Capital gains tax rates for 2026

Federal capital gains tax starts with a subtraction: sale proceeds minus adjusted cost basis and selling expenses. The answer is the gain or loss. What happens next depends on the asset, how long you owned it, your other income, and any losses available to offset the gain.

That is why a flat percentage calculator can only give a rough estimate. The Capital Gains Tax Calculator is useful for checking the basic arithmetic, but you need the holding period and your full tax picture before choosing the rate to enter.

The 2026 long-term capital gains brackets

Most net long-term capital gains fall into the federal 0%, 15%, or 20% rate structure. IRS Revenue Procedure 2025-32 sets these taxable-income thresholds for 2026:

  • Married filing jointly or qualifying surviving spouse: the 0% band ends at $98,900, and the 15% band ends at $613,700.
  • Married filing separately: the 0% band ends at $49,450, and the 15% band ends at $306,850.
  • Head of household: the 0% band ends at $66,200, and the 15% band ends at $579,600.
  • Single and other individual filers: the 0% band ends at $49,450, and the 15% band ends at $545,500.
  • Estates and trusts: the 0% band ends at $3,300, and the 15% band ends at $16,250.

Long-term gain above the top of the 15% band is generally taxed at 20%. These figures are taxable-income thresholds, not the size of the gain and not gross salary. Deductions and other taxable income affect how much room remains in each band.

The rates also stack on top of ordinary taxable income. Imagine a single filer with $45,000 of taxable ordinary income and a $10,000 net long-term gain in 2026. The ordinary income has already used most of the 0% capital-gain band, which ends at $49,450. Only the part of the gain that fits between $45,000 and $49,450 would remain in that band. The rest would move into the 15% band. This is an illustration of the stacking rule, not a completed tax return.

Short-term gains use ordinary income rates

The holding period splits gains into two groups. The IRS capital gains and losses guide says a gain is generally long term when you held the asset for more than one year. A holding period of one year or less is generally short term.

Net short-term capital gains are taxed as ordinary income rather than under the 0%, 15%, and 20% long-term schedule. The difference can be substantial, but holding an investment longer solely for tax treatment introduces market risk. Its price can change while the calendar advances.

Holding-period rules also have exceptions. Gifts, inherited property, certain partnership interests, and some other assets can require different treatment. The date shown in a brokerage account may not settle every case.

How to calculate a capital gain

For a simple stock sale, start here:

Amount realized minus adjusted cost basis equals capital gain or loss.

The amount realized is usually the sale proceeds after selling expenses. Adjusted basis usually begins with purchase cost, including certain acquisition costs, then changes for items that apply to the asset.

Suppose shares sell for $25,000. Their adjusted basis is $15,000, and the sale has $100 of fees. The rough gain is $9,900:

$25,000 minus $15,000 minus $100 equals $9,900.

Entering a 15% assumed rate in the calculator would produce a rough federal tax estimate of $1,485. It would not decide whether 15% is the correct rate. It also would not account for loss netting, state tax, the net investment income tax, or a special asset category.

Basis is where many quick estimates go wrong. Reinvested mutual-fund distributions can add to basis even though no cash reached your bank account. Stock splits change basis per share. Improvements can raise a home's basis, while depreciation can reduce the basis of rental or business property. Inherited and gifted assets follow their own rules. The IRS points taxpayers to Publication 551 for basis details.

Capital losses can offset gains

Capital gains and losses are not usually taxed one transaction at a time. They are netted on the return. Short-term items are combined, long-term items are combined, and the resulting totals interact under the Schedule D rules.

If total capital losses exceed capital gains, the IRS says an individual can generally deduct the smaller of the remaining net loss or $3,000 against other income. The limit is $1,500 for married taxpayers filing separately. An unused net capital loss can carry into later years.

The sequence matters. A $5,000 loss does not automatically create a $5,000 deduction against wages if the same return has capital gains. It first offsets gains. Only the remaining net loss reaches the annual deduction limit.

Wash-sale rules can also postpone a loss deduction when substantially identical stock or securities are bought within the restricted period around a loss sale. A calculator that asks only for proceeds and basis cannot test that rule.

The home-sale exclusion is separate from the rate brackets

A main home has an exclusion that does not apply to an ordinary stock sale. Under IRS Topic 701, a qualifying seller may exclude up to $250,000 of gain. The maximum may be $500,000 on a qualifying joint return.

The headline dollar amounts are not automatic. In general, the seller must meet ownership and use tests during the five-year period ending on the sale date. The IRS describes the basic test as owning the home for at least 24 months and using it as a residence for at least 24 months within that five-year window. Joint filers have additional requirements, and using an exclusion on another home during the prior two years can affect eligibility.

The exclusion applies to gain, not proceeds. Selling a house for $700,000 does not mean there is a $700,000 capital gain. Purchase basis, qualifying improvements, selling costs, and other adjustments come first.

A home sale may still need to be reported even when the gain is excludable. Topic 701 says a seller who receives Form 1099-S must report the sale, and reporting is also required when all of the gain cannot be excluded. Rental use, home-office depreciation, installment terms, or a partial exclusion can make the calculation more involved.

For the financing side of homeownership, the mortgage refinance break-even guide explains how closing costs and monthly savings interact. Those cash-flow calculations are separate from the tax basis and gain calculation when a home is eventually sold.

Some gains do not fit the standard 0%, 15%, and 20% pattern

The familiar long-term rates cover many investments, but not every gain. The IRS lists several exceptions:

  • Net gains from collectibles, such as coins or art, can face a maximum 28% rate.
  • Taxable gain from certain qualified small business stock can also fall under a maximum 28% rate.
  • Unrecaptured Section 1250 gain tied to depreciated real property can face a maximum 25% rate.
  • The net investment income tax may apply separately to some taxpayers with investment income.

State income tax can add another layer. States use different rates, exclusions, and definitions, and some do not give long-term gains a separate preferred rate. A federal estimate should not be labeled an all-in tax estimate unless state and local rules are included.

What a capital gains tax calculator can and cannot tell you

A basic calculator is good at four inputs: proceeds, basis, selling costs, and an assumed rate. It can answer a narrow question: "If this is my taxable gain and this rate applies, what is the rough tax?"

It cannot discover an unknown basis, determine whether shares are short or long term, pick tax lots, apply a home exclusion, or prepare Form 8949 and Schedule D. It also cannot know how the gain stacks with wages, business income, deductions, dividends, or another sale later in the year.

Before treating an estimate as usable, check:

  • The exact asset and tax lot sold.
  • Acquisition and sale dates.
  • Adjusted basis, including applicable fees and adjustments.
  • Other capital gains, losses, and carryovers.
  • Taxable income before the gain.
  • Special federal rules and state tax.

Records matter more than clever math here. Trade confirmations, year-end brokerage forms, reinvestment history, closing statements, receipts for home improvements, and prior tax returns can change the result.

A cleaner way to read a capital gains estimate

Do not start by multiplying sale proceeds by 15%. Start with gain. Then separate short-term and long-term transactions, net the gains and losses, and place any net long-term gain on top of other taxable income. Only then do the 2026 thresholds show which slices may fall into the 0%, 15%, or 20% bands.

The site's Economy section has more explainers on taxes, inflation, interest rates, and housing. The numbers above cover federal rules for the 2026 tax year and can change in later years.

Educational only. This article is not personalized tax, legal, financial, or investment advice. Tax rules can turn on facts that a simple calculator does not collect.