last updated for tax year 2026 · Federal figures reviewed

Sources

  • Long-term capital gains rate brackets, 2026 — Rev. Proc. 2025-32
  • Federal income tax brackets, 2026 — Rev. Proc. 2025-32 §4.01, Tables 1–4
  • Net investment income tax, 2026 — §1411 — statutory thresholds, never indexed

Individual results vary. A planning estimate, not tax advice — confirm with a CPA before you file.

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