See the tax before you sell.
Enter what you paid, what you sold for, how long you held it and your income. See your estimated federal capital gains tax, the rate you actually pay on the gain, and what you keep after tax.
The sale
Long-term gains stack on top of your taxable income to set the 0%, 15% or 20% rate. Short-term gains are taxed as ordinary income.
What this means for you
Short-term vs long-term on the same gain
The cost of selling too soon
Your gain at a glance
Tax at each long-term tier
What the same gain would cost at each long-term rate, plus the short-term (ordinary income) equivalent. Your result is highlighted.
| Scenario | Rate on gain | Tax | Net after tax |
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Capital gains tax, explained
Short-Term vs Long-Term Capital Gains
The tax treatment of capital gains depends entirely on how long you held the asset before selling. Short-term capital gains, from assets held less than one year, are taxed as ordinary income at your marginal tax rate, which can be as high as 37%. Long-term capital gains, from assets held one year or more, receive preferential tax rates of 0%, 15%, or 20% depending on your taxable income. This significant rate difference makes holding period a critical factor in investment tax planning.
2024 Capital Gains Tax Rates and Brackets
For the 2024 tax year, long-term capital gains rates are structured in three tiers. Single filers pay 0% on gains if their taxable income is below $47,025, 15% for income between $47,025 and $518,900, and 20% for income above $518,900. Married filing jointly thresholds are $94,050 and $583,750 respectively. Additionally, high earners may owe a 3.8% Net Investment Income Tax (NIIT) on top of these rates if their modified adjusted gross income exceeds $200,000 (single) or $250,000 (joint).
Strategies to Minimize Capital Gains Tax
Several legitimate strategies can reduce your capital gains tax liability. Tax-loss harvesting involves selling losing investments to offset gains, reducing your net taxable gain. Holding investments for at least one year qualifies you for the lower long-term rates. Contributing to tax-advantaged accounts like 401(k)s and IRAs shields investment growth from taxes entirely. Charitable giving of appreciated stock allows you to avoid capital gains tax while receiving a fair market value deduction.
Capital Gains Tax on Real Estate
When you sell a primary residence, you may exclude up to $250,000 in capital gains from taxes if you are single, or $500,000 if married filing jointly, provided you lived in the home for at least two of the last five years. Gains exceeding these exclusions are taxed at capital gains rates. Investment properties do not qualify for this exclusion, but a 1031 exchange allows you to defer capital gains taxes by reinvesting proceeds into a like-kind property within strict timeframes.
Common questions
What is the difference between short-term and long-term capital gains?
Short-term capital gains (assets held less than one year) are taxed as ordinary income at your marginal tax rate (up to 37%). Long-term gains (held one year or more) are taxed at preferential rates of 0%, 15%, or 20% depending on your income.
What are the 2024 long-term capital gains tax rates?
For single filers, the 0% rate applies to taxable income up to $47,025, the 15% rate for income up to $518,900, and 20% above that. Married filing jointly thresholds are $94,050 and $583,750 respectively.
How can I reduce my capital gains tax?
Hold investments for at least one year for lower rates, use tax-loss harvesting to offset gains with losses, maximize contributions to tax-advantaged accounts (401k, IRA), and consider qualified opportunity zone investments.
Do I owe capital gains tax on my home sale?
If you lived in the home for at least 2 of the last 5 years, you can exclude up to $250,000 in gains (single) or $500,000 (married filing jointly) from taxes. Gains above the exclusion are taxed at capital gains rates.
What is the Net Investment Income Tax?
High earners may owe an additional 3.8% Net Investment Income Tax (NIIT) on capital gains if their modified adjusted gross income exceeds $200,000 (single) or $250,000 (married). This applies on top of the regular capital gains rate.
Estimates for planning only. This tool covers federal capital gains tax using 2024 brackets and does not include state tax, the 3.8% Net Investment Income Tax, the home-sale exclusion, wash-sale rules or other adjustments. Confirm with a tax professional before you sell.