Capital Gains Tax Calculator

How capital gains tax actually works

Here's the part that trips most people up: the IRS doesn't tax your whole sale, only your profit — and how long you held the asset changes everything. If you owned it for one year or less, your gain is "short-term" and gets stacked on top of your salary, taxed at your ordinary income rate (anywhere from 10% to 37%). Hold it for more than a year and it becomes a "long-term" gain, which enjoys special lower rates of 0%, 15%, or 20% depending on your total income. That single year of patience can easily cut your tax bill in half.

Long-term rates are also stacked. Your gain sits on top of your other taxable income, and the portion that falls inside each band is taxed at that band's rate. So a modest earner with a big gain might pay 0% on the first slice and 15% on the rest. That's exactly what this calculator models — it doesn't just slap one flat rate on your profit, it walks the gain through the 0/15/20 thresholds the way a tax pro would.

A few things worth knowing before you sell: your "cost basis" is what you paid plus commissions and any reinvested dividends — getting that number right lowers your taxable gain. Selling at a loss isn't all bad either; capital losses offset capital gains dollar-for-dollar, and up to $3,000 of net loss can offset ordinary income each year. And high earners may owe an extra 3.8% Net Investment Income Tax on top of what you see here — this tool covers the core federal capital gains tax, not state tax or the NIIT surcharge.