Disclaimer: This article is for educational purposes only and is not tax, legal, or financial advice. Tax rules change periodically, always check current IRS guidance or consult a qualified tax professional.
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Quick Answer: 2026 Capital Gains Tax Rates
Long-term capital gains (assets held over one year) are taxed at 0%, 15%, or 20% depending on your taxable income and filing status. Short-term gains (one year or less) are taxed at ordinary income rates of 10% to 37%.
The rates themselves didn't change from 2025, but the income thresholds rose about 2.7% due to inflation adjustments. The One Big Beautiful Bill Act made these rates permanent. High earners may also owe the 3.8% Net Investment Income Tax, bringing the maximum effective rate on long-term gains to 23.8%.
Key Takeaways
- Three long-term rates: 0%, 15%, and 20%. Your rate depends on taxable income and filing status. Single filers pay 0% on gains up to $49,450 in taxable income and 20% above $545,500.
- Short-term gains are taxed at ordinary income rates. Assets held one year or less face rates from 10% to 37%, the same brackets as wages and salary.
- Thresholds increased for 2026. All income cutoffs rose roughly 2.7% from 2025 per IRS Revenue Procedure 2025-32. For married filing jointly, the 0% threshold went from $96,700 to $98,900.
- The 3.8% NIIT still applies to high earners. The Net Investment Income Tax hits capital gains when your MAGI exceeds $200,000 (single) or $250,000 (MFJ). These thresholds are not indexed for inflation.
- Special rates exist for collectibles and QSBS. Art, coins, precious metals, and the taxable portion of qualified small business stock face a maximum rate of 28%.
- The OBBBA made these rates permanent. The One Big Beautiful Bill Act (signed July 4, 2025) eliminated the TCJA sunset, so these capital gains rates have no expiration date.
What Are Capital Gains Taxes?
A capital gain is the profit you make when you sell an asset for more than you paid for it. Stocks, real estate, cryptocurrency, mutual funds, bonds, and even collectibles can all generate capital gains.
The IRS only taxes realized gains, meaning you must actually sell (or "dispose of") the asset. If your stock portfolio grew by $50,000 this year but you didn't sell anything, you owe nothing. The tax bill arrives when you cash out.
Short-term vs. long-term
The holding period determines which tax rate applies:
- Short-term capital gains: assets held one year or less. Taxed at your ordinary income rate (10% to 37%).
- Long-term capital gains: assets held more than one year. Taxed at preferential rates of 0%, 15%, or 20%.
That rate differential is the main reason capital gains planning matters. A single filer in the 32% ordinary income bracket who sells stock after 13 months might pay just 15% on the gain instead of 32%. Holding an extra day can save thousands.
How gains are calculated
Your capital gain equals the sale price minus your cost basis. The cost basis is typically what you paid for the asset, plus any purchase costs (commissions, fees). For inherited assets, the basis is usually the fair market value on the date the previous owner died (the "stepped-up basis" rule).
Formula: Capital Gain = Sale Price − Cost Basis
2026 Long-Term Capital Gains Tax Rates and Brackets
Long-term capital gains are taxed at three rates: 0%, 15%, and 20%. The rate you pay depends on your total taxable income (not just the gain itself) and your filing status. These thresholds come from IRS Revenue Procedure 2025-32.
Single filers
| Tax Rate | Taxable Income Range |
|---|---|
| 0% | Up to $49,450 |
| 15% | $49,451 to $545,500 |
| 20% | Over $545,500 |
Married filing jointly
| Tax Rate | Taxable Income Range |
|---|---|
| 0% | Up to $98,900 |
| 15% | $98,901 to $613,700 |
| 20% | Over $613,700 |
Head of household
| Tax Rate | Taxable Income Range |
|---|---|
| 0% | Up to $66,200 |
| 15% | $66,201 to $579,600 |
| 20% | Over $579,600 |
Married filing separately
| Tax Rate | Taxable Income Range |
|---|---|
| 0% | Up to $49,450 |
| 15% | $49,451 to $306,850 |
| 20% | Over $306,850 |
2025 vs. 2026 comparison
The rates stayed the same, but the income thresholds rose roughly 2.7% to account for inflation. Here's how the 0% and 20% thresholds shifted for the two most common filing statuses:
| Bracket | Filing Status | 2025 | 2026 | Change |
|---|---|---|---|---|
| 0% | Single | Up to $48,350 | Up to $49,450 | +$1,100 |
| 0% | MFJ | Up to $96,700 | Up to $98,900 | +$2,200 |
| 20% | Single | Over $533,400 | Over $545,500 | +$12,100 |
| 20% | MFJ | Over $600,050 | Over $613,700 | +$13,650 |
The upward shift means you can earn slightly more in 2026 before jumping to the next rate. If you were near a threshold boundary in 2025, the extra headroom could keep you in a lower bracket.
Why these rates are now permanent
The Tax Cuts and Jobs Act of 2017 originally set these capital gains brackets with a sunset date of December 31, 2025. The One Big Beautiful Bill Act (P.L. 119-21), signed on July 4, 2025, made them permanent. There's no longer an expiration date on the 0%/15%/20% structure.
2026 Short-Term Capital Gains Tax Rates
Short-term capital gains, from assets held one year or less, don't get preferential treatment. They're added to your ordinary income and taxed at the same federal rates as wages and salary.
2026 ordinary income tax brackets (single and MFJ)
| Tax Rate | Single | Married Filing Jointly |
|---|---|---|
| 10% | $0 to $12,400 | $0 to $24,800 |
| 12% | $12,401 to $50,400 | $24,801 to $100,800 |
| 22% | $50,401 to $105,700 | $100,801 to $211,400 |
| 24% | $105,701 to $201,775 | $211,401 to $403,550 |
| 32% | $201,776 to $256,225 | $403,551 to $512,450 |
| 35% | $256,226 to $640,600 | $512,451 to $768,700 |
| 37% | Over $640,600 | Over $768,700 |
The gap between short-term and long-term rates is steep. A single filer with $250,000 in taxable income would pay 32% on a short-term gain but only 15% on a long-term gain. On a $50,000 profit, that's $16,000 versus $7,500: a $8,500 difference just from holding the asset one day longer than a year.
This rate gap is the strongest argument for buy-and-hold investing. When possible, waiting past the one-year mark before selling converts a short-term gain into a long-term one.
Special Capital Gains Tax Rates: Collectibles, QSBS, and the NIIT
Beyond the standard 0%/15%/20% rates, three additional capital gains taxes surprise many investors.
28% rate on collectibles
Long-term gains on collectibles are taxed at a maximum rate of 28%, higher than the standard 20% top rate. The IRS defines collectibles as:
- Art and antiques
- Coins and stamps
- Precious metals (gold, silver, platinum)
- Gems and jewelry
- Rare wines
- Certain ETFs backed by physical precious metals
If your ordinary income puts you below the 28% bracket, your collectibles gains are taxed at your ordinary rate. The 28% is a ceiling, not a floor. But if you're in the 32% or 37% bracket for ordinary income, collectibles gains are capped at 28%, which actually saves you money compared to short-term treatment.
28% rate on qualified small business stock (Section 1202)
Section 1202 of the tax code lets you exclude a portion of the gain from selling qualified small business stock (QSBS) held for at least five years. The exclusion percentage depends on when you acquired the stock:
- 100% exclusion for stock acquired after September 27, 2010 (subject to limits)
- 75% exclusion for stock acquired between February 18, 2009, and September 27, 2010
- 50% exclusion for stock acquired before February 18, 2009
Any taxable portion of QSBS gain (the part not excluded) faces a maximum rate of 28%. The One Big Beautiful Bill Act introduced a new tiered exclusion structure for higher-value dispositions, so consult a tax professional if your gain exceeds $10 million.
3.8% Net Investment Income Tax (NIIT)
The NIIT is a 3.8% surtax on net investment income that applies when your modified adjusted gross income (MAGI) exceeds:
- $200,000 for single filers
- $250,000 for married filing jointly
- $125,000 for married filing separately
Net investment income includes capital gains, dividends, interest, rental income, and royalties. The 3.8% applies to the lesser of your net investment income or the amount your MAGI exceeds the threshold.
Worth knowing: these NIIT thresholds are not indexed for inflation. They haven't changed since the tax was created in 2013. As incomes rise, more taxpayers cross the line each year.
Maximum effective capital gains rate
For high-income investors, the combined rate on long-term capital gains can reach 23.8% (20% long-term rate + 3.8% NIIT). On collectibles, the combined maximum is 31.8% (28% + 3.8%). These are federal rates only; state taxes can add more.
Capital Gains Tax on Home Sales in 2026
Selling your primary residence triggers capital gains rules, but most homeowners owe nothing thanks to the Section 121 exclusion.
Exclusion amounts
- Single filers: exclude up to $250,000 of gain
- Married filing jointly: exclude up to $500,000 of gain
If your profit is under the threshold, you pay zero capital gains tax on the sale and don't even need to report it on your return.
Qualification rules
To claim the full exclusion, you must meet two tests:
- Ownership test: you owned the home for at least 2 of the 5 years before the sale.
- Use test: you lived in the home as your primary residence for at least 2 of the 5 years before the sale.
The two years don't need to be consecutive, and the ownership and use periods can overlap but don't have to. You can generally claim this exclusion only once every two years.
Partial exclusion
If you don't meet the full two-year requirement due to a job relocation, health condition, or other unforeseen circumstance, you may qualify for a partial exclusion. The excluded amount is prorated based on how long you actually lived there.
When gains exceed the exclusion
If your profit exceeds $250,000 (single) or $500,000 (joint), only the excess is taxable. For example, a married couple who sells for a $600,000 gain pays tax on only $100,000 of that gain. The rate depends on their taxable income and how long they owned the home (long-term rates if owned over one year, which is almost always the case for a primary residence).
High earners with gains above the exclusion may also owe the 3.8% NIIT on the taxable portion.
7 Strategies to Reduce Your Capital Gains Tax in 2026
Capital gains taxes aren't fixed. With planning, you can reduce or even eliminate what you owe. These seven strategies all work under current 2026 rules.
1. Hold investments for more than one year
The simplest strategy. Moving from short-term to long-term treatment can cut your rate from as high as 37% down to 15% or even 0%. Before selling an appreciated asset, check when you acquired it. If you're close to the one-year mark, waiting can save thousands.
2. Tax-loss harvesting
Offset your gains by selling investments that have declined in value. Capital losses cancel out capital gains dollar for dollar. If your losses exceed your gains, you can deduct up to $3,000 of the excess against ordinary income each year. Unused losses carry forward indefinitely.
Watch the wash-sale rule: if you repurchase a "substantially identical" security within 30 days before or after the sale, the IRS disallows the loss. You can avoid this by buying a similar (but not identical) investment instead.
3. Stay in the 0% bracket
If your taxable income falls below the 0% threshold ($49,450 single, $98,900 MFJ for 2026), your long-term gains are tax-free. Retirees, part-time workers, and anyone with a gap year between jobs can take advantage of this. Deliberately realizing gains in low-income years, called tax-gain harvesting, resets your cost basis higher and reduces future tax exposure.
4. Use tax-advantaged accounts
Investments inside a 401(k), IRA, or HSA grow without triggering capital gains taxes. A traditional 401(k) defers all tax until withdrawal. A Roth IRA removes the tax on gains altogether, since qualified withdrawals are tax-free. An HSA provides tax-free growth and tax-free withdrawals for medical expenses.
Prioritize holding your highest-growth investments in tax-advantaged accounts and keeping lower-growth, tax-efficient investments (like index funds or municipal bonds) in taxable accounts.
5. Charitable donation of appreciated assets
Donating appreciated stock or other assets directly to a qualified charity lets you avoid the capital gains tax completely. You get a charitable deduction for the full fair market value (up to 30% of AGI for appreciated assets), and neither you nor the charity pays tax on the gain. This works best for assets with large unrealized gains and a low cost basis.
6. Primary residence exclusion planning
If you're thinking about selling your home and the gain might exceed the $250,000/$500,000 exclusion, timing matters. Make sure you meet the two-year ownership and use tests. If you're close to getting married and your individual exclusion isn't enough, consider whether filing jointly after marriage doubles the exclusion. If you've recently converted a rental property back to a primary residence, you'll need to live there for at least two years before selling to claim the full exclusion.
7. Qualified Opportunity Zone reinvestment
By reinvesting capital gains into a Qualified Opportunity Zone (QOZ) fund within 180 days of the sale, you can defer the tax on those gains. If you hold the QOZ investment for at least 10 years, any future appreciation in the fund is permanently tax-free. The One Big Beautiful Bill Act extended and modified this program, making it available for gains realized through 2033.
QOZ investing is best suited for large, concentrated gains where you don't need the cash immediately and are willing to lock it up for a decade.
Capital Gains Tax Calculation Examples
These examples use 2026 tax rates and thresholds. Your actual tax depends on your complete income picture, filing status, and deductions. Use the Tax Calculator US app to run your own numbers.
A single filer sells stock held for three years, realizing a $30,000 long-term capital gain. They also earn $35,000 in wages.
- Wages: $35,000
- Long-term capital gain: $30,000
- Standard deduction: $16,100
- Taxable income: $35,000 + $30,000 - $16,100 = $48,900
Since $48,900 is below the $49,450 single-filer 0% threshold, the entire $30,000 long-term gain is taxed at 0%. The filer owes ordinary income tax only on their wage income above the standard deduction.
- Capital gains tax: $0
- Ordinary income tax on wages: approximately $2,090
A married couple filing jointly earns $180,000 in combined wages and sells stock held for two years, realizing a $75,000 long-term gain.
- Wages: $180,000
- Long-term capital gain: $75,000
- Standard deduction: $32,200
- Taxable income: $180,000 + $75,000 - $32,200 = $222,800
Their taxable income exceeds the $98,900 MFJ 0% threshold but stays below the $613,700 20% threshold. The entire $75,000 gain is taxed at 15%.
- Capital gains tax: $75,000 x 15% = $11,250
- NIIT: MAGI of $255,000 exceeds $250,000 by $5,000. NIIT = 3.8% x $5,000 = $190
- Total tax on gains: $11,250 + $190 = $11,440
A single filer with $120,000 in wages sells an investment for a $40,000 profit. How much difference does the holding period make?
- Wages: $120,000
- Investment gain: $40,000
- Standard deduction: $16,100
- Taxable income: $143,900
If held 11 months (short-term): The $40,000 gain is taxed as ordinary income. At this income level, most of the gain falls in the 24% bracket. Approximate tax on the gain: $9,600.
If held 13 months (long-term): The $40,000 gain is taxed at the 15% long-term rate. Tax on the gain: $6,000.
Savings from waiting two extra months: $3,600. That's 9% of the gain recovered simply by holding past the one-year mark.
Frequently Asked Questions
Tips for Managing Capital Gains Tax
- Check your holding period before selling. The difference between 364 days and 366 days can mean paying 37% instead of 15%. If you're close to the one-year mark, waiting a few weeks can save thousands.
- Track your cost basis carefully. Brokerages report cost basis to the IRS, but errors happen, especially with older holdings, inherited assets, or reinvested dividends. A wrong basis leads to a wrong gain amount, and you could end up overpaying.
- Harvest losses before year-end. Review your portfolio in November and December for positions that are down. Selling them to lock in losses that offset your gains is one of the few year-end tax moves that actually lowers your bill.
- Watch for the NIIT threshold. If your income is near $200,000 (single) or $250,000 (MFJ), a large capital gain could push you over and trigger the extra 3.8% tax. Consider spreading sales across multiple tax years to stay below the line.
- Run the numbers with a calculator. Capital gains interact with ordinary income, deductions, and surtaxes in ways that aren't obvious. The Tax Calculator US app lets you model different scenarios before you sell.
- Don't let taxes drive every decision. Paying 15% tax on a profitable investment is better than holding a declining asset just to avoid the tax. Factor taxes into your decision, but don't let the tax tail wag the investment dog.
References
- IRS Topic No. 409 — Capital Gains and Losses — Official IRS guidance on capital gains and losses, including holding periods, rates, and reporting requirements.
- IRS Revenue Procedure 2025-32 (2026 Inflation Adjustments) — Official IRS document with all 2026 inflation-adjusted tax thresholds, including capital gains brackets.
- Tax Foundation — 2026 Tax Brackets and Federal Income Tax Rates — Analysis of 2026 federal tax brackets, capital gains thresholds, and standard deductions for all filing statuses.
- IRS — Questions and Answers on the Net Investment Income Tax — IRS guidance on the 3.8% NIIT, including who owes it, applicable thresholds, and what counts as net investment income.
- IRS Topic No. 701 — Sale of Your Home — IRS rules on the Section 121 home sale exclusion, ownership and use tests, and partial exclusion eligibility.
- Kiplinger — Capital Gains Tax Rates and Brackets for 2025 and 2026 — Year-over-year comparison of capital gains tax thresholds and analysis of OBBBA changes.