Capital Gains Calculator

The gain itself is the easy part. Subtract selling costs from the sale price to get the amount realized, then subtract your adjusted cost basis. Basis is where errors start: it begins with what you paid, but IRS Publication 551 lists additions such as acquisition costs and improvements, and reductions such as depreciation and returns of capital. The number on your brokerage statement is not automatically your adjusted basis. What the gain is taxed at turns on a single date. Under IRS Topic No. 409, a conventional capital asset held one year or less produces short-term gain, taxed as ordinary income at your regular bracket rate — the calculator does that by measuring how much your total federal tax rises when the gain is added on top of your other taxable income. Held more than one year, the gain is long term and gets the preferential 0%, 15% and 20% maximum rates. One day either side of that line can change the tax on a large gain by tens of thousands of dollars, and the clock generally starts the day after acquisition. The long-term calculation follows the Qualified Dividends and Capital Gain Tax Worksheet from the Form 1040 instructions, and the mechanic people misread is stacking. The preferential brackets are not a separate allowance applied to every gain; the gain sits on top of your ordinary taxable income and fills whatever rate capacity is left above it. For 2026, Rev. Proc. 2025-32 §4.03 sets the zero-rate ceiling at $49,450 single, $98,900 married filing jointly, $49,450 married filing separately and $66,200 head of household. The 15% band runs from there to $545,500 single, $613,700 jointly, $306,850 separately and $579,600 head of household; anything above is 20%. So a $40,000 long-term gain is fully tax-free for a single filer with no other income, entirely 15% for one with $80,000 of ordinary income, and split across bands for someone in between. A single gain routinely occupies two or three rate slices at once, and your result breaks out the dollars in each. Because of this, the taxable-income field means something specific: projected Form 1040 taxable income after deductions, including this sale’s taxable gain. That matches the line the worksheet starts from. The calculator then backs the gain out to find the ordinary layer beneath it. Entering income before the gain stacks the gain twice and can land it in the wrong band. Two refinements are built in. When deductions absorb part of the gain, only the portion actually present in taxable income enters the worksheet. And the worksheet ends by comparing preferential tax against regular tax and using the lower, which matters at bracket edges and prevents overstating tax on small long-term gains. On a loss, the calculator reports the statutory ceiling that might offset other income — $3,000, or $1,500 if married filing separately — without computing an exact deduction, because Schedule D first nets all current-year gains and losses and applies prior carryovers, which one isolated sale cannot reproduce. Excluded here: the 3.8% net investment income tax, state and local tax, the alternative minimum tax, the collectibles rate, unrecaptured section 1250 gain, wash-sale adjustments and the Publication 523 home-sale exclusion. To see the ordinary schedule the short-term path uses, open the income tax calculator; if the sale is funding retirement, the investment calculator shows what the after-tax proceeds do over time.