Capital Gains Tax Rates 2026: Brackets, NIIT and Planning

Quick answer: In 2026, most net long-term capital gains are taxed at 0%, 15% or 20%. The 0% ceiling is $49,450 for single or married filing separately, $66,200 for head of household and $98,900 for married filing jointly or a qualifying surviving spouse. The 20% rate begins above $545,500 for single filers, $306,850 for married filing separately, $579,600 for head of household and $613,700 for joint filers. These are taxable-income thresholds, not separate allowances.

2026 long-term capital gains tax brackets

The IRS publishes a maximum zero-rate amount and a maximum 15% rate amount for each filing status. Eligible net capital gain falling at or below the first ceiling is taxed at 0%. The next portion is generally taxed at 15%, and the portion above the second ceiling is generally taxed at 20%.

The table does not mean a single filer can earn $49,450 of ordinary income and then take another $49,450 of gains at 0%. Preferential-rate income is layered on top of ordinary taxable income. Tax software uses the Qualified Dividends and Capital Gain Tax Worksheet or Schedule D Tax Worksheet to perform that stacking calculation.

How the stacking rule works

Suppose a single filer has $35,000 of ordinary taxable income and $25,000 of eligible net long-term capital gain in 2026. The first $14,450 of the gain fills the space between $35,000 and the $49,450 zero-rate ceiling. That portion is taxed at 0%. The remaining $10,550 sits above the ceiling and is generally taxed at 15%.

This simplified example assumes no special-rate gain, no capital-loss carryover and no other worksheet adjustments. It also excludes state income tax and NIIT. The important concept is that total taxable income determines where the gain lands. A deduction that reduces taxable income can sometimes create more room in the 0% band, while a bonus, Roth conversion or additional gain can use it up.

Qualified dividends generally share the same preferential-rate bands. They can therefore reduce the 0% space available for a long-term gain even though they do not appear as sale proceeds. Review the entire return rather than evaluating a trade in isolation.

Short-term versus long-term capital gains

A gain is generally short-term when the asset was held for one year or less and long-term when it was held for more than one year. Short-term net gains are generally taxed at the ordinary income-tax rates that apply to wages and other ordinary income. For the broader rate structure, see the 2026 federal tax brackets and standard deduction.

Count the holding period from the day after acquisition through the date of sale. A sale one calendar day too early can change the federal rate category. However, taxes should not be the only reason to retain a concentrated or unsuitable investment. Market risk, diversification, fees and financial goals matter too.

Inherited property generally receives long-term treatment regardless of how long the heir held it, but basis and estate rules require care. Gifts can carry over the donor's basis and holding period. Employee stock, partnership interests, cryptocurrency, mutual-fund distributions and property used for business can each introduce additional rules.

Your gain starts with adjusted basis—not sale proceeds

A basic gain calculation is amount realized minus adjusted basis and selling costs. For a purchased investment, basis often begins with price plus certain acquisition costs. Reinvested taxable mutual-fund distributions may increase basis; failing to include them can cause the same economic income to be taxed twice.

Real estate basis can include eligible improvements and decrease for depreciation allowed or allowable. Brokerage statements may show covered-share basis, but older lots, transferred accounts and alternative assets can require records from the taxpayer. Review Form 1099-B and proposed Form 8949 entries before filing.

Specific identification can change the result

If multiple lots of the same security were purchased at different prices, the lot sold matters. Specific identification generally requires timely instructions to the broker and confirmation. Default methods may apply when identification is not completed. Choosing a higher-basis lot can reduce the current gain, while a lower-basis lot can intentionally realize more income when the 0% band is available.

When the 3.8% Net Investment Income Tax applies

NIIT is a separate federal tax equal to 3.8% of the lesser of net investment income or the amount modified adjusted gross income exceeds the applicable threshold. The thresholds are $200,000 for single or head of household, $250,000 for married filing jointly or qualifying surviving spouse, and $125,000 for married filing separately.

Those thresholds are not the capital-gains brackets and are not indexed annually in the same way. A taxpayer can be in the 15% long-term bracket and still owe NIIT. Conversely, crossing a threshold does not automatically apply 3.8% to the entire gain; the lesser-of formula limits the base.

Example: A joint-filing couple has $270,000 of MAGI and $50,000 of net investment income. The MAGI excess over $250,000 is $20,000, which is less than $50,000. Their NIIT would be 3.8% of $20,000, or $760, before considering any special facts.

Special maximum rates: 25% and 28%

The familiar 0%, 15% and 20% table does not cover every kind of long-term gain. Unrecaptured section 1250 gain attributable to depreciation on certain real property can be taxed at a maximum 25% rate. Collectibles gain and certain gain connected with qualified small business stock exclusions can fall in the 28% rate group.

“Maximum” matters: the worksheet compares the special rate with the ordinary tax calculation where required. Do not simply multiply all gain on a rental property or collectible by the headline maximum. Use Schedule D, Form 8949 and any asset-specific forms that apply.

Capital losses, carryforwards and wash sales

Capital gains and losses are netted by character. Short-term items are combined, long-term items are combined and the resulting categories interact under Schedule D. If losses exceed gains, an individual can generally deduct up to $3,000 of net capital loss against other income, or $1,500 when married filing separately. Remaining loss generally carries to later years.

A carryforward is valuable but does not justify taking unnecessary risk or selling solely for a tax result. Preserve the prior Schedule D and the Capital Loss Carryover Worksheet. Brokerage dashboards may not know about losses created in another account or before an account transfer.

The wash-sale rule can defer a loss when substantially identical stock or securities are acquired within the period beginning 30 days before and ending 30 days after the loss sale. Purchases in another brokerage account or an IRA can be relevant. Our tax-loss harvesting guide explains the workflow, but use current professional guidance for complex replacements.

Home sales have a separate exclusion framework

Qualifying homeowners may exclude up to $250,000 of gain, or up to $500,000 on some joint returns, under the principal-residence rules. Ownership and use tests, prior exclusions and exceptions matter. The exclusion is not an annual 0% capital-gains bracket and it does not automatically cover depreciation from rental or business use.

Keep the closing statement, purchase records and improvement documentation even when a sale appears fully excluded. Large appreciation, divorce, inheritance, periods of nonqualified use or a home-office history can change the calculation.

A practical 2026 sale-planning checklist

1. Confirm the exact acquisition and sale dates for the holding period.
2. Reconstruct adjusted basis, including reinvested distributions and valid adjustments.
3. Separate short-term, regular long-term and special-rate items.
4. Apply current-year gains and losses plus any loss carryforward.
5. Estimate total taxable income so you can locate gains in the 0%, 15% and 20% bands.
6. Test NIIT using MAGI and net investment income, not the capital-gains table alone.
7. Consider state and local tax; states do not necessarily follow federal preferential rates.
8. Check whether withholding or estimated payments need an adjustment.

Federal estimated-tax safe-harbor rules can sometimes prevent an underpayment penalty even when a balance remains, but the required timing and amounts depend on prior-year tax, current-year income and payment dates. IRS Publication 505 includes 2026 worksheets for qualified dividends and capital gains. A large uneven gain may also make the annualized-income installment method relevant.

Official sources

• IRS Revenue Procedure 2025-32: 2026 maximum capital-gains rate amounts
• IRS Publication 505 (2026): capital-gain and estimated-tax worksheets
• IRS Topic 409: capital gains and losses
• IRS: Net Investment Income Tax thresholds and scope
• IRS: Schedule D for capital gains and losses

Frequently asked questions