Last updated: March 2, 2026

How Are Capital Gains Taxed?

Formula

Capital gains tax applies to the profit from selling investments. Long-term gains (held over 1 year) are taxed at lower rates.

Short-term gains are taxed as ordinary income. Long-term rates are 0%, 15%, or 20% based on income.

Common use cases:

  • Planning investment sales
  • Estimating tax on stock sales
  • Tax-loss harvesting decisions

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