Capital Gains Tax Rates 2026: What Changed

The IRS raised the 0% capital gains bracket income limit again for 2026. Here is exactly how much you can realize tax-free — and what every investor needs to know before selling stocks, real estate, or crypto this year. All 2026 figures below come from IRS Revenue Procedure 2025-32.

Capital gains taxes are separate from ordinary income taxes. Long-term gains on assets held more than one year are taxed at preferential rates of 0%, 15%, or 20%. Short-term gains are taxed as ordinary income.

2026 Capital Gains Tax Brackets

Long-term capital gains rates for 2026 are based on your taxable income — not gross income or proceeds. Thresholds below are the final 2026 amounts from Rev. Proc. 2025-32.

Single Filers

• 0% rate: $0 to $49,450
• 15% rate: $49,451 to $545,500
• 20% rate: $545,501+

Married Filing Jointly

• 0% rate: $0 to $98,900
• 15% rate: $98,901 to $613,700
• 20% rate: $613,701+

Head of Household

• 0% rate: $0 to $66,200
• 15% rate: $66,201 to $579,600
• 20% rate: $579,601+

Married Filing Separately

• 0% rate: $0 to $49,450
• 15% rate: $49,451 to $306,850
• 20% rate: $306,851+

What changed from 2025: Each threshold moved up modestly with the chained CPI-U adjustment. The 0% ceiling rose from $48,350 to $49,450 for single filers and from $96,700 to $98,900 for MFJ.

Use our capital gains tax calculator to run exact numbers.

Short-Term vs Long-Term: The 1-Year Rule

Holding period is the most important variable. Hold more than one year and the preferential long-term rates apply. Hold one year or less and your gain is short-term, taxed as ordinary income at rates up to 37%.

Selling on day 365 after acquisition is short-term; day 366 is long-term.

The NIIT: 3.8% Surtax on Investment Income

Under IRC §1411, the Net Investment Income Tax adds 3.8% when MAGI exceeds these thresholds:

• $200,000 — single filers / head of household
• $250,000 — married filing jointly
• $125,000 — married filing separately

These NIIT thresholds are not inflation-adjusted; they have been fixed since 2013.

The NIIT applies to the lesser of: (a) net investment income, or (b) MAGI minus the threshold.

Example — single filer with $220,000 MAGI and $15,000 LTCG:

• MAGI above threshold: $20,000
• Net investment income: $15,000
• Lesser amount: $15,000
• NIIT owed: $15,000 × 3.8% = $570
• Combined federal rate on the gains: 15% + 3.8% = 18.8%

Capital Gains on Home Sales

Under IRC §121, you can exclude a large portion of gain from your primary-residence sale:

• Single filers: Exclude up to $250,000 of gain
• Married filing jointly: Exclude up to $500,000 of gain

These amounts are not inflation-adjusted; they have been at these levels since 1997.

Qualification:

• Owned the home at least 2 of the last 5 years (ownership test)
• Used it as primary residence at least 2 of the last 5 years (use test)
• Did not claim the exclusion on another home in the prior 2 years

Depreciation recapture: Any depreciation claimed is taxed separately as unrecaptured Section 1250 gain, at a maximum 25%, even if the total gain is within the exclusion.

Crypto and NFT Capital Gains in 2026

The IRS treats cryptocurrency and NFTs as property. Every disposal is a taxable event.

• Held over one year: long-term rates apply (0%, 15%, 20%)
• Held one year or less: ordinary income rates (up to 37%)
• Crypto-to-crypto trades are taxable disposals at fair market value
• Spending crypto triggers a gain/loss calculation

The wash sale rule still does not apply to crypto as of 2026. The 30-day repurchase restriction (IRC §1091) applies to securities but — as of this writing — not to digital assets. Sell at a loss on December 31 and rebuy immediately without disallowing the loss.

See our wash sale calculator and tax-loss harvesting calculator.

Strategies to Reduce Your Capital Gains Tax Bill

1. Tax-Loss Harvesting

Sell underperforming positions at a loss to offset gains. Excess losses deduct up to $3,000 against ordinary income per year; remaining losses carry forward indefinitely.

2. Hold for Long-Term Status

Wait until assets cross the 1-year threshold. On a $50,000 gain, the gap between the top short-term rate (37%) and top long-term rate (20%) is $8,500.

3. Realize Gains in the 0% Bracket

If 2026 taxable income falls below $49,450 (single) or $98,900 (MFJ), long-term gains are taxed at zero percent. Valuable in career transitions, early-retirement gap years, and sabbaticals.

4. Gift Appreciated Shares

Gift appreciated stock to a family member in a lower bracket. They inherit your basis and pay tax at their rate when sold. The 2026 annual gift tax exclusion is $19,000 per recipient.

Donating appreciated shares directly to a qualified charity is even more powerful: you deduct the full fair market value (subject to AGI limits) and avoid capital gains tax on the appreciation.

5. Roth Conversions in Low-Income Years

Low-income years are ideal for both harvesting long-term gains at 0% and converting Traditional IRA balances at low marginal rates. Coordinate carefully — stacking can push income past the 0% ceiling or above NIIT.

6. Installment Sales for Large Gains

IRC §453 installment sales spread gain recognition over multiple years, keeping annual taxable income below higher brackets and the NIIT threshold.

Capital Gains 0% Ceiling: 2024 vs 2025 vs 2026

How Capital Gains Stack on Ordinary Income

Long-term gains do not sit in their own bracket — they stack on top of ordinary income for bracket determination.

Example — single filer (2026), $40,000 ordinary income, $20,000 long-term gains:

• Total taxable income: $60,000
• 0% ceiling (single): $49,450
• Gains below the ceiling: $49,450 − $40,000 = $9,450 taxed at 0%
• Remaining gains: $10,550 taxed at 15% = $1,583
• Total capital gains tax: $1,583 (effective 7.9% on the $20,000 gain)

Key Takeaways

• 2026 0% LTCG ceiling: $49,450 single / $98,900 MFJ / $66,200 HoH / $49,450 MFS
• 2026 15%-to-20% breakpoint: $545,500 single / $613,700 MFJ / $579,600 HoH / $306,850 MFS
• Short-term gains taxed as ordinary income; hold 12+ months for LTCG rates
• NIIT 3.8% above $200,000 MAGI (single) / $250,000 (MFJ); thresholds frozen
• Home sale exclusions remain $250,000 / $500,000 (unchanged since 1997)
• Crypto wash sale gap still open in 2026

Sources

2026 LTCG brackets from IRS Revenue Procedure 2025-32 (PDF) and the IRS 2026 inflation adjustments announcement (IR-2025-103). Structural rules from IRC §§1(h), 1411, 121, 453, 1091. Educational only — consult a qualified tax professional.