Capital gains tax generally depends on what you sold, your adjusted basis, how long you held it and your overall taxable income. This guide concerns U.S. federal individual income tax, with 2026 thresholds for ordinary long-term capital gains. Other countries, state taxes, nonresident rules and special assets can produce different results.
Calculate the gain before calculating tax
A gain is generally the amount realized on a sale minus adjusted tax basis. Basis often begins with purchase cost and relevant acquisition costs, but gifts, inheritances, reinvested distributions, corporate actions and depreciation can change it. Keep supporting records rather than assuming the amount deposited by a broker is the taxable gain.
For example, shares purchased for $4,000 and sold for net proceeds of $5,200 would produce a $1,200 gain if there were no other basis adjustments. That is a calculation of gain, not a calculation of the tax owed.
Short-term and long-term treatment
For many assets, holding for more than one year produces a long-term gain; one year or less produces a short-term gain. The IRS capital gains and losses guidance explains the distinction, netting and exceptions. Net short-term gains generally face ordinary income tax rates. Most net long-term gains use the 0%, 15% or 20% structure, but not every asset qualifies for that schedule.
2026 federal long-term capital gains thresholds
The following thresholds come from IRS Revenue Procedure 2025-32, section 4.03. They apply to taxable years beginning in 2026. They are total taxable-income thresholds, not allowances for an additional amount of gains regardless of your other income.
| Filing status | Maximum taxable income for the 0% band | Upper end of the 15% band |
|---|---|---|
| Single | $49,450 | $545,500 |
| Married filing jointly or qualifying surviving spouse | $98,900 | $613,700 |
| Married filing separately | $49,450 | $306,850 |
| Head of household | $66,200 | $579,600 |
The 15% rate generally applies to the relevant portion above the zero-rate threshold up to the second threshold; the 20% rate applies to the relevant portion above it. A gain can span more than one band. Use the tax-year worksheet and applicable rules when filing rather than applying one rate to all investment proceeds.
Worked example: a gain spanning two bands
Assume a single U.S. taxpayer in 2026 has $43,000 of ordinary taxable income and a $10,000 net long-term stock gain. Assume no qualified dividends, losses, special-rate gains or other complicating items. The remaining 0% band is $49,450 − $43,000 = $6,450. The other $3,550 falls in the 15% band, producing $532.50 of regular federal tax on the gain. Tax on the ordinary income is separate. State tax and other rules are not included. This is an illustration, not an individualized return calculation.
Losses, special assets and additional taxes
Capital losses first interact with gains under netting rules. An excess net loss may offset a limited amount of other income, with eligible unused losses carried forward. Personal-use losses generally are not deductible. Wash-sale rules and transactions across accounts can complicate stock or securities losses.
Collectibles, certain small-business stock gains and unrecaptured depreciation-related real-estate gain can have special treatment. The Net Investment Income Tax can add another federal tax for taxpayers meeting its conditions. Do not assume 20% is a universal maximum all-in rate.
A tax-deferred account is a different calculation
Trading inside an IRA or workplace retirement account generally does not follow the same annual taxable-brokerage gain calculation; contributions and withdrawals have their own rules. See our retirement savings plan comparison. Reinvesting a distribution in a taxable account, by contrast, does not automatically remove its tax consequences.
Keep records and check your jurisdiction
Retain purchase and sale confirmations, basis adjustments, distribution statements and information about each tax lot. A move between countries can create overlapping residence, reporting and treaty questions; our tax treaty guide explains why relief is not automatic. Obtain qualified advice for cross-border sales, business or rental property, inherited assets or uncertain basis before relying on a simplified example.