Capital Gains Tax 2026: What You Owe When You Sell

The tax on your sale is decided by one number: your taxable income for the year. Cross a line and the rate on every dollar above it jumps from zero to fifteen percent. Stay under the line and the government takes nothing from your gain. That is not an edge case — it is a planning target, and knowing where the lines sit is worth real money at sale time.

The 2026 rate table

Long-term gains — assets held more than a year — use three rates keyed to taxable income:

These are the 2026 inflation-adjusted thresholds (IRS). Two things make the table counterintuitive:

• Ordinary income fills the bracket first. Your salary, interest, and other income count toward the thresholds before your gains do.
• The rates are marginal. Gains stack on top of your other income, and only the portion above a line moves to the next rate.

Short-term gains — held a year or less — skip this table entirely and use your ordinary income rates, which is why "hold for a year" is the cheapest tax advice available.

The NIIT layer

Above $200,000 of modified adjusted gross income (single) or $250,000 (married filing jointly), the 3.8% Net Investment Income Tax applies to investment income including capital gains. It stacks on top of the 0/15/20% rates, so a high-income seller in the 20% bracket effectively pays 23.8% on gains.

The thresholds are MAGI-based, not taxable-income-based, and they are not inflation-indexed — a couple with $260,000 of income pays NIIT on every dollar of investment income above the line, every year.

Worked examples

Example 1 — the 0% bracket in action. A married couple has $60,000 of taxable ordinary income and sells a rental position for a $60,000 long-term gain. Their gain stacks on the $60,000: $38,900 of it fills the space under the $98,900 ceiling at 0%, and the remaining $21,100 is taxed at 15% — about $3,165 total. The capital gains tax calculator runs this exact split.

Example 2 — the NIIT layer. A single filer with $220,000 of MAGI realizes a $50,000 long-term gain. The gain is taxed at 15% (above the $49,450 line, below $545,500) plus 3.8% NIIT: about $9,400 total, not the $7,500 the base rate suggests.

Example 3 — the home exclusion. Selling a primary home you owned and lived in for two of the last five years excludes up to $250,000 of gain ($500,000 married). Above the exclusion, the regular table applies. The home equity calculator sizes what you are actually walking away with.

Headroom planning

The table is a planning tool, not just a bill:

• Fill the 0% bracket deliberately. If your income is low in a given year — a sabbatical, a business loss, early retirement — realize gains up to the ceiling at zero cost.
• Harvest losses against gains. Losses offset gains dollar for dollar, then up to $3,000 of ordinary income per year.
• Watch the NIIT line. Splitting a large sale across two tax years can keep MAGI under the threshold.
• Roth conversions and gains interact. The IRMAA headroom and Roth conversion planners model the retirement-side tradeoffs the same way.

The capital gains rules sit inside the larger 2026 picture — the 2026 tax changes guide covers the standard deduction and bracket updates that shift where the lines land. For the paycheck side of the same math, the gross-to-net pay guide shows what ordinary rates are doing to your salary.

Bottom line

Long-term gains ride a three-step ladder — 0%, 15%, 20% — with a 3.8% NIIT layer on top for high earners, and your other income fills the rungs first. Hold over a year, harvest losses, and plan around the ceilings. The capital gains calculator shows your exact rate split before you sell.