2026 Capital Gains Tax Brackets & Rates

2026 Long-Term Capital Gains Tax Brackets

Long-term capital gains apply to assets held for more than one year before selling. These rates are significantly lower than ordinary income tax rates, making the holding period one of the most important factors in your tax bill.

The IRS adjusts these thresholds annually for inflation. The 2026 brackets below reflect those inflation adjustments under the framework extended by H.R.1 (One Big Beautiful Bill), which made the Tax Cuts and Jobs Act (TCJA) individual rate structure permanent.

Single Filers

Married Filing Jointly

Head of Household

Married Filing Separately

2026 Short-Term Capital Gains Tax Rates

Short-term capital gains apply to assets held for one year or less. Unlike long-term gains, short-term gains receive no preferential treatment -- they are taxed at the same rates as your wages, salary, and other ordinary income.

For the full breakdown of all ordinary income tax brackets, see our 2026 Federal Tax Brackets guide.

Long-Term vs. Short-Term: Why Holding Period Matters

The difference between long-term and short-term rates can be substantial. Holding an investment for just one extra day -- crossing the one-year threshold -- could save you thousands of dollars in taxes.

Example: $50,000 Gain on $100,000 Income

Consider a single filer with $100,000 in salary who realizes a $50,000 capital gain. Here is how the tax differs based on holding period:

That is a $4,500 savings simply by waiting a few extra months to sell. For strategies on reducing your capital gains tax further, see our Capital Gains Tax Strategies 2026 guide.

The 3.8% Net Investment Income Tax (NIIT)

High earners face an additional 3.8% surtax on net investment income. This tax, established by the Affordable Care Act, applies on top of the standard capital gains rates.

NIIT Thresholds (2026)

The NIIT is charged on the lesser of your net investment income or the amount by which your modified adjusted gross income (MAGI) exceeds the threshold. Net investment income includes capital gains, interest, dividends, rental income, and royalties.

Capital Gains Tax on Real Estate in 2026

The $250,000 / $500,000 Home Sale Exclusion

Under Section 121 of the Internal Revenue Code, you can exclude up to $250,000 in capital gains from the sale of your primary residence ($500,000 for married couples filing jointly). To qualify, you must meet both of these tests:

• Ownership test: You owned the home for at least 2 of the 5 years before the sale
• Use test: You lived in the home as your primary residence for at least 2 of the 5 years before the sale

The 2 years do not need to be consecutive. If you meet only a partial requirement due to a job change, health issue, or unforeseen circumstance, you may qualify for a partial exclusion.

Example: Home Sale Tax Calculation

In this example, the entire gain falls within the $500,000 married exclusion, resulting in zero federal capital gains tax.

Capital Gains on Investment Property

Investment and rental properties do not qualify for the Section 121 exclusion. When you sell investment property, you owe capital gains tax on the full gain. Additionally:

• Depreciation recapture: Previously claimed depreciation is taxed at a maximum rate of 25%, which is higher than the standard long-term rate
• 1031 Exchange: You can defer capital gains tax by reinvesting proceeds into a like-kind property within specific timeframes (45 days to identify, 180 days to close)

For more on using exchanges and other strategies to reduce your real estate tax burden, see our capital gains tax strategies guide.

Capital Gains Tax on Specific Assets

Stocks and ETFs

Stocks and exchange-traded funds follow the standard long-term and short-term capital gains rules outlined above. When you sell shares, your tax depends on:

• Holding period: Shares held more than one year qualify for long-term rates
• Cost basis method: You can use FIFO (first in, first out), specific identification, or average cost (for mutual funds) to determine your gain
• Dividend reinvestment: Each reinvested dividend purchase creates a new tax lot with its own holding period and cost basis

You can estimate your after-tax returns with our Investment Calculator or measure performance with the ROI Calculator.

Cryptocurrency

The IRS treats cryptocurrency as property, not currency. This means every sale, trade, or exchange of crypto is a taxable event. Key rules for 2026:

• Same long-term and short-term capital gains rates apply as for stocks
• Crypto-to-crypto trades (such as swapping Bitcoin for Ethereum) are taxable events
• Mining and staking rewards are taxed as ordinary income when received
• Reporting uses Form 8949 and Schedule D, with cost basis tracking required for each transaction

Collectibles

Collectibles held for more than one year are taxed at a special maximum rate of 28%, which is higher than the standard 20% top long-term rate. Collectibles include:

• Art and antiques
• Gold, silver, and precious metals (including certain ETFs backed by physical metals)
• Coins and stamps
• Rare wines and other tangible personal property collected for investment

Short-term gains on collectibles are still taxed as ordinary income at rates up to 37%.

Qualified Small Business Stock (QSBS)

Under Section 1202 of the Internal Revenue Code, gains from qualified small business stock may be partially or fully excluded from federal tax:

• 100% exclusion for QSBS acquired after September 27, 2010 and held for at least 5 years
• The exclusion is limited to the greater of $10 million or 10 times the adjusted basis of the stock
• The stock must be in a domestic C-corporation with gross assets under $50 million at the time of issuance
• You must have acquired the stock at original issuance (not on the secondary market)

For stock acquired before September 28, 2010, the exclusion percentage may be 50% or 75% depending on the acquisition date. Any gain not excluded is taxed at a maximum rate of 28%.

Section 1250 Depreciation Recapture

When you sell rental or investment property that you have depreciated, the IRS requires you to "recapture" the depreciation deductions at a special rate:

• Unrecaptured Section 1250 gain is taxed at a maximum rate of 25%, which is higher than the standard 0/15/20% long-term rates
• This applies to the portion of gain attributable to depreciation previously claimed on the property
• Any remaining gain above the depreciation recapture amount is taxed at the standard long-term capital gains rates (0%, 15%, or 20%)
• Section 1250 recapture does not apply to your primary residence (which typically is not depreciated)

For example, if you sell a rental property with $100,000 in total gain and $40,000 in accumulated depreciation, the $40,000 of depreciation recapture is taxed at up to 25%, and the remaining $60,000 is taxed at your applicable long-term rate.

How to Reduce Capital Gains Tax in 2026

Understanding the brackets is the first step. Here are the most effective strategies to minimize what you owe:

• Hold for the long term: Waiting more than one year to sell drops your rate from up to 37% to a maximum of 20%
• Use the 0% bracket: If your taxable income is low enough, you may owe zero federal tax on long-term gains
• Tax-loss harvesting: Sell losing investments to offset gains dollar-for-dollar, with up to $3,000 in excess losses deductible against ordinary income
• Charitable giving: Donate appreciated assets directly to charity to avoid capital gains tax and receive a deduction
• Opportunity Zones: Invest gains in Qualified Opportunity Zone funds to defer and potentially reduce taxes
• Use tax-advantaged accounts: Hold high-turnover investments in IRAs or 401(k)s to shelter gains

For the full breakdown of each strategy with worked examples, read our complete Capital Gains Tax Strategies 2026 guide. You can also explore Roth conversion strategies to manage your overall tax picture, or review ROI benchmarks by investment type for after-tax return comparisons.

2026 Capital Gains Rates: All Filing Statuses at a Glance

This consolidated table shows the long-term capital gains thresholds for every filing status. Bookmark this page for quick reference during tax season.

Remember: These thresholds are based on total taxable income, not just your capital gains. Your ordinary income fills the brackets first, and capital gains stack on top.