Capital Gains Tax Calculator 2026

How to Use the Capital Gains Tax Calculator

1. Enter the gain — the profit, not the sale price. If you only know the sale price, subtract your adjusted basis and selling costs first (see the next section).
2. Choose Long-Term or Short-Term. More than one year of ownership is long-term.
3. Pick your filing status — single, married filing jointly, married filing separately or head of household.
4. Enter your other taxable income for the year. This sets which bracket the gain lands in.
5. Select your state. The calculator applies federal tax, the 3.8% NIIT where it applies, and state tax, and shows what you keep.

The calculator works for stocks, ETFs and mutual funds, crypto, a business interest, land or any other capital asset. Selling a house or a rental? The capital gains tax on real estate calculator adds improvements, the §121 home-sale exclusion and depreciation recapture.

How Capital Gains Tax Is Calculated

Capital gains tax is charged on profit, not on proceeds. The starting point is always the same subtraction: what you sold it for, minus what the tax code says it cost you.

1. Cost basis. What you paid, plus capital improvements and certain acquisition costs. For property you have depreciated, basis also falls by every dollar of depreciation taken. Inherited and gifted assets have their own basis rules, covered below.
2. Gain. Sale price minus selling costs, minus adjusted basis.
3. Holding period. Held more than one year, the gain is long-term and taxed federally at 0%, 15% or 20%, set by taxable income and filing status. Held one year or less, it is short-term and taxed as ordinary income at your marginal rate, which is usually much worse.
4. Net Investment Income Tax. A further 3.8% applies to investment income once modified adjusted gross income passes $200,000 single or $250,000 married filing jointly.
5. State tax. Applied last, on top of everything above. This is where the arithmetic stops being national and starts depending entirely on where you live.

Every figure this tool produces is an estimate for educational purposes. Confirm your own numbers with your CPA before you sign anything.

2026 Long-Term Capital Gains Tax Brackets

Long-term gains are taxed at the rate set by your total taxable income, with the gain stacked on top of your other income. These are the 2026 thresholds published by the IRS in Rev. Proc. 2025-32, §3.03:

Two special federal rates sit outside this table: gain on collectibles (art, coins, precious metals held directly) is taxed at up to 28%, and unrecaptured §1250 gain — the part of a real estate gain created by depreciation — at up to 25% (IRS Topic No. 409).

2026 Ordinary Income Brackets (Short-Term Gains)

A short-term gain is simply added to your ordinary income. The 2026 brackets for the two most common filing statuses, from Rev. Proc. 2025-32, §3.01:

The calculator also applies the 2026 head-of-household and married-filing-separately brackets from the same revenue procedure.

Long-Term Versus Short-Term: Why One Year Matters

The federal difference between a long-term and a short-term gain is not a rounding error. A long-term gain tops out at 20%. A short-term gain is ordinary income and can reach 37% federally, before NIIT and before state tax.

On a $500,000 gain for a top-bracket taxpayer, the gap between 37% and 20% is $85,000 of federal tax. If a sale is being negotiated near the one-year anniversary, the closing date is a tax decision as much as a commercial one. The holding period generally begins the day after you acquire the asset and includes the day you sell.

Worked Examples

Each example uses 2026 federal figures. For simplicity, modified adjusted gross income is assumed to equal taxable income — the same simplification the calculator makes.

1. Long-term gain, married filing jointly, Texas. Other taxable income $150,000; long-term gain $200,000.

• Total taxable income is $350,000 — inside the 15% band ($98,901–$613,700), and the $150,000 of ordinary income already uses up the 0% band. Federal tax: $200,000 × 15% = $30,000.
• NIIT: income exceeds the $250,000 threshold by $100,000, which is less than the $200,000 gain, so $100,000 × 3.8% = $3,800.
• Texas state tax: $0. Total: $33,800, about 16.9% of the gain.
• The same household in California would add about $26,600 at the 13.3% top rate the calculator applies.

2. Short-term versus long-term, single filer. Other taxable income $120,000; gain $50,000.

• Sold after eleven months: total income of $170,000 falls in the 24% band, so federal tax is $50,000 × 24% = $12,000.
• Sold after thirteen months: the gain is long-term and taxed at 15% = $7,500.
• Waiting past the one-year mark saves $4,500. Income stays under $200,000, so no NIIT either way.

3. A gain that crosses into the 20% band, single filer. Other taxable income $500,000; long-term gain $300,000.

• The gain stacks on top: the first $45,500 fills the 15% band up to $545,500 ($6,825), and the remaining $254,500 is taxed at 20% ($50,900). Federal tax: $57,725.
• NIIT: 3.8% × $300,000 = $11,400.
• The calculator’s quick estimate applies 20% to the whole gain ($60,000), so it shows about $2,275 more — a deliberately conservative simplification for gains that straddle a breakpoint.

The Net Investment Income Tax

The 3.8% NIIT is the most commonly missed line in a capital gains estimate. It is a separate federal surtax under IRC §1411, it applies on top of the 0/15/20 rates rather than replacing them, and it is charged on the lesser of your net investment income or the amount by which modified adjusted gross income exceeds the threshold:

The thresholds are set in the statute and are not indexed to inflation (IRS Topic No. 559), so they reach further every year. A large one-off gain frequently pushes an otherwise ordinary earner over the line for a single tax year. Gain excluded under the §121 home-sale exclusion is not investment income for NIIT purposes.

Selling Your Home: The §121 Exclusion

If you owned and lived in a home as your main residence for at least two of the five years before the sale, you can generally exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly (IRC §121; IRS Publication 523). The exclusion is generally available once every two years.

Three points catch people out:

• Gain above the exclusion is taxable as a normal long-term capital gain, and counts toward NIIT.
• Depreciation is not excluded. Any depreciation claimed after May 6, 1997 — a home office, or a period when the home was rented — is taxed as unrecaptured §1250 gain at up to 25%.
• Rental periods can reduce the exclusion. Periods of “nonqualified use” after 2008, such as renting the home before moving in, can reduce the share of gain that qualifies.

For a property sale, use the capital gains tax on real estate calculator, which applies the exclusion for you.

Depreciation Recapture

If you claimed depreciation on the asset — typically rental or business real estate — part of the gain is taxed differently. On real property, gain up to the depreciation taken is unrecaptured §1250 gain, taxed at up to 25% rather than 15% or 20%. On depreciated equipment and other personal property, §1245 recapture is taxed as ordinary income (IRS Publication 544).

The general calculator above does not separate recapture out. The depreciation recapture calculator does.

Capital Losses, Offsets and Carryovers

Losses are part of the calculation, not an afterthought:

• Netting. Short-term losses offset short-term gains and long-term losses offset long-term gains first; any net loss in one category then offsets net gain in the other.
• The $3,000 limit. If losses exceed gains, up to $3,000 of net capital loss ($1,500 married filing separately) can be deducted against ordinary income each year (IRS Topic No. 409).
• Carryover. Unused losses carry forward indefinitely and keep their short- or long-term character, reported on Schedule D.
• Wash sales. A loss on a security is disallowed if you buy substantially identical securities within 30 days before or after the sale (IRC §1091). The disallowed loss is added to the basis of the new shares.
• Personal-use property. A loss on your home or car is not deductible, even though a gain on the same asset can be taxable.

Investment expenses do not reduce the gain either: investment advisory fees and other miscellaneous itemized deductions are no longer deductible, a disallowance the One Big Beautiful Bill Act made permanent (IRC §67(h)). Selling costs such as commissions, by contrast, do reduce the amount realised.

Inherited Assets and the Step-Up in Basis

An heir’s basis in inherited property is generally its fair market value on the date of death (IRC §1014; IRS Publication 551). Gain that built up during the original owner’s lifetime is never taxed to the heir, and a later sale is treated as long-term regardless of how long the heir held it. See step-up in basis in the glossary.

Gifts during life work differently: the recipient generally takes over the giver’s carryover basis (IRC §1015), so the built-in gain comes with the gift. For an inherited asset, enter only the gain above the stepped-up value in the calculator.

Capital Gains Tax by State

State tax is the single largest variable most people can still influence, and the spread is enormous. The same one million dollar gain carries no state tax at all in nine states and over $133,000 in California.

The rates below are 2026 top rates on long-term gains, and they are the same figures this calculator applies — the table and the calculator read one data file. Each rate was checked on September 26, 2026 against the state’s revenue department, tax-form instructions or statute, linked in the Source column. Most states tax capital gains as ordinary income through graduated brackets, so a smaller gain may face a lower rate than the table shows. Several states give long-term gains special treatment — a separate lower rate (Hawaii, Montana, Massachusetts), a partial exclusion (Arizona, Arkansas, North Dakota, South Carolina, Wisconsin) or a surtax on large incomes or gains (Maine, Maryland, Massachusetts, Minnesota, Washington). The calculator models those; county and city income taxes it does not. Confirm your own figures with your CPA or tax advisor.

State rates verified September 26, 2026 against state revenue department publications or statute; top rates only — county and city income taxes are not included.

The Nine States With No Capital Gains Tax

Alaska, Florida, Missouri, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming levy no state tax on capital gains. (New Hampshire’s former tax on interest and dividends never applied to capital gains, and was repealed from 2025. Missouri still taxes wages and other income, but from tax year 2025 lets individuals subtract 100% of federally reported capital gains — Missouri Department of Revenue.)

For a Texas resident this is not a small footnote. On a one million dollar long-term gain, a California resident in the top bracket faces roughly $133,000 of state tax that a Texan simply does not owe — before a single federal dollar is counted. It is the reason state of residence at the time of sale is worth confirming before a closing date is set, particularly for anyone who has moved recently or splits time between states.

Residency for tax purposes is a question of fact, not preference, and states with high rates scrutinise departures closely. Speak to your CPA before assuming a move changes the answer.

The Highest Capital Gains Tax States

In these states the combined federal, NIIT and state burden on a long-term gain can exceed 37%. That is the arithmetic that makes deferral strategies worth understanding rather than dismissing.

Ways to Reduce or Defer Capital Gains Tax

These are categories of strategy recognised in the tax code, described for education:

• Hold for more than one year. The simplest lever: it moves the gain from ordinary rates to the 0/15/20% schedule.
• Time the sale. The rate depends on total taxable income in the year of sale, so a sale in a lower-income year — or split across two tax years — can land in a lower band or stay under the NIIT threshold.
• Installment sale. Receiving payments over several years spreads the gain across those years (IRC §453; IRS Publication 537).
• Tax-loss harvesting. Realising losses elsewhere in a portfolio to offset realised gains, subject to the wash-sale rule.
• 1031 exchange. For investment or business real estate, a properly completed like-kind exchange into other real property can defer the entire gain, including depreciation recapture. Deferred, not forgiven.
• Opportunity Zone funds. Investing eligible gain in a qualified opportunity fund, generally within 180 days, can defer it, with additional treatment for the new investment if it is held long enough. The rules for investments made from 2027 differ from the original program; the OZ calculator explains both.
• Charitable giving of appreciated assets. Donating long-held appreciated property instead of cash can avoid realising the gain at all, subject to deduction limits.
• Step-up in basis. Assets held until death generally pass to heirs at fair market value, which can eliminate built-in gain for them.

These are categories, not recommendations. Which of them applies — if any — depends on the asset, the holding period, your state and your wider tax position, and each carries its own rules, costs and risks.

What This Calculator Does Not Include

To keep the inputs to five, the estimate leaves out: depreciation recapture (use the depreciation recapture calculator), the 28% collectibles rate, qualified small business stock exclusions, the alternative minimum tax, local income taxes, and phase-outs of other deductions caused by a higher income. It also applies one federal rate to the whole gain, as shown in example 3 above.

Sources

• IRS, Rev. Proc. 2025-32 — 2026 tax brackets (§3.01) and capital gains rate thresholds (§3.03)
• IRS, Topic No. 409, Capital gains and losses
• IRS, Topic No. 559, Net investment income tax
• IRS, Publication 523, Selling Your Home
• IRS, Publication 544, Sales and Other Dispositions of Assets
• IRS, Publication 551, Basis of Assets
• IRS, Publication 537, Installment Sales

Related Tools and Reading

• Capital gains tax on real estate calculator — adds basis, improvements, the §121 exclusion and depreciation recapture for a property sale
• How much capital gains tax do I pay? — the five inputs that set your rate, explained in plain English
• 1031 Exchange Calculator — estimate the tax a like-kind exchange could defer
• Depreciation Recapture Calculator — the §1250 piece, separated out
• Texas capital gains tax rate and calculator — how much is capital gains tax in Texas (state rate 0%; federal still applies)
• Opportunity Zone Calculator — deferral through a qualified opportunity fund
• The 3.8% Net Investment Income Tax — how the surtax works in detail
• Tax Strategies for Accredited Investors — the categories above in context

Grace Capital Management, LLC is an SEC Registered Investment Adviser. Securities offered through Concorde Investment Services, LLC, member FINRA/SIPC — separate and unaffiliated entities. This page is educational and is not investment, tax, or legal advice. Tax figures are for tax year 2026 as published by the IRS; state rates are top marginal rates and may not reflect the latest changes. Tax rules change and individual circumstances vary; confirm any figure with your own CPA, tax and legal advisers before acting.