When you sell an investment or other capital asset for a profit, the tax rate depends on how long you owned the asset before selling it.
- Short-term capital gains apply to assets held for one year or less. These gains are generally taxed at your ordinary federal income tax rates, the same rates that apply to wages and other income.
- Long-term capital gains apply to assets held for more than one year. These gains may qualify for lower tax rates of 0%, 15%, or 20%, depending on your filing status and taxable income.
2026 Long-Term Capital Gain Tax Rates
For tax year 2026 (returns filed in 2027), the long-term capital gain tax rates are:
| Tax Rate | Single | Married Filing Separately | Head of Household | Married Filing Jointly |
| 0% | Up to $49,450 | Up to $49,450 | Up to $66,200 | Up to $98,900 |
| 15% | $49,451 - $545,500 | $49,451 - $306,850 | $66,201 - $579,600 | $98,901 - $613,700 |
| 20% | Over $545,500 | Over $306,850 | Over $579,600 | Over $613,700 |
How Is Capital Gains Tax Calculated?
The IRS considers several factors when determining how much tax you owe on a capital gain:
- Your holding period (how long you owned the asset).
- Your taxable income.
- Your filing status.
- Any capital losses that may offset your gains.
For example, if you owned stock for more than one year before selling it, any profit may qualify for the lower long-term capital gain rates shown above. If you sold the stock after holding it for one year or less, the gain is generally taxed at your regular income tax rate.
Are All Long-Term Gains Taxed at 0%, 15%, or 20%?
Not always. Some types of gains are subject to special tax rules. For example:
- Some collectible assets may be taxed at different rates.
- Real estate sales may be subject to depreciation recapture rules.
- Higher-income taxpayers may also owe the Net Investment Income Tax (NIIT) in addition to any capital gains tax.
Key Takeaway
Short-term capital gains are generally taxed at your ordinary income tax rates, while long-term capital gains may qualify for the preferential rates of 0%, 15%, or 20%. The rate that applies to your gain depends on your filing status, taxable income, and how long you held the asset before selling it. Understanding these rules can help you estimate your tax bill and make more informed investment decisions.