Capital Gains Tax Calculator

Short-term capital gains apply to assets held for one year or less. They're taxed at ordinary income rates — anywhere from 10% to 37% federally, depending on your bracket — making them substantially more expensive than long-term gains in most cases.

Long-term capital gains apply to assets held for more than one year. The federal rate is 0%, 15%, or 20% depending on taxable income. The holding period is measured day-to-day from the day after purchase to the day of sale; selling on day 365 is short-term, selling on day 366 is long-term. The difference can be tens of thousands of dollars on a meaningful gain — waiting one extra day is sometimes the highest-value financial decision someone makes in a year.

The 0% long-term capital gains rate applies up to certain taxable income thresholds — for 2024, $47,025 single, $94,050 MFJ. This means a retiree with low income, a worker on sabbatical, or anyone in a low-income year can realize substantial long-term capital gains entirely tax-free up to the threshold.

Tax-gain harvesting: deliberately selling appreciated long-term positions in the 0% bracket to step up the cost basis, then re-buying immediately. Unlike tax-loss harvesting, there's no wash-sale rule for gains. Done annually in low-income years, this can permanently reset basis and avoid taxes that would otherwise apply when income rises later.

Tax-loss harvesting: selling investments at a loss to offset capital gains and (up to $3,000/year) ordinary income. Excess losses carry forward indefinitely. In a volatile market with significant losses, harvesting can substantially reduce current-year tax bills.

The wash-sale rule disallows the loss if you purchase the same or substantially identical security within 30 days before or after the sale. Designed to prevent purely cosmetic loss-taking, the rule's interpretation is sometimes unclear (especially for bonds and options); when in doubt, wait the 30 days or buy a clearly different asset.

Most states tax capital gains as ordinary income, regardless of the federal long-term/short-term distinction. California, in particular, taxes long-term gains at full state rates (up to 13.3%) on top of the federal 20% rate — making total tax on large gains in high-tax states approach 35%.

The Net Investment Income Tax (NIIT) adds 3.8% to investment income (interest, dividends, capital gains, rental income) for high earners (modified AGI above $200,000 single, $250,000 MFJ). It's a separate tax not included in headline rates; high earners often forget to include it in projections, underestimating the true tax cost of large capital gains.

Section 121: married couples can exclude up to $500,000 of capital gain on the sale of a primary residence; singles up to $250,000. To qualify, you must have owned and used the home as your primary residence for at least 2 of the past 5 years. The exclusion can be used once every 2 years.

For long-time owners in high-appreciation markets, gains above the exclusion can still be substantial. Cost basis includes the original purchase price plus most major improvements (with documentation) — kitchens, additions, roofs. Keep records; the basis you can document is the basis you can claim.