Capital Gains Tax Brackets for 2026

NIIT is 3.8% of the lesser of net investment income or modified AGI above the applicable threshold: $200,000 for single or head-of-household filers, $250,000 joint, and $125,000 married filing separately. Crossing the threshold does not tax every dollar of a gain automatically. Collectibles can have a maximum 28% rate; unrecaptured Section 1250 gain can have a maximum 25% rate. Those special categories are outside the ordinary 0/15/20% table.

These breakpoints are indexed annually; the figures above are the 2026 amounts. Note they're based on taxable income, after your standard or itemized deduction, not gross income, which works in your favor.

The single most misunderstood mechanic in the capital gains system: your gain doesn't get its own bracket ladder, it stacks on top of your ordinary income. Ordinary taxable income fills the brackets from the bottom; the long-term gain sits on top and is taxed at whatever capital-gains rate applies at that altitude. A gain can even straddle two rates.

Worked example. A married couple has $80,000 of taxable ordinary income and sells stock for a $30,000 long-term gain. The 0% bracket for joint filers runs to $98,900. The first $18,900 of their gain fills the space between $80,000 and $98,900, taxed at 0%. The remaining $11,100 is taxed at 15%, costing $1,665. Total tax on a $30,000 gain: $1,665, a 5.6% effective rate. Assume no qualified dividends, capital losses, special-rate gains, state tax, or other return interactions. A separate joint-filing household with $400,000 of taxable ordinary income and sufficient MAGI excess may owe 15% capital-gains tax plus 3.8% NIIT on the same gain: $5,640. These are hypothetical examples, not client results.

Holding an asset more than one year generally produces a long-term gain. One year or less generally produces a short-term gain taxed at ordinary income rates. Compare acquisition and sale dates carefully; inherited assets and gifts have special holding-period rules. NIIT and state tax are separate from this distinction.

Short-term and long-term positions also net against each other in a specific order (short losses first offset short gains, long against long, then across). If you're carrying losses, the netting order is plannable, see the harvesting section below.

Real estate plays by the same brackets with three big twists:

• Primary residence exclusion (Section 121): the ownership, use, and other tests can allow a $250,000 exclusion, or $500,000 for qualifying joint filers. Depreciation and nonqualified use may reduce the eligible amount. See selling versus renting your former home.
• Depreciation at sale: unrecaptured Section 1250 gain can be taxed at up to 25%; Section 1245 components may produce ordinary-income recapture. The result depends on the assets and disposition. Review the exit implications of cost segregation.
• Section 1031: a qualifying exchange of investment or business real property may defer gain. Cash received, debt relief, and other facts can leave taxable gain. Use the 1031 exchange guide before committing to a transaction.

Full guide for founders and owners: Capital Gains Tax on a Business Sale.

Start with the transaction facts rather than a promised tax reduction. These questions help organize a paid planning engagement:

• What is the adjusted basis, including prior depreciation and improvements?
• Does the holding period change the federal treatment?
• Are capital losses available, and do wash-sale restrictions affect them?
• Would a qualifying exchange or installment sale fit the transaction?
• How do state sourcing, NIIT, and estimated payments change the result?
• Does a charitable transfer fit the household's goals and applicable deduction limits?
• What implementation costs, liquidity needs, and deadlines matter?

See the educational capital gains calculator for a first illustration, then discuss Taxstra tax planning services with our team. Higher earners can also see our tax planning services for high earners.

A large gain can affect federal income tax, NIIT, state tax, and income-based provisions. California capital gains tax uses different rules from the federal rate table. Review estimated tax payments for the year of sale; timing and annualized-income calculations can matter.

The right sequence is model first, sell second. Start with the capital gains tax calculator for the federal picture, then pressure-test the full plan, state, NIIT, timing, and the reinvestment side, with a CPA before the transaction closes. Some options depend on arrangements made before closing; others remain available afterward.