How capital gains are taxed
When you sell an investment for more than you paid, the profit is a capital gain. How it is taxed depends on how long you held it:
- Long-term (more than one year): 0%, 15% or 20%, depending on your total taxable income.
- Short-term (one year or less): the same rates as wages, 10% to 37%.
High earners also pay the 3.8% Net Investment Income Tax on gains above $200,000 of income ($250,000 for married couples).
| 2026 taxable income, single | Long-term rate |
|---|---|
| Up to $49,450 | 0% |
| $49,451 to $545,500 | 15% |
| Over $545,500 | 20% |
Worked example
A single filer with $40,000 of other taxable income sells stock for a $20,000 long-term gain. The first $9,450 of the gain fits under $49,450 and is taxed at 0%; the other $10,550 at 15%: $1,582.50. Held for less than a year, the same gain would cost $3,360.
How this works
The gain is placed on top of your other taxable income. Long-term gains are split across the 0%, 15% and 20% ranges for your filing status; short-term gains are taxed as the extra ordinary income tax they cause. The 3.8% NIIT applies to the part of the gain above the income threshold, using taxable income as an approximation of modified AGI.
Frequently asked
What are the 2026 long-term capital gains rates?
0% up to $49,450 of taxable income for single filers ($98,900 joint), 15% up to $545,500 ($613,700 joint), 20% above.
What counts as long-term?
Assets held for more than one year before selling.
What is the NIIT?
A 3.8% tax on investment income for incomes above $200,000 single or $250,000 joint.
Are crypto gains taxed the same way?
Yes. Cryptocurrency is property, so the same short- and long-term rules apply.
Sources
- IRS Rev. Proc. 2025-32 — 2026 tax rate schedules, standard deduction and capital gains thresholds
- IRS Topic 409 — Capital gains and losses
- IRS — Net Investment Income Tax
Reviewed Oct 17, 2026 · test vectors fixtures/calculators/finance/us/capital-gains-tax-calculator/