Did You Know There Are 4 Tax Rates For Capital Gains?
Recent success stories:
We helped two clients by running some tax projections and advised them to delay the sale of real estate and stocks into the next year when their overall income was going to be less. Because the next year had lower income and therefore lower capital gains rates, it saved them approximately $26,000 and $63,000.
Capital gains taxes are divided into two groups depending on how long you’ve held the asset.
What are the capital gains tax rates?
The capital gains rates themselves (0%, 15%, 20%) haven't changed, but the income thresholds that determine which bracket you fall into are adjusted for inflation every year. Here are the long-term capital gains tax brackets for 2026:
Source: IRS Revenue Procedure 2025-32
We helped two clients by running some tax projections and advised them to delay the sale of real estate and stocks into the next year when their overall income was going to be less. Because the next year had lower income and therefore lower capital gains rates, it saved them approximately $26,000 and $63,000.
Capital gains taxes are divided into two groups depending on how long you’ve held the asset.
- Short-term capital gains tax is a tax applied to profits from selling an asset you've held for one year or less. Short-term capital gains are taxed at the same rate as your ordinary income, such as wages from a job.
- Long-term capital gains tax is a tax applied to assets held for more than a year. The long-term capital gains tax rates are 0 percent, 15 percent, and 20 percent, depending on your income. These rates are typically much lower than ordinary income tax rates. High earners may also owe an additional 3.8 percent Net Investment Income Tax (NIIT) on top of the long-term rate, bringing the maximum effective rate to 23.8 percent.
What are the capital gains tax rates?
The capital gains rates themselves (0%, 15%, 20%) haven't changed, but the income thresholds that determine which bracket you fall into are adjusted for inflation every year. Here are the long-term capital gains tax brackets for 2026:
Source: IRS Revenue Procedure 2025-32
In 2026, individual filers won't pay any capital gains tax if their total taxable income is $49,450 or less. The rate jumps to 15 percent on capital gains if their income is between $49,451 and $545,500. Above that income level, the rate climbs to 20 percent. Married couples filing jointly can realize up to $98,900 in long-term gains at the 0% rate, with the 15% rate applying up to $613,700 and 20% above that.
In addition, capital gains may be subject to the Net Investment Income Tax (NIIT) — an additional 3.8 percent levy — if the taxpayer's modified adjusted gross income is above $200,000 (single) or $250,000 (married filing jointly).
Meanwhile, short-term capital gains are taxed using the ordinary income tax brackets shown below. Unlike the long-term capital gains tax rate, there is no 0 percent floor or 20 percent ceiling for short-term capital gains taxes — they follow the full ordinary-income schedule above, up to 37 percent.
In addition, capital gains may be subject to the Net Investment Income Tax (NIIT) — an additional 3.8 percent levy — if the taxpayer's modified adjusted gross income is above $200,000 (single) or $250,000 (married filing jointly).
Meanwhile, short-term capital gains are taxed using the ordinary income tax brackets shown below. Unlike the long-term capital gains tax rate, there is no 0 percent floor or 20 percent ceiling for short-term capital gains taxes — they follow the full ordinary-income schedule above, up to 37 percent.
