2024 Capital Gains Tax Rates
Long-term capital gains thresholds by filing status
| Filing Status | 0% Rate | 15% Rate | 20% Rate |
|---|---|---|---|
| Single | $0 — $47,025 | $47,026 — $518,900 | $518,901+ |
| Married Filing Jointly | $0 — $94,050 | $94,051 — $583,750 | $583,751+ |
| Married Filing Separately | $0 — $47,025 | $47,026 — $291,875 | $291,876+ |
| Head of Household | $0 — $62,900 | $62,901 — $551,350 | $551,351+ |
✓ Long-Term Gains
Held more than 1 year. Taxed at preferred 0%, 15%, or 20% rates.
✗ Short-Term Gains
Held 1 year or less. Taxed as ordinary income (10% to 37%).
Plus: Net Investment Income Tax (NIIT)
If your modified adjusted gross income exceeds $200,000 (single) or $250,000 (MFJ), add 3.8% to all capital gains. This brings the top rate to 23.8% federally.
State and local taxes apply on top of federal rates.
Understanding Capital Gains Tax
Capital gains are profits from selling stocks, real estate, or other investments. The tax depends on how long you held the asset:
Long-Term vs. Short-Term Capital Gains
- Long-term gains: Assets held more than 1 year—taxed at preferential 0%, 15%, or 20% rates shown in the table
- Short-term gains: Assets held 1 year or less—taxed as ordinary income at rates from your tax bracket (10% to 37%)
Strategic Tax Planning with the 0% Bracket
One of the most powerful tax strategies is harvesting gains at the 0% rate. If your taxable income is low, you may be able to realize long-term capital gains with zero federal tax. Common scenarios:
- Taking a sabbatical or gap year (low income year)
- Retiring before Social Security and required minimum distributions begin
- Selling appreciated stock in years with large business losses (offsetting ordinary income)
- Charitable giving years where charitable deductions exceed income
Net Investment Income Tax (NIIT)
Don't forget the additional 3.8% Net Investment Income Tax (NIIT) that applies when modified adjusted gross income exceeds:
- $200,000 (single)
- $250,000 (married filing jointly)
- $125,000 (married filing separately)
This effectively means the highest capital gains rate is 20% + 3.8% = 23.8% (before state taxes).
Tax Loss Harvesting
When investments decline, sell losing positions to realize capital losses. Use these losses to offset capital gains (and up to $3,000 of ordinary income annually). This powerful strategy reduces your overall tax liability while adjusting your portfolio as needed.
State and Local Taxes
Remember that capital gains are also subject to state income taxes. Some states like Florida, Texas, and South Dakota have no income tax, while California and New York have significant rates. Consider tax implications when planning investment location strategy.