Calculate your 2026 capital gains tax on stocks, real estate, and other investments. See short-term vs long-term rates and how much you save by holding longer.
Capital gains tax is one of the most impactful and misunderstood parts of the tax code for investors. In 2026, long-term capital gains on investments held over one year are taxed at preferential 0%, 15%, or 20% rates — significantly lower than ordinary income tax rates. Short-term gains on assets held less than one year are taxed at your ordinary income rate, which can be as high as 37%. High-income investors also owe the 3.8% Net Investment Income Tax (NIIT) on investment income. For home sellers, the Section 121 exclusion allows up to $250,000 (single) or $500,000 (married) of primary residence gains to be tax-free. Strategic tax-loss harvesting — selling losing positions to offset gains — is a key year-end tax planning tool.
The 2026 long-term capital gains tax rates for single filers are: 0% on gains when total income is up to $48,350; 15% on gains when income is $48,351–$533,400; and 20% on gains when income exceeds $533,400. For married filing jointly: 0% up to $96,700; 15% up to $600,050; 20% above that. Short-term capital gains (assets held under one year) are taxed as ordinary income at your marginal tax bracket rate, which can be as high as 37%. High-income taxpayers also owe the 3.8% Net Investment Income Tax (NIIT).
Short-term capital gains are profits from assets held for one year or less. These are taxed as ordinary income at your regular federal income tax bracket rates (10%–37%). Long-term capital gains come from assets held longer than one year and qualify for preferential tax rates of 0%, 15%, or 20% depending on your taxable income. The tax savings from holding an investment longer than one year can be substantial — for a taxpayer in the 22% bracket, long-term gains are taxed at just 15%, a savings of 7 percentage points.
Under Section 121 of the tax code, you can exclude up to $250,000 of capital gains from selling your primary residence ($500,000 for married filing jointly). To qualify, you must have owned the home and lived in it as your primary residence for at least 2 of the 5 years before the sale. This exclusion can be used once every 2 years. Any gain above the exclusion amount is taxed as long-term capital gains if you owned the home for more than one year.
The Net Investment Income Tax (NIIT) is an additional 3.8% tax on investment income for higher earners. It applies to the lesser of: your net investment income (capital gains, dividends, interest, rental income) or the amount by which your modified AGI exceeds the threshold ($200,000 for single filers, $250,000 for married filing jointly in 2026). This means high-income investors may effectively pay 23.8% on long-term capital gains (20% + 3.8% NIIT) or up to 40.8% on short-term gains (37% + 3.8% NIIT).
Yes. Capital losses can offset capital gains dollar-for-dollar. Short-term losses first offset short-term gains; long-term losses first offset long-term gains. Net remaining losses can offset the other type. If total capital losses exceed capital gains, you can deduct up to $3,000 of net capital losses against ordinary income per year. Any remaining losses carry forward to future tax years indefinitely. This strategy — called tax-loss harvesting — is commonly used to reduce capital gains tax liability.