2026 Capital Gains Tax Rates
- Pathfinding Consultants
- Mar 31
- 3 min read
When you sell an investment, a property, or another capital asset for more than you paid for it, the profit is called a capital gain. The IRS taxes capital gains differently depending on how long you held the asset before selling. Understanding whether your gain is short-term or long-term and which rate applies can make a significant difference in what you owe. These figures apply to assets sold during calendar year 2026. Returns are filed in early 2027. Source: IRS Topic No. 409.
Short-Term vs. Long-Term Capital Gains
| Short-Term Gain | Long-Term Gain |
Holding Period | Held 1 year or LESS | Held MORE than 1 year |
Tax Rate | Taxed as ordinary income (10% - 37%) | Lower preferred rates (0%, 15%, or 20%) |
Example | Bought stock in March 2026, sold September 2026 | Bought stock in 2024 or earlier, sold in 2026 |
2026 Long-Term Capital Gains Tax Rates
Single Filers
Rate | Taxable Income Range | Who This Covers |
0% | $0 – $48,350 | Lower-income investors |
15% | $48,351 – $533,400 | Most middle and upper-middle income |
20% | Over $533,400 | High-income earners |
Married Filing Jointly / Surviving Spouses
Rate | Taxable Income Range | Who This Covers |
0% | $0 – $96,700 | Lower-income couples |
15% | $96,701 – $600,050 | Most married couples |
20% | Over $600,050 | High-income couples |
Head of Household
Rate | Taxable Income Range | Who This Covers |
0% | $0 – $64,750 | Lower-income HOH filers |
15% | $64,751 – $566,700 | Most HOH filers |
20% | Over $566,700 | High-income HOH filers |
Special Capital Gains Rates
Asset Type | Max Rate | Details |
Collectibles (coins, art, antiques) | 28% | Higher rate regardless of income bracket |
Qualified Small Business Stock (Section 1202) | 28% | Taxable portion of gain on qualified small business stock |
Section 1250 Real Property (Depreciation Recapture) | 25% | Portion of real estate gain attributable to prior depreciation |
Short-Term Gains (held 1 year or less) | 10%-37% | Taxed at ordinary income rates — same as your regular tax bracket |
Net Investment Income Tax (NIIT) — The Extra 3.8%
High-income taxpayers may owe an additional 3.8% Net Investment Income Tax on top of capital gains rates. This applies to the lesser of your net investment income or the amount by which your Modified Adjusted Gross Income (MAGI) exceeds the threshold.
Filing Status | MAGI Threshold | Additional Tax |
Single / Head of Household | Over $200,000 | 3.8% on net investment income |
Married Filing Jointly | Over $250,000 | 3.8% on net investment income |
Married Filing Separately | Over $125,000 | 3.8% on net investment income |
This means a high-income taxpayer could face an effective rate of up to 23.8% on long-term capital gains (20% + 3.8% NIIT).
Capital Losses — How They Reduce Your Tax Bill
Rule | How It Works |
Offset capital gains | Capital losses first offset capital gains of the same type, then can offset the other type. |
Deduct against ordinary income | If losses exceed gains, you can deduct up to $3,000 ($1,500 if married filing separately) against ordinary income per year. |
Carry forward unused losses | Losses beyond the $3,000 limit carry forward to future tax years indefinitely until used up. |
Frequently Asked Questions
What is the difference between short-term and long-term capital gains?
Short-term capital gains apply to assets held one year or less and are taxed at your ordinary income rate (10% to 37%). Long-term capital gains apply to assets held more than one year at the preferred rates of 0%, 15%, or 20%. Holding an asset just one day beyond the one-year mark can significantly reduce your tax bill.
Do I pay capital gains tax when I sell my home?
You may be able to exclude a portion of the gain. Single filers can exclude up to $250,000 and married filers up to $500,000, provided they meet the IRS ownership and use requirements. Any gain above the exclusion is taxable as a long-term capital gain if you have owned the home more than one year.
What is the 0% capital gains rate and who qualifies?
The 0% rate applies if your taxable income falls below certain thresholds — $48,350 for single filers and $96,700 for married filing jointly in 2026. In lower income years this creates a planning opportunity to realize gains at no federal tax cost.
When are capital gains taxes due?
Capital gains on assets sold during 2026 are reported on your 2026 tax return, normally due April 2027. If you have a significant capital gain, you may be required to make quarterly estimated tax payments during the year to avoid an underpayment penalty.
How does tax-loss harvesting work?
Tax-loss harvesting is the practice of selling investments at a loss to offset capital gains from other investments. By strategically realizing losses in the same tax year as gains, you reduce your net taxable gain. Unused losses carry forward to future years.
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