Capital Gains Tax Estimator: Compare Short-Term vs. Long-Term Rates

Enter your asset details and income profile to instantly compare your tax liability at short-term vs. long-term rates, including the NIIT surcharge, using 2025 IRS brackets.

Asset Details and Taxpayer Profile

Asset Details

Purchase Price / Cost Basis ($)

Sale Price ($)

Holding Period

Taxpayer Profile

Filing Status

Annual Regular Income ($)

Your standard W-2 or business income before this asset sale.

Estimated Capital Gains Tax

Enter your values above to estimate

Net Profit After Tax

Capital Gain minus total tax owed

Effective Tax Rate

0.0%

Total tax as % of capital gain

NIIT Surcharge

3.8% net investment income tax

Holding Period Tax Rate Comparison

Short-Term Rate

0.0%

Long-Term Rate

0.0%

Enter values above to see the side-by-side comparison.

Key Terms Explained

Capital Gain

The profit realized when you sell an asset for more than you paid for it. Calculated as Sale Price minus Cost Basis. Capital gains are subject to federal tax in the year the sale occurs.

Cost Basis

The original purchase price you paid for an asset, including commissions and fees. Your cost basis is subtracted from the sale price to determine your taxable capital gain or loss.

Short-Term vs. Long-Term

Assets held for one year or less produce short-term gains taxed at ordinary income rates (10% to 37%). Assets held more than one year produce long-term gains taxed at preferential rates of 0%, 15%, or 20%.

Net Investment Income Tax (NIIT)

An additional 3.8% federal surtax on investment income (including capital gains) for taxpayers whose modified adjusted gross income exceeds $200,000 (Single) or $250,000 (Married Filing Jointly).

Effective Tax Rate

The actual percentage of your capital gain paid in taxes, calculated as total capital gains tax divided by the capital gain. This often differs from the marginal bracket rate because gains stack on top of ordinary income.

Capital Loss

When an asset is sold for less than its cost basis, the result is a capital loss. Capital losses can offset capital gains and up to $3,000 of ordinary income per year, with unused losses carried forward indefinitely.

Tax Bracket

A range of income taxed at a specific rate. The U.S. uses a progressive system where only the income within each bracket is taxed at that bracket's rate - not your entire income. For capital gains, your ordinary income fills brackets first.

Holding Period

The length of time between the purchase date and the sale date of an asset. The holding period determines whether your gain or loss is classified as short-term or long-term, which is the single biggest driver of your capital gains tax rate.

The Complete Guide to Capital Gains Tax Rates

Capital gains tax is one of the most controllable taxes an investor faces. Unlike ordinary income, you often choose when to trigger it - and the difference between selling an asset one day early versus one day late can mean the difference between a 37% marginal rate and a 0% or 15% rate. Understanding how holding periods, income stacking, and the NIIT interact is essential for tax-efficient investing.

How to Use This Estimator

Fill in your purchase price (cost basis) and sale price in the Asset Details panel. Select your holding period using the toggle - note the amber border for short-term (warning: higher rates) and the green border for long-term (tax-efficient). Then enter your filing status and annual regular income. All results update in real time. The rate comparison bars show both short-term and long-term effective rates side by side, so you can instantly see the tax cost of selling early.

Short-Term Capital Gains: Taxed as Ordinary Income

If you sell an asset after holding it for one year or less, the gain is classified as short-term and taxed exactly like wages - at your ordinary income bracket rates. For 2025, these range from 10% on the lowest income to 37% on income above $626,350 (Single) or $751,600 (Married Filing Jointly).

The calculation stacks your gain on top of your regular income. If your salary already pushes you into the 24% bracket, even the first dollar of short-term gain is taxed at 24% or higher. This is why high-income investors pay close attention to the one-year mark before selling.

2025 Ordinary Income Brackets (Short-Term Gains)

Rate	Single	Married Filing Jointly	Head of Household
10%	$0 - $11,925	$0 - $23,850	$0 - $17,000
12%	$11,926 - $48,475	$23,851 - $96,950	$17,001 - $64,850
22%	$48,476 - $103,350	$96,951 - $206,700	$64,851 - $103,350
24%	$103,351 - $197,300	$206,701 - $394,600	$103,351 - $197,300
32%	$197,301 - $250,525	$394,601 - $501,050	$197,301 - $250,500
35%	$250,526 - $626,350	$501,051 - $751,600	$250,501 - $626,350
37%	Over $626,350	Over $751,600	Over $626,350

Long-Term Capital Gains: Preferential Rates

Assets held for more than one year are taxed at 0%, 15%, or 20% depending on your total taxable income. Your ordinary income still fills the lower thresholds first - the long-term gain is stacked on top - but instead of applying ordinary income rates, only the LTCG rates apply to the gain itself.

2025 Long-Term Capital Gains Rate Thresholds

Rate	Single	Married Filing Jointly	Head of Household
0%	Up to $48,350	Up to $96,700	Up to $64,750
15%	$48,351 - $533,400	$96,701 - $600,050	$64,751 - $566,700
20%	Over $533,400	Over $600,050	Over $566,700

The Net Investment Income Tax (NIIT)

High earners face an additional 3.8% surtax on top of their capital gains rate. The NIIT applies to the lesser of your net investment income (including the capital gain) or the amount by which your total income exceeds the threshold ($200,000 for Single and Head of Household filers, $250,000 for Married Filing Jointly). Combined with the 20% long-term rate, the maximum federal capital gains rate for the highest earners is effectively 23.8%.

Frequently Asked Questions

You must hold an asset for more than one year (more than 365 days) before selling it to qualify for long-term capital gains tax rates. An asset sold on exactly the one-year anniversary of purchase is still short-term. The one-year holding period is measured from the day after the purchase date to and including the sale date. Long-term rates are 0%, 15%, or 20% depending on your taxable income, compared to ordinary income rates of up to 37% for short-term gains.

A step-up in basis is a tax provision that resets the cost basis of an inherited asset to its fair market value on the date of the original owner's death. If a parent bought stock for $10,000 and it was worth $100,000 at death, the heir's cost basis becomes $100,000 rather than the original $10,000. This means the heir can sell the asset immediately and owe zero capital gains tax on the $90,000 of appreciation that occurred during the decedent's lifetime. The step-up applies to most inherited assets including stocks, real estate, and mutual funds.

The NIIT is an additional 3.8% surtax that applies to net investment income (including capital gains) if your modified adjusted gross income exceeds $200,000 for Single or Head of Household filers, or $250,000 for Married Filing Jointly. The 3.8% applies to the lesser of your net investment income or the amount by which your MAGI exceeds the threshold. These thresholds are not adjusted for inflation. If your total income including the gain stays below the threshold for your filing status, the NIIT does not apply.

Yes, but with limits. Capital losses first offset capital gains of the same type (short-term losses offset short-term gains, long-term losses offset long-term gains), and any remaining losses can offset the opposite type. If total net losses exceed total gains for the year, you can deduct up to $3,000 of the remaining net capital loss against ordinary income ($1,500 if Married Filing Separately). Any unused loss beyond $3,000 carries forward to future tax years indefinitely until it is fully used. This tool assumes you are entering your net gain after losses have been applied.

Long-term capital gains are stacked on top of your ordinary income when determining which rate bracket they fall into. Your salary and other ordinary income fills up the lower rate thresholds first. Only the portion of your capital gain that pushes total income above a threshold is taxed at the higher rate. For example, if the 15% LTCG threshold for a single filer is $48,350 and your ordinary income is $40,000, the first $8,350 of gain falls into the 0% LTCG bracket, and only the remainder is taxed at 15%.

This tool provides estimates for educational and planning purposes only. It uses 2025 federal income tax brackets and does not account for state or local taxes, the Alternative Minimum Tax (AMT), qualified dividends, deductions, credits, collectibles (28% rate), Section 1250 unrecaptured depreciation, or qualified small business stock. Consult a licensed CPA or tax advisor before making investment or tax decisions.