Capital Gains Tax 101: How Much Will You Pay?
Did you sell a stock, a house, or some crypto this year? The IRS wants a cut of your profit. The good news: if you held it for more than 366 days, you get a huge discount. Here are the 2026 rules.
The 366-Day Magic Trick
The difference between selling on Day 365 and Day 366 can be thousands of dollars in tax savings.
| Holding Period | Tax Type | Rate (Approx) |
|---|---|---|
| 1 Year or Less | Ordinary Income | 10% – 37% |
| More than 1 Year | Capital Gains | 0%, 15%, 20% |
Sold in 6 months: You pay ~$2,400 tax (24% bracket).
Sold in 13 months: You pay ~$1,500 tax (15% bracket).
Savings: $900 just for waiting.
| Strategy | Action |
|---|---|
| Day Trading | Tax Nightmare |
| Buy & Hold | Tax Efficient |
2026 Long-Term Capital Gains Rates
If you held for >1 year, find your income below to see your rate. (Note: These are 2026 estimates based on inflation).
| Rate | Single Income | Married Income |
|---|---|---|
| 0% (Tax Free!) | $0 – $49,450 | $0 – $98,900 |
| 15% (Most People) | $49,451 – $545,500 | $98,901 – $613,700 |
| 20% (High Earners) | Over $545,500 | Over $613,700 |
Pro Tip: The 0% Bracket Strategy
The Secret “Rich Tax” (NIIT)
If you make a lot of money, the IRS adds an extra cherry on top.
It’s called the Net Investment Income Tax (NIIT). It adds an extra 3.8% tax on your gains if your Modified AGI is over:
- Single: $200,000
- Married: $250,000
So, high earners actually pay 18.8% (15% + 3.8%) or 23.8% (20% + 3.8%).