Capital Gains Tax Rates (2026)

2026 long-term capital gains brackets

A capital gain is the profit from selling an asset — a stock, bond, fund, crypto, or a second home — for more than you paid for it. If you held the asset for more than one year, the gain is "long-term" and taxed at one of three preferential rates: 0%, 15%, or 20%. Which rate applies depends on your taxable income and filing status^[1].

The IRS adjusts these brackets for inflation each year. The figures below apply to assets sold during 2026, reported on the return you file in early 2027^[2].

Short-term vs long-term: the one-year rule

The single most important number in capital gains planning is one year. Hold an asset for more than a year before selling and your gain qualifies for the long-term rates above. Hold it for one year or less and the gain is "short-term" — taxed at the same rates as your wages, which run from 10% to 37%^[1].

For 2026, the top ordinary-income rate of 37% kicks in above $640,600 for single filers and $768,700 for married couples filing jointly^[3]. That's the gap that makes timing matter: a short-term gain at a high bracket can be taxed more than double what the same gain would owe if you'd waited past the one-year mark.

The holding period starts the day after you buy and ends the day you sell. Sell on day 365 and it's short-term; sell on day 366 and it's long-term. The difference is not a rounding detail — for a large gain, it can mean thousands of dollars in tax.

How your capital gains tax is calculated

The tax is not on the full sale price — it's on your net gain: the selling price minus your cost basis, which is usually what you paid plus any reinvested dividends or fees. If you sold two positions in the same year, one at a $10,000 profit and another at a $4,000 loss, your net long-term gain is $6,000, and that's the amount subject to tax.

The rates are marginal, meaning your income is taxed through the brackets rather than all at the top rate. A single filer with $60,000 in taxable income pays 0% on the portion up to $49,450 and 15% only on the amount above it. The brackets apply to your total taxable income — ordinary income plus the gain — not just the gain itself.

If your losses exceed your gains, you can use up to $3,000 of the excess to offset ordinary income each year ($1,500 if married filing separately), and carry any remainder forward to future years^[4].

The 3.8% net investment income tax (and other surtaxes)

High earners pay a little more. The net investment income tax (NIIT) adds 3.8% on top of the capital gains rates once your modified adjusted gross income (MAGI) passes $200,000 (single or head of household), $250,000 (married filing jointly), or $125,000 (married filing separately)^[5]. Unlike the brackets, these thresholds are not adjusted for inflation.

One special category is taxed higher still: long-term gains on collectibles — coins, precious metals, antiques, and art — are capped at a 28% rate^[1]. And your primary home gets its own break: if you've owned and lived in it for two of the last five years, you can exclude up to $250,000 of gain ($500,000 for married couples) from tax entirely^[6].

How to pay less capital gains tax

Hold for longer than a year. This is the simplest lever and usually the biggest. The gap between ordinary-income rates and the 15% long-term rate is the entire game for most investors.

Use tax-advantaged accounts. Trades inside a 401(k), traditional IRA, or Roth IRA don't trigger capital gains tax while the money stays in the account. Roth IRAs and 529 plans can make withdrawals entirely tax-free when you follow the rules, while traditional accounts defer the tax until you take distributions in retirement.

Harvest losses. Selling a losing position to offset gains is a standard end-of-year move. It lowers your net gain now, and any leftover loss can offset up to $3,000 of ordinary income and carry forward.

Watch your bracket. If your income lands near the top of the 0% band, delaying a sale or spreading it across two tax years can keep more of the gain in the zero-rate zone. The 0% bracket is generous — up to $98,900 of taxable income for a married couple — so timing can genuinely zero out the tax on a modest gain.

Keep records of your basis. Reinvested dividends and fees add to your basis and reduce the taxable gain, but only if you track them. Most brokers report this for covered securities, but it's worth checking before you sell.

FAQ

Do I pay capital gains tax on crypto?

Yes. The IRS treats cryptocurrency as a capital asset, so selling, trading, or spending it triggers the same short- and long-term rules as a stock. Even swapping one coin for another is a taxable event.

What's the difference between the 15% and 20% rate?

It's purely a matter of taxable income. Below $545,500 (single) or $613,700 (married filing jointly) in 2026, long-term gains are taxed at no more than 15%. Above that, the portion over the threshold is taxed at 20%.

Do I pay capital gains tax if I reinvest the profit?

Yes. Reinvesting doesn't defer the tax — once you sell at a gain, the gain is realized and generally taxable, regardless of what you do with the proceeds. The exception is selling inside a tax-advantaged account.

How much can I sell a house for without paying tax?

Up to $250,000 of gain is excluded for single filers and $500,000 for married couples filing jointly, if you owned and lived in the home as your main residence for at least two of the five years before the sale.