What is the difference between short-term and long-term capital gains?

Assets held one year or less generate short-term gains taxed at ordinary income rates (10%-37%); assets held longer than a year get the preferential long-term rates (0%/15%/20%). Holding an extra day past the one-year mark can cut the tax bill dramatically.

Capital Gains Tax Calculator

Q: What are the 2025 long-term capital gains rates?

0% for taxable income up to $48,350 (single) / $96,700 (married filing jointly); 15% up to $533,400 / $600,050; 20% above. Gains stack on top of ordinary income to determine which rate applies.

Q: How can I reduce capital gains tax?

Hold past one year for long-term rates, harvest losses to offset gains (plus up to $3,000 of ordinary income per year), realize gains in low-income years to use the 0% bracket, use tax-advantaged accounts, and remember the home-sale exclusion of $250,000/$500,000 for primary residences.

Q: Does capital gains tax apply to crypto the same way as stocks?

Yes. The IRS treats cryptocurrency as property, so the same short-term versus long-term holding rules and rate brackets apply. Each taxable event — selling for cash, trading one coin for another, or spending crypto on goods — can trigger a reportable gain or loss.

Q: What is the wash-sale rule?

It disallows a tax-loss deduction if you buy the same or a substantially identical security within 30 days before or after the sale that generated the loss. The disallowed loss isn't gone forever — it's added to the cost basis of the replacement shares — but it can't be used to offset gains in the current year.

Selling stock, crypto, or property? Estimate the federal tax — with gains stacked on your other income the way the IRS actually does it.

Written by the Calculator Index team · Last reviewed September 2026

Estimated federal tax on this gain

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Capital gain

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Effective rate on gain

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You keep

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If held long-term instead

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How capital gains are taxed

Long-term gains (held >1 year) use preferential brackets; short-term gains are just ordinary income. Either way, the gain stacks on top of your other taxable income — your other income fills the lower brackets first, and the gain is taxed in whatever bracket space remains.

2025 long-term capital gains brackets (taxable income)

Rate	Single	Married filing jointly
0%	$0 – $48,350	$0 – $96,700
15%	to $533,400	to $600,050
20%	above	above

Worked example

Bought stock for $20,000, sold for $35,000 after 2 years · single · $65,000 other taxable income:

Gain: $15,000, stacked from $65,000 to $80,000 — entirely inside the 15% long-term bracket → tax ≈ $2,250.

Sold at 11 months instead? The same gain lands in the 22% ordinary bracket → ≈ $3,300. One more month of holding saves $1,050.

Worked example — a large gain straddling the 0% and 15% brackets (MFJ)

Married filing jointly, $80,000 other taxable income, selling long-held stock for a $50,000 long-term gain — stacking from $80,000 to $130,000 total income.

The MFJ 0% bracket runs to $96,700, so the first $16,700 of the gain (96,700 − 80,000) is taxed at 0%. The remaining $33,300 falls in the 15% bracket: 33,300 × 15% = $4,995. Total tax on the $50,000 gain: just $4,995 — an effective rate of under 10% on the gain, even though this household isn't low-income, because part of the gain still lands inside the 0% bracket.

Common capital gains tax mistakes

Assuming the entire gain is taxed at one rate. As the example above shows, a single large gain can straddle two or three brackets, with only the top portion taxed at the higher rate.
Buying back a "harvested" loss position too soon. The wash-sale rule disallows the loss deduction if you repurchase a substantially identical security within 30 days.
Forgetting state capital gains tax. Most states tax gains as ordinary income on top of the federal rates calculated here, which this calculator doesn't include.

Legal ways to shrink the bill

Hold past one year — the single biggest lever, as the example shows. Harvest losses: realized losses offset gains dollar-for-dollar, plus $3,000/yr against ordinary income (mind the 30-day wash-sale rule). Use the 0% bracket: in low-income years — early retirement, sabbaticals — singles can realize gains up to $48,350 of total taxable income federally tax-free. Location matters: gains inside a Roth IRA or 401(k) aren't taxed on sale at all. Home sellers: $250k/$500k of primary-residence gain is excluded if you lived there 2 of the last 5 years. High earners: a 3.8% net investment income tax applies above $200k/$250k MAGI, not modeled here. Compute the underlying return first with the ROI calculator.

Frequently asked questions

What are the 2025 long-term capital gains rates?

0% to $48,350 single / $96,700 MFJ; 15% to $533,400 / $600,050; 20% above — stacked on other income.

Short-term vs. long-term gains?

≤1 year = ordinary rates (10–37%); >1 year = 0/15/20%. A single extra day of holding can matter a lot.

How can I reduce capital gains tax?

Hold long-term, harvest losses, use the 0% bracket in low-income years, shelter in retirement accounts, use the home-sale exclusion.

Does capital gains tax apply to crypto the same way as stocks?

Yes — the IRS treats crypto as property, so the same short/long-term rules and brackets apply to sales, trades, and even some purchases made with crypto.

What is the wash-sale rule?

It disallows a loss deduction if you buy a substantially identical security within 30 days before or after the sale; the loss rolls into the new position's cost basis instead.

Related calculators

Note: Federal tax only, 2025 brackets; excludes the 3.8% NIIT, state taxes, depreciation recapture, and collectibles rates. Not tax advice. Brackets: 2025 tax year. Last reviewed: September 2026.