Long-term capital gains tax rates and brackets for 2026
Assets held more than a year are taxed at 0%, 15% or 20% depending on your taxable income. Here are the 2026 breakpoints.
Sourced from official pages · Updated September 30, 2026💡 Key takeaways
- Assets held more than one year get long-term rates of 0%, 15% or 20%; one year or less is taxed as ordinary income.
- Gains are stacked on top of your ordinary income, so part of a gain can be taxed at 0% and the rest at 15%.
- Higher earners may also owe the 3.8% net investment income tax.
- Losses can offset gains, subject to IRS rules.
Short-term vs long-term
Gains on assets held one year or less are short-term and taxed as ordinary income at your regular bracket rate. Gains on assets held more than one year are long-term and taxed at 0%, 15% or 20%.
2026 long-term rate breakpoints (taxable income)
| Filing status | 0% rate | 15% rate | 20% rate |
|---|---|---|---|
| Single | Up to $49,450 | $49,451 – $545,500 | Over $545,500 |
| Married filing jointly / surviving spouse | 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 |
The breakpoints apply to your total taxable income (including the gain). Gains are stacked on top of your ordinary taxable income, so part of a gain can be taxed at 0% and the rest at 15%.
Other taxes to know about
- The net investment income tax (3.8%) can apply to investment income for higher-income filers (threshold of modified AGI above $200,000 single / $250,000 married filing jointly).
- Certain collectibles and depreciation recapture on real estate can be taxed at different maximum rates.
- State income tax may also apply.
Use the capital gains tax calculator to estimate the federal tax on a sale.
How gains are actually taxed
Your taxable income (after deductions) fills the ordinary brackets first. Long-term gains sit on top. The 0%, 15% and 20% breakpoints in the table apply to your total taxable income, including the gain.
Because of this stacking, a retiree with modest income can sell an appreciated asset and pay little or no federal tax on part of the gain.
Holding period and basis
- Holding period starts the day after you acquire the asset and ends the day you sell it.
- Basis is generally what you paid, plus certain costs, and gain = sale price − basis.
- Inherited assets and gifts follow special basis rules; check IRS Publication 550.
Losses and other special cases
Capital losses first offset capital gains. If losses exceed gains, IRS rules allow a limited amount to offset other income, with the rest carried forward. Collectibles and certain real-estate depreciation are taxed at different maximum rates. See IRS Topic 409 in the sources for details.
🔤 Key terms
| Term | Meaning |
|---|---|
| Basis | What you paid for an asset, adjusted |
| Long-term | Held more than one year |
| Short-term | Held one year or less; taxed as ordinary income |
| NIIT | Net investment income tax of 3.8% for higher incomes |
Steps to estimate the tax on a sale
- Find your basis and the sale price.
- Compute the gain and the holding period.
- Add your other taxable income.
- Apply the breakpoints in the table.
- Use the capital gains calculator to check.
🧮 Worked example: married couple with a $30,000 gain
A couple filing jointly has $80,000 of ordinary taxable income and sells shares for a $30,000 long-term gain. The 0% zone runs up to $98,900 of taxable income, so the first $18,900 of the gain is taxed at 0% and the remaining $11,100 at 15%. The federal tax on the gain is $1,665. Try it in the capital gains calculator.
⚠️ Common mistakes to avoid
- Selling one day short of one year and paying ordinary-income rates.
- Forgetting the net investment income tax for higher incomes.
- Using the wrong cost basis (for example ignoring reinvested dividends).
- Ignoring state tax on gains.
- Assuming the 15% rate applies to your whole gain.
🛠️ Try it yourself
❓ Frequently asked questions
What is the long-term capital gains rate in 2026?
0%, 15% or 20% depending on taxable income and filing status; the breakpoints are in the table above.
Are gains in a 401(k) or IRA taxed this way?
No. Traditional accounts are taxed as ordinary income on withdrawal and Roth accounts can be tax-free if the rules are met.
Does selling my home count?
Home sales have their own exclusion rules; see IRS Topic 701.
Do I owe tax on gains I reinvest?
Yes. Selling triggers the tax even if you buy something else with the proceeds.
Can I offset gains with losses?
Yes, subject to IRS rules.
📚 Sources
This guide is general information, not financial, tax or legal advice. Rules and limits change; confirm with the sources above or a licensed professional.