How are short-term gains taxed?

Short-term gains are generally taxed at ordinary federal income-tax rates.

How are long-term gains taxed?

Long-term gains generally use federal 0%, 15%, and 20% thresholds based on filing status and taxable income.

Capital Gains Tax Calculator

Estimate short-term or long-term capital gains tax using 2026 federal thresholds and filing status.

Fixed reference tax year 2026, generally filed in 2027. Assumes one standalone regular-rate capital-asset sale eligible for regular federal rates. Enter adjusted basis and proceeds after any sale costs you have already accounted for; the model does not calculate basis or costs. Other income is ordinary taxable income after deductions, not gross income or MAGI; it is not reduced by a standard deduction again. Holding period and eligibility are assumed, not verified.

Adjusted cost basis

$0$500,000

Sale proceeds before modeled tax

$0$1,000,000

Other ordinary taxable income (after deductions)

$0$1,000,000

Signed realized gain or loss

$25,000.00

Effective tax rate on positive gain

15.0%

Incremental federal tax estimate

$3,750.00

Sale proceeds after modeled tax

$46,250.00

Incremental federal tax on modeled gain

Sale model details

Component	USD amount
Adjusted cost basis	$25,000.00
Sale proceeds before modeled tax	$50,000.00
Other ordinary taxable income (after deductions)	$90,000.00
Signed realized gain or loss	$25,000.00
Positive gain assessed by this model	$25,000.00
Incremental federal tax estimate	$3,750.00
Sale proceeds after modeled tax	$46,250.00
Highest applied rate on modeled gain	15.0%

Applied rate-schedule slices

Taxable-income band	Rate	Modeled amount in band	Allocated tax
$49,450.00 - $545,500.00	15%	$25,000.00	$3,750.00

Signed realized gain/loss equals proceeds less basis. Only a positive gain is assessed; a loss is shown with zero modeled tax benefit. There is no netting against other gains/losses, loss deduction, carryover, wash-sale, gift/inheritance basis, home exclusion, collectible/recapture/special-asset or qualified-dividend calculation. NIIT is excluded because ordinary taxable income does not establish MAGI; state/local tax, credits and other surtaxes are excluded.

Short-term positive gain is sliced incrementally above the entered ordinary taxable income through the 2026 ordinary brackets. Long-term positive gain uses the 2026 0%/15%/20% thresholds stacked above that income. Exact slice taxes are summed before one half-up cent rounding; table rows allocate cumulative rounded tax differences. The highest applied rate is the inclusive highest used band, not the next-dollar rate. This is not a filed return or refund quote and excludes Tax Table/whole-dollar return rounding.

IRS 2026 rate schedules and deductions

IRS capital gains/losses (topic numeric examples are 2025)

How capital gains tax works

Capital gains tax depends on two big variables: how long you held the asset and how much taxable income you have for the year. Assets held one year or less generally create short-term gains, which are taxed at ordinary federal income-tax rates. Assets held longer than one year usually qualify for long-term capital gains rates of 0%, 15%, or 20%.

For 2026, the long-term federal thresholds are commonly cited as up to $49,450 for Single, $98,900 for Married Filing Jointly, $49,450 for Married Filing Separately, and $66,200 for Head of Household for the 0% bracket. Higher-income households may move into the 15% or 20% long-term bands.

Short-term vs long-term gains

Short-term gains are usually less tax-efficient because they are taxed at the same marginal rates as wages and other ordinary income. If a sale is close to the one-year mark, waiting long enough to qualify for long-term treatment can materially reduce the tax cost.

This calculator focuses on core federal tax only. Special asset classes, net investment income tax, state taxes, wash-sale rules, loss harvesting, basis adjustments, and depreciation recapture can all change the final number.