Capital Gains Tax Calculator: Short-Term & Long-Term

Short-term capital gains are profits from selling assets held for one year or less, and are taxed as ordinary income at your marginal tax rate (10% to 37%). Long-term capital gains are from assets held for more than one year, and receive preferential tax rates of 0%, 15%, or 20% depending on your taxable income and filing status. For example, a taxpayer in the 24% bracket pays 24% on short-term gains but only 15% on long-term gains—a significant 9 percentage point difference. The holding period is calculated from the day after purchase to the sale date.

Long-term capital gains tax brackets are based on your total taxable income (including the gains themselves). For 2025 estimates: The 0% rate applies if taxable income is up to ~$47,025 (single) or ~$94,050 (married filing jointly). The 15% rate applies from ~$47,026 to ~$518,900 (single) or ~$94,051 to ~$583,750 (married). The 20% rate applies above those thresholds. These brackets are separate from ordinary income tax brackets and adjust annually for inflation. Unlike ordinary income which is taxed progressively across multiple brackets, capital gains are typically taxed at one rate based on your total income level.

The Net Investment Income Tax (NIIT) is a 3.8% surtax on investment income including capital gains, dividends, interest, rental income, and passive business income. It applies when your Modified Adjusted Gross Income (MAGI) exceeds $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately). You pay NIIT on the lesser of: (1) your net investment income, or (2) the amount your MAGI exceeds the threshold. Example: Single filer with $220,000 MAGI and $30,000 capital gains pays NIIT on only $20,000 (the MAGI excess) = $760. The NIIT applies to both short-term and long-term gains and is in addition to regular capital gains tax.

Capital losses first offset capital gains of the same type (short-term losses → short-term gains, long-term losses → long-term gains), then offset the opposite type. After offsetting all gains, you can deduct up to $3,000 ($1,500 if married filing separately) of remaining net capital losses against ordinary income each year. Any losses exceeding $3,000 carry forward indefinitely to future tax years. Example: $50,000 capital loss with no gains. Year 1: deduct $3,000 against ordinary income, carry forward $47,000. Year 2: deduct $3,000, carry forward $44,000. Continue until exhausted. You report carryforward losses on Form 1040 Schedule D. There's no expiration—losses carry forward until used or death.

The wash-sale rule disallows capital loss deductions if you purchase a substantially identical security within 30 days before or after the sale (61-day window total). The disallowed loss isn't permanently lost—it's added to the cost basis of the replacement shares, deferring the tax benefit. Example: Sell 100 shares of Stock A for a $1,000 loss on December 15. Buy 100 shares of Stock A on December 20. The $1,000 loss is disallowed in the current year but increases the basis of the new shares by $1,000. To avoid wash sales: (1) Wait 31+ days before repurchasing the same security, (2) Buy a similar but not identical investment (different company in the same sector, or an index ETF instead of individual stocks), or (3) Use the loss to offset gains without repurchasing. Important: Wash sales also apply if you buy the security in an IRA within 30 days of selling in a taxable account—this permanently disallows the loss.

Qualified dividends are taxed at the preferential long-term capital gains rates (0%, 15%, or 20%) rather than as ordinary income. To qualify, dividends must be paid by a U.S. corporation or qualified foreign corporation, and you must hold the stock for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date. Most dividends from stocks held in regular brokerage accounts for several months meet these requirements. Non-qualified (ordinary) dividends are taxed at regular income tax rates and include: dividends from REITs, MLPs, and foreign corporations in certain countries, dividends on stocks held less than 61 days, and dividends from tax-exempt organizations. Qualified dividends are also subject to the 3.8% NIIT when MAGI exceeds thresholds.

Yes, state capital gains tax treatment varies significantly. Some states have no income tax at all (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming), so capital gains are not taxed at the state level. Most states tax capital gains as ordinary income at their standard income tax rates—California (up to 13.3%), New York (up to 10.9%), Oregon (up to 9.9%). A few states offer preferential rates or exclusions for certain capital gains. Washington state has a 7% capital gains tax on gains exceeding $250,000 (individual). Some states allow deductions for retirement account contributions or other adjustments that reduce taxable capital gains. High-income earners can save 10%+ on investment gains by residing in no-tax states. State residency for tax purposes is determined by domicile and physical presence rules, not just where you sell the investment.