Long-Term Capital Gains Tax Brackets and Rates

Long-term capital gains fall into one of three federal tax brackets: 0%, 15%, or 20%. Which bracket applies to your gain depends on your taxable income and filing status, and the income thresholds shift each year for inflation. To get any of these preferential rates in the first place, you have to hold the asset for more than one year before selling.1Office of the Law Revision Counsel. 26 USC 1222 – Other Terms Relating to Capital Gains and Losses Sell earlier and the gain is short-term, taxed at your ordinary income rate.

2026 Income Thresholds by Filing Status

For tax year 2026, the taxable-income breakpoints between the three brackets are the numbers below.2Tax Foundation. 2026 Tax Brackets

0% Bracket

You owe zero federal tax on long-term gains if your total taxable income stays at or below:

  • Single: $49,450
  • Married filing jointly: $98,900
  • Head of household: $66,200
  • Married filing separately: $49,450

This bracket does more work than people expect. A retiree with modest ordinary income can sometimes sell appreciated stock and pay nothing on the gain at the federal level.

15% Bracket

The 15% rate covers most middle- and upper-middle-income investors. Long-term gains that push taxable income past the 0% ceiling are taxed at 15% up to these limits:

  • Single: $49,451 to $545,500
  • Married filing jointly: $98,901 to $613,700
  • Head of household: $66,201 to $579,600
  • Married filing separately: $49,451 to $306,850

20% Bracket

Any long-term gain that pushes taxable income above the 15% ceiling is taxed at 20%. For a single filer, that means taxable income above $545,500; for a married couple filing jointly, above $613,700. High earners in this bracket often also owe an additional 3.8% surcharge covered below.

How Stacking Decides Which Bracket Your Gain Lands In

The bracket that applies isn’t determined by looking at the gain alone. The IRS uses a stacking method: your ordinary income fills the brackets first, and your long-term gains sit on top of it.3Office of the Law Revision Counsel. 26 USC 1 – Tax Imposed Each dollar of gain is then taxed at whichever preferential rate matches the bracket space it occupies after the ordinary income is already counted.

That’s why a single gain can straddle two brackets. Suppose a married couple filing jointly in 2026 earns $120,000 in wages and sells stock for a $50,000 long-term gain. After the 2026 standard deduction of $32,200, taxable income is $137,800.4Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 The ordinary portion is $87,800. Since the 0% ceiling for joint filers is $98,900, the first $11,100 of the gain still fits under that ceiling and is taxed at 0%. The remaining $38,900 is taxed at 15%. Total federal capital gains tax on the $50,000 gain: $5,835.

Change the wages to $100,000 and the ordinary income alone already exceeds $98,900, so the full $50,000 gain is taxed at 15%. The size of your paycheck affects the rate on your investment gains. You report the calculation on Schedule D of your return.5Internal Revenue Service. Instructions for Schedule D (Form 1040) (2025)

Assets That Use Higher Maximum Rates Instead

Not every long-term gain rides the 0/15/20 track. Two categories carry higher maximum rates that apply before the standard rates do.6Internal Revenue Service. Topic No. 409, Capital Gains and Losses

25% on Real Estate Depreciation Recapture

When you sell rental or commercial property at a gain, the IRS splits the gain in two. The portion equal to the depreciation you claimed over the years is taxed at up to 25%.7Internal Revenue Service. 26 CFR Part 1 TD 8836 – Capital Gains, Installment Sales, Unrecaptured Section 1250 Gain Anything above that runs through the standard 0/15/20% brackets.

Say you bought a rental for $200,000, took $60,000 in depreciation, and sold for $300,000. Your adjusted basis is $140,000, so the total gain is $160,000. The first $60,000 (the depreciation) is taxed at up to 25%; the other $100,000 uses the ordinary long-term brackets based on your income.

28% on Collectibles and Certain Small Business Stock

Gains on collectibles such as artwork, antiques, stamps, coins, precious metals, and gems carry a maximum rate of 28%.6Internal Revenue Service. Topic No. 409, Capital Gains and Losses “Maximum” is the operative word. If your income would put you in the 15% bracket, you pay 15% on collectibles too. Only when you’d otherwise be in the 20% bracket does the 28% ceiling raise your rate.

The taxable portion of gain from qualified small business stock under Section 1202 uses the same 28% maximum. Much of that gain is often excluded from income entirely under the Section 1202 exclusion rules, and the 28% rate applies only to whatever isn’t excluded.8Office of the Law Revision Counsel. 26 USC 1202 – Partial Exclusion for Gain From Certain Small Business Stock

The 3.8% Net Investment Income Tax on Top

Higher earners owe an additional 3.8% on investment income, including long-term capital gains. The Net Investment Income Tax sits on top of whichever capital gains rate already applies, so a single filer in the 20% bracket can face a combined federal rate of 23.8%.9Internal Revenue Service. Net Investment Income Tax

The NIIT kicks in when modified adjusted gross income exceeds:

  • Single or head of household: $200,000
  • Married filing jointly: $250,000
  • Married filing separately: $125,000

These thresholds are not indexed for inflation. They haven’t moved since the tax took effect in 2013, so more taxpayers cross them each year as incomes rise.10Internal Revenue Service. Questions and Answers on the Net Investment Income Tax The 3.8% applies to the lesser of your net investment income or the amount your MAGI exceeds the threshold.11Internal Revenue Service. Topic No. 559, Net Investment Income Tax You calculate it on Form 8960.12Internal Revenue Service. About Form 8960, Net Investment Income Tax Individuals, Estates, and Trusts

Losses That Reduce the Gain Before Brackets Apply

The rate brackets act on your net long-term gain, so any capital losses you realize in the same year come out of the calculation first. The netting is done inside each holding-period category before crossing over: long-term losses cancel long-term gains, short-term losses cancel short-term gains, and a leftover net loss in one category then offsets the other category’s net gain.6Internal Revenue Service. Topic No. 409, Capital Gains and Losses

If your total losses exceed your total gains for the year, you can deduct up to $3,000 of the net loss against ordinary income ($1,500 if married filing separately). Anything unused carries forward indefinitely to offset gains or ordinary income in future years.13Office of the Law Revision Counsel. 26 USC 1211 – Limitation on Capital Losses

One trap to know about: the wash sale rule. If you buy a substantially identical security within 30 days before or after selling at a loss, the IRS disallows that loss. The disallowed amount is added to the basis of the replacement shares, so the tax benefit is deferred rather than lost. Wait out the 30-day window or buy something genuinely different if you want the loss to count this year.

State Taxes Are Separate

The brackets covered here are federal only. Most states tax capital gains as ordinary income, which can add anywhere from 0% to over 13% on top of the federal rate. A handful of states have no income tax; a few others offer partial exclusions or lower rates for long-term gains. Your combined rate depends on where you live, so check your state’s tax authority for the specifics.