Capital Gains Tax Brackets 2026: Rates, Thresholds, and Planning Moves

Capital gains taxes are simple in principle and easy to miscalculate in practice. The key is separating short-term gains from long-term gains, then layering in your full taxable-income picture.

If you want the scenario-level math first, use the Capital Gains Tax Optimizer and then cross-check with the Federal and State Tax Calculator.

1) Short-Term vs Long-Term: The Rule That Drives Everything

• Short-term capital gains: held 1 year or less, taxed at ordinary income rates.
• Long-term capital gains: held more than 1 year, taxed at preferential rates.

This means two investors can sell the same stock at the same gain and owe very different taxes depending on holding period and total income.

2) 2026 Long-Term Capital Gains Brackets

For most taxpayers, long-term capital gains are taxed at 0%, 15%, or 20%.

• 0% bracket: lower taxable income ranges.
• 15% bracket: the middle-income range where most filers land.
• 20% bracket: higher-income range (commonly discussed around roughly $533,400 single and $600,050 married filing jointly for 2026 planning scenarios).

Your marginal long-term rate applies on the portion of gains that falls into each bracket band.

3) NIIT: The Extra 3.8% Many People Miss

High-income taxpayers may owe the Net Investment Income Tax (NIIT) on top of long-term capital gains rates. If NIIT applies, your effective long-term rate can be:

• 18.8% (15% + 3.8%)
• 23.8% (20% + 3.8%)

This is one reason “sell all appreciated positions this year” can backfire without bracket planning.

4) Where Capital Losses Help Most

Losses offset gains dollar-for-dollar:

1. Net short-term losses first offset short-term gains.
2. Net long-term losses offset long-term gains.
3. If total losses exceed gains, up to $3,000 can offset ordinary income annually, with carryforward for the remainder.

For execution rules and wash-sale constraints, keep the Wash Sale Rules Complete Guide nearby before placing trades.

5) Practical Planning Moves for 2026

Hold winners past the 1-year mark when reasonable

Crossing from short-term to long-term treatment can materially reduce tax drag.

Harvest losses intentionally, not reactively

Use loss harvesting when it fits your portfolio plan, then avoid replacement purchases that would disallow the loss.

Spread realized gains across tax years

Large one-time realizations can push gains into higher long-term bands and trigger NIIT.

Model tax lot selection before selling

Specific-lot selling can reduce short-term exposure versus default FIFO in some portfolios.

6) Calculator Workflow (Fastest Way to Get It Right)

1. Run candidate sells in the Portfolio Simulator.
2. Check wash-sale exposure in the Wash Sale Calculator.
3. Estimate annual return impact in the Tax Calculator.

That flow gives you lot-level clarity, rule compliance, and a full-year tax estimate before you execute.

Related Guides

• Year-End Tax Loss Harvesting Checklist (2026)
• RSU Cost Basis and Capital Gains: How to Report
• Wash Sale Rules Complete Guide (2026)