Selling an investment isn't just about the profit — it's about how much of that profit you get to keep. The difference between holding for 364 days vs. 366 days can cut your tax bill in half.
Here's what you need to know about capital gains tax in 2026.
Short-Term vs. Long-Term Gains — What's the Difference?
The length of time you hold an asset determines how your gain is taxed. **Short-term capital gains** (held 365 days or less) are taxed as ordinary income — at your marginal rate, which can be as high as **37%**. **Long-term capital gains** (held more than 365 days) get preferential rates of **0%, 15%, or 20%**.
That's potentially a 17-percentage-point difference — one of the biggest tax breaks in the code.
| Filing Status | 0% Rate | 15% Rate | 20% Rate |
|---|---|---|---|
| Single | $0 – $47,025 | $47,026 – $518,900 | $518,901+ |
| Married Filing Jointly | $0 – $94,050 | $94,051 – $583,750 | $583,751+ |
| Head of Household | $0 – $63,000 | $63,001 – $551,350 | $551,351+ |
What Is the Net Investment Income Tax (NIIT)?
If your modified adjusted gross income exceeds **$200,000 (single)** or **$250,000 (married filing jointly)**, an additional **3. 8% NIIT** applies to your net investment income. This surtax was introduced by the Affordable Care Act and applies to capital gains, dividends, interest, and rental income.
For a high-earner in the 20% LTCG bracket, NIIT pushes the effective federal rate to **23. 8%**.
Can Capital Losses Offset Your Gains?
Yes — and this is one of the most powerful tax strategies available. Capital losses offset capital gains dollar-for-dollar. If your losses exceed your gains, you can deduct up to **$3,000 ($1,500 if married filing separately)** against ordinary income each year.
Remaining losses carry forward indefinitely. This strategy — called tax-loss harvesting — is widely used by investors to reduce taxable gains.
Beware of the wash-sale rule. If you sell a security at a loss and buy a substantially identical security within 30 days before or after the sale, the loss is disallowed for tax purposes. This applies to stocks, ETFs, and crypto.
See Exactly What You'll Owe Before You Sell
Use our free Capital Gains Tax Calculator with 2026 brackets, NIIT, and state tax support. Compare short-term vs. long-term scenarios instantly.