Step 1: Select your tax year (2024 or 2025), filing status(single, married filing jointly, etc.), and state. State selection affects both income tax rates and whether capital gains receive special treatment.

Step 2: Enter short-term gains and losses (assets held ≤ 1 year) separately. Include stocks, crypto, and other investments sold within a year of purchase. The calculator nets these automatically.

Step 3: Enter long-term gains and losses (assets held > 1 year). Add any qualified dividends if applicable—they're typically taxed at long-term capital gains rates if holding period requirements are met.

Step 4: Add capital loss carryovers from previous years if you have unused losses. Include other ordinary income (W-2 wages, freelance income) to calculate your total tax bracket and determine LTCG rates.

Step 5: Toggle NIIT if your MAGI exceeds thresholds ($200K single / $250K married). Click "Calculate" to see total tax, effective rate, after-tax proceeds, detailed federal/state/NIIT breakdown, netting summary, and carryforward amounts with visual charts.

Hold investments > 1 year: The single most impactful strategy. Long-term rates (0-20%) are significantly lower than short-term rates (10-37%). For a taxpayer in the 24% bracket, this saves 9-24 percentage points by waiting just one extra day past the 1-year mark.

Tax-loss harvesting: Realize capital losses to offset gains in the same tax year. Losses first offset gains of the same type (short-term losses → short-term gains), then offset the other type. Remaining losses offset up to $3,000 of ordinary income, with unlimited carryforwards. Beware wash-sale rules: repurchasing a "substantially identical" security within 30 days before/after the sale disallows the loss.

Use the 0% LTCG bracket strategically: In low-income years (retirement, career gap, entrepreneurial startup), intentionally realize long-term gains up to the 0% threshold. This "harvests gains" to step up your cost basis without paying federal capital gains tax.

Asset location optimization: Hold high-turnover investments (actively managed funds, frequent trading) in tax-advantaged accounts (401k, IRA, HSA) where gains aren't taxed annually. Keep buy-and-hold investments in taxable accounts to benefit from long-term rates and step-up in basis at death.

Donate appreciated assets: Donate stocks, crypto, or real estate held > 1 year directly to charities or donor-advised funds. You receive a tax deduction for fair market value AND avoid capital gains tax entirely. More tax-efficient than selling assets and donating cash.

Gift to family in lower brackets: Transfer appreciated assets to children, parents, or relatives in the 0% or 15% capital gains brackets (within annual gift tax limits: $18,000 per person in 2025). They can sell at lower tax rates.

Coordinate with deductions and income timing: Time gain realization with years when you have large deductions (business losses, charitable contributions, mortgage interest). Spread gains across multiple years to avoid "bracket cliffs" and NIIT thresholds.