Capital Gains
taxAlso known as: capital gains, investment gains
Updated · Written and reviewed by Konstantin Iakovlev
Detailed explanation
Long-term capital gains rates for 2026 are: 0% on income up to $49,450 (single) / $98,900 (MFJ); 15% on income up to $492,300 (single) / $553,850 (MFJ); 20% above. The 3.8% Net Investment Income Tax (NIIT) adds on for high earners. Short-term capital gains (assets sold within 1 year) get NO preferential treatment — they're taxed as ordinary income at your marginal rate (up to 37%). Capital losses can offset capital gains; net losses up to $3,000/year offset ordinary income; remaining losses carry forward indefinitely. Section 121 exempts up to $250K/$500K of gain on a primary residence.
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Related tax terms
Adjusted Gross Income (AGI)
Adjusted Gross Income (AGI) is your total gross income minus specific "above-the-line" deductions like contributions to ...
Modified Adjusted Gross Income (MAGI)
Modified Adjusted Gross Income (MAGI) is your AGI plus certain deductions added back, used to determine eligibility for ...
Standard Deduction
The standard deduction is a fixed dollar amount that reduces your taxable income. For 2026, it's $16,100 single, $32,200...
Marginal Tax Rate
Your marginal tax rate is the rate applied to your last dollar of taxable income — the bracket your highest-earning doll...
Effective Tax Rate
Your effective tax rate is your total tax liability divided by your total income — the blended average across all tax br...
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