Capital Gains Tax Calculator

How long you held an investment changes its tax rate dramatically — short-term gains are taxed like ordinary income; long-term gains get a separate, usually much lower, rate.

Cost basis (what you paid)Sale priceHolding periodOther annual taxable incomeFiling status

$750 Tax on this gain

Capital gain: $5,000
Federal tax on the gain: $750
Effective rate on the gain: 15.0%
After-tax proceeds from the gain: $4,250

Tax by bracket
Rate	Gain taxed at this rate	Tax at this rate
15%	$5,000	$750

Federal tax only — state capital gains tax isn't modeled. The gain is assumed to stack on top of your other income, per how the IRS actually taxes it.

How it works

The gain is treated as stacking on top of your other taxable income — short-term gains fill in at ordinary tax rates from there, long-term gains fill in at the separate 0%/15%/20% long-term schedule from there. A 3.8% Net Investment Income Tax is added on the portion of your total income above the statutory high-earner threshold.

Explain it to a kid

If you buy something and later sell it for more, the extra money you made is called a gain, and the government taxes part of it — but waiting longer than a year to sell usually means owing less. It's like a reward for being patient.

Frequently asked questions

Why does the holding period matter so much?

Short-term gains (held one year or less) are taxed as ordinary income, at whatever marginal rate they fall into. Long-term gains (held more than a year) get a separate, more favorable 0%/15%/20% schedule — holding an investment just past the one-year mark can noticeably lower the tax on selling it.

Why does my other income affect the tax on my gain?

Capital gains stack on top of your other taxable income for bracket purposes. The same size gain can be taxed at 0% for someone with modest other income, or 20% for someone whose other income already fills the lower long-term brackets.

What is the Net Investment Income Tax?

An additional 3.8% federal surtax on investment income (including capital gains) for higher earners — above $200,000 of total income for single/head-of-household filers, or $250,000 for married filing jointly. It's fixed by statute and hasn't been adjusted for inflation since 2013.

Does this include state capital gains tax?

No — only federal tax is modeled. Most states tax capital gains as ordinary income at their own rates, so add your state's tax separately for a full picture.

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