Calculate your federal and state capital gains tax liability
Calculate Your
Capital Gains Tax
Get accurate federal and state capital gains tax calculations for your investments. Simple, fast, and free to use.
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Enter Your Investment Details
Fill in the details of your investment to calculate your capital gains tax
📊 Enter your annual taxable income before including this capital gain. This determines your capital gains tax bracket.
📊 Choose your investment holding period
Most states tax capital gains as ordinary income
Tax Calculation Results
Understanding Capital Gains Tax
Long-term vs Short-term
Long-term gains (assets held > 1 year) are taxed at preferential rates: 0%, 15%, or 20%, depending on your income.
Short-term gains (assets held ≤ 1 year) are taxed as ordinary income at your marginal tax rate.
2025 Tax Brackets
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Capital Gains Tax Strategies
Tax-Loss Harvesting
Offset capital gains by selling losing investments. You can deduct up to $3,000 in net capital losses against ordinary income each year, with unused losses carrying forward.
Hold for One Year
Holding investments for over one year qualifies for long-term capital gains rates, which are significantly lower than short-term rates.
State Capital Gains Tax
Most states tax capital gains as ordinary income, but some states offer favorable treatment:
Popular State Calculators:
Frequently Asked Questions
What counts as a capital gain?
A capital gain occurs when you sell an asset (stocks, bonds, real estate, etc.) for more than you paid for it. The difference between the sale price and purchase price is your capital gain.
When do I pay capital gains tax?
Capital gains tax is only owed when you sell (realize) the gain. Simply holding appreciated assets doesn't trigger tax until you sell them.
Smart Investment Tips
Use Tax-Advantaged Accounts
401(k), IRA, and Roth IRA accounts allow investments to grow tax-free or tax-deferred, avoiding capital gains entirely.
Consider Index Funds
Index funds typically have lower turnover, resulting in fewer taxable distributions compared to actively managed funds.
Time Your Sales
If you're near a tax bracket threshold, consider timing sales to optimize your capital gains rate.
How Capital Gains Tax Works
Capital gains tax is applied when you sell an investment or asset for more than your original purchase price. The tax you owe depends on several key factors:
1. Calculate Your Gain
Sale Price - Purchase Price - Improvements - Selling Costs = Capital Gain
2. Determine Holding Period
Less than 1 year = Short-term | More than 1 year = Long-term
3. Apply Tax Rate
Short-term: Your ordinary income rate | Long-term: 0%, 15%, or 20%
Short-term vs Long-term Capital Gains
Short-term (≤ 1 year)
- • Taxed as ordinary income
- • Rates: 10% to 37%
- • No preferential treatment
- • Higher tax burden
Long-term (> 1 year)
- • Preferential tax rates
- • Rates: 0%, 15%, or 20%
- • Significant tax savings
- • Rewards patient investing
2025 Federal Capital Gains Tax Brackets
0% Tax Rate
15% Tax Rate
20% Tax Rate
Net Investment Income Tax (NIIT)
Additional 3.8% tax on investment income for high earners:
Real Estate Capital Gains Rules
Primary Residence Exclusion
Exclude up to $250,000 (single) or $500,000 (married) of gain if you:
- Owned and lived in the home for 2 of the last 5 years
- Haven't used this exclusion in the past 2 years
- The home was your primary residence
State considerations: Calculate state taxes on gains above federal exclusion for California, New York, and other high-tax states.
1031 Like-Kind Exchanges
Defer taxes on investment property sales by:
- Exchanging for similar investment property
- Completing within strict timelines (45/180 days)
- Using a qualified intermediary
- Reinvesting all proceeds
Depreciation Recapture
On investment properties, pay 25% tax on depreciation claimed:
- Applies to all depreciation taken over ownership
- Separate from capital gains calculation
- Cannot be avoided with primary residence exclusion
Advanced Tax Minimization Strategies
Timing Strategies
- Harvest losses in December
- Time sales across tax years
- Coordinate with income levels
- Plan around retirement timing
Charitable Strategies
- Donate appreciated assets
- Charitable remainder trusts
- Donor-advised funds
- Qualified charitable distributions
Asset Location
- Hold growth assets in taxable accounts
- Use retirement accounts for bonds
- Consider Roth conversions
- Optimize withdrawal strategies
Estate Planning
- Step-up basis at death
- Grantor trusts
- Generation-skipping transfers
- Installment sales
Common Capital Gains Tax Mistakes
Record Keeping Errors
- • Not tracking cost basis accurately
- • Missing improvement documentation
- • Forgetting reinvested dividends
- • Losing purchase records
Timing Mistakes
- • Selling too early (missing long-term rates)
- • Not coordinating with income
- • Missing loss harvesting opportunities
- • Poor retirement account withdrawals
Planning Oversights
- • Ignoring state tax implications (use our state calculators)
- • Not considering NIIT (3.8% on high earners)
- • Missing charitable opportunities
- • Inadequate diversification
Real Estate Specific
- • Missing primary residence exclusion
- • Improper 1031 exchange timing
- • Not tracking depreciation
- • Converting too early
Related Tax Calculators & Tools
High Tax States
No State Tax
All State Calculators:
When to Consult a Tax Professional
While our calculator provides accurate estimates, complex situations benefit from professional tax advice. Consider consulting a qualified tax professional if you have:
Complex Situations
- Multiple property sales in one year
- Investment property conversions
- International tax implications
- Business asset sales
- Estate and gift tax considerations
Planning Opportunities
- Multi-year tax strategies
- Retirement planning coordination
- Charitable giving strategies
- Business succession planning
- State residency optimization (compare no-tax states)
Professional Resources
Disclaimer: This calculator provides estimates only. Consult a qualified tax professional for advice specific to your situation.
Tax Calculation Results
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