How capital gains are taxed
A capital gain is the profit when you sell an investment or property for more than you paid (your cost basis). How it is taxed depends on how long you owned it:
- Short-term (1 year or less) – taxed as ordinary income at your regular rate, from 10% to 37%.
- Long-term (more than 1 year) – taxed at lower rates of 0%, 15% or 20%.
2026 long-term capital gains rates
- 0% – taxable income up to $49,450 (single), $98,900 (married filing jointly) or $66,200 (head of household).
- 15% – up to $545,500 (single), $613,700 (joint) or $579,600 (head of household).
- 20% – above those amounts.
Higher earners may also owe the 3.8% net investment income tax on gains when modified AGI is above $200,000 (single) or $250,000 (joint). Most states tax capital gains as regular income, and a few have no income tax at all. The calculator stacks your gain on top of your other taxable income to find the right rates.
Frequently asked questions
Do I pay capital gains tax when I sell my house?
If you owned and lived in the home as your main residence for at least 2 of the last 5 years, you can usually exclude up to $250,000 of gain ($500,000 for married couples) from tax.
Can capital losses reduce my taxes?
Yes. Losses first offset gains. If losses are larger, you can deduct up to $3,000 a year from other income and carry the rest forward to future years.
Is crypto taxed like stocks?
Yes. The IRS treats cryptocurrency as property, so selling, trading or spending it can create a short-term or long-term capital gain or loss.