Long-term gains get their own separate 0/15/20% rate structure — not a special case of ordinary income brackets, but a genuinely different set of brackets stacked on top of other income.
How it works
A short-term gain (held one year or less) is simply added to ordinary income and taxed at your marginal ordinary rate. A long-term gain (held more than a year) is taxed at 0%, 15%, or 20% depending on where it falls once stacked on top of your other taxable income — the same way an income tax bracket applies only to the income inside it.
What this does not include
This uses simplified single-filer brackets and doesn’t model the Net Investment Income Tax, state capital gains taxes, or the specific treatment of collectibles and Section 1250 real estate depreciation recapture, all of which can change the actual rate.
How to use this calculator
- Enter the capital gain and whether it was held more or less than a year.
- Enter your other taxable income, since long-term rates depend on where the gain lands on top of it.
Frequently asked questions
Why does the same gain cost more if it’s short-term?
Short-term gains are taxed at ordinary rates, which run higher than the long-term 0/15/20% brackets at most income levels — holding an asset past one year can substantially lower the tax on the same dollar gain.
Can a long-term gain be taxed at 0%?
Yes — if your total taxable income including the gain stays within the 0% bracket, the gain itself owes no federal tax at all.
Does this include state taxes?
No — this is federal only; most states also tax capital gains, often at ordinary income rates with no separate long-term break.
