The 2026 Capital Gains Tax Brackets differ from 0% to 15% to 20% depending on a person’s taxable income and filing status. A preferential federal rate typically is used when you dispose of a capital asset that has been held for over 12 months. However, long-term capital gains generally will be subject to ordinary federal income tax rates if the assets have been held for less than 1 year.
There are different factors that determine the rate at which you will be taxed on your capital gain, and the amount of the capital gain is not the only factor. The other income sources are first considered, the long-term gains will be taxed based on the applicable capital gains tax rates. Thus, the same additional gain might be taxed at different rates.
For 2026 Tax Year, the following thresholds are for those qualifying gains that are realized between January 1, 2026 and December 31, 2026 and will be reported on 2027 tax returns. If 2025 returns are being filed in 2026, then the 2025 capital gains tax rates and income thresholds will apply.
Most of the Long-Term Capital Gains are taxed at 0%, 15% or 20% for the 2026 tax year, depending on your taxable income and filing status. Generally, long-term gains are the profits that are realized from the sales of capital assets that have been held for over a year.
| Filing Status | 0% Rate | 15% Rate | 20% Rate |
|---|---|---|---|
| Single | Up to $49,450 | $49,451–$545,500 | Over $545,500 |
| Married Filing Jointly | Up to $98,900 | $98,901–$613,700 | Over $613,700 |
| Married Filing Separately | Up to $49,450 | $49,451–$306,850 | Over $306,850 |
| Head of Household | Up to $66,200 | $66,201–$579,600 | Over $579,600 |
These brackets have nothing to do with how much of the capital gain you have, but rather they are based on your taxable income. Given that long term gains are added to other taxable income, amounts of the same gain can be in various capital gains tax brackets.
For 2026, most long-term capital gains are taxed at 0%, 15%, or 20% based on taxable income and filing status.
| Filing Status | 0% | 15% | 20% |
|---|---|---|---|
| Single | Up to $49,450 | $49,451–$545,500 | Over $545,500 |
| Married Filing Jointly | Up to $98,900 | $98,901–$613,700 | Over $613,700 |
| Married Filing Separately | Up to $49,450 | $49,451–$306,850 | Over $306,850 |
| Head of Household | Up to $66,200 | $66,201–$579,600 | Over $579,600 |
If the taxpayers’ taxable income is in the 0% brackets, the 0% rate will apply to qualifying long term gains. The rate is calculated on the total taxable income, and not on the size of the gain.
The 15% rate is used for the amount of qualified long term gains within the middle income range. This isn’t applicable to all taxpayers.
For the most part, the 20% rate is only applicable to the amount of qualifying gain exceeding the maximum 15% allowed for a filing status.
The capital gains tax brackets increased for 2026 because of annual inflation adjustments. The tax rates themselves remain 0%, 15%, and 20% for most long-term capital gains.
| Filing Status | 2025: 0% Up To | 2026: 0% Up To | 2026: 20% Starts Above |
|---|---|---|---|
| Single | $48,350 | $49,450 | $545,500 |
| Married Filing Jointly | $96,700 | $98,900 | $613,700 |
| Married Filing Separately | $48,350 | $49,450 | $306,850 |
| Head of Household | $64,750 | $66,200 | $579,600 |
The 15% rate generally applies between the 0% ceiling and the threshold where the 20% rate begins.
The biggest difference for most taxpayers is the increased income limits, rather than the new capital gains tax rates. For example, the 0% limit for single filers increased from $48,350 in 2025 to $49,450 in 2026, while the married-filing-jointly limit rose from $96,700 to $98,900.
Of course, the 2025 thresholds and rules are for gains on transactions that occur in 2025 and would be reported on 2026 tax returns and the 2026 thresholds and rules are for gains on transactions that occur during 2026 and generally would be reported on 2027 tax returns.
Since the IRS adjusts a number of tax provisions on an annual basis for inflation, the capital gains tax rates in 2026 are higher than in 2025. The long-term capital gains tax rates for the main preferential rates are however zero, 15% and 20%. The change will enable the taxpayer to shift some of the income they have to a lower long-term capital gains tax rate before they jump into a higher rate. These figures are the 2026 adjusted for inflation figures and are generally for 2027 tax returns.
The reporting of digital assets is still on the rise in 2026. Most brokers started reporting gross proceeds on some transactions of digital assets on Form 1099-DA for transactions from 2025.
After 2025, brokers will be required to report, generally, cost basis of digital assets treated as covered securities for sales of digital assets. Reporting for noncovered securities continues to be mostly voluntary, and some transactions involving stablecoins and NFTs could be subject to special reporting rules.
Even if a taxpayer doesn’t get Form 1099-DA, they are required to report taxable income, gains and losses from digital assets.
If a taxpayer recorded a deferred income from a Qualified Opportunity Fund (QOF) investment, then the deferred income is typically recognized by the time of an inclusion event or by December 31, 2026. The IRS has also issued some transitional guidance to investments subject to the new Opportunity Zone rules.
Capital gains tax brackets are based on taxable income, not just the size of your gain.
Long-term gains generally sit on top of other taxable income.
Example — Single filer:
Ordinary taxable income: $40,000
Long-term gain: $30,000
2026 0% ceiling: $49,450
Result:
Yes. Different portions of the same long-term gain can fall into different capital gains tax brackets.
STCG taxed at regular federal income tax rates, they are considered as ordinary income. Long-term capital gains are taxed at special rates, which are usually 0%, 15% or 20%. They continue to add to taxable income and can impact capital gains brackets, NIIT (net income from other sources) and other income brackets-based tax provisions.
Somewhat depends on length of asset ownership. Gains that are generated from assets that are held for one year or less will generally be short-term gains while gains generated on assets that are held for more than one year will generally be considered long-term gains. Must Read Short-Term vs Long-Term Capital Gains.
Short-term gains are taxed using ordinary-income brackets:
| Rate | Single | MFJ | MFS | HOH |
|---|---|---|---|---|
| 10% | $0 | $0 | $0 | $0 |
| 12% | >$12,400 | >$24,800 | >$12,400 | >$17,700 |
| 22% | >$50,400 | >$100,800 | >$50,400 | >$67,450 |
| 24% | >$105,700 | >$211,400 | >$105,700 | >$105,700 |
| 32% | >$201,775 | >$403,550 | >$201,775 | >$201,750 |
| 35% | >$256,225 | >$512,450 | >$256,225 | >$256,200 |
| 37% | >$640,600 | >$768,700 | >$384,350 | >$640,600 |
Figures show where each marginal rate begins.
If the assets are not held for use in the business, are not part of inventory, are not depreciable or amortizable, then they are likely to be held for more than one year and to be treated as a long-term capital gain. Most of the savings will be tax-free or taxed at 0%, 15% or 20%, depending on the taxable income and filing status of the taxpayer.
| Issue | Short-Term Gain | Typical Long-Term Gain |
|---|---|---|
| Holding period | 1 year or less | More than 1 year |
| Main rates | Ordinary rates | 0%, 15%, 20% |
| Filing status matters | Yes | Yes |
| Taxable income matters | Yes | Yes |
| Exceptions possible | Yes | Yes |
Some of the information that is useful is the tax year, filing status, ordinary income, gains/losses, qualified dividends, carryovers, special-rate gains and NIIT/MAGI. Answer should be called estimates.
Capital losses are considered a reduction in the amount of capital gains that are taxable. Any capital gains are first matched by any capital losses, which can reduce the amount of taxable capital gain.
Capital losses typically can be used to offset capital gains prior to the final calculation of the tax. Some of the excess will also decrease ordinary income if total losses are greater than total gains.
Most people can deduct up to $3,000 of net capital loss in any one year from their regular income. That is the limit for a married taxpayer filing separately, with the limit being $1,500. In general, unused losses can be carried forward to future years.
In general, unrealized capital losses can be carried forward and used to offset future (capital) gains and can be recognized as ordinary income.
There is no universal capital gains exemption. Taxpayers may instead benefit from:
If applicable, ownership and use requirements are met, there is a $250,000 exclusion for qualifying homeowners, and a $500,000 exclusion for eligible married couples filing jointly.
If it meets a series of requirements, a Qualified Small Business Stock (QSBS) may be eligible for a partial or full gain exclusion under Section 1202. The 2025 tax law made the following changes to newly acquired stock: Phased exclusions after three years, four years and five years; an increase in the qualifying business asset limit. Section 1202 is very technical – remind the readers to refer to a special tax guide on QSBS to ensure that they have the rules for eligibility.
The federal tax rates on capital gains may be higher than 20% in some cases. The following are the net investment income (NII) thresholds for which you will have to pay the 3.8% Net Investment Income Tax (NIIT):
| Filing Status | MAGI Threshold |
|---|---|
| Single / Head of Household | $200,000 |
| Married Filing Jointly / Qualifying Surviving Spouse | $250,000 |
| Married Filing Separately | $125,000 |
Important: NIIT uses MAGI, not the taxable-income thresholds used for the 0%, 15%, and 20% capital gains brackets.
There is also a special maximum rate for some long term gains; the unrecaptured Section 1250 real estate gain (not collectibles) is 25% taxable, and the tax rate on the taxable gain on Section 1202 is 28%.
The 2026 capital gains tax rate brackets may differ based on the type of asset that is sold, its holding period, and whether there are any special tax provisions.
Generally, any increase in the value of a stock or ETF and thus its profit is subject to taxes at the time it is sold or otherwise disposed of. When the value of an investment increases while you own it, the increase is called an unrealized gain and therefore does not pay the capital gain tax until it’s realized.
The difference between the amount of money you realize from the sale and your adjusted cost basis is the amount of your taxable gain. Short-term gains are generally linked with the short-term investments (investments of less than one year) while long-term gains are generally linked with the long-term investments (investments of a year or more).
Qualified dividends are subject to the same 0%, 15%, 20% maximum tax rates as net capital gains, but also subject to the requirement and period of holding that applies to net capital gains.
Ordinary dividends, on the other hand, are an ordinary income. Reported on Form 1099-DIV, dividend classification is generally done.
Cryptocurrencies and other digital assets are property for federal tax purposes. A capital gain or loss may be realized with respect to the sale, redemption, or otherwise disposition of a digital asset held for investment purposes based on the adjusted basis and value of the digital asset at the time of the sale, redemption, or disposition.
Certain digital asset dispositions are reported on Form 1099-DA that are filed by brokers. Covered digital assets will generally also need to be reported on basis for transactions in 2026. Taxpayers are still required to report taxable transactions even if they don’t get Form 1099-DA.
Real estate tax treatment depends on the property:
The property’s sale price is not considered to be taxable gain. Generally, the selling costs, the amount realized, and the adjusted basis (along with depreciation and exclusions) will play a role in determining whether there has been a taxable gain. The $250,000 ($500,000 for some joint filers) of gain can be excluded for qualifying homeowners.
Capital gains and losses are typically reported via details provided on brokerage tax forms, or digital asset or real estate tax forms and are consolidated on the relevant Internal Revenue Service (IRS) schedules.
The Form 8949 is normally filled out for each transaction involving the sale or exchange of capital assets. Requires taxpayers to submit such information as proceeds, adjusted basis, gain or loss, and adjustments.
Normally, the totals from the Form 8949 will be reported on Schedule D (Form 1040). Short-term capital gains and capital losses, on Schedule D, and capital-loss carryovers, on the amount reported on Schedule D, will be the short-term capital gains and capital losses, respectively, which will be finally reported on Form 1040, line 15.
The Qualified Dividends and Capital Gain Tax Worksheet may be required for tax calculations on federal income taxes for taxpayers who have qualified dividends or net capital gain. A 15% gain multiplied by 15% could be deceiving as some of the gain might be considered ordinary or preferential income.
Yes. If your total capital gain is substantial, you may have to make an estimated payment and/or pay an additional withholding. For those with an irregular income pattern, the IRS offers an annualized income installment method that could be useful to planning estimated payments on a more regular basis in the quarter in which the gain occurs. Estimated-tax obligations are based on your estimated total tax, withholding, credits and safe-harbor rules.
2026 Form Note: As of August 31, 2026, the IRS lists 2026 Form 8949 as a draft. Do not rely on draft line instructions as final filing guidance.
The federal capital gains tax might not be the only tax expense. The tax treatment is different in each state and some states impose income tax which can be due and add to the amount due. Before determining the amount of taxes to be paid on a sale, consult the latest tax rules in your state tax agency.
The Federal Capital Gains Tax Rates are 0%, 15% and 20%. The capital gain tax could be even higher because the amount of state taxes paid is in addition.
States don’t all tax capital gains in the same manner. Some have normal state income tax rates, some have different, some don’t have individual income tax. Clear state connections, rather than a table of state capital gains tax rates, to the state tax agency and/or published state capital gains tax by state guide.
Several strategies may help reduce or defer Capital Gains Tax depending on individual circumstances:
The significant transactions may also need professional tax advice due to the possibility of a significant gain being included in the 3.8% NIIT and/or other tax provisions.
Common errors that can lead to an incorrect capital gains tax calculation include:
Most long-term gains use 0%, 15%, or 20% rates based on taxable income and filing status.
Up to $49,450 single/MFS, $98,900 MFJ, or $66,200 HOH.
Taxable income, with gains stacked on other taxable income.
Yes. Different portions can fall into different brackets.
Yes, though short- and long-term gains receive different treatment.
They can affect taxable income and other tax thresholds.
One year or less is generally short-term; over one year is long-term.
No. NIIT is a separate 3.8% tax when applicable.
Generally $3,000 annually, or $1,500 if married filing separately.
Qualifying taxpayers may exclude up to $250,000, or $500,000 on many joint returns.
Investment digital assets can generate capital gains or losses.
Typically Form 8949 and Schedule D.