Long-Term vs Short-Term Capital Gains
Capital gains are profits from selling assets like stocks, bonds, real estate, or other investments. The tax rate you pay depends on how long you held the asset before selling.
Long-term capital gains apply to assets held for more than one year. These receive preferential tax rates of 0%, 15%, or 20% based on your taxable income and filing status.
Short-term capital gains apply to assets held for one year or less. These are taxed as ordinary income, meaning they are subject to your regular federal income tax rate (10% to 37% in 2026).
2026 Long-Term Capital Gains Brackets
| Rate | Single | Married Filing Jointly | Head of Household |
|---|---|---|---|
| 0% | Up to $48,350 | Up to $96,700 | Up to $64,750 |
| 15% | $48,351 – $533,400 | $96,701 – $600,050 | $64,751 – $566,700 |
| 20% | Over $533,400 | Over $600,050 | Over $566,700 |
These thresholds are based on your taxable income (after deductions), not your gross income. The 0% bracket can be a powerful planning tool for retirees and lower-income investors looking to realize gains tax-free.
Net Investment Income Tax (NIIT)
The Net Investment Income Tax (NIIT) adds an extra 3.8% surtax on investment income (including capital gains, dividends, interest, and rental income) for high earners.
NIIT applies when your modified adjusted gross income (MAGI) exceeds:
| Filing Status | MAGI Threshold | Effective Top Rate (LTCG + NIIT) |
|---|---|---|
| Single | $200,000 | 23.8% |
| Married Filing Jointly | $250,000 | 23.8% |
| Married Filing Separately | $125,000 | 23.8% |
| Head of Household | $200,000 | 23.8% |
The NIIT is calculated on the lesser of your net investment income or the amount by which your MAGI exceeds the threshold. These thresholds are not inflation-adjusted and have remained unchanged since the tax was introduced in 2013.
Special Capital Gains Rates
| Asset Type | Max Rate | Details |
|---|---|---|
| Collectibles | 28% | Art, antiques, coins, precious metals, stamps, wine, and other collectibles |
| Depreciation Recapture | 25% | Gain attributable to depreciation deductions on real property (Section 1250) |
| Qualified Small Business Stock | 0% – 28% | Section 1202 QSBS may exclude 50%, 75%, or 100% of gain depending on acquisition date |
Collectibles: Long-term gains on collectibles are taxed at a maximum rate of 28%, which is higher than the standard 20% top rate. If your ordinary income tax rate is below 28%, you pay that lower rate instead.
Depreciation recapture: When you sell rental or business property, the portion of gain attributable to prior depreciation deductions (known as "unrecaptured Section 1250 gain") is taxed at a maximum rate of 25%.
Strategies to Minimize Capital Gains Taxes
Tax-loss harvesting: Sell losing investments to offset capital gains dollar-for-dollar. Up to $3,000 in net losses can be deducted against ordinary income per year, with excess losses carried forward.
Hold for over one year: Ensure investments are held longer than 12 months to qualify for the lower long-term capital gains rates instead of ordinary income rates.
Harvest gains in the 0% bracket: If your taxable income falls within the 0% bracket, strategically realize gains tax-free. This is especially useful for retirees with lower income.
Use tax-advantaged accounts: Hold investments in 401(k)s, IRAs, or Roth IRAs where gains grow tax-deferred or tax-free, avoiding capital gains taxes altogether.
Donate appreciated assets: Donating long-term appreciated securities to charity avoids capital gains tax entirely and may provide a charitable deduction for the full fair market value.
Qualified Opportunity Zones: Investing capital gains into a Qualified Opportunity Fund can defer and potentially reduce capital gains taxes.
Calculate your exact capital gains tax liability with our free tool
Open Capital Gains Calculator →Frequently Asked Questions
What are the 2026 long-term capital gains tax rates?
For 2026, long-term capital gains are taxed at 0%, 15%, or 20% depending on your taxable income and filing status. Single filers pay 0% on gains up to $48,350, 15% from $48,351 to $533,400, and 20% above $533,400. An additional 3.8% NIIT may apply for high earners.
What is the Net Investment Income Tax (NIIT) for 2026?
The NIIT is an additional 3.8% tax on net investment income for individuals with MAGI above $200,000 (single) or $250,000 (married filing jointly). Combined with the 20% top long-term rate, the maximum effective rate on long-term capital gains is 23.8%.
How are short-term capital gains taxed in 2026?
Short-term capital gains (assets held one year or less) are taxed as ordinary income. In 2026, federal ordinary income tax rates range from 10% to 37%, so your short-term gains rate depends on your total taxable income and filing status.
What is the capital gains tax rate on collectibles in 2026?
Collectibles such as art, antiques, coins, and precious metals are subject to a maximum long-term capital gains rate of 28%. If your ordinary tax bracket is below 28%, you pay the lower rate. This 28% cap is higher than the standard 20% top rate for other long-term gains.