Understand 2026 long-term capital gains tax rates of 0%, 15%, and 20%. Free calculator, bracket tables by filing status, holding period rules, gain harvesting strategies, and NIIT impact explained.
0%, 15% and 20% brackets with income stacking
Your total long-term capital gain (asset held more than 1 year)
Your income from other sources (excluding this gain)
The IRS rewards patience. Hold an investment for more than a year and the tax rate on your profit drops dramatically.
0%
For lower-income taxpayers
15%
Most common bracket
20%
For higher-income taxpayers
Long-term capital gains are profits from selling a capital asset you have held for more than one year. The U.S. tax code gives these gains a big break compared to short-term gains, which get hit with ordinary income rates as high as 37%. Congress set up this preferential system to encourage long-term investment over short-term speculation — rewarding people who commit their capital for extended periods rather than flipping assets quickly. For 2026, long-term gains qualify for rates of 0%, 15%, or 20% depending on your taxable income, a substantial discount from the 10% to 37% ordinary rates.
The holding period is the make-or-break factor for qualifying for long-term rates. Under IRS rules, the clock starts the day after you acquire the asset and stops on the day you sell it. You need to hold for more than 365 days — not 365, but more than 365. Buy a stock on January 1, 2025, and you must wait until at least January 2, 2026 to sell for long-term treatment. Selling on January 1 would still be short-term because the holding period is exactly 365 days.
That single extra day can mean the difference between owing 15% versus 35% on a large gain. On a $200,000 profit, that is a swing of $40,000 or more in federal tax alone. Always check your purchase date before placing a sell order — it takes thirty seconds and can save you a fortune.
The same $50,000 long-term gain can be taxed at very different rates depending on your other income. A retiree with $30,000 in ordinary income would have the entire gain taxed at 0%. A working professional earning $200,000 in salary would see most of that same gain taxed at 15%. The reason is that capital gains are “stacked” on top of your ordinary income when the IRS figures out which bracket you land in. Your wages and other ordinary income fill up the lower brackets first, and then capital gains get whatever space is left. This stacking rule is why two people with identical gains can owe very different amounts of tax.
Short-Term (35% bracket)
~$70,000
in federal tax
Long-Term (15% bracket)
~$30,000
in federal tax
Holding just one extra day saves roughly $40,000 in this example. Use our capital gains calculator to run your own numbers.
Long-term gains benefit from preferential rates of 0%, 15%, or 20% based on your taxable income and filing status. Here are the exact numbers for 2026.
| Tax Rate | Taxable Income Range | Tax on Gains |
|---|---|---|
| 0% | Up to $49,450 | No tax on long-term gains |
| 15% | $49,451 – $545,500 | $0 + 15% over $49,450 |
| 20% | Over $545,500 | $74,407.50 + 20% over $545,500 |
| Tax Rate | Taxable Income Range | Tax on Gains |
|---|---|---|
| 0% | Up to $98,900 | No tax on long-term gains |
| 15% | $98,901 – $613,700 | $0 + 15% over $98,900 |
| 20% | Over $613,700 | $77,220 + 20% over $613,700 |
| Tax Rate | Taxable Income Range |
|---|---|
| 0% | Up to $49,450 |
| 15% | $49,451 – $306,850 |
| 20% | Over $306,850 |
| Tax Rate | Taxable Income Range |
|---|---|
| 0% | Up to $66,200 |
| 15% | $66,201 – $579,600 |
| 20% | Over $579,600 |
High-income taxpayers may also owe the 3.8% NIIT on long-term capital gains when their MAGI exceeds certain levels. This pushes the effective top federal rate on long-term gains to 23.8%.
This is one of the best deals in the entire tax code — paying zero federal tax on investment gains. Here is exactly who gets it.
The 0% long-term capital gains rate is one of the most valuable tax breaks available to American taxpayers. It allows individuals with modest incomes to realize long-term gains without owing a single dollar in federal income tax on those profits. For 2026, the 0% rate applies to single filers with total taxable income up to $49,450, married couples filing jointly up to $98,900, married filing separately up to $49,450, and head of household filers up to $66,200. Remember, these thresholds include both your ordinary income and your capital gains combined — it is your total taxable income that matters, not just the gain itself.
Gain harvesting is a strategy where you intentionally sell appreciated investments to realize long-term gains in years when your income is below the 0% threshold. If you are a single filer with $30,000 in ordinary income, you could realize up to $19,450 in long-term gains and pay zero federal tax. You then immediately repurchase the same investments to reset your cost basis at the higher price, permanently eliminating future tax on that appreciation.
This works because, unlike with losses, there is no wash sale rule for gains. You can sell and buy back the same security on the same day with no IRS restrictions. It is one of the cleanest tax moves available, and many investors make it a yearly habit — especially retirees and people in their gap years between peak earnings and retirement.
The 0% rate is a federal benefit only. Most states still tax capital gains at their standard income tax rates, even when the federal rate is zero. California, for instance, taxes long-term gains at up to 13.3% with no preferential rate. But if you live in one of the nine states with no income tax — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming — you can realize long-term gains with truly zero combined tax. Check our state tax rates guide to see your state's capital gains tax rate.
The difference between holding 366 days versus 365 days is not trivial — it can change your tax rate by 17 percentage points or more.
| Taxable Income | Short-Term Rate | Long-Term Rate | Savings |
|---|---|---|---|
| $40,000 | 12% | 0% | 12% |
| $80,000 | 22% | 15% | 7% |
| $200,000 | 32% | 15% | 17% |
| $400,000 | 35% | 15% | 20% |
| $600,000 | 37% | 20% | 17% |
Not all long-term gains get the standard 0%/15%/20% treatment. Collectibles, real estate depreciation, and small business stock have their own rules.
28%
Collectibles max rate
25%
Depreciation recapture rate
0%
QSBS exclusion possible
Art, antiques, coins, precious metals, stamps, and other collectibles are subject to a maximum long-term capital gains rate of 28% — significantly higher than the 20% top rate for regular investments. This higher rate applies regardless of your income bracket, which means even a moderate-income taxpayer could face 28% on collectible gains. If you are in the 15% ordinary bracket, you would actually pay your ordinary rate (up to 28%) rather than the preferential collectible rate — whichever is lower applies. Gold and silver bullion, despite feeling like investments, are classified as collectibles by the IRS, so profits from selling physical precious metals get hit with this higher rate.
When you sell a rental property or other real estate that you have been depreciating, the portion of your gain attributable to depreciation you previously claimed is taxed at a flat 25% maximum rate — not the standard 0%, 15%, or 20%. This is called depreciation recapture, and it catches many real estate investors by surprise. The remaining gain (the actual appreciation above your adjusted basis) is taxed at the regular long-term rates. For example, if you bought a rental for $300,000, claimed $80,000 in depreciation, and sold for $500,000, the $80,000 depreciation recapture gets taxed at up to 25%, while the $120,000 remaining gain gets the standard long-term treatment. Visit our real estate capital gains guide for a full breakdown.
Section 1202 of the tax code offers a potentially massive break for investors in qualified small business stock (QSBS). If you hold QSBS for more than five years, you may be able to exclude 50%, 75%, or even 100% of the gain from federal income tax, depending on when the stock was acquired. The 100% exclusion applies to stock acquired after September 27, 2010, with the excluded gain also exempt from the 3.8% NIIT and the alternative minimum tax. There is a cap: the exclusion is limited to the greater of $10 million or ten times your basis in the stock. For startup founders and early-stage investors, this can mean millions in tax-free gains — making QSBS one of the most powerful provisions in the entire tax code.
The rules change depending on whether you received the asset through inheritance or as a gift.
When you inherit an asset, two things happen that work in your favor. First, you get a stepped-up basis — the cost basis resets to the fair market value on the date of the original owner's death. So if your grandfather bought stock for $10,000 that was worth $200,000 when he passed away, your basis becomes $200,000. Sell it a week later for $205,000 and you only owe tax on $5,000. Second, inherited assets automatically qualify for long-term capital gains treatment regardless of how long either you or the deceased person held them. Even if you sell one day after inheriting, the gain is long-term.
Gifted assets work very differently from inherited ones. The recipient takes on the donor's original cost basis and holding period — this is called a carryover basis. If your parent bought stock for $5,000 twenty years ago and gifts it to you when it is worth $100,000, your basis remains $5,000 and your holding period started twenty years ago. Sell it immediately and you qualify for long-term rates on the $95,000 gain. But if the stock was bought six months ago, you would need to wait another six-plus months to hit the one-year mark for long-term treatment. Always ask the donor for their original purchase price and date — without that information, calculating your tax is a guessing game.
Legitimate, proven approaches that can save you thousands — sometimes tens of thousands — per year.
This is the simplest and most impactful strategy on the list. Before selling any appreciated asset, check whether you have held it for more than 365 days. If you are even a few days short, wait. The difference between short-term rates (up to 37%) and long-term rates (max 20%) can mean saving 17 cents or more on every dollar of gain. On a $300,000 gain, that is potentially $51,000 in savings for the cost of waiting a few extra days. Put a reminder on your calendar for the exact date your holding period crosses the one-year mark so you never accidentally sell short-term.
If your income dips below the 0% threshold — whether because of retirement, a sabbatical, job loss, or just a bonus-free year — take advantage by selling appreciated investments up to the limit of the 0% bracket. You pay zero federal tax, then immediately rebuy to reset your cost basis. This is called gain harvesting, and it works because there is no wash sale rule for gains. Make it a habit each December: look at your total taxable income, figure out how much room you have left in the 0% bracket, and realize that amount in long-term gains. Over a decade of doing this, you can reset the basis on substantial holdings without ever paying a dollar of federal capital gains tax.
Selling losing investments to offset your long-term gains is a straightforward way to shrink your tax bill. Every dollar of loss offsets a dollar of gain, and if your losses exceed your gains, you can deduct up to $3,000 of the excess against ordinary income while carrying the rest forward indefinitely. The key catch is the wash sale rule: you cannot buy back the same or a substantially identical security within 30 days. But you can buy a similar but not identical replacement — for example, swapping one S&P 500 ETF for another — to stay invested while capturing the tax loss. Visit our tax loss harvesting guide for a detailed walkthrough.
If you are charitably inclined, donating appreciated stock instead of cash is a double tax win. You get a charitable deduction for the full fair market value of the stock (if held more than one year), and you completely avoid paying capital gains tax on the appreciation. Donate $50,000 of stock that you bought for $10,000, and you get a $50,000 deduction while skipping the 15% or 20% tax on the $40,000 gain. For someone in the 15% long-term bracket, that is an additional $6,000 in savings beyond the charitable deduction itself. Donor-advised funds make this even easier by allowing you to bunch multiple years of charitable giving into a single tax year.
If you have a large gain that would push you into the 20% bracket, consider splitting the sale across two calendar years. Sell half in December and the other half in January, and each year's gain gets evaluated against that year's income. This can keep both years in the 15% bracket instead of pushing one year into 20%. The same logic applies to NIIT: staying below the $200,000/$250,000 MAGI threshold in each year eliminates the 3.8% surtax entirely. Coordinate with your tax advisor in November so you know exactly where you stand before making year-end decisions.
Opportunity Zone investments let you defer capital gains by reinvesting them into qualified opportunity funds, and if you hold the investment for 10+ years, any appreciation on the new investment is completely tax-free. Qualified small business stock (Section 1202) offers up to a 100% exclusion on gains if held for more than five years. Both strategies require specific types of investments and longer holding periods, but the tax savings can be enormous. A $500,000 gain on QSBS held for five years could be entirely excluded from federal income tax — saving $100,000 or more compared to the standard 20% rate. These are not for every investor, but for those who qualify, they represent the most powerful tax-advantaged investment structures available.
These errors cost investors real money every year. Know them so you can steer clear.
Selling on day 365 instead of day 366 turns a long-term gain into a short-term one. On a $100,000 gain, that mistake could cost you $20,000+ in extra tax.
Your gains sit on top of your ordinary income. Even a modest gain can push part of it from the 0% bracket into 15% if your salary is close to a threshold.
High earners often calculate their 20% long-term rate and stop there. Add the 3.8% NIIT and the real rate becomes 23.8% — plus state taxes on top.
Low-income years are a window to realize gains tax-free. Failing to harvest means leaving free basis resets on the table, costing you tax in future years.
Gold, silver, art, and coins are taxed at up to 28%, not 20%. Treating them like regular investments leads to underestimating your tax bill.
The 0%/15%/20% rates are federal only. States like California add up to 13.3% on top. Your real combined rate can be far higher than the federal number alone.
Complete calculator for both short-term and long-term gains
Ordinary income rates of 10%-37% for assets held 1 year or less
Depreciation recapture, 1031 exchanges, and home sale exclusions
Calculate the 3.8% Net Investment Income Tax surcharge
Offset gains and reduce your capital gains tax bill
Compare capital gains tax rates across all 50 states