US Capital Gains Tax (CGT) Estimator

How are Capital Gains Taxed in the USA?

The IRS treats profits from stock sales differently depending on how long you held the asset before selling. Understanding these rules can save you thousands in taxes.

1. Short-Term Capital Gains (STCG)

If you hold a stock for one year or less, any profit is considered a short-term capital gain. These gains are added to your regular taxable income and taxed at your ordinary income tax rates, which range from 10% to 37%.

2. Long-Term Capital Gains (LTCG)

If you hold a stock for more than one year, you qualify for preferential long-term capital gains tax rates. For the 2024 tax year, these rates are:

• 0% if your taxable income is below $47,025 (Single) or $94,050 (Married Joint).
• 15% for most middle-income earners.
• 20% if your income exceeds $518,900 (Single) or $583,750 (Married Joint).

3. Net Investment Income Tax (NIIT)

High-income earners (Single with MAGI over $200k, Married over $250k) may be subject to an additional 3.8% tax on investment income, known as the NIIT.