Capital Gains Tax Calculator 2026 — Estimate Short-Term & Long-Term Gain Taxes

How to Use the Capital Gains Tax Calculator

This free Capital Gains Tax Calculator helps you estimate your federal and state tax liability when selling investments in 2026. Whether you are selling stocks, cryptocurrency, real estate, or other capital assets, the calculator handles both short-term (held ≤ 1 year) and long-term(held > 1 year) gains using the latest 2026 tax brackets.

Start by selecting your Filing Status — this determines the tax bracket thresholds used for both long-term capital gains rates and short-term ordinary income rates. Next, select the Asset Type (for reference — all assets are taxed the same way, except collectibles which may be taxed at a maximum 28% rate). Enter your Purchase Price (cost basis) and Sale Price (proceeds), then add any Cost Basis Adjustments like brokerage commissions, real estate improvements, or transaction fees.

Enter your Ordinary Income from wages, self-employment, or other sources — this is essential because (1) short-term gains are added to your ordinary income and taxed at your marginal income tax rate, and (2) the 3.8% Net Investment Income Tax (NIIT) applies when your total income exceeds certain thresholds. Finally, choose your Holding Period (long-term vs. short-term) and enter your State Capital Gains Tax Rate if applicable. The calculator instantly computes your federal gains tax, NIIT surcharge, state tax, combined effective rate, and net proceeds after all taxes.

2026 Capital Gains Tax Rates — Complete Breakdown

Long-Term Capital Gains Tax Brackets (Assets Held > 1 Year)

Long-term capital gains are taxed at preferential rates of 0%, 15%, or 20%, depending on your taxable income and filing status. These rates are significantly lower than ordinary income tax rates, which is why holding investments for more than one year is one of the most effective tax strategies available to investors.

For the 2026 tax year, the long-term capital gains brackets are:

• 0% rate: Single up to $49,450 | MFJ up to $98,900 | HOH up to $66,200
• 15% rate: Single $49,451–$545,500 | MFJ $98,901–$613,700 | HOH $66,201–$579,600
• 20% rate: Single over $545,500 | MFJ over $613,700 | HOH over $579,600

Important: Your long-term capital gains are stacked on top of your ordinary income. This means your ordinary income fills the lower tax brackets first, and your capital gains start stacking from there. Our calculator handles this stacking automatically.

Short-Term Capital Gains (Assets Held ≤ 1 Year)

Short-term capital gains are taxed as ordinary income at your marginal income tax rate. For 2026, these rates range from 10% to 37% depending on your filing status and total taxable income. Because short-term gains are added to your existing ordinary income, they can push you into higher tax brackets — making them significantly more expensive than long-term gains for most investors.

Net Investment Income Tax (NIIT) — The 3.8% Surcharge

High-income earners are subject to an additional 3.8% Net Investment Income Tax (NIIT). This surcharge applies to the lesser of:

• Your net investment income (including capital gains), or
• The amount by which your modified adjusted gross income (MAGI) exceeds the threshold:

• $200,000 for Single / Head of Household / Qualifying Widow(er)
• $250,000 for Married Filing Jointly
• $125,000 for Married Filing Separately

For example, if you're single with $180,000 in ordinary income and $50,000 in long-term capital gains, your total income is $230,000. The NIIT applies to $30,000 ($230,000 − $200,000 threshold), resulting in an additional $1,140 tax (3.8% × $30,000). Our calculator automatically computes this surcharge for you.

Step-by-Step Calculation Examples

Example 1: Long-Term Stock Sale (Middle-Income Investor)

Scenario: Sarah, single filer, earned $80,000 in wages. She sells Apple stock she held for 3 years, purchasing at $20,000 and selling at $55,000. No state tax (Texas).
Cost Basis Adjustment: $0 (no commissions).
Capital Gain: $55,000 − $20,000 = $35,000 (long-term).
Total Income: $80,000 + $35,000 = $115,000.
Long-Term Gain Tax: The first $49,450 of her income fills the 0% bracket. Her $35,000 gain falls entirely in the 0% bracket → $0 federal gains tax.
NIIT: $115,000 is below the $200,000 single threshold → $0.
Total Tax on Gain: $0 — Sarah keeps the full $35,000 gain tax-free at the federal level.

Example 2: Short-Term Crypto Trade (High Income)

Scenario:Married Filing Jointly couple, combined wages $300,000. They trade cryptocurrency frequently (held < 1 year). Purchased at $50,000, sold at $120,000. California state tax (13.3% rate on gains).
Cost Basis Adjustment: $500 in exchange fees.
Short-Term Gain: $120,000 − $50,000 − $500 = $69,500.
Total Income: $300,000 + $69,500 = $369,500.
Short-Term Tax: Ordinary tax on $300,000 alone is ~$66,640. With $69,500 added, total ordinary tax is ~$91,830. The marginal tax on the gain is $25,190 →~36.2% effective rate on the gain (32% bracket + additional NIIT impact).
NIIT: $369,500 − $250,000 = $119,500 → $119,500 × 3.8% = $4,541.
State Tax (CA 13.3%): $69,500 × 13.3% = $9,244.
Total Tax on Gain: $25,190 + $4,541 + $9,244 = $38,975.
Net Proceeds: $120,000 − $38,975 = $81,025.

Frequently Asked Questions (FAQs)

What is the difference between short-term and long-term capital gains?

Short-term capital gains (assets held for 1 year or less) are taxed as ordinary income at your marginal tax rate (10%–37% for 2026). Long-term capital gains (assets held for more than 1 year) are taxed at preferential rates of 0%, 15%, or 20% — significantly lower than ordinary income rates for most taxpayers. The holding period is measured from the date of purchase to the date of sale. Holding an asset for just one day past the 1-year mark can save you thousands in taxes.

How does the 3.8% Net Investment Income Tax (NIIT) work?

The NIIT is an additional 3.8% surcharge on the lesser of your net investment income (including capital gains) or the amount your MAGI exceeds $200,000 (single/HOH), $250,000 (MFJ), or $125,000 (MFS). It applies on top of your regular capital gains tax. For high-income investors, this can increase the effective tax rate on long-term gains from 20% to 23.8%, and on short-term gains from 37% to 40.8%. The NIIT was established by the Affordable Care Act and remains in effect for 2026 with no changes.

Do I pay state taxes on capital gains?

Most states tax capital gains as ordinary income at your state's marginal income tax rate. States with no income tax (Texas, Florida, Nevada, South Dakota, Wyoming, Washington, Alaska, Tennessee) do not tax capital gains. Some states offer partial exemptions or special treatment for certain types of gains. California taxes capital gains at the highest rate — up to 13.3% for top earners. New York taxes up to ~10.9%, and New Jersey up to ~10.75%. Our calculator lets you enter your specific state rate to get an accurate combined federal + state estimate.

Can capital losses offset capital gains?

Yes, capital losses can offset capital gains — this is called tax-loss harvesting. Short-term losses offset short-term gains first, and long-term losses offset long-term gains first. If your total capital losses exceed your capital gains, you can deduct up to $3,000 ($1,500 if married filing separately) of net capital losses against your ordinary income each year. Any remaining losses carry forward to future tax years indefinitely. This calculator assumes a net capital gain situation — if you have losses, they would reduce your taxable gain before the brackets are applied.

What is the wash sale rule?

The wash sale rule (IRS Section 1091) prevents you from claiming a tax deduction on a security if you repurchase the same or a substantially identical security within 30 days before or after the sale. If you trigger a wash sale, the loss is disallowed and added to the cost basis of the replacement shares. This rule applies to stocks, ETFs, mutual funds, and options — but notablydoes not apply to cryptocurrency (as of 2026), making crypto particularly attractive for tax-loss harvesting strategies. Always consult a tax professional before executing wash sale or tax-loss harvesting strategies.

Data Sources & Methodology

Our Capital Gains Tax Calculator uses the latest 2026 tax brackets from the IRS. All rates are verified as of May 2026.

• Long-Term Capital Gains Brackets: 0%, 15%, and 20% rates from IRS Revenue Procedure 2025. Thresholds are adjusted annually for inflation.
• Ordinary Income Brackets: 10%–37% brackets from IRS Form 1040 Instructions. Used for short-term capital gains calculations.
• NIIT (3.8%): Net Investment Income Tax guidelines from IRS Topic 559. Thresholds: $200,000 single, $250,000 MFJ, $125,000 MFS.
• Wash Sale Rule: IRS Section 1091 from US Code Title 26. Currently does not apply to cryptocurrency.

How We Calculate: Long-term capital gains tax is calculated by comparing total tax with and without the gain when stacked on top of ordinary income. Short-term gains are added to ordinary income and taxed at marginal rates. The NIIT is calculated on the lesser of net investment income or MAGI minus the applicable threshold. State tax is calculated at the user-specified rate on the capital gain amount.

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