How capital gains are taxed in 2026
Your gain is the sale price minus what you paid (your cost basis), each adjusted for fees. Assets held more than one year get the lower long-term rates; anything held a year or less is taxed like wages.
| Long-term rate | Single | Married filing jointly | Head of household |
|---|---|---|---|
| 0% | Up to $49,450 | Up to $98,900 | Up to $66,200 |
| 15% | $49,451 – $545,500 | $98,901 – $613,700 | $66,201 – $579,600 |
| 20% | Over $545,500 | Over $613,700 | Over $579,600 |
For 2027 the 0% rate covers taxable income up to $51,050 single ($102,100 married), and 20% starts above $563,200 ($633,600 married). Pick the year above.
The thresholds are taxable income, with the gain stacked on top of your other income after the standard deduction. A 3.8% net investment income tax also applies to the part of your gains that pushes modified AGI above $200,000 ($250,000 married).
Example: a single filer with $80,000 of wages sells stock bought for $30,000 for $50,000. After the $16,100 standard deduction, wages fill taxable income to $63,900, already past the 0% band, so the whole $20,000 long-term gain is taxed at 15%: $3,000. Sold within a year, it would be taxed at the 22% bracket instead: $4,400.
Ways to lower capital gains tax
- Hold over a year to qualify for long-term rates.
- Harvest losses: losses offset gains, and up to $3,000 of other income a year.
- Selling your home: up to $250,000 of gain ($500,000 married) is excluded if you owned and lived in it 2 of the last 5 years.
- Use retirement accounts like a Roth IRA, where gains aren't taxed when you sell.
Frequently asked questions
What is the capital gains tax rate for 2026?
Long-term gains are taxed at 0%, 15% or 20% depending on taxable income. Single filers pay 0% up to $49,450 and 15% up to $545,500. Short-term gains are taxed at ordinary rates, up to 37%.
How long do I have to hold to avoid short-term capital gains?
More than one year: from the day after you bought it through the day you sell.
Do I pay capital gains tax if I reinvest?
Yes. Selling triggers the tax even if you buy something else right away, except inside retirement accounts or certain real estate exchanges.
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