What is the long-term capital gains tax rate?

Long-term capital gains tax rates are 0%, 15%, or 20% depending on your taxable income and filing status. Assets must be held for more than one year to qualify for these preferential rates.

What is the short-term capital gains tax rate?

Short-term capital gains are taxed as ordinary income at your marginal tax rate, which ranges from 10% to 37% in 2026.

How can I reduce capital gains taxes?

Strategies include holding investments for over one year, tax-loss harvesting, using tax-advantaged accounts (401(k), IRA, HSA), gifting appreciated assets, and timing sales in lower-income years.

Long-Term vs Short-Term Capital Gains Tax Rates (2026)

When you sell an investment for more than you paid, the profit is a capital gain — and the IRS wants its share. How much you owe depends on how long you held the asset and your total taxable income.

2026 Long-Term Capital Gains Tax Rates

Long-term capital gains apply to assets held for more than one year. These rates are significantly lower than ordinary income tax rates, which is why long-term investing is tax-advantaged.

Single Filers

Tax Rate	Taxable Income
0%	$0 – $48,350
15%	$48,351 – $533,400
20%	Over $533,400

Married Filing Jointly

Tax Rate	Taxable Income
0%	$0 – $96,700
15%	$96,701 – $600,050
20%	Over $600,050

Married Filing Separately

Tax Rate	Taxable Income
0%	$0 – $48,350
15%	$48,351 – $300,000
20%	Over $300,000

Head of Household

Tax Rate	Taxable Income
0%	$0 – $64,750
15%	$64,751 – $566,700
20%	Over $566,700

Short-Term Capital Gains Tax Rates

Short-term capital gains apply to assets held for one year or less. These gains are taxed as ordinary income — meaning they’re added to your regular income and taxed at your marginal tax rate, which ranges from 10% to 37%.

Tax Rate	Single Filer Income
10%	$0 – $11,925
12%	$11,926 – $48,475
22%	$48,476 – $103,350
24%	$103,351 – $197,300
32%	$197,301 – $250,525
35%	$250,526 – $626,350
37%	Over $626,350

Long-Term vs Short-Term: Side-by-Side Comparison

The difference in tax treatment is substantial and illustrates why holding investments longer can save you thousands:

	Short-Term	Long-Term
Holding period	≤ 1 year	> 1 year
Tax rate	10% – 37%	0% – 20%
Taxed as	Ordinary income	Preferential rate
Applies to	Stocks, bonds, crypto, real estate	Same assets, held longer

Example: $50,000 Gain

For a single filer with $100,000 in other taxable income who realizes a $50,000 gain:

	Short-Term	Long-Term
Tax rate applied	24%	15%
Tax owed on gain	$12,000	$7,500
Savings from holding long-term		$4,500

Net Investment Income Tax (NIIT)

High earners may owe an additional 3.8% surtax on investment income, including capital gains. The NIIT applies when your modified adjusted gross income exceeds:

Filing Status	NIIT Threshold
Single	$200,000
Married Filing Jointly	$250,000
Married Filing Separately	$125,000
Head of Household	$200,000

The NIIT is applied on the lesser of your net investment income or the amount by which your MAGI exceeds the threshold.

Capital Gains on Specific Asset Types

Stocks and ETFs

Gains on stocks and ETFs follow the standard short-term and long-term rules above. Dividends from qualified stocks held for more than 60 days are taxed at the long-term capital gains rate.

Real Estate

Primary residences qualify for exclusions of up to $250,000 (single) or $500,000 (married filing jointly) if you’ve lived in the home for at least 2 of the last 5 years. Investment properties do not qualify for this exclusion but can use 1031 exchanges to defer gains.

Cryptocurrency

The IRS treats cryptocurrency as property. Selling, trading, or using crypto to purchase goods triggers a taxable event. The same short-term and long-term rules apply based on holding period.

Collectibles

Gains on collectibles (art, antiques, precious metals, stamps) held for more than one year are taxed at a maximum rate of 28%, higher than the standard long-term capital gains rates.

How to Minimize Capital Gains Taxes

Hold investments for more than one year — The simplest strategy. Long-term rates are significantly lower than short-term rates.
Tax-loss harvesting — Sell losing investments to offset gains. You can deduct up to $3,000 in net losses against ordinary income per year, and carry forward unused losses.
Use tax-advantaged accounts — Investments held in 401(k)s, IRAs, and HSAs grow tax-free or tax-deferred.
Time your sales — If possible, realize gains in years when your income is lower (between jobs, early retirement, etc.).
Gift appreciated assets — Gifting stock to family members in lower tax brackets or to charity can eliminate or reduce capital gains taxes.
Donate to charity — Donating appreciated assets directly avoids capital gains entirely and provides a deduction for the full market value.
Use the primary residence exclusion — If selling your home, ensure you meet the 2-of-5-year ownership and use test.
Step-up in basis at death — Inherited assets receive a stepped-up basis to fair market value at the date of death, eliminating unrealized gains.

Capital Gains Tax Rates: Historical Perspective

Year	Long-Term Max Rate	Short-Term Max Rate
1978	33.8%	70%
1982	20%	50%
1987	28%	38.5%
1997	20%	39.6%
2003	15%	35%
2013	20% (+3.8% NIIT)	39.6% (+3.8% NIIT)
2018	20% (+3.8% NIIT)	37% (+3.8% NIIT)
2026	20% (+3.8% NIIT)	37% (+3.8% NIIT)

The preferential treatment of long-term capital gains has been a consistent feature of the U.S. tax code, though the spread between ordinary income and capital gains rates has varied significantly.