If you sell an asset such as stock, a fund or a rental property after owning it for more than a year, the profit is a long-term capital gain. Long-term gains are taxed at 0%, 15% or 20%, which is usually lower than ordinary income tax rates.
2026 long-term capital gains tax rates
| Filing status | 0% rate up to | 15% rate up to | 20% rate above |
|---|---|---|---|
| Single | $49,450 | $545,500 | $545,500 |
| Married filing jointly | $98,900 | $613,700 | $613,700 |
| Head of household | $66,200 | $579,600 | $579,600 |
| Married filing separately | $49,450 | $306,850 | $306,850 |
Thresholds apply to total taxable income, including the gain.
Short-term vs long-term
Assets held one year or less produce short-term gains, taxed at your ordinary income rate of 10% to 37%. Holding for more than a year can cut the rate substantially.
Extra taxes that can apply
- Net investment income tax (NIIT): an extra 3.8% when modified AGI exceeds $200,000 (single) or $250,000 (married filing jointly).
- Collectibles such as art and coins: up to 28%.
- Unrecaptured section 1250 gain on real estate depreciation: up to 25%.
- Home sale: up to $250,000 of gain ($500,000 for married couples) can be excluded if you meet the ownership and use tests.