Estimate federal tax owed on a short-term or long-term capital gain based on your taxable income.
Gains on assets held one year or less are short-term and taxed at your ordinary income rate. Gains on assets held over a year are long-term and taxed at preferential 0%, 15%, or 20% rates depending on your total taxable income.
Illustrative estimate only, using simplified/rounded 2026 figures — not tax advice. Actual federal, state, and payroll tax rules are more detailed. Always confirm with the IRS or a licensed tax professional.
The single biggest factor in US capital gains tax is how long you held the asset. Sell within a year and the gain is taxed as ordinary income, at the same federal brackets as your salary — up to 37% for high earners. Hold for more than a year and it qualifies as long-term, taxed instead at 0%, 15%, or 20% depending on your taxable income and filing status. For 2026, single filers pay 0% on long-term gains up to $49,450 of taxable income ($98,900 for married filing jointly), 15% in the middle range, and 20% once income exceeds $545,500 ($613,700 for joint filers).
Losses are not wasted: capital losses first offset capital gains of the same type, then up to $3,000 of ordinary income per year, with any excess carried forward to future years. High earners should also factor in the 3.8% Net Investment Income Tax, which can apply on top of the standard rate above certain income thresholds.
Most states tax capital gains as ordinary income alongside your federal return — there is no separate lower state rate for long-term gains in most cases. A handful of states (Texas, Florida, Washington, and a few others) have no state income tax at all, which meaningfully changes the total bill.
Often, yes, up to a limit. Single filers can typically exclude up to $250,000 of gain on a primary residence, and married couples filing jointly up to $500,000, provided ownership and use tests are met (generally owning and living in the home for at least two of the last five years).
It runs from the day after you acquired the asset to the day you sold it. An asset sold exactly one year and one day after purchase qualifies for long-term treatment; sold at exactly one year, it does not.
No — dividends are a separate category. Qualified dividends are taxed at the same preferential rates as long-term capital gains, while ordinary (non-qualified) dividends are taxed as regular income.