What counts as long-term?

You must hold the asset for more than one year, measured from the day after acquisition to the day of sale, so selling on the anniversary itself is still short-term. That one-day distinction changes the rate path completely, which is why the holding period is a required input.

How are short-term gains taxed?

As ordinary income. The tool computes your federal tax with and without the gain and reports the difference, so a gain that straddles two brackets is handled correctly rather than being flat-rated at your top bracket.

Does it handle capital losses?

No. If the sale price is below the purchase price the gain is treated as zero and no benefit is shown. In reality losses offset gains and up to $3,000 of net loss can reduce ordinary income each year, with the remainder carried forward.

Does it include state tax?

No, only federal tax is calculated. Several states tax capital gains as ordinary income, a few have no income tax at all, and one applies a separate capital-gains excise, so the real total varies substantially with where you live.

Is the Net Investment Income Tax included?

No. The additional 3.8% surtax on investment income above $200,000 for single filers and $250,000 for joint filers is not applied here, so a high earner will see a figure that is too low. The Crypto Tax Calculator does model that surtax.

Why does the long-term band use only my ordinary income?

It is a deliberate simplification. The statutory bands are based on taxable income including the gain, so a large gain can push part of the profit into the next band. This tool selects one band from ordinary income alone, which is optimistic for very large gains.

Does selling a home work the same way?

Not exactly. A primary residence can qualify for an exclusion of up to $250,000 of gain for a single filer and $500,000 for a married couple filing jointly, subject to ownership and use tests. No exclusion is applied here, so a qualifying home sale is overstated.

Which country do these rules cover?

The United States only. Rates, holding periods, and thresholds are IRS rules in US dollars. TaxEase separately provides paid services for Pakistani taxpayers under FBR rules, where capital gains fall under a different regime entirely.

Capital Gains Tax Calculator: Short and Long-Term Rates

Capital Gains Tax Calculator: Short and Long-Term RatesThe Capital Gains Tax Calculator is a free browser-based tool that estimates the US federal tax on a single investment sale and shows how much of the profit survives it. The gap it exists to expose is the holding period: a position sold inside a year is taxed at your ordinary income rate, while the same profit held past a year qualifies for the preferential long-term rates of 0%, 15%, or 20%. Enter what you paid, what you sold for, how long you held it, your other income, and your filing status, and the tool returns the gain, the tax, the rate applied, and the net profit.

What people use it for

Deciding whether to wait out the one-year mark

An investor holding a position at a $5,000 profit is eleven months in and tempted to sell before the market turns. Running the same sale as short-term and then as long-term puts a dollar value on waiting four more weeks, which is usually a far larger number than people expect from what looks like a calendar technicality rather than a tax decision.

Selling into a deliberately low-income year

Someone between jobs with modest income for the year checks whether a long-held position falls inside the 0% long-term band. At $30,000 of ordinary income the tool returns zero federal tax on a long-term gain, which turns an unplanned sabbatical into a deliberate window for realising appreciation that would be taxed in any normal year.

Sizing a sale that has to fund a house deposit

A buyer needs $60,000 in cash and plans to liquidate part of a brokerage account to get it. Working backwards from the net profit figure shows how much actually has to be sold to clear $60,000 after tax, rather than discovering the shortfall when the transfer lands and the completion date has already been agreed.

Checking a bonus-driven change of band

A large bonus pushes ordinary income into a higher range, and the long-term rate applied to an entirely unrelated stock sale moves from 15% to 20%. Entering the higher ordinary income exposes the interaction, which is easy to miss because the bonus and the share sale look like independent events with nothing to do with each other.

How it works

Enter the purchase price Use your cost basis, which includes commissions and any reinvested distributions that were already taxed once. An understated basis inflates the gain and overstates the tax on this page, so it is worth reconstructing properly.
Enter the sale price The gross proceeds from the disposal. The tool subtracts the purchase price to derive the gain, and it treats a negative result as zero rather than modelling a loss, so a losing sale needs different treatment.
Choose the holding period Short-term means one year or less, long-term means more than a year, measured from the day after acquisition. This single choice routes the calculation down two completely different rate paths and changes everything below it.
Enter ordinary income and filing status Your income excluding this gain. For a short-term sale it sets the bracket the gain stacks into; for a long-term sale it selects which of the 0, 15, or 20 percent bands applies, and the thresholds differ by status.
Read the four result cards Capital gain, federal tax, the effective rate applied, and net profit, with a summary underneath showing purchase price, sale price, and return on investment so the trade can be judged after tax rather than before.

Worked examples

Input: Bought $10,000, sold $15,000, long-term, ordinary income $50,000, single

Result: Capital gain $5,000, tax rate 15.0%, federal tax $750, net profit $4,250, return on investment 50.0%. At $50,000 of ordinary income a single filer sits in the middle long-term band, so the profit is taxed well below the ordinary rate.

Input: The same $5,000 gain sold short-term, ordinary income $50,000, single

Result: Federal tax $1,100 at an effective rate of 22.0%, leaving $3,900. The gain stacks on top of ordinary income and falls entirely in the 22% bracket, so holding past the one-year mark would have been worth $350 on this trade alone.

Input: Bought $8,000, sold $13,000, long-term, ordinary income $30,000, single

Result: Capital gain $5,000, tax rate 0.0%, federal tax $0, net profit $5,000, return on investment 62.5%. The identical profit costs nothing federally because the ordinary income sits inside the 0% long-term band for a single filer.

Frequently asked questions

What counts as long-term?: You must hold the asset for more than one year, measured from the day after acquisition to the day of sale, so selling on the anniversary itself is still short-term. That one-day distinction changes the rate path completely, which is why the holding period is a required input.
How are short-term gains taxed?: As ordinary income. The tool computes your federal tax with and without the gain and reports the difference, so a gain that straddles two brackets is handled correctly rather than being flat-rated at your top bracket.
Does it handle capital losses?: No. If the sale price is below the purchase price the gain is treated as zero and no benefit is shown. In reality losses offset gains and up to $3,000 of net loss can reduce ordinary income each year, with the remainder carried forward.
Does it include state tax?: No, only federal tax is calculated. Several states tax capital gains as ordinary income, a few have no income tax at all, and one applies a separate capital-gains excise, so the real total varies substantially with where you live.
Is the Net Investment Income Tax included?: No. The additional 3.8% surtax on investment income above $200,000 for single filers and $250,000 for joint filers is not applied here, so a high earner will see a figure that is too low. The Crypto Tax Calculator does model that surtax.
Why does the long-term band use only my ordinary income?: It is a deliberate simplification. The statutory bands are based on taxable income including the gain, so a large gain can push part of the profit into the next band. This tool selects one band from ordinary income alone, which is optimistic for very large gains.
Does selling a home work the same way?: Not exactly. A primary residence can qualify for an exclusion of up to $250,000 of gain for a single filer and $500,000 for a married couple filing jointly, subject to ownership and use tests. No exclusion is applied here, so a qualifying home sale is overstated.
Which country do these rules cover?: The United States only. Rates, holding periods, and thresholds are IRS rules in US dollars. TaxEase separately provides paid services for Pakistani taxpayers under FBR rules, where capital gains fall under a different regime entirely.

Tips

Check the actual trade dates before choosing the holding period. Brokerages report the acquisition date on Form 1099-B, and a position bought in tranches can be part short-term and part long-term.
Reconstruct cost basis carefully for anything held a long time. Reinvested dividends were already taxed once, and leaving them out of the basis means paying tax on the same money twice.
Run the year with and without the sale before committing. A gain that lifts ordinary income across a band boundary can raise the rate on the whole gain, not just the part above the line.
If you are also holding an unrealised loss, remember this page ignores it entirely. Realising both in the same year can leave a far smaller taxable amount than either figure suggests alone.

Written by Ahsan Mahmood. Last updated 2026-07-21. This calculator runs entirely in your browser and produces estimates, not tax advice.TaxEase — Capital Gains Tax Calculator: Short and Long-Term Rates